text:
    HOULIHAN v. FOGARTY.
    1. Executors and Administrators — Sales—License.
    Without a lawful license, no valid sale of real estate can be made by executor, administrator, or guardian.
    3. Same — Guardian and Ward — Evidence or Sale.
    The sale of real estate by an administrator who also controlled the same property as a guardian of a part of the interested owners, is shown to be a sale in his capacity of guardian by evidence that as such guardian he published a notice, acknowledged the deed and filed an account of the sale.
    3. Guardian and Ward.
    No valid sale of real estate is executed where the guardian having control of the property obtains no license, in advance of the sale, although he procures the subsequent execution of a license dated back to a proper time, where he gave no bond upon the sale, took no oath in writing, published an incorrect and incomplete notice of sale, accepted a bid not made at the place of sale or in the county in which the land was situated, and failed to execute a deed in accordance with the alleged authority. 3 Comp. Laws, §§ 9094, 9129.
    4. Same — Confirmation of Sale — Validity.

      A confirmation of guardian’s sale of realty made 30 days after the sale and 15 days after the execution of a deed transferring the property, but dated two days later than the date of sale at the request of the guardian, is not a valid confirmation.
    5. Same — Purchase by Guardian — Good Faith.
    A purchase at public sale, by a guardian, of property held by him in trust for others, is void, where the title has not passed to a bona fide purchaser without notice. 3 Comp. Laws, § 9095.
    6. Same — Purchaser in Good Faith.
    Where purchasers have notice by a reference in the guardian’s deed that license to sell was granted on the day of sale, and where fatal defects in the proceedings appear, no title is conveyed.
    7. Estoppel — Conveyances.
    An estoppel to question the validity of a guardian’s sale does not arise in favor of parties who know the actual facts, are not induced to act to their prejudice or to lose rights by the acts of the owners.
    8. Same.
    The lessor is estopped as against his lessee from asserting ownership of a smaller interest, but not from asserting title to a larger interest than the instrument expresses.
    9. Same — Deeds—Lease.
    In an action not founded on a lease recitals contained in it do not operate by way of estoppel, as to a party with whom no covenants are made.
    10. Equity — Laches.
    Evidence held not to show laches of the complainants in a suit to set aside a guardian’s sale and conveyance.
    Appeal from Iron; Stone, J.
    Submitted February 18, 1910.
    (Docket No. 56.)
    Decided September 27, 1910.
    Bill by Theresa Houlihan and others against Patrick Fogarty and others to set aside a deed. From a decree dismissing the bill, complainants appeal.
    Reversed, and decree entered for complainants.

      Fred H. Abbott {M. J. Sherwood, of counsel), for complainants.

      Gummiskey & Spencer and A. F. Dixon (John i Power, of counsel), for defendants.
   McAlvay, J.

Complainants on January 23, 1907, filed their bill of complaint against defendants for the purpose of having a certain deed set aside and declared null and void as a cloud upon their title to certain lands located in Iron county. On July 10, 1887, Michael Houlihan, the father of the complainants, died intestate, at his home in Wisconsin, seised in fee simple of 160 acres of wild timber land described as the southeast quarter of section 36 in township 43 north, range 35 west, in Iron county. The complainants are his only heirs at law. Ellen Houlihan, his widow, is their mother. These nine children were all minors at the time of the death of their father, of ages between 18 and 3 years, and all but two of them have always been nonresidents of this State. In December, 1887, the probate court of Iron county appointed defendant Patrick Fogarty guardian of the nine minor children. He afterwards, on January 3, 1888, petitioned to be appointed administrator of the estate of Michael Houlihan, deceased. He qualified in both capacities. His bond as guardian, and also his bond as administrator, were signed by defendants John Dinneen and Edward Donovan (deceased) as sureties. The estate of Michael Houlihan consisted only of the 160 acres of land above described. He was indebted at the time of his death to the amount of $400 or $500. The widow and the children had no means of support. The estate of the minor children consisted only of their several interests in this land inherited from their father. It is claimed that as administrator Patrick Fogarty petitioned the probate court for license to sell this land for the purpose of paying debts, interest, and charges, as appears from what purports to be an order of sale of the premises for the purposes mentioned, subject to dower and homestead rights of the widow, made on hearing a petition granted to him as administrator. The date upon which this license to sell was made is in dispute. In the first paragraph it appears that the date had been changed. A pen had been drawn through the date September 8, 1888, and July 25th substituted. It reads as follows:

“ State of Michigan, “ County of Iron.
) )
“Ata session of the probate court for said county held at the probate office in the township of Crystal Falls on Saturday the eighth 25 day of September July, in the year of our Lord one thousand eight hundred and eighty-eight.
“Present, Charles Gallagher, Judge of Probate.”

Fogarty as guardian of the minor heirs of Michael Houlihan, commencing June 9, 1888, published a notice for thirteen successive weeks, as follows:

“For Sale: As guardian of the heirs of M. Houlihan, deceased, I am authorized, by the probate court of Iron county, to dispose of the following described property for the benefit of the heirs, to wit: The S. E. i of section 36, township 43, range 35 west. Will sell with right to reserve one-fourth interest in minerals. Price paid to be cash. Good clear title will be given. For information write to me at Stambaugh, Michigan, or apply at my homestead in Stambaugh township. Bids to be in by September 8, 1888.
“Pat Fogarty, Guardian.”

In the description given in the above notice it was printed township “ 42.” An erasure has been made with a pen, and it is changed in ink to read “ 43 ” which is the correct description. Fogarty admits that he made this change. There is not of record in the probate court any order of hearing the petition for license to sell this land by Fogarty either as guardian or as administrator, nor any proof of publication, or other service of such order, nor any order granting any license to sell any of this land for any purpose by him in any capacity. The order above referred to as purporting to be a license of sale granted to him as the administrator of the estate of Michael Houlihan, deceased, was found in the files in probate court. It will be more particularly described later in this opinion. On September 8, 1888, Fogarty reported that he had sold as “'guardian of the heirs of M. Houlihan” the following described lands to the following named persons:

“ The N. W. i of the S. E. \ of sec. 36, 43-35 to William Young at $8 per acre, equals $320.00. The N. E. i of the S. E. of sec. 36, 43-35 to John Swanson at $10.25 per acre equals $410.00. The S. i of the S. E. i of sec. 36, 43-35 to John Dinneen at $8 per acre equals .$640.00.”

On September 14, 1888, Fogarty, as guardian, executed -deeds of the lands above described to the parties above named. The deed executed to defendant John Dinneen purporting to convey the S. i of the S. E. i of section 36, excepting an undivided one-quarter interest in all minerals, is the deed which complainants by this suit ask the •court to set aside. The other deeds are not involved. The bid of Dinneen was made to Fogarty at Escanaba, Delta county, before the sale, and was accepted by Fogarty at Escanaba. Dinneen was not present at the sale in Iron county. At this time the relations between Fogarty, the guardian, and defendants Dinneen, Maloney, •and Donovan, now deceased, but who is represented by an administrator, were that Dinneen and Donovan were sureties upon his bond as administrator, and also upon his ■guardian’s bond, and Maloney was a surety upon what is claimed to be his administrator’s sale bond. The four defendants, Fogarty, Dinneen, Donovan, and Maloney, resided at Escanaba, and were old friends. Within six months after Fogarty as guardian made the deed to Dinneen and while he was yet administrator of the estate of M. Houlihan and guardian of these minors, Dinneen divided the interest he claimed in the premises equally with Fogarty, Donovan, and Maloney, by deeding to each one-fourth thereof, making each the apparent owner of three-sixteenths, and each paid Dinneen exactly one-fourth of $640, the purchase price paid by him. At the time of instituting this suit,' the apparent fee-simple title to the mineral conveyed to Dinneen remains exactly the same as when deeded by Dinneen to Fogarty, Maloney, and Donovan. They received from the Kinneys who purchased the surface land $800 in 1901.

In the year 1903 William J. Tully obtained an option for a mining lease on these premises from the parties claiming to be the owners, including these complainants, and afterwards a mining lease was prepared by Fogarty; but this lease was in some way lost. This option and lease are not in the record. They were procured by Mr. Tully for the purpose of prospecting for iron ore. While he was attempting a sale of his option, the question of the state of title was raised for the first time, and eminent counsel was employed to investigate the title and to procure options for a mining lease. He acted for defendant Tully Mining Company, to which Tully has assigned his rights, and for other clients. Counsel says in his testimony:

There were grave doubts in my mind at that time as to whether that sale was valid, and as to whether or not the Houlihans were not entitled to the entire property.”

He succeeded in obtaining another option from complainants to Mr. Tully dated November 2,1903. The first option to Tully was dated January 10, 1903. A few days before November 2, 1903, Mr. Tully’s counsel met Mrs. Ellen Houlihan, the widow, at her daughter’s house in Oconto in October before the 28th. He says:

“I endeavored to make her understand as well as I could just what the situation was, and also that the title of Dinneen, and those claiming under him, was seriously open to question. I advised her to present the matter to her lawyers. The daughter who was sick was present, and the old lady’s mind was very much troubled, and I got over the matter as soon as I could. The daughter was lying there, and I could see her through the door. The old lady seemed to be very nervous and troubled.”

He also talked with a son-in-law of Mrs. Houlihan when he was securing his wife’s signature to an option. The son-in-law testifies that he told some of the Houlihans. This is the first notice any of the complainants had that the validity or regularity of the sale made by Fogarty was questioned. Several of the complainants did not learn of it until late in 1905. Mrs. Houlihan’s interest in these premises, as widow of Michael Houlihan, is not in dispute or questioned by any of the defendants. She is not a party to this suit. The defendants Fogarty, Dinneen, Maloney, and Donovan (by representatives) are the fee claimants, and the real defendants in the case. Defendants Kinney are interested only in the surface land. The defendant mining companies by stipulation with complainants will be unaffected whatever the result of this suit. The foregoing statement of the situation in this case if not sufficiently complete-will be made so as necessity arises. In their answer to the bill of complaint, the principal defendants rely for their source of title upon the conveyance from Fogarty, claiming to act as guardian, and that he as such guardian conveyed to Dinneen, in fee simple, the land in question, and allege the regularity of such sale. Upon the hearing had in the court below a decree was entered dismissing the bill of complaint without costs.

It is insisted by the principal defendants that the proceedings relied upon by them, which were taken by Fogarty to sell the land in question, were valid proceedings and according to law; that, at most, the imperfections in those proceedings pointed out by complainants were mere irregularities which will not make void the sale. They contend that under a valid license to sell as administrator Fogarty followed substantially the essential requirements of the statute in every step taken by him, and in all that he did he acted as administrator. The contention of complainants is that, acting as guardian, Fogarty undertook to make a sale of this real estate, and as such guardian attempted to convey the same to defendant Dinneen; that he did so without authority by license as required by statute; and that he failed in practically all essential particulars to conform with the law. The learned circuit judge took the view, and adopted the theory, of the principal defendants.

Section 9129, 3 Comp. Laws, to which both parties appeal as containing the requirements necessary to the validity of a sale of real estate by executors, administrators, or guardians, provides:

“ In case of an action relating to any estate sold by an executor, administrator or guardian in which an heir or other persons claiming under the deceased or in which the ward, or any person claiming under him shall contest the validity of the sale it shall not be avoided on account of any irregularity in the proceedings, provided it shall appear:
First. That the executor, administrator or guardian was licensed to make the sale by the probate court having jurisdiction;
‘ ‘ Second. That he gave a bond which was approved by the judge of probate in case a bond was required upon granting a license;
Third. That he took the oath prescribed in this chapter;
Fourth. That he gave notice of the time and place of sale as in this chapter prescribed; and
Fifth. That the premises were sold accordingly and the sale confirmed by the court, and that they are held by one who purchased them in good faith.”

It must first be determined from this record in what capacity Fogarty acted . in making this sale. If, as is contended by defendants, and determined by the court, he was acting as administrator of the estate of Michael Houlihan, deceased, we must consider the authority under which it is claimed he acted. It is urged that the probate court of Iron county granted him a license to sell as administrator. This claimed license was found in the files of court. No indorsement of filing is written upon it. It was never recorded in the records of the probate court, as provided by law. It is a blank form filled in, purporting to be a license granted to Fogarty as administrator to sell this real estate. It is not signed in the place provided-in the blank. The only signature of the probate judge is to the following form of a certificate which is written upon it:

“State or Michigan, )
“County of Iron. j S' ’
“ I hereby certify that the foregoing is a true copy of the order and of the whole thereof heretofore entered in the above matter authorizing a sale by the said administrator of the above described real estate.
“Dated Sept. 8, 1888.
“Charles Gallagher, “Judge of Probate of said County.”

This date is quite significant. If the first paragraph of this instrument given above is examined, it will show that it is the same date which was first written and after-wards erased, and for which July 25th was substituted. September 8th is the date Fogarty claims the sale was made to Dinneen. The learned circuit judge inclined to the belief that this was the original order, that the probate judge in his carelessness or. ignorance signed it as it appears, and that the presumption was that the erasure was made before its execution — citing Munroe v. Eastman., 31 Mich. 285, and quoting,

Where nothing suspicious appears on the face of the deed beyond the fact that an erasure is momifest.”

If it is accepted as the original, its date is fixed upon its face as September 8, 1888, when it was signed, from which it must be inferred that the correct date was first written in this license when it was made out, and was afterwards changed. An examination of a calendar for the year 1888 shows that September 8th occurred on Saturday and July 25th on Wednesday. The license as mutilated reads, “On Saturday the eighth 25 day of September July,” which is additional proof that the license was not issued before Saturday, September the 8th. Fogarty gave notice of the sale of this land, which will be considered later. This notice and its date of publication is, however, of present importance, as bearing upon the question of the genuineness and validity of the claimed license to the administrator. It will be remembered that it is claimed that this license was granted July 25, 1888. The files of the newspaper in which this notice was published, introduced in evidence, show that the first publication was June 9, 1888, and the last was September 1, 1888. By the notice he claimed to be authorized by the probate court of Iron county to sell this real estate 47 days before July 25,1888.

From the foregoing facts, taken from this record, it would appear that the instant case is readily distinguishable from the case relied upon. Can it be said that nothing suspicious appears on the face of the instrument beyond the fact that an erasure is manifest ? Not only is the face of this instrument clouded with suspicions, but the evidence furnished by Fogarty impeaches its authenticity and forces the conclusion that it was made on the date first written. After a careful consideration of the facts, it is impossible to seriously consider this license as genuine. The only reasonable theory which will account for this instrument is that on the day of the sale it was discovered that no license had ever been granted. Such a paper was necessary to show a license authorizing a sale of this real estate, and this paper was manufactured. We have in this record in the handwriting of Fogarty evidence requesting a similar act by this judge of probate which will be considered later. We find that, in fact, no license was issued as provided by law to Fogarty as administrator authorizing him to make this sale. If the contention that Fogarty acted as administrator in his proceedings to make this sale is admitted, our finding that no license was ever granted to him as administrator for that purpose disposes of it. Without lawful license, no valid sale of real estate can be made by executor, admin, istrator, or guardian.

On the other hand, if Fogarty, as complainants contend, proceeded to make this sale as guardian of these minors, we must determine whether that contention is true, and if found true, whether his proceedings were taken according to the requirements of the statute and the sale consequently valid. The deed by which title, if any, passed to these defendants being their source of title, would naturally be the first item of evidence to challenge attention. In this Fogarty describes himself as “guardian of the heirs of Michael Houlihan,” and he acknowledged the deed as such guardian. Next, the notice given by Fogarty in pursuance of which the sale was made also describes him as guardian of the heirs of M. Houlihan, and signed by him as such guardian. The record shows what purports to be a report of the sale, also signed by him as “Guardianof the heirs of M. Houlihan.” He also as guardian filed an account of proceeds realized from such sale. All of these solemn instruments made and signed by him in the performance of his official acts, not contradicted by any testimony in the record, established beyond question that the grantor of these defendants intended to, and did, make this sale to these defendants as such guardian, and not otherwise. No claim is made in this record, or can be made, that he acted under a mistake. The allegation in their answer, “These defendants further severally answering admit that the defendant Patrick Fogarty claiming to act as guardian of the complainants made, executed and delivered unto John Dinneen a certain deed bearing date the 14th day of September, 1888, * * * whereby for the consideration of $640.00 the said Patrick Fogarty as such guardian conveyed to said John Dinneen in fee simple,” etc., and the further statement in said answer denying the allegation in the bill that Fogarty was not authorized to make such deed as guardian, and the absence of claim or intimation in the answer that he- was acting in any other capacity, are overwhelming evidence of the understanding of these parties, who were grantees in that deed, both at the time it was executed in 1888, and in 1907, when its validity was challenged.

We find no evidence in the record to show that Fogarty acted or intended to act in any other capacity than as guardian in making this sale. Under the statute above quoted, the first essential requirement to make a valid sale of real estate by this guardian was “a license to make the sale by the probate court having jurisdiction.” It is not claimed that the record shows that any license to make this sale was ever granted to the guardian. As already shown, the case was decided upon another theory. The two theories cannot be reconciled. Fogarty at the time was holding two distinct fiduciary offices. He was administrator of the estate of M. Houlihan, deceased. He was also “ In the matter of the estate of Katie Houlihan and others, minors,” appointed guardian of these minors. These were separate estates. His duties as administrator and guardian were distinct and separate. He never petitioned the probate court for a license to sell real estate, “ In the matter of the estate of Katie Houlihan and others, minors,” of which he was guardian. This is practically admitted upon this record. If the paper purporting to be a license to sell real estate could be accepted for what is claimed for it, it appears upon its face that as administrator “ In the matter of the estate of Michael Houlihan, deceased,” he was licensed to sell all real estate whereof decedent died seised, to pay debts, claims, interest, and charges, “subject to the right of dower and the homestead rights of the widow.” It is not claimed by defendants that this was a license to Fogarty as guardian, but it is admitted and was determined to be a proceeding by the administrator, “In the matter of the estate of Michael Houlihan, deceased.” The contention of these defendants indicates that the fact that two separate estates were being administered has been disregarded, not because the record of that fact is in any manner disputed, but because of the fact that in no other way is it possible to give this sale a semblance of validity under the statute. Our determination that no license to sell was ever granted, to Fogarty has eliminated all confusion of the two estates, and the separate offices he held. We find from the great weight of the evidence that Fogarty, as guardian of these minors, was never licensed to make the sale of this real estate by the judge of probate.

We think it proper to consider other alleged fatal defects in these proceedings because of the insistence of counsel for defendants that they were mere irregularities, and for the reason that, if the conclusion as to the irregularities of the claimed administrator’s license is questioned, other defects appear to show the invalidity of this sale. It is undisputed that Fogarty as guardian never gave a sale bond as required by the statute. It follows that no bond was approved. As to the required oath, it appears-from the testimony of Fogarty that he was at Crystal Falls on September 8, 1888, and took an oath before the sale was made. There is no evidence to show that this oath was in writing. No oath was filed as required, and no official record or evidence shows that the required oath was taken. The notice of this sale is already given. It in no essential particular conforms with the requirements of law. The undisputed evidence shows that this notice-as published described land in another township. When Fogarty attached a copy of this notice to the claimed administrator’s license, he changed the number of the township to make a correct description. This notice contains neither time or place of the sale, nor that the land would be sold at public vendue to the highest bidder. It was of no legal effect whatever as notice of a guardian’s or administrator’s sale of real estate. It follows that the sale-was made without notice previously given as required by law. It appears as an undisputed fact from the testimony of Dinneen and Fogarty that the bid of Dinneen was given to and accepted by him at Escanaba, Delta county, not at Crystal Falls, the county seat of Iron county, in which the land was located, nor at Stambaugh. It also appears. that Dinneen was not present in Iron county on the date of the sale. Fogarty testifies:

“ I made the sale the 8th of September, 1888. When I, made the sale, I was either at Stambaugh or Escanaba., It may be possible that I made the sale to Dinneen at Escanaba. Dinneen never went over to Iron River. His. bid was at Escanaba, and it was accepted there.”

The sale therefore was not made according to notice or the provisions of section 9094, 3 Comp. Laws, which requires “ such sale to be in the county where the lands are. situated, at public vendue,” but was made to Dinneen, in. Escanaba, Delta county, where his bid was received and. accepted. It was not made in accordance with the claimed, •authority, which reserved the widow’s dower and homestead interest, nor was the whole of it sold as reported to the court, but with a reservation of one-quarter of the. mineral. The record shows conclusively that no valid, sale was made. The report of the sale was inclosed in a letter from Fogarty to the judge of probate, dated October 9, 1888, which, among other things, contained the following :

“ Inclosed please find my report of sale, and I wish you would send me a confirmation or copy of confirmation of the sale and date it back to about September 10, 1888, • and if necessary to put my report into blank form, you do so and it will be all right.”

This is the instance referred to where Fogarty requested the judge of probate to falsify his record. It is evident that at the time this letter was written the sale h ad not been confirmed by the court, and this is the only evidence in the case relative to confirmation, except a recital in the deed to Dinneen. This was 30 days after the sale and 15 days after the deed was executed and delivered. A slip of paper found in the files apparently torn from a sheet of legal cap bears upon it the following writing:

“ 1. Wednesday, July 25. 2. July 25. Sold September 8. Confirmation given Sept. 10.”

It was considered by the court below as evidence of confirmation of this sale. It is certainly evidence that, if there was a confirmation, it was falsely and fraudulently made and dated back, according to Fogarty’s request, from which it may be conclusively inferred that the other dates now very familiar to the court on this slip of paper were likewise fixed to serve the exigencies which confronted the guardian. A confirmation brought about in this manner cannot be held by this court to be a bona fide valid confirmation contemplated by the statute.

Much stress has been laid upon the bona fides of the fee claimant defendants Fogarty, Dinneen, Donovan, and Maloney. From foregoing intimations in this opinion it is evident that the good faith of Mr. Fogarty is at least questioned, and the fact that within six months after the sale he became a one-fourth owner of the property sold in consideration of $160 while he was yet administrator and guardian, thereby by indirection becoming a purchaser at his own sale, as a matter of law dissipates his defense of a good faith purchaser. The law prohibits such a transaction, and declares it void. Section 909,5, 3 Comp. Laws. This court in construing this statute has held that such a purchase is void, where the title has not passed to a bona fide purchaser without notice, before the sale is impeached. Otis v. Kennedy, 107 Mich. 312 (65 N. W. 219), and cases cited. See, also, Litchfield v. Tunnicliff, 118 Mich. 383 (76 N. W. 760). The explanation of Fogarty and Dinneen as to how Dinneen became a purchaser “just to help out his neighbors the Houlihans,” and how the three others each took an interest from Dinneen “just to help him out,” because he was short of money, does not carry conviction of its truth. It has been explained that three of these men were bondsmen for Fogarty in these estates. It appears from the testimony of Fogarty that quantities of equally good land in that locality were for sale at $1.25 per acre, and yet the above is the only explanation either of them makes why eight dollars an acre were paid by them, or why there was any reservation of minerals. It is apparent that it was expected by these men that minerals underlay this land, otherwise mention of minerals in the deeds and a division of interest in the minerals among them would be foolishness. Whether or not they were in a conspiracy to get this land is not material. None of them can be held to be a bona fide purchaser. All had knowledge of the record of the title deed upon which Dinneen relied. On its face this deed showed that no valid license to sell had ever been granted to Fogarty. The deed was executed and delivered September 14, 1888, and among its recitals stated that the sale was made pursuant to a license granted September 8, 1888, which is the date of the sale, as stated in the deed. Furthermore, the defense of good faith under section 9129, supra, is not available to a purchaser except when all the essential requirements of the statute have been complied with. The defects in the proceedings in this case to sell these premises were not mere irregularities but were fatal and rendered the sale absolutely void. It follows that title never passed from complainants, and they are entitled to the relief asked, unless by their acts or failure to act since knowledge came to them of their rights in the premises. It is admitted by these fee claimant defendants that they cannot establish title by estoppel in pais because of the statute of frauds. It is also admitted that an estoppel will not arise in favor of defendants claiming title.

They urge, however, that an estoppel has arisen in favor of the defendant mining company. This last-named defendant has not answered the bill of complaint. Whether the bill has been taken as confessed against it does not appear. The amended record shows that, by stipulation, whoever succeeds in this suit the interests or rights of that company will in no manner be affected. The record shows that the solicitors for all these parties at the close of the proofs in a colloquy with the court stated that the royalty under the mining lease would follow the decree of the court on the fee, that no estoppel was claimed against complainants by reason of this lease, and the attention of this court has been specifically called to this stipulation, which it is understood will be provided for in the decree if necessary. The joining by complainants in the options and leases did not operate as an estoppel, legal or equitable. The lessees were not induced to enter into these agreements by reason thereof. They were fully informed of all the facts as to the title. They did not do or omit to do anything to their prejudice in consequence or on the faith of such acts of complainants. Authorities need not be cited to show that estoppel will not be created by such acts. The options and leases were not made by complainants with the fee claimants, but are agreements separate and distinct made with the lessees. The first option and lease were given by complainants before any knowledge of an invalid sale. Do these options and leases create estoppel by deed ? The lessor is estopped as against the lessee from asserting ownership of a smaller interest, but not from asserting title to a larger interest than is as-pressed. There is no covenant whatever with the co-lessor. The action in this, case is not founded upon the mining option and lease but is collateral to it, and facts recited or admitted in such instrument do not operate by way of estoppel in this action. 16 Cyc. p. 721, and notes; 11 Am. & Eng. Enc. Law (2d Ed.), p. 401, and notes. The mining lease printed in a supplemental record is too long to be printed in this opinion. The recitals above referred to are simply statements that complainants are collectively owners of an undivided one-fourth of the premises.

There is no question of adverse possession in this case, nor is the statute of limitations invoked. Nor can complainants be charged with laches. After all were fully and completely informed of their rights, reasonable diligence was had in bringing this suit. The relative positions of the parties are not altered to the prejudice of these defendants by any delay of complainants. The deed made to Dinneen is a cloud upon the title of complainants to these premises by reason of the illegality of the sale.

The decree of the circuit court is reversed and a decree will be entered in this court in their favor, declaring the sale of said land by Fogarty null and void, and vacating and setting aside the deed given to Dinneen, as a cloud upon the title of complainants, and that they be decreed to be the owners in fee to all of said premises, subject to the right of dower or other right of Ellen Houlihan, widow, and subject to the rights of defendant Tully Mining Company under the stipulation between the parties, the essential terms thereof to be recited in such decree, and that complainants do recover against said defendants Fogarty, Dinneen, Maloney, and the representatives of Donovan, their costs of both courts to be taxed.

Hooker, Moore, Brooke, and Blair, JJ., concurred.


source: Caselaw Access Project

author: Moore, J.

license: Public Domain

text:
    BARNES v. SPENCER & BARNES CO.
    1. Corporations — Dividends—Formality op Determination to Distribute Profits.
    Stockholders of a corporation, may informally agree to distribute a certain sum as dividends without going through the form of corporate action, or without action of the board of directors.
    2. Same — Profits—Dividends.
    A division of profits is a dividend, even though not called or considered such by directors or stockholders.
    3. Same — Bills and Notes — Denial of Execution.
    Failing to deny the execution of a corporate note, made by the president of the association without express authority, permits the introduction of the note in evidence; whereupon it makes a prima facie case.

      4. Same — Negotiable Instruments — Authority of Corporate Officer — Ratification .
    A promissory- note executed in the corporate name by its president, to himself, for the price of timber sold by him to the corporation, is valid in the absence of evidence that the price was unfair, and especially upon proof that the directors knew of the transaction, never repudiated the note, and the corporation credited the amount of the purchase price on its books, in his name.
    5. Same — Dealing Between Officers and Corporation — Fiduciary Relation.
    A corporate officer may deal with the corporation if his acts are open and fair and known to the directors and stockholders.
    6. Equity — Set-Off—Accounting.
    Under a plea of the general issue and notice that the defendant purposes to file a bill for an accounting of plaintiff’s acts as corporate president, asking that the amount, when so determined, may be set off against any amount due upon notes involved in the action at law, the defendant’s remedy is in equity.
    Error to Berrien; Coolidge, J.
    Submitted April 6, 1910.
    (Docket No. 10.)
    Decided September 27, 1910.
    Assumpsit by John E. Barnes against the Spencer & Barnes Company for money had and received. A judgment for plaintiff on a verdict directed by the court is reviewed by defendant on writ of error.
    Affirmed.

      Gore & Harvey, for appellant.

      M. L. Howell and Humphrey 8. Gray, for appellee.
   Moore, J.

The plaintiff sued defendant in an action of trespass on the case upon promises, and gave notice that upon the trial under the money counts he would give in evidence certain notes. One of them was for |1,000, payable to Mrs. J. E. Barnes, guardian, etc., and was dated July 1, 1903. It had on the back of it the indorsement:

“ Pay to the order of J. E. Barnes, Mrs. J. E. Barnes, guardian.”

It also had 11 indorsements showing the interest had been paid up to July 1,1908, and 9 indorsements showing payments upon the principal. One of the notes was for $5,000, dated January 1, 1904, payable to the order of J. E. Barnes, and had many indorsements showing upwards of $1,200 paid upon the principal, and many indorsements showing payment of interest up to July 1, 1908. There was another note for $3,000 and two notes for $2,000 each. All of these notes were signed: “The Spencer & Barnes Company, by J. E. Barnes, President.” Each note had many indorsements showing payments upon the principal, and many indorsements showing payments of the interest up to July 1, 1908.

The defendant did not deny under oath the execution of any of these notes. It pleaded the general issue, and gave notice of several defenses, one of which was to the effect that when the notes were given the payee was president of the company, under a large salary, and owed all his services to the company; that he engaged in outside business under the firm name of Barnes & Robinson, which firm dealt with defendant company. We quote from the plea and notice:

“That by virtue of such sales the said John E. Barnes realized large profits which said Barnes then and there converted to his own use, and which said sums of money the defendant avers lawfully and of right belonged to the defendant, and which said amounts the plaintiff has refused to pay over and account for to the defendant, though the same have often been demanded of plaintiff.
The defendant avers that by virtue of such manipulation and by reason of plaintiff’s interest in said contracts with the Spencer & Barnes Company, that the said plaintiff, John E. Barnes, has realized large profits on said contracts, amounting to the sum of $10,000, and said profits lawfully and of right belong to said defendant. That no part thereof has been paid by plaintiff to the defendant, though often requested so to do, and thereby the plaintiff became and is indebted to the defendant in the sum of $10,000.
“ That said John E. Barnes, in violation of his contract obligations to the defendant, as aforesaid, whose president and financial manager he was, made several purchases of timber and timbered lands for his own account ■and not for the account of the Spencer & Barnes Company, as he was under contract and legally bound to do. That said plaintiff, John E. Barnes, scheming and designing to deprive the defendant Of its just share of the profits in said purchases of timber and timber lands, entered into a copartnership with one John Robinson under the firm -name and style of ‘ Barnes & Robinson,’ and also under the name of the ‘ Weesaw Lumber Company, John E. .Barnes, Manager,’ for the purpose of purchasing large tracts of timbered lands located in the county of Berrien, •and for the cutting of the timber thereon and the sale ■ thereof upon the market. * * * Said John E. Barnes '.realized large profits therefrom, the exact amount whereof .is unknown to defendant, but defendant avers that from such sales the plaintiff reaped large profits, to wit, the sum of $10,000. That said profits justly and legally belonged, and do now belong, to the defendant, and, although often requested, the plaintiff has refused and neglected, and still refuses and neglects, to pay the same, or any part thereof, to the defendant.”

Notice was given of the following:

“ That said defendant will insist that said notes and each thereof are null and void.
“ That defendant will insist that said notes, and each thereof, are void because each of said notes was made, executed, and delivered by said plaintiff to himself or to others for his benefit, while president of the Spencer & Barnes Company, defendant, without authority so to do.
“ Defendant will show in evidence that there has been no ratification by the stockholders of the making, execution, and delivery of said notes by the plaintiff, as president of the Spencer & Barnes Company, to himself.”

The plea ended with the following statement:

“You will further take notice that, pursuant to Circuit Court Rule 24c, the defendant hereby waives the benefit of the general issue, and admits the facts alleged in the plaintiff’s declaration (that is to say, defendant admits that, except for the facts set forth in this notice, the plaintiff would be entitled to recover upon the promissory notes set forth in the declaration herein, and waives the necessity of the introduction of said notes in evidence for the purpose of proving the signatures thereon and the delivery thereof, and waives the necessity of the computation of the amount due thereon), and, hereby relying on the defense herein set forth, this defendant claims the benefit of said Rule 24 in respect to the opening and closing in the taking of testimony and in the argument on the trial of said cause.”

Upon the trial the notes were introduced in evidence, and many witnesses were sworn on the part of the defendant. At the close of the testimony, after hearing arguments of counsel, the circuit judge expressed himself as of the opinion that the defense of invalidity of the notes and of offset could not be urged in an action at law. He said:

“ In this suit, gentlemen, Mr. Barnes is a party on one side and the corporation on the other, and the stockholders are not made parties. I hold equal justice could not be done unless all the stockholders are brought in, and I also hold that so far as offsets are claimed in this case they are matters for a court of chancery for similar reasons, and therefore the plaintiff as far as this action is concerned is entitled to judgment upon the notes.
“A court of chancery may hereafter determine as to what offsets will be allowed to the corporation, and perhaps determine what remedies may exist between the various stockholders of this company. Therefore, as a matter of law, I have come to the conclusion that the plaintiff is entitled to a judgment upon those notes, and that there is no legal defense whatever to the notes. The amount of those notes has been computed and amounts to $20,841.83.”

He directed a verdict for the above amount. The case is brought here by writ of error.

The important alleged errors relied upon are stated by counsel as follows:

“(1) The court erred in sustaining the validity of all the notes sued on (except the note, dated July 1,1903, for $1,000), because each thereof was given without consideration, without authority of the directors, and because the plaintiff as president of the corporation, without specific authority so to do, made the notes to himself as payee.
“(2) The validity of the notes dated January 1, 1904, for $5,000 each, are assailed as invalid because each thereof is without consideration and each thereof purports to be a contract between the plaintiff as president of the defendant corporation and himself as payee; and because there is no authority in the charter, by-laws, or elsewhere for making said notes and no attempted ratification thereof by the directors or stockholders.
“(3) The court erred in permitting a recovery upon the-two notes for $2,000 each, dated July 1, 1905, wherein Z. Dotte Waite, guardian, etc., and Z. Dotte Waite, the plaintiff’s daughter, is payee, because it conclusively appears there was no consideration for such notes; that said notes were wholly unauthorized and ultra vires.
“(4) The note for $2,000 dated July 22, 1905, is void because it is shown by undisputed proof to have been given by the plaintiff to himself on account of the sale of certain logs belonging to plaintiff at Union Pier, Mich., and sold by plaintiff to himself as president of the defendant company. No other officer or person was a party either to the contract of sale or the promissory note in question.
“(5) The note for $3,000 dated December 1, 1903, wherein plaintiff is both payee and maker, is void. It is wholly unauthorized and without consideration. The only action taken by the directors during the year 1903,. referring to dividends, was that all small stockholders be paid the amount of dividends due, 20.2 per cent.
“(6) The fiduciary relation of the plaintiff to the defendant is involved. He was its president and was paid by it for his time and services, and it was his duty to purchase timber, logs, lumber, and timbered lands for and on account of the defendant, and his embarking, against the protest of the other officers, in such enterprises for his individual profit at the expense of the company whose president he was, and in violation of his trust relation and contract of employment, renders the profits so earned and held by him as money had and received for the defendant’s benefit. The court erred in ruling that said moneys could not be recovered by the defendant in this suit.”

Counsel are agreed upon the following:

“Upon the organization of this company there was issued 2,000 shares of preferred stock to B. H. Spencer and 2,000 shares of preferred stock to John E. Barnes; and 1,340 shares of common stock issued to John E. Barnes, and 50 shares of common stock issued to Z. Dotte Ortland, daughter of John E. Barnes. There was issued to B. H. Spencer 1,370 shares of common stock and to his daughter, Mary L. Spencer, 20 shares of common stock, making a total stock issue at par of $67,800. It is thus seen that the stock in this company was owned by these two families, B. H. Spencer and John E. Barnes. Later stock was transferred by B. H. Spencer to other members of his family. In 1899 Frank T. Plimpton became a stockholder in the company, and he has continued as such ever since.
“From the organization of the company in 1896 until 1903 the amount of the stock owned by B. H. Spencer and the members of his family was exactly equal to the amount of stock owned by John E. Barnes and the members of his family. During all this time John E. Barnes was president of the company and as such exercised the powers and performed the duties laid down in the bylaws, and B. H. Spencer was vice president and superintendent and as such exercised the powers and performed the duties provided in the by-laws except as hereinbefore stated. The same board of directors served the company from its organization in 1896 to 1907. These directors were John E. Barnes, B. H. Spencer, and Mary L. Spencer. The latter was secretary and treasurer of the company. She was also head bookkeeper of the company. The business was apparently conducted with little regard for the by-laws.”

The purpose of the corporation is stated in its articles to be “ the manufacture of various kinds of furniture from wood, iron, or brass, as the demands may require.” The preferred stock drew a fixed dividend of 6 per cent. The by-laws provided that the president should have full charge of all the offices and business and should sign all drafts, notes, checks, and contracts and all papers pertaining to the business of the company wherein there was a money consideration making the company liable. They also contained the following provisions:

“The dividends shall be declared on the first day of March after the annual inventory. All profits shall be divided with the preferred stockholders up to six per cent., and the remainder with the preferred and common stockholders share and share alike and shall be paid within sixty days thereafter.”

An annual meeting was held each year. A yearly inventory was taken, and a statement made showing resources and liabilities, and also showing whether the business had been profitable or unprofitable. The action was sometimes somewhat informal as to the declaration of dividends, but there were some entries made upon the books in relation thereto. At the annual stockholders’ meeting February 2,1899, the following action was taken:

“It was moved and carried that small stockholders be paid the 5.8 per cent, which is the per cent, of gain after preferred stockholders’ 6 per cent, is deducted from whole gain.”

At the stockholders’ meeting of January 23, 1900, the following appears upon the minutes, to wit:

“Moved that all stockholders except B. H. Spencer and J. E. Barnes be paid in full 25.35 per cent, which is per cent, after 6 per cent, on preferred stock has been deducted and as all stockholders except B. H. Spencer and J. E. Barnes have always been paid in full the balance is to be divided equally between them, and to be drawn out as business will allow. Motion was carried.”

At the.annual meeting of directors for 1901 the following appears:

“ It was moved that surplus on account of B. H. Spencer and J. E. Barnes be taken up by notes with interest at 4 per cent, per annum from January 1st, 1901, interest payable quarterly. Motion carried. It was then moved that $4,000 of undivided profits be set aside for building account and balance, $3,064.24, be paid in dividends as provided by by-laws. Motion was carried.”

At the annual meeting of the stockholders February 3, 1902, the following appears:

“ Moved by J. E. Barnes and supported by B. H. Spencer that the notes held by B. H. Spencer and J. E. Barnes bearing 4 per cent, be taken up and new notes be given drawing 6 per cent, interest per annum, payable quarterly. Motion carried. It was then moved that small stockholders be paid 14.11 per cent, dividends in full and large stockholders be given notes, bearing 6 per cent, interest per annum, interest payable quarterly. Motion was carried.”

At the annual meeting of the directors January 30, 1903, the following appears:

“It was moved by J. E. Barnes that all small stockholders be paid the amount of dividends due, 20.2 per cent. Motion carried.”

At the annual meeting of the directors January 30,1904, the following appears:

Moved by J. E. Barnes and supported by B. H. Spencer that small stockholders, Irven Spencer and W. S. Waite, be paid as soon as convenient and that notes be made for J. E. Barnes and B. H. Spencer as in previous years. Motion carried.”

At the annual meeting of the directors January 16,1905, the following appears:

Moved by M. L. Spencer that stockholders be paid dividends due and that Irven Spencer and W. S. Waite be paid five (5) per cent, of the net profits of 1904 as. per agreement as soon as convenient. Supported by B. H. Spencer and carried.”

At the annual meeting of the directors January 24,1907, the following appears:

“It was then moved that stockholders be paid their share of profits on or before March 1, 1907. Motion carried.”

The record is clear that the stockholders and directors were fully advised as to what was done. From time to time the small stockholders were paid dividends in cash. The profits were often shown to be in the form of accounts, notes, and merchandise. Mr. B. H. Spencer and the plaintiff owned the great bulk of the stock, and, instead of being paid cash, as were the smaller stockholders, they were credited the amount of the dividends due them upon the books of the company, or notes were given to them for these amounts.

The record indicates pretty clearly that no one thought that there was anything irregular about the method of making dividends or of paying them. Miss Spencer, who was secretary and treasurer of the company and the daughter of B. H. Spencer, vice president and superintendent of the company, and the two constituting a majority of the directors, testified that not until August, 1907, did she have any knowledge—

“As to what legal authority the president of a manufacturing corporation like Mr. Barnes had in the manner and matter of drawing promissory notes. I was not informed in regard to the limitations upon that power until after this suit was commenced. I did not have knowledge until after this suit was commenced as, to the power or authority of an officer of the company to execute and deliver so-called dividend notes.”

On the cross-examination she testified:

“The books of the Spencer & Barnes Company show that interest was paid on these notes. It is regularly entered upon the books. The interest indorsed upon these notes was entered upon the books of the company. Witness wrote some of the notes and made indorsement for interest on some.”

Witness’ attention was called to $5,000 note, January 1, 1904, and she testifies that was given for a dividend.

“Q. Did you and all the other stockholders of the company receive the same percentage of dividend that those notes were on the stock held by Barnes; that is, were the dividends equal in per cent, of the stock — I mean all the common stock ?
“A. Yes, sir; the common stock all got the same dividend, and the preferred stock all got the same dividend. At the time Mr. Barnes got those two $5,000 notes, my father got two $5,000 notes. They did not hold the same amount of stock at this time, Mr. Spencer had some more. It might have been 60 shares more; it might not have been that much. He had a majority of the stock at that time. He got the same percentage on the stock that Barnes did. His notes were canceled and stock issued to him for them. I would not be positive these were the notes for which stock was issued. His notes were all taken up in this manner by the company, except one note of $1,200. He has received all but $1,200 of the dividends. The other stockholders have all been paid except Mr. Barnes.”

The indorsements on the $5,000 note were identified by witness as all in her handwriting, with the exception of one made by the assistant bookkeeper, Mrs. Clark. Exhibit 3, indorsements made of interest by Mrs. Clark, Mr. Belding, a clerk in the office, and some by the witness. Exhibit 3 was a dividend note. It is dated December 1, 1903.

“Q. That was given for a dividend declared about that time?
“A. No, sir.
“Q. For what was it given ?
“A. Part of a dividend note of, I think, $7,000, and $4,000 was paid. $3,000 was the renewal of the note.
“Q. The other stockholders got the same per cent, of dividends that went into this note; that is, the common stockholders got the same per cent, with each other and the preferred stockholders got the same percent, with each other ?
“A. Yes, sir; that i?, the common stockholders shared with the preferred stockholders after the 6 per cent.
“Q. As far as you were concerned, those dividends were voted in good faith, all of them, were they not ?
“Mr. Gore: That is assuming that they were voted. One of our claims is that they were not voted, and the record don’t show the authority for it. (Objection overruled. To which ruling of the court the defendant by its counsel duly excepted.)
The Court: To the witness: Did you understand the question ?
“A. Yes, sir; he asked about voting on the question. I do not think the records of the meeting would say that we did vote on the question.
“Q. The dividends you say that were declared and the notes that were issued, was that done in good faith ?
“Mr. Gore: That assumes what the witness has not said. She has not said dividends were declared.

(Last question read.)

The Witness: There is no record of the dividends being declared; but, as far as my action is concerned in writing out the notes, it was in good faith. The records that I kept of the minutes showing the earnings of the company, its assets and liabilities, are correctly shown, and correctly show the profits that appeared by the books to have been made.
“Q. So that when they did show that the profit, or so much remained, that was believed to be so in every case, was it not ?
“A. Yes, sir. At the time this $3,000 note dated December 1, 1903, was given, my father had a majority of the stock; I can’t tell how much either one of them had. The books show that. Notes were issued to my father and to Mr. Barnes at the same time; whenever one got a note the other got one. This was always so, and each for the proportion of the dividend due him according to the computation.”

Though the record does not show that as formal action was taken as would be shown by the records of a carefully conducted corporation, we think it cannot be said that dividends were not authorized and declared. ' It must be remembered that no question of the right of creditors is involved. See 2 Cook on Corporations (6th Ed.), § 534; Hartley v. Pioneer Iron Works, 181 N. Y. 73 (73 N. E. 576); Rorke v. Thomas, 56 N. Y. 559; Beading Trust Co. v. Beading Iron Works, 137 Pa. 282 (21 Atl. 169, 170); McKusick v. Seymour, Sabin & Co., 48 Minn. 172 (50 N. W. 1116); Pennsylvania Iron Works Co. v. Mackenzie, 190 Mass. 61 (76 N. E. 228).

A resolution will be construed as equivalent to a declaration of a dividend where any other construction would amount to an illegal preference among the stockholders. Redhead v. Iowa Nat. Bank, 127 Iowa, 572 (103 N. W 796).

A dividend may be legal even though not formally declared, it being paid by common consent, and hence cannot be recovered back on that ground after being actually paid. Berryman v. Insurance Co., 117 App. Div. 730, 102 N. Y. Supp. 695.

The stockholders may agree among themselves informally to distribute a certain sum as dividends without going through the form of corporate action. No formal declaration is necessary, either by the stockholders or board of directors, and a distribution of profits by a unanimous consent without corporate action is legal. M. Groh’s Sons v. Groh, 80 App. Div. (N. Y.) 85 (80 N. Y. Supp. 438).

A division of profits is a dividend, even though not called such and not considered such by the directors or stockholders. 2 Cook on Corporations (6th Ed.), § 534,, p. 1445, and cases cited. A scrip dividend is resorted to> where company has profits not in cash. Id. § 535.

It is impossible to read this record without reaching the conclusion that in what was done about the dividends everybody acted in good faith, believing they had been earned. All of the stockholders have been paid upon the same ratio in proportion to the stock carried by them, except this plaintiff. It is also clear that all the stockholders and directors knew the course of procedure and approved of it. The other two directors knew of the giving of these notes, for what they were given, and the treasurer from time to time made payments thereon, and made indorsements thereon. The authorities cited by counsel fail to show that notes made under the circumstances disclosed by this record were void.

As to the $2,000 note given in payment for certain logs sold by plaintiff to defendant, there is nothing in the record to indicate that they were not sold for a fair price. The other directors knew all about the transaction. By failing to deny the execution of this note under oath, it was competent to introduce it in evidence, and when offered in evidence it prima facie made a case, which case has not been overcome by the defense interposed. A time came when Mr. Spencer and his family got a controlling share of the stock. They had control when the logs were bought for which this note was given. Mr. Barnes was credited on the books for the amount of these logs before the note was given.

There came a time when there was a discussion between the plaintiff and the other stockholders about his engaging in outside operations. The record would indicate that the discussion resulted in an understanding with reference to what should be done, and Mr. Barnes wrote the following letter:

“Benton Harbor, Mich., 1/14/1905.
“I, J. E. Barnes, agree that I will close up my land, log and wood matters as fast as I can without loss, and from this date will not buy any of the above except for the firm of Spencer & Barnes Company while I am an officer of said company.
[Signed] “ J. E. Barnes.”

The Spencers then had a majority of the stock, but Mr. Barnes was continued as a director and the president. The record does not disclose any departure from this agreement.

It is not the law that an officer of a corporation cannot deal with the corporation if his acts are open and fair and known to the directors and stockholders. See 10 Cyc. p. 794; Ft. Payne Rolling Mill v. Hill, 174 Mass. 224 (54 N. E. 532); Africa v. Duluth News-Tribune Co., 82 Minn. 283 (84 N. W. 1019, 83 Am. St. Rep. 424); 2 Cook on Corporations (6th Ed.), § 652; U. S. Steel Corp. v. Hodge, 64 N. J. Eq. 807 (54 Atl. 1); Ten Eyck v. Railroad Co., 74 Mich. 226 (41 N. W. 905, 3 L. R. A. 378, 16 Am. St. Rep. 633); Henry v. Benevolent Ass’n, 147 Mich. 142 (110 N. W. 523).

At the annual meeting held in January, 1907, a full settlement, except the notes, was had with Mr. Barnes. In the statement of the affairs of the corporation appeared the notes held by Mr. Barnes and Mr. B. H. Spencer as bills payable, and, as already appears, Mr. Spencer was afterwards paid nearly all his notes. B. H. Spencer, M. L. Spencer, and Irven Spencer were elected as directors. The records of the meeting show the following:

“That the stockholders of the Spencer & Barnes Company extend their thanks to John E. Barnes, the retiring president, for the services rendered by him during the past ten years. That this resolution be spread upon the minutes of the company and a copy of the same be presented to Mr. Barnes. Carried unanimously.”

These notes had been included after they were made in every annual report made to the stockholders. January 26, 1907, the following resolution was adopted:

“ It was moved that whereas it was shown by the books of the company that there is an outstanding indebtedness exceeding §50,000, and whereas in view of recent changes in the management and policy of the company a larger amount of capital is necessary to properly and successfully carry on the business of this company: Now therefore be it resolved, that the president and secretary of this company be and the president and secretary hereby are authorized to sell all the unissued stock in the treasury of this company, to wit, 1,980 shares at not less than $10 per share (par value).”

Miss Spencer, the secretary, testified:

“ That indebtedness referred to in the minutes of 1907, of over $50,000, included all notes in this suit on February 5, 1907.”

Mr. Barnes was not a director at this time. If this record does not show knowledge and ratification of the acts of the plaintiff, it is difficult to see how a record could show them.

In relation to the matter of the set-off, in addition to what we have already said about what is contained in the notice attached to the plea, is the following:

“Defendant gives notice of its intention to file a bill of complaint in equity for the purpose of obtaining a full and complete accounting from the plaintiff of the profits made and received by him out of sales to this defendant and to other persons, firms, and corporations, during the time the said plaintiff was president of the defendant corporation and owed to it his time, services, and business ability. That this action should abate until such accounting between the parties is had. Wherefore, the defendant demands that the amounts due it from the plaintiff, when ascertained, be set off against the demands of the plaintiff sued upon in this action.”

No such accounting had been made when the case was tried. In 10 Cyc. p. 794, in discussing the matter of profits received by an officer of a corporation, it is said the rule applies to secret and not to open profits, and as to them—

“Such contracts will be scrutinized in equity and will be_ set aside if not made in the utmost fairness and good faith. * * * The rule is. especially applicable where, although the director received a profit out of the transaction, the contract was made in good faith, was not improvident, had been performed, and the corporation had received the benefit of its performance, under which circumstances it has been held that it could not be undone by a receiver subsequently appointed for the corporation.”

It is said, at page 795:

“ Rule subject to maxim that he who seeks equity must do equity. The rule under consideration does not extend so far as to work entire confiscation of the property of the unfaithful director, which he may have attempted to sell to his corporation at an advance over its cost to him, so as to derive a secret profit therefrom; but in the accounting which takes place under the principle, the director will be compelled to yield to the corporation the secret profit, but will be allowed a credit for the property sold to the corporation at its real value.”

The stockholders of this corporation are practically the same as they were during all the time the plaintiff was president. All of them except the plaintiff have received and retained dividends. As has already appeared, they knew of the contracts before mentioned; they had and used the material furnished. The proof as to profits consisted largely of so-called admissions which were more in the nature of an expression of hope or expectation before the transaction referred to was closed than a statement of fact as to conditions after a final disposition of the business had been reached. If any defense is open to the defendant, we think it clear it can only be upon an accounting where all the equities of the parties can be reached.

Judgment is affirmed.

McAlvay, Brooke, Blair, and Stone, JJ., concurred.


text:
    KELLEY v. EAST JORDAN CHEMICAL CO.
    1. Sales — Logs and Logging — Destruction or Subject-Matter.
    Under the provisions of an agreement of defendant to buy-wood of plaintiffs at §2.10 a cord, and pay §1.10 in the woods after it was scaled, and §1.00 additional when it was delivered at the railroad, the defendants were liable for all wood cut, scaled, and paid for by them, although fire destroyed a part of the wood before plaintiffs delivered it at the track.
    2. Contracts — Orrer and Acceptance — Voluntary Services.
    Services rendered at the expense of the vendor of wood in fighting fire to protect it, without the knowledge or direction of the vendee, are not recoverable of the latter, even though after receiving notice of the expense a written statement was rendered to the vendor showing credit for this item, but showing an erroneous balance due for money advanced to the vendor.
    Error to Antrim; Mayne, J.
    Submitted April 5, 1910.
    (Docket No. 2.)
    Decided September 27, 1910.
    Assumpsit by Prank L. Kelley and another against the East Jordan Chemical Company for goods sold and delivered. A judgment for the amount of a set-off claimed by defendant on a verdict directed by the court is reviewed by plaintiffs on writ of error.
    Reversed.

      Nelson G. Weter, for appellants.

      Nicholas & Nicholas, for appellee.
   Moore, J.

This litigation grows out of a situation testified to by Mr. Kelley, one of the plaintiffs, as follows:

“ The other plaintiff in the case is Mr. Shepard. We had some business relations with defendant company in 1908. We heard that they were buying wood along the line of the D. & C. R. R. I wrote to them, and in about two weeks from the time I wrote their man came to rne. His name was Maddock. He came on and explained what he was there for. I told him we had 1,000 cords or better to be cut yet, a mile and half east of town, about-60 rods from track, and good banking ground there. I asked him price. He said $2.10. After he had got the location of timber, nearness to track, and there was good banking ground, I asked him specifications. He said they wanted their wood 50 inches long, as near as they could get it, and round wood, nothing less than 2 inches and nothing larger than 7 inches, larger should be split, piled in the woods 4 feet, 4 inches high, and that he would come and scale it as often as we had 100 cords, and would pay us a dollar ten a cord in the woods. When it was piled on the track, it was to be piled eight feet, eight inches high. He said: ‘We will scale it, and give you a dollar a cord then.’ ‘Wéll,’ I said, ‘I think we will cut it on those terms. I will talk it over with Mr. Shepard, and, if we conclude to cut it, we will notify you, and we will cut it, and you can come and scale it.’ So we did notify them, and they came all right and scaled it in the woods. We got our pay by a memorandum wood check, printed across bottom, ‘Payable at East Jordan Bank.’ I think the defendant’s name was on the order. When the wood was ready I notified Mr. Maddock, the scaler. I did not notify the East Jordan Chemical Company direct at that time. The East Jordan Chemical Company was paying me. * * * The last payment that they made to us was on the 7th of September, for some wood that was at the track after the fires. We hauled some wood out after that. It was scaled, but I don’t know when. I got notice of the scale made in October. It was 147f cords. Mr. Shepard got the notice, and made a kick on it, and they came back there and found Mr. Adams, and he told them where there was more wood. They gave us the proper scale, which was 160f cords. They have not paid us for that. The last scale they paid us for, September 7th, 79-J- cords, was scaled after the fire. They paid us for that. * * ' *
Witness: The $36 in the bill of particulars against the defendant company was for fighting fire in the woods to protect the wood that had been scaled in the woods. I sent them a statement charging them with the 160f cords at $1 per cord, and in that statement was $36 for fighting fire, $18 of which was due Mr. Shepard for himself, men, and teams for fighting fire, making $36 in all. * * *
We have not been paid for that 160f cords. We have not been paid the $36 for fighting fire.”

On the cross-examination he testified among ‘other things:

“The contract in the first instance was made at my office. No one present but Mr. Maddock and myself. The agreement was that they would scale in the woods and pay us $1.10 per cord. We did not agree to deliver the wood at railroad for $2.10 a cord.
“Q. What prices did he tell you he would pay for that wood right there in your office ?
“A. When he first came, I .asked the price of wood, and he said $2.10 a cord, that was supposed to be delivered at the railroad track. No, sir; we did not agree to deliver the wood. We made no subsequent contract with Mr. Maddock in regard to this wood. The one we made at my office is the only one. At my office we did not agree to cut that wood and deliver it at the railroad or at the banking ground, as you call it, for $2.10 a cord. Two dollars and ten cents was the price he said they were paying for wood.
“ Q. Did you accept that price ?
“A. No; not on that terms, that we should deliver it at the track for $2.10. No, sir; we did not come to a final agreement that day anyway. I mean this: That we agreed that, as soon as I could see Mr. Shepard, we would notify him, and we did notify him that there was — I suppose, if we get right down to it, the contract was made then. We sent for him to come and scale it, and that would be the final deal in it. * * * When I was discussing the matter with Mr. Maddock, it was all standing timber yet. I am not acquainted with the members of the defendant corporation that I know of, and I made no agreement with them in regard to this wood. Mr. Maddock is the only man I had any deal with. The stumpage belonged to Mr. Shepard and me. We were partners. At the time I had talk with Mr. Maddock we were partners. I was acting for the copartnership. * * S:
“Q. What was the agreement as to the delivery of the wood. Didn’t you agree to deliver that wood at the rail.road for $2.10 a cord ?
“A. No, sir.
ilQ. You did not agree to.deliver that wood ?
'“A. No, sir; we didn’t agree to deliver it.
Q. Did you make any subsequent contract with Mr. Maddock in regard to this wood ?
“A. No, sir.
“Q. That is the only contract you ever made, the one you made at your office ?
“A. That is the only one.
“Q. And at your office you didn’t agree to cut that wood and deliver it at the railroad or banking ground, as you call it, for $2.10 a cord ?
“A. No, sir.
“Q. You say that he agreed to give you $2.10 for the wood ?
“A. That is the price he said they were paying for the wood.
“Q. Did you accept that price ?
(‘A. No; not on that terms, that we should deliver it at the track for $2.10. No, sir; we didn’t come to a final agreement that day anyway. * * *
“Q. Then you never made any contract at your office for this wood, is that right ?
“A. I suppose, if you get right down to it, the contract was made then. We sent for him to come and scale it, and that would be the final deal in it. * * * I never offered to sell to defendant any wood delivered at the tracks at $1. I did not offer to sell, nor did I sell, any wood to the East Jordan Chemical Company at $2.10 a cord delivered at track. I did not sell to them under that proposition; no, sir: * * * No money was advanced to us that I know anything about. The $1.10 a cord was received as part of purchase price for wood, and was paid from time to time, as we asked for the scale of wood in the woods. We were to deliver it on the track. The wood did not have to be delivered at the track before we got any pay for it; no, sir. We got $1.10 in the woods corded up. Had to be scaled first; yes.
Q. And before you could be paid, or demand your pay for the wood, it had to be delivered at the track, and had to be scaled, did it not ?
“A. The final payment; yes, sir. No, sir; we did not have to deliver at track and have it scaled in order to determine what amount of money was coming to us. It was partly determined in the woods. The wood was on 120 acres of land. I had a number of different wood choppers at work. Mr. Maddock was only notified by us the first time to come out and scale. After that, he came out every two weeks, without notice, and would scale all that was cut and piled up at that time in woods, and stamped it. It might have been letter ‘C,’ but I thought it was ‘O.’
“Q. Then, when the wood was delivered at the track, didn’t he mark it with another stamp ?
“A. Yes, sir.
“Q. And the wood that was stamped with the letter ‘ C ’ was a guide that assisted you in determining what wood was cut and what was not cut ?
“A. Yes, sir. The wood after it was stamped and paid for was theirs. We had an interest in it, of course, but we could not sell it to any one else. At the time the wood was destroyed in the woods it had all been scaled.
“Q. And the defendant had advanced this $1.10 on each cord that had been scaled ?
“A. They had paid us $1.10 on it; yes, sir. They paid us on that scale as soon as they could figure it up at the office. Yes, sir; it was a cash deal up till the final wind up.
liQ. It had been a cash deal with you up to the time when this wood was destroyed by fire. Is that right ?
“A. Yes; they made one scale after the fire that they paid for. No; they did not pay for that scale before they knew of fire. I think 1,085£ cords were scaled in woods, and for that we received $1.10 a cord. They paid us for 535f cords, at $1 a cord.”

No one else testified as to the contract. The attorney for the defendant'said in part in his opening statement to the jury:

“ I think, gentlemen of the jury, that it will be achnitted by all hands — that is, the parties to this case, and those interested — that this fire that occurred and destroyed the wood in question was not due to the negligence or carelessness of either of the parties. I do not think there is any claim of that kind made' by either of the parties. The plaintiffs do not claim it, and we do not either.”

There was some testimony as to fighting the fire, and the cost thereof, and of the circumstances of the #79 payment made after the fire. At the conclusion of the testimony, the judge suggested there was no question for the jury, to which suggestion the lawyers acquiesced except as to the item for fighting the fire. Later the judge directed a verdict in favor of defendant for $233.47. In Exhibit A there was a credit for the item in relation to fighting fire, but there was a claim of .balance due defendant of $233.47. The case is brought here by writ of error.

It was and is the claim of defendant that the contract was an entirety for the sale and purchase of all the wood to be delivered at the railroad tracks at $2.10 a cord, and that defendant should be charged only with the amount of wood actually delivered, and should be credited with all moneys paid upon the scale in the woods so that all the loss from the destruction of the wood should fall upon the plaintiffs. This view was accepted by the trial judge. It is the claim of the plaintiffs that the agreement should be carried out as made; that when the wood was cut and piled and scaled and marked with the letter c C ’ in the woods, and the $1.10 a cord was paid, that this money became the money of the plaintiffs because it was so agreed. It is further claimed that, when the wood was later drawn to the railroad and scaled, plaintiffs were then entitled to the further sum of $1 a cord because it was so agreed. It is further claimed that, as none of the parties anticipated forest fires and made no agreements in relation thereto, the parties should be left where the fire left them, the plaintiffs losing their interest in the wood which was destroyed by the fire, and the defendant losing the paymenta which had been made according to agreement when the scale in the woods was made. The agreement sworn to by Mr. Kelley is not ambiguous. It is not denied by any witness upon the stand. No testimony was offered by defendant as to that phase of the case. The agreement must control the case. Defendant should have paid for the 160 cords delivered at the railroad track.

The item of $36 for fighting the fire demands some attention. This expense was not incurred at the request of the defendant. It is said by plaintiffs that, when notified of the expense, defendant credited plaintiffs with the amount thereof, and thereby became liable to pay. This contention loses its force when it is stated that this credit appeared in a statement charging plaintiffs with all payments made and crediting them, in addition to the $36, with only the wood delivered upon the railroad, which statement claimed a balance due defendant of $233.4?. We think this does not establish a. liability for the $36 item.

Judgment is reversed, and a new trial ordered.

McAlvay, Brooke, Blair, and Stone, JJ., concurred.


author: Hooker, J.

text:
      In re FOX’S ESTATE.
    Costs — States—Statutes.
    An estate in process of probate is entitled to costs against the people on an appeal by the auditor general from an order of the probate court refusing to require the payment of an inheritance tax in an excessive amount asked by the State. 3 Comp. Laws, § 11277.

      Case made from Kent; Sessions, J., presiding.
    Submitted April 13, 1908.
    (Docket No. 59.)
    Decided September 27, 1910.
    Motion for allowance of costs in favor of the estate and against the people in case reported in 159 Mich. 420 (124 N. W. 60).
    Granted.

      Kleinhans & Knappen, for the motion.

      Franz C. Kuhn, Attorney General, and Thomas Ambrose Lawler, Assistant Attorney General, contra.

   Hooker, J.

After the death of E. Crofton Fox, late of Grand Rapids, a question arose over the payment of the transfer tax, commonly called “inheritance tax,” due to the State. The record does not show what measures were taken, if any, to set the probate court in motion to determine the amount of transfer tax chargeable; but we find that an order was made, and that it was not satisfactory to the auditor general, who promptly appealed to the circuit court, where the probate order was reversed. The cause was brought to this court on case made by the estate, and it was reversed and the probate order sustained, by an opinion reported in 159 Mich. 420 (124 N. W. 60), which was silent upon the subject of costs. No formal order has been made in the case, and counsel ask the settlement of a proposed order. We understand that the only dispute is over the question of costs.

The decision must depend on the applicability of section 11277, 3 Comp. Laws:

“ Sec. 22. In all civil suits and proceedings by or in the name of the people of this State, instituted by any officer duly authorized for that purpose, and not brought on the relation, or for the use of, any citizen, or upon any penal statute, the people shall be liable for costs in the same cases, and to the same extent, as if such suit or proceeding were instituted by an individual.”

That there has been “a civil suit or proceeding by or in the name of the State by an officer duly authorized for that purpose ” seems obvious. Our understanding is that the probate court was asked by the State authorities to make an order for the payment of a sum in excess of the amount chargeable under the law. If so, that was to all intents and purposes a civil proceeding instituted by such officer. But if we should hold that it was not, and that the probate judge had merely performed a routine duty in the settlement of the estate of his own motion or on request of the executor, the appeal from his order by the auditor general was the institution of a suit, or at least a civil proceeding, within the meaning of said section, and not within its exceptions, which has resulted in judgment in both the circuit and this court. The estate is entitled to costs to be taxed, and the order proposed containing this provision is approved.

Moore, McAlvay, Brooke, and Blair, JJ., concurred.


text:
    LAPIER v. BEAUBIEN ICE & COAL CO.
    1. Master and Servant — Negligence—Assumed Risk.
    A fireman who willingly enters upon a journey in a tug at so late an hour that he would arrive in the dark at a place difficult of navigation, and who was familiar with the situation and difficulties likely to be encountered, assumes the risk of any alleged negligence for starting at an unseasonable time.
    2. Same — Duty Devolving on Servant.
    Alleged negligence in the use of a towline full of kinks and turns, one of which caught and injured plaintiff, was not actionable, where plaintiff knew of the condition of the towline and might have remedied the defects.

      3. Same — Insuppicuent Lights.
    And plaintiff could not recover for failure to provide sufficient lights, where insufficient illumination resulted from the smoky condition of a light of which he and another servant were in charge.
    4. Same — New Trial.
    The denial of a new trial on grounds which were disputed by affidavits of the opposing party was not an abuse of discretion.
    5. Same — Navigation—Captain op Tug.
    With a crew of three persons besides the captain, and with two barges of ice in tow and the outfit aground in the dark, it cannot be said that the post of duty for the captain was in the pilot house, or the post of duty of the engineer in the engine house, all of the time.
    6. Same — Medical Attendance — Care.
    No duty is imposed on a tug of under 30 tons burden, making trips of less than 40 miles on inland lakes, to have medical attendance and means of cure aboard for siok or injured seamen ; and reasonable diligence is exercised where the captain puts into port without unnecessary delay and secures sufficient treatment and attendance.
    Error to Wayne; Mandell, J.
    Submitted April 8, 1910.
    (Docket No. 46.)
    Decided September 27, 1910.
    Case by Benjamin A. Lapier against the Beaubien Ice & Coal Company and others for personal injuries. A judgment for defendants on a verdict directed by the court is reviewed by plaintiff on writ of error.
    Affirmed.

      F. O. Moriarty and Lehman, Biggs & Lehman, for appellant.

      George F. & Peter J. Monaghan, for appellees.
   Moore, J.

This is an action in a plea of trespass on the case. The declaration contains two counts. The first count recites several concurring acts of negligence, which, it is claimed, caused the loss of the left leg of plaintiff. The second count charges unlawful neglect by defendants after 'the injury was received and before the limb was amputated. There was but one witness sworn. This witness was the plaintiff. At the conclusion of the testimony for the plaintiff, the judge directed a verdict for defendant. Later a motion for a new trial was made, based not only upon the record as it then existed, but upon affidavits. A counter showing was made by defendant. The motion was overruled. The case is brought here by writ of error.

It is claimed by plaintiff that defendant was negligent in at least three respects:

(a) That they were absolutely reckless in attempting to navigate Baltimore Bay in the darkness of the night without a compass or other instrumentalities for such a journey.

(b) That they were negligent in the use of a towline full of kinks and turns.

(c) That they were negligent in making the trip at the time and under the conditions without proper supplies and necessary instrumentalities.

The plaintiff was about 48 years of age. He had been a fireman for more than 20 years, nearly all of the time on tugboats. The defendant had a tugboat of 27 tons burden, called the Frank J. Haines.” ■ It was engaged in towing barges loaded with ice from Fair Haven, Mich., to Detroit, Mich., taking empty barges back to Fair' Haven on the return trip. Fair Haven is on the west shore of Lake St. Clair, and about 37 miles nearly north of Detroit. In August the plaintiff became fireman on this tug, and continued in that capacity until his foot was caught in a towline, and he was drawn around the tow post on the 28th of October, 1904, and his leg badly crushed, so that it had to be amputated. With this general statement we may proceed with the groupings of claimed negligence.

(a) It is asserted that the captain of the tug was negligent in leaving Detroit at half past 8 o’clock in the evening, which would bring him into the vicinity of Fair Haven when it was dark, instead of at daylight, which, it is claimed, would have resulted if his departure had been delayed until half past 11 o’clock. As to the suggestion that the boat was without a compass, we do not find anything in the record upon that subject. The record discloses that the tug had made the trip daily to Fair-Haven and back, though not at the same hours as upon this occasion, during all the time plaintiff was in defendant’s employ. Plaintiff knew the situation. He knew how long it took to make the trip and the difficulties likely to be encountered. There is nothing to indicate that he did not enter upon this journey willingly. The situation, at the time of the accident will be dwelt upon more in detail later.

(5) Under this head it is said it was negligent to use a towline full of kinks and turns. It is stated the captain knew this line was full of kinks and turns before it was put upon the tug. Plaintiff testified to this effect, and that the captain directed the line to be put upon the tug-in that condition. This was a month before the accident happened. If the captain gave this direction, it does not appear why he gave it; nor does it appear that he did not expect the kinks would be taken out later when there was time to look after them. The plaintiff testified that Mr. Coleman was hired, and generally did the same sort of work he did.

“The captain when in the discharge of his duty is in the pilot house on the front end of the tug. The engineer is about the middle of the tug in the engineer’s room. The tug was 14 feet wide at its widest part. My place was just forward of the engine room. Mr. Coleman generally did the same kind of work I was doing. Mr. Coleman helped me fire; once in a while he attended to the lines. We attended to the lights, etc., and keeping them in their places, and if Mr. Coleman had to make a line fast or anything it was his duty to do so; of course, both of us had to attend to those lines. I had been given directions by the captain while Coleman and I were there on the subject of the lines, and about helping and showing him, and the captain said to me: ‘ This man here ain’t been on the boat before in his life. Of course he is a little green at the work, and you show him all you can.’ And I said, ‘Yes, I will show him all I can,’ and he said the boy had never been on the boat before and didn’t know much about it, and he said further than that: 4 Show him how to fire. He don’t know anything about firing.’ And he says, 4 Show him, maybe he will get handy around the boat.’ So I showed him all I could while I was there.”

The plaintiff’s account of the accident is as follows:

“On the day in question we left Detroit at 8:30. It was very dark that night when we got up in that same vicinity. It was a very dark night. In hauling ice back and forth we took up an empty barge and went down with one loaded. The barges are a good deal larger than the. tug. I should say a barge would be two or three times as large as a tug. On the night in question we were taking up two empty barges of about the same size. On that night we run aground twice in going up there, once opposite to Mt. Clemens, and we got off there and went on from there until we touched the mud bank. At that time we was somewhere around New Baltimore, as near as I can tell. We got stuck in the mud in the vicinity of New Baltimore. We then took the hind barge and brought .her around in front of the tug and put her crossways in front of the tug, and after we got the barge in front of the tug they worked the engine slowly up against the higher barge, up against the mud bank, so while I had the ice barge in front the engineer says, 4 You better go and fix the fire.’ So I went down and fixed the fire and went up again and went in the back end of the tug, and after I went out of the fire hole I looked back and saw that the line was slipping away from Coleman, and I ran and grabbed the line so as to get another turn on the post to hold the line, and in doing that there was a turn in the line, and when I threw my foot back I threw it in the hole, and when the line drew up there around the post it drew up against my ankle tight, and I was about feet from the post, and I hollered and screamed and hollered and Coleman also. Before I got to the post I tried to get the axe to chop the towline. The axe was right back of the cabin, about three feet and a half above the deck, and I pulled at the axe to get the blade out of there, and I couldn’t do it, and I kept hollering, and I said to Coleman, * Go to the front end of the tug and see if you can get the captain there,’ and he came back and said the captain ain’t there, so I looked through a window in the back part of the engine room, and I could not see any engineer there, and I hollered and hollered, and finally I went around the tow post twice, and after I was all crushed to pieces the captain and engineer came and said, ‘ What is the matter?’ I said: ' I am all crushed to pieces; back the tug up so I can get the line offand they backed the tug right away and stood me up on my foot and took the line off the ankle. I was drawn around the tow post twice.”

He testified that the engineer and captain were not in their places, and that if they had been, they could have saved him from haying his leg crushed. He also testified that the light on the stern did not amount to anything; that it was smoked up. He further testified that after they got him out of the rope they put him upon the captain’s bed; that they gave him no medicine, and did not bandage his wound; that he begged the captain to abandon the barges and to take him to Detroit; that during the five hours he was on the tug he lost nearly all his blood and suffered great pain. In other portions of his testimony it appeared that during the entire two months of his employment he and Mr. Coleman had charge of the lines, of placing them on deck aftér they had been in use; that he knew how to take out the kinks; that it could be done in 20 or 25 minutes; that there were times when the tug was idle at the dock when plaintiff had an hour or two at a time with nothing to do; that Mr. Coleman and himself had charge of the lanterns and lights; that the tug had the requisite number of each; that it was the duty of Mr. Coleman and himself to keep them cleaned and lighted. It is also apparent from his testimony that he regarded the pilot house as the post of duty for the captain and the engine house for the engineer, when he testified that if they had been at their posts of duty he could have been saved. His testimony, however, shows that the tug had two barges in charge, one in the front and one in the rear; that when the accident occurred they were aground for the second time; that it was very dark; that the navigation was difficult where they were; that they were lost and did not know where they were. His testimony shows that he had known the captain many years; that he had known the engineer for two years; that they and Mr. Coleman were all friendly with him. He testified that he had been in and about this little tug from soon after the time he went to work upon her, and knew her equipment. He also testified that when it came daylight, so they could see where they were, they started for Fair Haven, where Mr. Coleman was left behind, presumably to remain in charge of the barges and tug, while the captain and the engineer took the plaintiff, and, after a delay of 5 or 10 minutes, boarded the first suburban car and started toward Detroit. At Mt. Clemens they took him from the car to a hospital and put him in charge of the doctors. We discover no claim in the record of any claim of negligence after this.

Upon the motion for a new trial, the captain, Mr. Coleman, and Mr. Thomas made affidavits that the leg of plaintiff was bandaged, that they gave him stimulants and did all for him that they knew how to do. As to the application for a new trial, in view of the countershowing, it is very clear the court did not abuse its discretion in overruling the motion.

In relation to the directed verdict upon the record as made, it is clear that the plaintiff knew the condition of the line and the condition of the lights, and he and Mr. Coleman were responsible for their condition. It is also clear that, with a crew of but three persons besides the captain, and with two barges in tow, with the outfit aground, in a dark night, with the parties lost, that it should not be said that the post of duty for the captain was in the pilot house all the time, and for the engineer was in the engine house all the time. The testimony of plaintiff indicates that all of the officers had been on one of the barges to learn the situation. Neither should it be said that under these circumstances it was negligence not to start back to Detroit. The injury is an unfortunate one, but the plaintiff knew as much about the situation as anybody, and he assumed the risk of the conditions. Kean v. Rolling Mills, 66 Mich. 277 (33 N. W. 395, 11 Am. St. Rep. 492); Hayball v. Railway Co., 114 Mich. 135 (72 N. W. 145); Rohrabacher v. Woodard, 124 Mich. 125 (82 N. W. 797); Fischer v. Goldie, 132 Mich. 574 (94 N. W. 5); Goga v. Foundry Co., 142 Mich. 340 (105 N. W. 859).

Counsel say (we quote from the brief) :

In support of our contention under the second count, we desire to quote from 20 Am. & Eng. Enc. Law (2d Ed.), p. 201:
‘ ‘ ‘ Under the maritime law, when a seaman becomes ill or receives an injury, in the performance of his duty, it is incumbent upon the master to furnish means of cure, and to use all reasonable exertions for that purpose. He must provide medicines and medical treatment, and must see to it that the disabled seaman is properly lodged, properly nursed, and provided with proper food. This obligation lasts until the end of the voyage, and even longer, if nursing and medical treatment are still necessary to effect a cure. If such medical or surgical treatment as is required cannot be given on board, and the vessel is within a reasonable distance from a port where it can be given, it is ordinarily the duty of the master to put into that port. For neglect to perform his duty in any of the above respects the master is liable for such damages as result therefrom; but when there are proper medicines and medical directions on board a vessel, to meet the needs of a particular case, and some person who is competent to carry out the directions, the master is probably under no obligation to send a seaman ashore for better medical treatment, or to have a physician from on shore sent for.’ ”

A case bearing somewhat upon this question is Johnson v. Holmes, 173 Mass. 514 (53 N. E. 1000). We hardly know what counsel have in mind by this quotation. Our attention has not been called to any statute or any authority requiring a tug of under 30 tons burden, making short trips of less than 40 miles on the inland lakes, to have means of cure aboard for the seamen who become ill or injured. It cannot be said that under the circumstances disclosed by this record there was any such delay after daylight came, in putting into port, as to constitute negligence. As before stated, there is no claim of negligence after plaintiff arrived at the hospital.

Judgment is affirmed.

McAlvay, Brooke, Blair, and Stone, JJ., concurred.