author: Montgomery, J. Hooker, J.

text:
    TOWNSHIP OF WASHINGTON v. FIRST NATIONAL BANK OF HUNTINGTON.
    Assignments — Nonnegotiable Instruments — Priority Between Assignees — Estoppel.
    A bridge company, having entered into a contract with a township for the erection of a bridge, executed an assignment thereof to a bank, attaching a copy of the contract, retaining the original, and agreeing to collect the money becoming due thereon and remit it to the bank. On receipt of the township order for the balance due, the bridge company sold it to another bank for value, the purchaser having no knowledge of the assignment. Held, that the prior assignee, by permitting the bridge company to retain the indicia of ownership, estopped itself to assert its superior right to the nonnegotiable paper, and that the equities of the second assignee should prevail. Hooker and Ostrander, JJ., dissenting.
    Appeal from Gratiot; Stone, J.
    Submitted November 14, 1906.
    (Docket No. 157.)
    Decided March 26, 1907.
    Bill of interpleader by the township of Washington against the Wabash Bridge & Iron Works, the First National Bank of Wabash, the First National Bank of Huntington, and E. W. Bowen & Company to determine the title to a township order. From a decree for defendant First National Bank of Wabash, defendants First National Bank of Huntington and E. W. Bowen & Company appeal.
    Affirmed.
    On the 20th day of August, 1902, the Wabash Bridge & Iron Works, of Wabash, Ind., entered into a contract with the complainant for the work and material to erect the superstructure of a bridge across Maple river in Gratiot county for the contract price of $995, to be completed November 20, 1902, and to be paid for in two township orders — one for $497.50, due March 1, 1903, and one for $497.50, due March 1, 1904, with interest at 6 per cent.
    On the 27th day of August, 1902, the bridge company made to the Huntington National Bank, of Huntington, Ind., a writing setting forth in substance that for the purpose of securing payment of a certain obligation held by said bank it assigned to said bank said contract, describing it by its number and amount, and attached a copy of said contract to said writing. It was further agreed therein that the bridge company should collect the money to come due on said contract, and remit the same to said bank in full satisfaction of the debt secured thereby, with interest.
    On the 14th day of October, 1902, the bridge company entered into another contract with the complainant for the erection of the substructure of said bridge for the price of $760, to be paid one-half in cash March 1, 1903, and the balance March 1,1904, with interest at 6 per cent., and the work to be completed on or before the 20th day of December, 1902.
    On the 20th day of October, 1902, the bridge company executed a writing to E. W. Bowen & Co., bankers, of Delphi, Ind., in all respects similar to the one it had previously made to the Huntington bank, except that it described by number and amount the contract last above mentioned, and set forth that the same was to secure a loan of $5,500. A copy of this contract was attached, and it contained the same agreement that the bridge company was to collect and remit to the satisfaction of the loan. At the time of these assignments the original contracts were not delivered in either case, and it was the understanding in both cases that the bridge company should go on and complete the contracts and make settlements with complainant therefor.
    The bridge company went on and completed the work under both contracts in accordance with their terms, and on March 7, 1903, the complainant accepted the work, and made settlement with the bridge company and paid it in full for said contract by making and delivering to said company’s demand township orders for $877.25, and one township order -for $877.75, payable March 1, 1904, with interest at 6 per cent. The bridge company received the money upon the demand orders, and neither the orders nor the money received therefrom are in controversy in this case, and the evidence does not disclose what the bridge company did with the money.
    On March 30, 1903, the bridge company sold the time order of $877.75 to the First National Bank of Wabash, Ind., and indorsed and delivered said order to said bank. The bank purchased said order in good faith in the regular course of its business, without notice of either of the assignments aforesaid, and paid the bridge company $869 net therefor. At the time the complainant settled with the bridge company and gave the order in question, it had received no notice from either the Huntington bank or the Delphi bank that they, or either of them, claimed any interest in the contracts in question.
    On September 29, 1903, the bridge company was adjudged insolvent, and at that time was owing to the Huntington bank, upon the debt mentioned in the written assignment, the sum of $3,700, and to E. W. Bowen & Oo. $5,500 on the debt mentioned in the assignment from the bridge company to this firm.
    Each of the claimants — the Huntington bank, the Wabash bank, and E. W. Bowen & Co. — made claims upon the complainant for the amount of the order in question. The complainant filed the bill of interpleader, and deposited with the court the amount of the order. The defendants have interpleaded, and the case was heard upon its merits upon such interpleadings. The controversy is between the Wabash bank on the one side, and the Huntington bank and the Delphi bank on the other. The Wabash bank claims the money as an innocent bona fide purchaser of the order for value without notice, and the Huntington and Delphi banks claim under their respective assignments of the contract. The circuit judge held that the First National Bank of Wabash was entitled to priority, and from this decree the Huntington bank and E. W. Bowen & Co. appeal.

      J. Leé Potts, for appellant First National Bank of Huntington.
    " John M. Everden, for appellant E. W. Bowen & Co.

      O. G. Tuttle, for appellee First National Bank of Wabash.

      As to priority rights of different assignees of fund in hands of third person, see note to Re Phillips (Pa.), 66 L. R. A. 760.

   Montgomery, J.

{after stating the facts). The contention of the appellants is that the order in question is not negotiable under the law merchant, and that one who purchases it takes it subject to all equities in favor of third persons who have a prior lien on the order or fund.

It is unquestionably the general rule that the seller or pledgor of property other than negotiable securities can convey no greater rights than he himself has. 1 Mechem on Sales, § 157; Judge v. Vogel, 38 Mich. 568, 569; Walker v. Thompson, 108 Mich. 686; Carmody v. Crane, 110 Mich. 508; Miner v. Vedder, 66 Mich. 101.

It has been said that this rule does not protect latent equities, and that the rights of a prior assignee are latent equities; but the better ruléis that when the real owner of a chose in action is not in any way in fault in inducing a purchase by another the equity prior in time will prevail. 2 Pomeroy on Equity. Jurisprudence (3d Ed.), § 708.

The delivery of a past-due negotiable note indorsed in blank, but delivered for a special purpose, does not amount to such an inducement to the second purchaser as estops the true owner from claiming title as against one to whom the paper has been fraudulently transferred. Osborn v. McClelland, 43 Ohio St. 284; Davis v. Bechstein, 69 N. Y. 440. It is otherwise if the assignment or indorsement is made with the intention that it shall be negotiated. Bloomer v. Henderson, 8 Mich. 395.

It has also been held in many cases that where the owner of a chattel or a nonnegotiable chose in action has clothed another with the indicia of ownership and possession a subsequent bona fide purchaser from one having the apparent title takes the chattel or chose in action free of the equities or rights of the true owner, the principle governing being in all respects analogous to that which validates the acts of an agent to the extent; of his apparent authority. See Mechem on Agency, § 787 et seq.; McNeil v. National Bank, 46 N. Y. 325; Moore v. Moore, 112 Ind. 149. In 2 Pomeroy on Equity Jurisprudence (3d Ed.), § 698, it is stated:

‘ ‘ It may be said, in general, that, in order to protect himself against subsequent transfer by the assignor, where a notice is not given to the debtor or the holder of the legal interest, the assignee should obtain a delivery and possession of the written instrument, which, in ordinary language, constitutes the thing in action, which embodies and is the highest evidence of the existing demand; or, when such delivery and possession are impossible from the very nature of the subject-matter, that he should take all the steps permitted by the law which are equivalent to actual possession.”

See, also, Graham Paper Co. v. Pembroke, 124 Cal. 117 (44 L. R. A. 632).

Applying these principles to the present case, it seems clear that the equities of the Wabash bank should prevail. The bridge company was permitted to retain the original contract, and this without notice of any rights of the prior assignees. It was known that the only method of payment was by. orders drawn on the township treasurer, and that these must come to the hands of the bridge company as the apparent owner. The bridge company was thus invested with every indicia of ownership, and within the rule stated one who was thus induced to purchase these orders and who parts with value upon the strength of this apparent ownership may well assert that the prior assignees have estopped themselves. The case of Miner v. Vedder, 66 Mich. 101, is relied upon by the appellants. In that case two claims were asserted by the respondent, first, that there was a mistake in the amount of the order; and, second, that the order was subject to a lien in favor of ■ John K. Boies. The relator claimed to be a bona fide holder. His relation to the order was as between him and Boies the same as that of the Wabash bank in this case. The language used in the decision as it relates to both claims ia broad, but an examination of the record discloses that the question of relator’s bona fides was submitted to the jury, and that the finding wa.s adverse to the relator, thus eliminating the question of priority of equities. If the case be limited to the point in issue no rule opposed to the views above expressed was laid down, and it appears that the charge of Judge Howell was fully in accord with this opinion.

The decree is affirmed, with costs against the Huntington bank and E. W. Bowen & Co.

MoAlvay, C. J., and Carpenter, Grant, Blair, and Moore, JJ., concurred with Montgomery, J.

Hooker, J.

(dissenting). The question in this case is whether an assignee of a chose in action, consisting of a sum to be earned by the assignor under a partially performed contract between itself and a township for the building of a bridge, is estopped from asserting its title against a subsequent assignee of the township warrants issued upon its treasurer to and in the name of the assign- or on full performance of the contract, under the rule laid down in McNeil v. National Bank, 46 N. Y. 325. The assignment was in writing, a copy of the contract between the township and the assignor was attached, and it contained a promise by the assignor to collect and remit the moneys to become due thereon, without expense to the bank, to the full satisfaction of a note held by the bank, given by the assignor.

It may be assumed that any chattel may become the object of an estoppel, and the true and rightful owner may be precluded by his own misconduct, and perhaps in some cases by negligence, from asserting bis title. In this case the acts which are said to raise an estoppel áre the failure to require possession of the original contract and the consent that the assignor should receive and remit payment from the township. It is argued that this necessarily contemplated the issue of orders to and in the name of the bridge company, and therefore was permitting it to obtain, or, in other words, investing it with, the indicia of title and apparent right to dispose of the orders. So far as the mere fact of not receiving the original contract is concerned, it may be eliminated, as it does not appear that the Wabash bank saw it, or knew or even inquired whether the bridge company had assigned it or then had possession of it, and therefore it was not misled by the apparent possession of the contract into the belief that the assignment gave the indicia of title. We do not, however, mean to intimate that the failure to take the contract might of itself create an estoppel.

The leading case supporting the claim of counsel for the Wabash bank is McNeil v. National Bank, supra. In that case, where an owner of corporate stock assigned the certificates in blank, which was the usual method of transferring stock, and delivered them to a broker who was one of a class usually engaged in the sale of stock for others, it was held that the assignor was estopped from denying the validity of a transfer of the stock by the broker to a bona fide holder, because he had by a writing over his signature not only conferred the apparent title upon the broker but had also given him a power of attorney to transfer the same according to the usual method.

It appears to be conceded that the delivery of past-due negotiable paper (which is therefore nonnegotiable) indorsed in blank, if for a special purpose, does not estop the indorser from disputing the title of a subsequent purchaser in good faith from the indorsee, though that is the usual way of transferring such paper, where not payable to bearer, and we should hesitate to say that the owner of a note payable to bearer is estopped by delivering after maturity for a special purpose, even if it be to an agent or attorney for collection, from denying the title of one to whom it has been wrongfully or fraudulently sold and transferred. See Davis v. Beckstein, 69 N. Y. 440.

The case of Moore v. Moore, 112 Ind. 149, is distinguishable in this, viz.: That, though the indorsement and delivery was procured by fraud and without consideration, it was not delivered for a special purpose, but under a contract which contemplated the actual transfer of the title. See Osborn v. McClelland, 43 Ohio St. 284; Wood v. McKean, 64 Iowa, 16; Woodsum v. Cole, 69 Cal. 142.

These cases seem to hold that it requires something more than an unqualified indorsement or assignment of nonnegotiable paper to create a presumption of absolute title, in view of the many cases of and reasons for transfers absolute upon their face; in other words, these are not enough of themselves to invest one with “that apparent indicia of title ” which raises an estoppel. In McNeil v. National Bank, supra, the court said :

“ Simply intrusting the possession of a chattel to another as depositary, pledgee, or other bailee,' or even under a conditional executory contract of sale, is clearly insufficient to preclude the real owner from reclaiming his property, in case of an unauthorized disposition of it by the person so intrusted. (Ballard v. Burgett, 40 N. Y. 323.)
“ ‘The mere possession of chattels, by whatever means acquired, if there be no other evidence of property or authority to sell * * * will not enable the possessor to give a good title.’ Covill v. Hill, 4 Denio (N. Y.), 327.”

The opinion continues:

“ But if the owner intrusts to another, not merely the possession of the property, but also written evidence, over his own signature, of title thereto, and of an unconditional power of disposition over it, the case is vastly different. There can be no occasion for the delivery of such documents, unless it is intended that they shall be used, either at the pleasure of the depositary, or under contingencies to arise. If the conditions upon which this apparent right of control is to be exercised are not expressed on the face of the instrument, but remain in confidence between the owner and the depositary, the case cannot be distinguished, in principle, from that of an agent who receives secret instructions qualifying or restricting an apparently absolute power.
‘ ‘In the present case the plaintiff delivered to and left with his brokers the certificate of the shares, having indorsed thereon the form of an assignment, expressed to be made ‘ for value received,’ and an irrevocable power to make all necessary transfers. The name of the transferee and attorney and the date were left blank. This document was signed by the plaintiff, and its effect must be now considered.”

See a discussion of this question and case in 2 Pomeroy on Equity Jurisprudence (3d Ed.), § 710, and note 2.

The question, then, is not whether a nonnegotiable chose in action may be so treated by its true owner as to create an estoppel against him to assert his title, but whether the circumstances before us should be given such effect. What are they ? The Huntington bank purchased and took an assignment of this claim. This assignment upon its face clearly showed the purpose for which it assented to the collection of the money to become due. If it can be said that the bank tranferred the absolute title to this fund, or the warrants, which counsel' agree to have been the method of payment which the parties must have contemplated for the reason that such is the only method of payment contemplated by law, it is plain that it restricted their use, and that the instrument plainly negatives any authority to sell them. If the Wabash bank did not see this assignment, it was not misled by it as an indicia of title. If it did, it was fully advised of its restrictions. Therefore, the case is left to rest upon the bare fact that the bridge company was allowed to have possession of the order, a nonnegotiable instrument, and is certainly a case no stronger than as though the Huntington bank had itself taken into its possession the orders contemplated by the contract, and delivered them for the special purpose of collection. Again, if the bridge company had the right to take orders in its own name, it was not authorized to take them in the name of C. H. Wheaton. In short, we should look in vain for anything over the signature of the Huntington bank conferring indicia of absolute title or unlimited authority to receive and negotiate the town orders issued. The estoppel, if there be one, must rest, not on a writing such as has been described in McNeil v. National Bank, supra, but upon a failure to put it out of the power of the bridge company to fraudulently obtain in its own name and for its own purposes the orders.to which the assignee had the true right.

We are of the opinion that this case is within the rule of Bush v. Lathrop, 22 N. Y. 535, and that the application of any other rule would go far towards obliterating the well-settled rule that nonnegotiable paper is taken subject to the equities of the true owner and making all choses in action practically negotiable, which, if it is considered desirable, should be left for the legislature to do. See Combs v. Hodge, 21 How. (U. S.) 397; Knox v. Eden Musee Americain Co., 148 N. Y. 441 (31 L. R. A. 779); Jarvis v. Manhattan Beach Co., 148 N. Y. 652 (31 L. R. A. 776); Cutts v. Guild, 57 N. Y. 229; Commercial Nat. Bank v. Burch, 141 Ill. 519; Patterson v. Rabb, 38 S. C. 138 (19 L. R. A. 831); Sutherland v. Reeve, 151 Ill. 385; Schafer v. Reilly, 50 N. Y. 61, 66.

We do not discuss at length the question of the Bowen claim, as it is sufficiently covered by what has been said.

The decree should be reversed, and a decree entered here in favor of the Huntington bank.

Ostrander, J., concurred with Hooker, J.


source: Caselaw Access Project

author: Moore, J.

license: Public Domain

text:
    HORNER v. BOARD OF SUPERVISORS OF IONIA COUNTY.
    1. Bridges — Establishment — Adjoining Townships — Board of Supervisors — Majority Vote.
    Under Act No. 306, Pub. Acts 1905, a majority of the board of supervisors is sufficient to carry a resolution ordering abridge built between adjoining townships, the act being complete in itself, and nowhere requiring a two-thirds vote, as required by sections 2484 and 2485, 1 Comp. Laws.
    2. Same — Statute—Constitutionality.
    It was competent for the legislature to pass Act No. 306, Pub. Acts 1905, providing for the building of bridges between townships without submitting the question to the electors.
    Certiorari to Ionia; Davis, J.
    Submitted January 8, 1907.
    (Calendar No. 21,836.)
    Decided March 26, 1907.
    Mandamus by Hozial Horner, supervisor of the township of Portland, to compel the board of supervisors of Ionia county and Isaiah Long, chairman of said board, to declare a resolution passed by a majority vote to be carried. There was an order granting the writ, and respondent brings certiorari.
    Affirmed.

      B. A. & W. E. Hawley, for relator.

      A. A. Ellis, for respondents.
   Moore, J.

An examination of the opinion in Board of Sup’rs of Ionia Co. v. Ionia Circuit Judge, 134 Mich. 412, will aid in understanding this proceeding, which is to review the action of the circuit judge in granting a writ of mandamus directing said board of supervisors to convene, and to declare a certain resolution which will be referred to later carried.

The bridge mentioned in the above opinion was built in 1904 and was carried away by a freshet in the spring of 1905. Pursuant to notice duly served, the highway commissioners and the township boards of the townships of Danby and Portland met on June 12, 1905, at the site of the bridge. They conferred about rebuilding the bridge. The township board and the highway commissioner of Danby refused to have anything to do with rebuilding or replacing the bridge. A petition in the form of a resolution was adopted by the township of Portland, petitioning and requesting the board of supervisors to order the rebuilding of the bridge. This petition was presented to the board at its January session, A. D. 1906. A resolution was offered directing the bridge to be rebuilt, and that 60 per cent, of the expense be apportioned to Portland and 40 per cent, to Danby. Twelve supervisors voted for the resolution and 11 against it. The chairman of the board was of the opinion that it required a two-thirds vote to pass the resolution, and declared the resolution lost. The circuit judge was of the opinion that, a majority of the supervisors having voted for the resolution, it was carried, and so ordered.

On the part of Danby it is claimed that section 2484, 1 Comp; Laws, as amended by Act No. 98, Pub. Acts, 1905, and section 2485, 1 Comp. Laws, control, and that the chairman was right in his ruling.

On the part of Portland it is contended that the provisions of the later act, being Act No. 306, Pub. Acts 1905, control, and that the circuit judge was right in his conclusion. The last-named act repealed Act No. 62, Pub. Acts 1889, which act was construed in Board of Sup’rs of Ionia Co. v. Ionia Circuit Judge, 134 Mich. 412, and took the place of said act. It was a complete act in and of itself. It nowhere requires the determination of the board in carrying into effect its provisons to be decided by a two-thirds vote, and we think it should not be so held. See section 2476, 1 Comp. Laws; Thomas v. Kent Circuit Judge, 116 Mich. 106.

It is urged that,, as the question has not been submitted to the voters of the two townships, there is nothing to show upon the part of the one township a desire to have the bridge rebuilt, or a failure upon request, upon the other township, to have the bridge rebuilt, and therefore the petition was unauthorized. We think that what was done was a substantial compliance with the provisions of Act No. 306, Pub. Acts 1905.

We also think it was decided in Board of Sup’rs of Ionia Co. v. Ionia Circuit Judge, 134 Mich. 412, that the action of the legislature was not in contravention of the Constitution.

The action of the circuit judge is affirmed, and the writ of mandamus will issue.

McAlvay, C. J., and Carpenter, Grant, and Blair, JJ., concurred.


author: Grant, J.

text:
    HAAB v. SCHNEEBERGER.
    Wills — Construction—Estates Devised.
    A devise to testator’s wife “to be enjoyed by her as long as she shall remain my widow,” and in case of her marriage the land to go to testator’s daughter for life, remainder to her issue, gives the widow a life estate terminable upon remarriage, the daughter a life estate after the termination of the widow’s estate either by marriage or death, and the daughter’s children a vested remainder in fee. ,
    Appeal from Washtenaw; Kinne, J.
    Submitted January 11, 1907.
    (Docket No. 24.)
    Decided March 26, 1907.
    Bill by Caroline Haab against Joseph Schneeberger, Catherine Curry, and others, for the construction of a will. From a decree for complainant, defendants Schneeberger and Curry appeal.
    Affirmed.
    John Schneeberger died December 28, 1877, aged 77 years, leaving a last will and testament, executed January 19, 1875. He left a widow, Caroline, aged 66 years, a son Joseph, the children of a deceased son John, and the complainant, his daughter, as his heirs at law. The will reads as follows:
    ‘ ‘ First. I give and devise to my wife, Caroline, my farm in the township of Freedom, county and State aforesaid, consisting of two hundred acres, to be enjoyed by her as long as she shall remain my widow. In case of her marriage my daughter Caroline shall' take the said farm, to be enjoyed by her during her life, and after her decease the said farm shall be divided among her issue, share and share alike.
    “ Second. I give and bequeath to my said wife all my personal estate on my said farm at the time of my death, to be used and enjoyed by her as long as'she shall remain my widow. In case of her marriage such property shall pass to my daughter Caroline absolutely.

      “Third. I give and bequeath to Leonard Gruner, of the city of Ann Arbor, all the monies, evidences of debt of all kinds, viz.: Money on hand, money loaned and outstanding at the time of my death; and the probate court of the county of Washtenaw shall provide for a succession of trustees and require them to give the necessary security for the faithful performance of their duties, and they shall be entitled to reasonable compensation for their services, upon trust; that he, the said Gruner, and his successors shall pay the interest of such sums to my wife, Caroline, or authorize and empower her to receive and take the same to her own use as her separate estate during her life, subject to the conditions hereinafter made, and. after her decease the said sums of money shall be divided into three parts and distributed as follows: one-third part to be equally divided among the issue of my son John F. Schneeberger (nowdeceased), one-third part to be divided equally among the children of my son Joseph Schneeberger, and one-third part to be divided equally among the issue of my daughter, Caroline Haab.
    “ Fourth. I hereby provide that my said wife, Caroline, in case of her marriage, shall elect whether ■ she will take her dower in my estate or the interest of the money in trust as herein provided. In case she should elect to take her dower, the said trust shall terminate and the said moneys shall be divided among my grandchildren as herein provided; otherwise, the interest shall be paid her as provided in the third provision herein.”
    Of the 200 acres, 80 were under cultivation. The will was admitted to probate, the estate settled, and an order of the probate court made adjudging that “the said residue of the said personal estate and said pieces or parcels of land be, and the same are, assigned to the said devisees and legatees according to said last will and testament. ” His widow did not marry, and died in 1905. Defendant Joseph then petitioned the probate court for the appointment of an administrator de bonis non with will annexed, claiming that the farm and the personal property thereon are intestate property, and belong to the heirs of John Schneeberger. The testator’s daughter, Caroline, married in 1870, and had five children, two of whom were living at the time of the publication of the will. She and her husband lived upon the farm, her husband leasing it and paying rent, until his death, in 1903. The widow lived with them. This lease was executed by Mr. John Schneeberger and complainant’s husband February 11, 1872, and was to continue during the life of Mr. Schneeberger and his wife, but was to terminate if the daughter Coroline should die before the death of her father and mother.
    After the presentation of the petition by Joseph to the probate court, complainant filed this bill to obtain a construction of the will. Issue was duly joined, proofs taken, and a decree entered holding:
    “That the complainant, Caroline Haab, is entitled to the full use and enjoyment of the said farm for and during the remainder of her lifetime and of all the said farm personalty absolutely; that the devise of the said farm to the issue of complainant became and was vested in such issue on the death of the testator, subject to open up and let in after-born children of the complainant.”

      Some years before executing the will the testator deeded 120 acres to each of his sons, John F. and Joseph, and gave them other property from time to time.

      JE1. B. Norris (M. J. Cavanaugh, of counsel), for complainant.

      J. O. Newberry and J. W. Bennett, for appellants.
   Grant, J.

(after stating the facts). It is apparent that the testator intended to die testate as to all his property. The will mentions and disposes of all his personal and real estate. It makes devises and bequests to his widow, to his daughter and grandchildren. The will gives his widow the income from all his estate, both real and personal, so long as she remains unmarried, and of the personalty, devised in trust, during her life. It is immaterial what name we attach to the estate devised to the widow. It seems unimportant whether we call it an estate during widowhood, or a life estate terminable if she should marry. It is an estate of which she was given the immediate possession and enjoyment, to be used and enjoyed by her for life, provided she did not marry, and to terminate provided she did marry. It is the contention of the appellant defendants that the testator intended to devise no interest to his daughter and her children, unless his widow should remarry. It is significant‘that the only provision made for his daughter is the life estate in the land and the personal property upon the farm. The complainant had always lived at home, while his two sons left upon attaining their majority. He intended that she should live with, and take care of, him and his wife as long as they should live. The lease executed between the testator and complainant’s husband provided for this. He had given her nothing during his lifetime, while it is conceded that he had given to each of his sons 120 acres of land, a team of horses each, and other property. Laying aside the surrounding circumstances, however, which were shown aliunde, the question is presented: Does the intent of the testator appear from the four corners of the instrument ? If it does, the circumstances aliunde are of no consequence. As already stated, his intention to provide for his daughter by a life interest in the farm and the property thereon, after the termination of his wife’s estate, is manifest. This being so, it would seem to follow that the method by which that estate devised to his wife was terminated is of little consequence. The probability of her marriage after she was 64 years of age was very remote. Widows seldom marry after that age. This fact is recognized as of some importance in some of the early authorities. If the testator had intended to devise to his living son, Joseph, and the heirs of his deceased son, John, an interest in the farm, either as a contingent or vested remainder, he naturally would have inserted some provision showing that intent. I cannot escape the conclusion that the testator supposed he had disposed of this farm to his widow, his daughter, and his daughter’s children. His sons were the children of his first wife, who must have died when they were young. Complainant was the daughter and only child of his second wife.

Jarman, in discussing vested and contingent remainders, says:

“Where a testator makes a devise to his widow for life, if she shall so long continue a widow, and if she shall marry, then over; the established construction is that the# devise over is not dependent on the contingency of the widow’s marrying again, but tabes effect, at all events, on the determination of her estate, whether by marriage or death.” 3 Jarman on Wills (5th Am. Ed.), 414.

In Luxford v. Cheeke, 3 Lev. 125, the devise was “to the wife for life if she does not marry; if she does, that his son, Humphry, shall enter and have the land in tail.” She did not marry, and the court held that the devise was an estate tail with remainders, and that “the words shall be read and taken thus; if she marry, Humphry to enter presently; if she does not marry, then Humphry shall have, hold, and enjoy them to him and the heirs males of his body, with remainder over.” The same will was before the court in Brown v. Cutter, Raymond, 428, and it was there held that there was no contingent remainder, but an estate vested in the testator’s son to take effect in possession upon the marriage or death of the widow.

In Browne v. Hammond, Johns. Eng. Ch. 210, the testator devised real estate and bequeathed all his residuary personal estate to his wife for her sole and separate use so long as she continued to be his widow; but, if she should marry again, his will was that the said property was to be sold and the proceeds of such sale to be equally divided between his children, their heirs and assigns, share and share alike, as tenants in common. At the date of the will he had two children, named Elizabeth and Mary Anne. Elizabeth died in the testator’s lifetime, leaving two children, infants, who were made defendants. The widow died without having remarried. It was held that “ the devise or bequest ovér, though in terms made upon the marriage of the donee of the preceding estate, is to be extended by implication, so as to take effect on the determination of that estate by death.”

Under a similar provision in Underhill v. Roden, L. R. 2 Ch. Div. 494, decided by the chancery division of the high court of justice in England, it was held that, the widow having died without remarrying, the gift over of the real estate took effect upon her death.. The court in that case quoted with approval the decision in Browne v. Hammond, supra, and also the following language in Eaton v. Hewitt, 2 Drewry & Sm. 184, 192:

“ It is a rule now well established that where a testator gives to a woman a life interest if she so long remains unmarried, and then directs that in the event of her marrying the property shall go over to another, although according to the strict language, the gift over is expressed only to take effect in the event of the marriage of the tenant for life, the gift over is held to take effect, even though the tenant for life does not marry.”

In Metcalf v. First Parish in Framingham, 128 Mass. 370, the provision in controversy was the following clause of the testator’s will:

“ I give and bequeath unto George P. Metcalf, in trust and confidence, however, one hundred shares of the stock of the Pittsburg, Port Wayne and Chicago Railroad Company, for the benefit of Nancy Green, sister of my deceased wife, and William Green, husband of said Nancy, for and during their natural lives, as follows: First, during the life of said Nancy, the net income of the same shall be paid over semi-annually to said Nancy. In case said Nancy should die before said William, then at the decease of said Nancy said trustee shall transfer one-half of said stock in equal parts to said Association and said Home. The income of the remainder shall be paid to said William as aforesaid during his natural life. Second. In case said William should die before said Nancy, then at the decease of said Nancy the whole of said stock shall be transferred in equal shares to said Association and said Home, and said trust estate shall cease. ”

The conclusion reached by the court, in an opinion by Chief Justice Gray, is thus stated:

“ The result is, that the legal effect of the 10th article is to create, first, an equitable estate for life in the wife in the whole fund; second, an equitable estate for life in the husband in one-half of the fund; and, third, subject to these equitable life estates, a vested remainder in the whole fund in the charities.”

The court there stated the settled rule in England to be:

“ A devise or bequest to a widow for life, if she shall not marry, and, if she shall marry, then over to another person, gives the remainder to him, if she dies unmarried.”

Similar language of a testator in Bates v. Webb, 8 Mass. 458, was held to convey a vested remainder.

Where the provision of the will was:

“I give and bequeath unto my beloved wife, Mary Resler; the whole of my estate, both real and personal, during her widowhood, or in other words, while she bears my name, but if she chooses to marry then it is my wish that the whole of my estate, both real and personal, shall be given to my daughter, Éve Resler, and her heirs forever,”

—it was held that the devise was during her widowhood with a vested remainder to the daughter. Farmers' Bank of Alexandria v. Hooff, 4 Cranch, C. C. (U. S.) 328. It is there said:

“The estate is expressly during her widowhood; and at the termination of that estate, it is as expressly given to his daughter in fee. According to the literal construction of the will, the devise to the daughter was to take effect only upon the marriage of the widow, an event which might never happen, and if that strict construction could be given to the will, the remainder to the daughter would be contingent. But would such a construction be consistent with the intention of the testator ? ”

Our conclusion, therefore, is that the testator by clause 1 of his will devised the entirety of the land. Upon his death the widow took a life estate terminable upon remarriage, his daughter took a life estate after the termination of the widow’s estate, either by marriage or death, and the children of the daughter took a vested remainder in fee. If it were permissible to consider the facts and circumstances under which this will was executed, there could be no possible doubt as to the intention of the testator. We said, speaking through my Brother McAlvay, in Foster v. Stevens, 146 Mich. 142:

“In the construction of wills no hard and fast rule can be applied to all cases alike. The peculiar facts and circumstances of each case must be considered, and from them the court must determine the rules of construction to be adopted.”

The will made no provision for his son, Joseph, but only for his children. His son, John, died years previous to the making of the will, and the final distribution of the trust estate is the only provision made for his children. This would show an unequal distribution of his property. The conceded facts are that when his sons married they left his home and started in the world for themselves. The father gave to each a farm and considerable personal property. He had given his daughter nothing. When these conceded facts are considered, the will, as above construed, resulted in an equal distribution of his property. We are not prepared to say that these facts and circumstances might not be considered in ascertaining the intent of the testator. Inasmuch, however, as we have reached our conclusion from the “ four corners ” of the instrument, it is unnecessary to determine the question.

The decree is affirmed, with costs.

McAlvay, C. J., and Blair, Montgomery, and Ostrander, JJ., concurred.


author: Hooker, J. Grant, J.

text:
    HAYWARD v. AUDITOR GENERAL.
    Taxation — Tax Deeds — Cancellation.
    ' There is no statutory impediment to cancellation by the auditor general of a tax deed or sale by the State after notice and the expiration of the period of six months referred to therein. Grant, J., dissenting.
    Mandamus by Zachariah Hayward to compel James B. Bradley, auditor general, to cancel a tax deed.
    Submitted November 7, 1906.
    (Calendar No. 21,938.)
    Writ granted March 26, 1907.

      M. E. Louisell, for relator.

      John E. Bird, Attorney General (Charles W. McGill, of counsel), for respondent.
   Hooker, J.

I am of the opinion that there is no statutory impediment to cancellation by the auditor general of a deed or sale by the State after notice and the expiration of the period of six months referred to therein (see Jakobowski v. Auditor General, 144 Mich. 46; Shaaf v. O’Connor, 146 Mich. 504), and that relator’s laches, if the delay may be so called, under the circumstances, should not preclude the granting of his application to the auditor general.

The writ should issue.

Me Alva y, C. J., and Carpenter, Blair, Montgomery, Ostrander, and Moore, JJ., concurred with Hooker, J.

Grant, J.

(dissenting). For the main facts in this case see Hayward v. O’Connor, 142 Mich. 230, 145 Mich. 52.

After the last decision was rehdered the relator applied to the auditor general for a cancellation of the deed issued to Mr. O’Connor.' Relator received a letter from Mr. O’Connor September 13, 1903, notifying him of the sale. To this he paid no attention for nearly two years. On August 12, 1904, notice was served upon him under sections >140 and 141 of the general tax law. (Sections 3959, 3960, 1 Comp. Laws.) To this he paid no attention until after the six months had expired, and for a year lacking two days. He then, in March, 1905, applied to the auditor general for cancellation of the deed. His application was refused. He then instituted a suit in court to set aside the deed.

The object now sought to be attained is the same as that sought in the former suit and in his first application to the auditor general for a cancellation of the deed. The law gives ample time for the taxpayer to proceed in some forum to obtain the annulment of a tax deed against his land. This the relator failed to do, and no sufficient excuse is alleged for not doing so. There should at some time be an end of litigation. Sayers v. Auditor General, 124 Mich. 259. The decision in Hayward v. O’Connor, 145 Mich. 52, was an ádjudication upon the jurisdictional question; and, after reciting the facts, the opinion states:

“ When the owner of land has notice — no matter how he obtains that notice — that his land has been sold for taxes, he must, if he desires to have the sale set aside by the circuit court, take proceedings within one year. This the petitioner did not do.”

Relator based his claim of want of jurisdiction upon an alleged misdescription of the property, but this court held it good. Relator admits that the village tax for which the property was sold was not paid. His tax receipt showed no village taxes, but only county, State, highway, and school taxes. Whether this was sufficient to put a prudent man upon inquiry, knowing that his property was subject to a village tax, we need not determine. It is sufficient to say that he did know that Mr. O’Connor had a tax deed based upon the village taxes for 1899, that the records showed such a tax, and that the law provided a way by which he could obtain a reconveyance of his title. He might have obtained a reconveyance under the statute by paying less than $50. Instead, he chose to rest a year, and then indulge in expensive litigation. His delay in not complying with the statute is unexcused. He had not moved promptly or with reasonable diligence, and his application was properly denied.

This is not a case of want of notice or of acting in good faith, as was the case of Jakobowski v. Auditor General, 144 Mich. 46, where the taxes had been paid. Neither is it like the case of Shaaf v. O’Connor, 146 Mich. 504, where, in an opinion rendered by Brother Hooker, it was said that the auditor general when applied to seasonably should cancel a sale where the tax has been paid. In both these cases the landowners had paid their taxes. We held that the statute gave them the right to raise this question at any time where they had acted seasonably, and authorized the auditor general to cancel the deed. The reason and justice of this interpretation of the law are fully stated in Jakobowski v. Auditor General.

In this case the relator admits that he had not paid his taxes. He had an opportunity for his day in court. Even when notified of the tax title, he took no steps for a year. In Shaaf v. O’ Connor, supra, we did not determine whether the relator had acted seasonably.

The writ of mandamus should therefore be denied.


author: Carpenter, J.

text:
    HARDY v. ALLEGAN CIRCUIT JUDGE.
    Equity — Injunction — Subjects op Relief — Rights of Mortgagee.
    Equity will not interfere to enjoin the selling, on mortgaged premises, of beer not of the mortgagee’s manufacture, contrary to the terms of the mortgage, the act complained of not tending to lessen the mortgagee’s security.
    Mandamus by August Hardy to compel Philip Padgham, circuit judge of Allegan county, to set aside an order granting an injunction.
    Submitted October 16, 1906.
    (Calendar No. 21,947.)
    Writ granted March 26, 1907.

      Grove & McDonald,, for relator.

      Wilkes & Stone {Bundy, Travis & Merrick, of counsel), for respondent. '
   Carpenter, J.

In April, 1906, relator purchased from Mary Carmody certain hotel property situated in the village of Wayland, Allegan county. Upon this hotel there was then and is now a mortgage given by said Mary Carmody, as mortgagor, to the Joseph Schlitz Brewing Company, as mortgagee. The mortgage secured the payment of $4,000 loaned by said mortgagee to said mortgagor, and also the performance of a certain contract (signed by the mortgagor and mortgagee) containing this stipulation:

“A saloon or licensed place for the sale of beer shall be continuously conducted on said premises, in which the beer of the Schlitz Brewing Company shall be exclusively sold, and that during said period (a period of five years from January 1, 1903) no other beer shall he sold or handled or in any manner dealt in on said premises.”

Relator, after his purchase, refused to purchase and handle beer of the Schlitz Brewing Company, but bought it elsewhere. Thereupon said Schlitz Brewing Company filed a bill and obtained an injunction enjoining relator from selling other beer on his premises. Relator asks a mandamus compelling respondent, the circuit judge who issued said injunction, to vacate his order granting the same.

In my judgment the agreement respecting the sale of beer secured by the mortgage is one which equity will not enforce, for the very simple reason that the remedy at law for damages is entirely adequate. All that complainant is entitled to is the profits of which he is deprived by the breach of his contract, and this he can recover in an action at law. The circumstance that the performance of the stipulation is secured by,a mortgage may give the brewing company a lien for its damages, and may, perhaps, enable those damages to be determined upon the foreclosure of the mortgage; but it does not entitle the brewing company to enforce that stipulation by an injunction. A stipulation not in its nature enforceable by injunction is not so enforceable because its performance is secured by a mortgage. A mortgagee under our law has only a lien upon the mortgaged land to secure his indebtedness. He has no grievance from anything that is done on that land which does not impair its value as such security. Until he has obtained title, by a foreclosure, he cannot, even by stipulation in the mortgage, interfere with the mortgagor’s right of possession. Hazeltine v. Granger, 44 Mich. 503. I think it clear that equity will not at his instance enjoin any act of the mortgagor which does not lessen the value of his security. Conformity to the stipulation in question will not improve the security of the mortgagee, and a breach of it will not impair the value of that security. In other words, that stipulation has no relation to the mortgagee’s interest in the land. I am unable to see, then, why the law laid down in this case will not apply to all similar stipulations, though not secured by a mortgage. If an injunction is issued to prevent a breach of this agreement, I do not know«how it can be refused to prevent the breach of all similar agreements. In that case, whenever a business man agreed to sell in his place of business the products of a certain dealer and to refuse to sell any other, the court would enjoin a breach of the last mentioned agreement. This would, in my judgment, be opposed to both reason and authority.

In James T. Hair Co. v. Huckins, 5 C. C. A. 522, it was held, as stated in the headnote of the case:

“An injunction will not be granted to restrain the breach of a contract whereby defendant agreed that for the term of five years he would use plaintiff’s hotel registers in his business, and no others, for plaintiff has an adequate remedy at law.”

So, in Steinau v. Gas Co., 48 Ohio St. 324, where defendant had contracted to use plaintiff’s gas upon his premises, and not to use electric lights or oils, an injunction against the use of electric lights in violation of the contract was denied. These cases are referred to with approbation in 2 High on Injunctions (4th Ed.), § 1107. See, also, Tawas, etc., R. Co. v. Iosco Circuit Judge, 44 Mich. 479. I think, too, we may profitably consider the consequences, if courts enjoin the breach of such contracts. If the court enforce by injunction the agreement of an owner of property that there shall not be sold thereon the products of any rival of a certain manufacturer or dealer, it thereby stamps what is equivalent to a trust upon that property, and gives manufacturers and dealers a power to place fetters on individual and industrial freedom which self-interest will impel them to use for their own aggrandizement. The protection of their own interest does not require that they should possess any such extraordinary power, for their remedy at law for damages is entirely adequate. I think reason and authority and the best interests of society require us to say that they must be contented with that remedy.

The cases of Catt v. Tourle, L. R. 4 Ch. App. 654; Ferris v. Brewing Co., 155 Ind. 539 (52 L. R. A. 305); John Brothers Abergarw Brewery Co. v. Holmes, L. R. 68 Ch. Div. 188 — are relied upon by respondent as opposed to the conclusion reached in this opinion. There is nothing in John Brothers Ahergarw Brewery Co v. Holmes, supra, requiring consideration; for there the court did not order the issuance of an injunction. In the other cases the courts did enforce by injunction a restrictive covenant similar to the stipulation in question. There is, however, this difference: that in each of these cases the restrictive covenant was inserted in a conveyance by the owner of the property. I doubt, however, if this difference distinguishes those cases from the case at bar; for there the injunction seems to have been sought and granted for no other purpose than to insure to a brewer the profits from the sale of his beer. As authorities denying the proposition asserted in this opinion, viz., that the remedy for damages at law was entirely adequate, these cases are most unsatisfactory. That question does not seem to have been discussed at all in Catt v. Tourle. All that is said upon that subject is this:

“It has been said that, even if the plaintiff has any right, he ought tó be left to assert that right in a court of law.”

In Ferris v. Brewing Co., supra, the question did receive consideration, and the right to the remedy by injnotion was upheld upon these two grounds:

(1) “It is a settled rule that provisions in a lease by which the lessee agrees that he will not use the leased premises for certain purposes, or carry on any kind of business therein except the kind named, may be enforced by injunction.”

This rule, which is founded upon the owner’s right to determine how his land shall be used, has no application to this case, nor to that case; for in that case a brewing company, not a party to the lease, was attempting to enforce the covenant.

(2) “Moreover it is a general rule that where one has made a valid contract that he will not engage in a certain business or occupation, and it is shown that said contract is being violated to the injury of one entitled to enforce the same, he is entitled to an injunction against the offending party.”

Such covenants are enforced by injunction, because their breach tends to the destruction of a business, and the remedy at law for damages is therefore inadequate. That reasoning does not apply where the damages are the profits of the beer sold on certain premises.

My confidence in this opinion is, therefore, not shaken by the authorities cited by respondent. Neither is that confidence shaken by the circumstance — not heretofore alluded to — that at law the brewing company has no remedy against relator. If that circumstance has any bearing, it only increases my confidence in this opinion; for those cases are anomalous in which equity will enforce a contract against a person not liable therefor in a court of law. And in this connection it is important to note that the brewing company is attempting to enforce this contract against relator personally. It is not simply undertaking — and this, perhaps, it has a right to do — to charge his property as security for the performance of this contract. The contract involved in this case was; in my judgment, only a personal contract between the brewing company and Mary Carmody, though, as heretofore observed, the damages resulting from a breach thereof may be a lien secured by a mortgage upon property now owned by relator and enforceable upon the foreclosure of said mortgage.

In my judgment the mandamus prayed for should issue.

McAlvay, C. J., and Grant, Blair, Ostrander, Hooker, and Moore, JJ., concurred. Montgomery, J., took no part.


text:
    MICHIGAN IRON & LAND CO. v. NESTER.

    1. Logs and Logging — Stumpage Contract — Construction.
    A contract to sell all the merchantable timber on certain lands cut prior to a date named conveys only so much of the timber as shall be cut within the time specified.
    2. Same — Taxes—Enforcement.
    Where a contract for the sale of the timber on certain lands provides that the purchaser shall pay the taxes levied upon the lands, and reserves title to the timber until the purchase price is paid in full, the purchaser’s agreement to pay the taxes is not a mere personal covenant, enforceable only at law, but is a condition constituting a part of the purchase price for which the vendor has a lien enforceable in equity.
    3. Equity — Jurisdiction—Liens—Enporoement.
    Where the chancery court acquires jurisdiction by an original bill to enforce a lien on standing timber for taxes paid by the vendor, it is not ousted by the fact that before the case is brought on for hearing all the timber to which the lien might attach has been removed by defendants.

      4. Logs and Logging — Stump age Contract — Construction — Taxes — Payment—Interest.
    Where the purchaser of standing timber agreed to pay the taxes on the land until the timber should be cut, but it was agreed that the vendor might pay them, and if it did, the purchaser was to repay the amount, with interest from the date of payment, the bringing of suits by third persons contesting the title of the vendor and enjoining the cutting of timber did not operate to waive the right of the vendor to interest, during their pendency, on the amounts paid as taxes.
    5. Equity — Supplemental Bill — Propriety — Enforcement of Lien — Subsequent Claims.
    On a bill by the vendor against the purchaser of standing timber to enforce a lien for taxes and interest paid by the vendor which the purchaser is required by the contract to pay, the vendor is entitled to file a supplemental bill, including taxes paid subsequent to the filing of the original bill, notwithstanding the timber has all been removed by the purchaser; it being proper to retain jurisdiction once obtained and dispose of the entire controversy.
    6. Logs and Logging — Stump age Contract — Payment of Taxes —Liability—Release.
    Where a contract for the sale of standing timber required the purchaser to pay the taxes on all the land until all the timber was removed, but provided that he might relieve himself of that liability as to each governmental subdivision by notifying the vendor in writing that such subdivision had been cut over, relief from liability could only be obtained by serving the required notices, and actual knowledge of the vendor as to the progress of the cutting, and its acts in appearing before the taxing authorities and securing reductions of its assessments on the ground of removal of the timber are immaterial.
    7. Executors and Administrators — Liability — Performance of Contracts.
    Where, after the death of the purchaser of standing timber, his administrator and heirs continue to cut the timber at large profit, they are estopped to deny their liability for the taxes on the land during the life of the contract, as provided therein, and a decree for such payments is not erroneous because holding the heirs personally liable or because establishing a claim against the estate.
    Cross-appeals from Houghton; Streeter, J.
    Submitted January 9, 1907.
    (Docket No. 9.)
    Decided March 26, 1907.
    Bill by the Michigan Iron & Land Company, Limited, against George Nester, administrator of the estate of Thomas Nester, deceased, and others, for an accounting. From the decree rendered, all parties appeal.
    Modified and affirmed.
    The controversy in this case arises over a contract made December 30, 1882, between the Michigan Land & Iron Company, Limited, a copartnership association, the assignor of the complainant, party of the first part, and Thomas Nester, party of the second part. The material parts of the contract are as follows:
    “The said party of the first part, for and in consideration of the sum of two hundred and sixty-nine thousand five hundred and sixty-one dollars, and an item of interest, all to be paid as hereinafter provided, and of the faithful performance of the covenants, agreements and conditions, hereinafter expressed, on the part .of the party of the second part to be performed (the performance of each and every of said covenants, agreements and conditions, including the payment of said moneys, being hereby expressly declared condition precedent, and of the essence of this contract), hereby agrees to sell to the party of the second part all the pine timber now-fit for merchantable uses growing, standing or being upon the following described lands, situate in the counties of Baraga and Houghton, in the State of Michigan [description of the land is unnecessary]. * * * ”
    All the timber was to be removed by December 30, 1902. Specific provisions were made for cutting and removing the timber. And the contract proceeds:
    ‘' But the said party of the second part shall have the right, during the continuation of this agreement, to cross any of said tracts or parcels of lands and to use the streams thereon for the purpose of removing the said pine timber from other tracts or parcels of said lands; provided, he shall so cross and use the same in such manner as shall interfere as little as practicable with the use of said lands and streams by the party of the first part and any and all persons claiming under them.
    “It is further understood and agreed that when said party of the second part shall enter upon any tract or parcel of said lands of the smallest government description for the purpose of cutting the said timber therefrom, as hereinbefore provided, he shall cut said, tract or parcel clean of merchantable pine as soon as practicable due regard being had to the contemporaneous cutting upon other lands; and forthwith, as soon as the same be cut clean as aforesaid, shall notify the party of the first part in writing, specifying by forty-acre tracts the land so cut clean; whereupon all right of the party of the second part to pine timber on, or to cut and remove the same from, such tract or parcel shall cease and be terminated.
    “One-half of all expenses properly incurred by the party of the first part in examining the said lands for the purpose of ascertaining whether the cutting by the party of the second part has been done under and pursuant to the conditions of this agreement, shall be paid by the party of the second part, and if it appears that there has been unauthorized cutting, all of such expenses shall be paid by him. * * *
    “ It is further understood and agreed that the title to the pine timber aforesaid shall be and remain in the party of the first part until payment therefor be made in accordance with the terms and provisions of this contract. On making each of said payments and performing the other conditions of this agreement then required to be performed, the party of the second part shall have the right and be entitled to select, cut and remove, in the manner aforesaid, and within the period of time hereinbefore mentioned, a portion of the pine timber on said lands corresponding in ratio to the payments so made. And in case said payments, or any of them, be not made by maturity, the time of payment being of the essence of this agreement, or in case the party of the second part shall fail to comply with any or all other of the terms and provisions hereof, the said right to acquire timber, and all other rights and privileges on the part of the party of the second part hereunder existing or arising, excepting as to any timber heretofore paid for, shall thereupon forthwith cease and be terminated; and the party of the first part shall have, hold and enjoy said timber and all right, title and interest therein free and clear of any right or claim whatsoever of the said party of the second part thereto; and all payments theretofore made by the party of the second part thereon of every kind shall be forfeited and belong to the party of the first part, without obligation to refund the same or any part thereof. * * *
    “And the party of the second part further agrees that he will pay all taxes, general and special, of every kind whatsoever which shall be assessed upon or against the lands above described from and after the date hereof until the pine timber shall be removed as aforesaid, or the right to remove the same shall be forfeited and lost as herein provided. And as fast as the lands shall be cut over, and a report in writing of such fact be made by the party of the second part to the party of the first part, specifically describing by forty-acre tracts the lands so cut over, the requirement to pay taxes on the lands so described shall thereupon cease. The party of the first part may pay any and all taxes assessed on said lands, or any part thereof, to be paid by said party of the second part as aforesaid, and all sums so paid by him, with interest, shall forthwith thereafter become payable and be paid by the said party of the second part to said party of the first part.
    “And the party of the first part doth covenant and agree to and with the said party of the second part to warrant and defend the said pine timber hereby sold unto the said party of the second part, his executors, administrators and assigns, against all and every person and persons whomsoever. And it is further expressly agreed that in the event of a breach of said covenant the damage to be recovered shall in no case exceed the consideration price for said timber herein mentioned, with interest thereon; and in case of a breach of said covenant as to any part of said timber, such damage shall not exceed a corresponding portion of said consideration price with interest.
    “ And it is further understood and agreed that in entering upon, cutting and removing the pine timber from said lands, the party of the second part shall so conduct his business thereon as to interfere as little as practicable with the use of said lands for other purposes.
    ‘ ‘ This agreement shall apply to and bind the heirs, executors, administrators, successors, legal representatives and assigns of the respective parties hereto.”

      The contract, though dated December 30,1882, was not in fact executed until the 6th of June, 1883. Under a parol agreement Mr. Nester was permitted to enter upon the lands during the winter of 1882 and 1883, and it was agreed that, should the contract fail of execution, he should pay for what timber he had meanwhile cut and removed. Mr. Nester, until his death in May, 1890, cut timber generally from the lands. A similar course was pursued by the defendants after his death until the entire amount was cut and removed during the year 1902, within the time prescribed by the contract. On December 31, 1896, the defendants gave notice under the contract that they had cut and removed the timber from certain of the lands, and that they released and quitclaimed all right or interest therein. This notice was by 40-acre descriptions, 160 in number. On November 28, 1900, the defendants gave complainant a similar notice covering all of the remaining lands except one section, but not in 40-acre tracts. Mr. Thomas Nester gave a verbal notice of the release of one section of land. That notice was accepted and the release minuted on the proper book of the Michigan Land & Iron Company. No notice was ever given of the release of the section, not included in its notice of November 28, 1900, and the right to cut timber thereon expired by limitation December 30, 1902. The lands owned by the Michigan Land & Iron Company purchased from the railroad company were the odd sections. Mr. Nester owned the even sections, and was lumbering from them at the same time. It appears from the letter written by Mr. Thomas Nester, of date December 13, 1883, that he expected the Michigan Land & Iron Company to look after the taxes, “and take all responsibility for the correctness and completeness of lists and receipts.” That company did this, paying the taxes and rendering statements therefor to Mr. Nester, which Mr. Nester paid every year to and including the taxes of 1888. Neither he nor the defendants who succeeded by heirship to his rights have paid any of the taxes since, except on three sections for 1898. The defendants having neglected and refused to pay, the Michigan Land & Iron Company filed its bill in equity on November 19, 1895, setting up the contract, the nonpayment of the taxes and the refusal to pay, the payment thereof by complainant, and prayed for an accounting as to the amount, for a decree therefor, and that, in default of payment, the defendants be enjoined from removing the timber, and be barred from all claim therein.
    The defendants Margaret Nester and Patrick Nester answered, disclaiming all interest in the suit. The other defendants answered, admitting the contract and their obligation under it to pay the taxes, but set up as an excuse a certain suit hereinafter referred to, instituted by the United States against the defendants, denying title of the defendants and of the Michigan Land & Iron Company in and to certain of the lands covered by the contract, and alleging, upon information and belief, that complainant had notice and knowledge that a large part of the lands had been cut over; that said knowledge amounted to a compliance with the provision of the contract for a notice that the land had been cut over; that complainant had waived that provision in the contract for the punctual payment of taxes, and that said claim for repayment of taxes was “ a mere personal claim against the defendants or some of them to be collected by ordinary legal proceedings, and are not a lien upon the said lands.” Replication was duly filed to this answer. The defendants filed a bond in the sum of $15,000 to pay any sum that the court might decree against them, and the preliminary injunction which had been issued was dissolved. No further proceedings were taken in that case until after the determination of the suit in the United States court. After that suit was determined and on April 18, 1904, complainant filed a petition alleging its succession to the property and rights of the Michigan Land & Iron Company, and praying for leave to file a supplemental bill, that order was entered, and a supplemental bill filed, setting forth the payment of the taxes after the filing of the original bill until the termination of the contract and the amounts thereof, and praying for a decree for the amounts so paid by it, as well as those paid prior to the filing of the original bill.
    The complainant obtained its title to these lands from the Marquette, Houghton & Ontonagon Railroad Company. They were a part of a grant of lands by the United States to the State for the construction of railroads. The railroad company, claiming that it had performed the conditions of the grant, obtained from the State certifications or patents for the land so claimed to be earned. Meanwhile a few homesteaders entered upon some of these lands, claiming that the railroad company had no title. Five of these homesteaders also instituted suits in chancery against the Michigan Land & Iron Company, claiming that the title of the Michigan Land & Iron Company was void. Of the lands covered by the contract, 5,620 acres were involved in the suit brought by the United States, leaving 12,120 acres about which no contest arose. That suit was finally determined in favor of the Michigan Land & Iron Company, and the defendants, and a decree entered in the United States court October 24, 1902, dismissing the bill of complaint, and decreeing the title to be in the Michigan Land & Iron Company, its successors and assigns. Neither Mr. Nest-er nor the defendants paid taxes upon any of the lands except as above stated. The proceedings in the contest over that title, both before the department of the interior at Washington and in the United States court, and the decree sustaining the complainant’s title, were set forth in this supplemental bill. Answer was duly filed and proofs taken. The answer is based chiefly upon the same defenses as those set up in the answer to the original bill. The court entered a decree for the amount of the taxes by complainant and its assignor up to the time of filing the original bill, with interest thereon from the 24th of October, 1902, the date on which the complainant’s title was affirmed by the decree of the United States court. The court denied the prayer of the supplemental bill, and dismissed it, holding that, as the supplemental bill was filed after the timber had been removed, the claims had become mere personal demands, that there was no property to which to attach a lien, and that the remedy was at law.
    Both parties appeal.

      Ball & Ball, for complainant.

      Tarsney & Fitzpatrick, for defendants.

       Rehearing denied July 15, 1907.

   Grant, J.

(after stating the facts). Complainant insists that the court erred:

(1) In refusing to allow interest from the time the taxes were paid, rather than from the time of the final decree entered in the suit in the United States court.

(2) In dismissing the supplemental bill and refusing to enter a decree for the amount of taxes paid subsequent to the filing of the original bill.

(3) In allowing interest at 5 per cent., rather than the rate in force when the taxes were paid by complainant.

The defendants contend:

(1) That the court of equity had no jurisdiction, and that complainants’ remedy was at law.

(2) That defendants’ liability to pay taxes on the lands not involved in the suits brought in the United States court ended when the timber had been cut and removed therefrom, although the notice required by the contract was not given.

(3) That the liability for taxes involved in those suits ended with the taxes for 1892.

(4) If, however, the defendants were still liable to pay those taxes, the time of repayment was modified, and the same were not repayable until the final determination of the United States cases, October 24, 1902, and that interest did not begin to run until a reasonable time after demand.

(5) That a personal decree cannot be entered against the heirs of Thomas Nester.

Did the court of chancery have jurisdiction ? The contract between these parties is unambiguous. It contains no provision of doubtful meaning. The Michigan Land & Iron Company agreed to sell all the merchantable timber on the lands which the vendee should cut prior to December 30, 1902. The construction to be placed upon this part of the contract is determined in French v. Lumber Co., 135 Mich. 424. It conveyed only so much of the timber as should be cut within the time specified. See, also, Golden v. Glock, 57 Wis. 118; Hicks v. Smith, 77 Wis. 146. But the title to the timber was expressly reserved in the vendor until it was cut and removed in compliance with the terms of the contract.

The money consideration was divided into two parts, namely, the cash payments to be made at various times for the timber and the cash payments for taxes as they were assessed upon the land. It is fair to presume that the price for the timber was fixed with reference to the payment of taxes, just as the rate of interest in a mort-; gage is made with reference to the payment of taxes by the mortgagor. The times at which these taxes were to become due were fixed by the law. The only thing uncertain was the amount; and that became certain every year. The defendants’ theory is that the provision for the payment of taxes by the vendee was a covenant, and not a condition. The payment of taxes was just as much a part of the money consideration as was the payment of the price agreed upon. It was therefore a part of the purchase price. But, as was said in Monroe v. Bowen, 26 Mich. 523, the name to be attached to it is of little importance. Under the defendants’ theory the vendee might neglect to pay the taxes or to perform any of the other agreements by him to be performed, and coolly say to the vendor :

“ These are simply covenants on my part. Sue me at law. I have paid you the moneys particularly specified in the contract as the purchase price, and now propose to remove this timber without complying with any of the other agreements on my part, and leave you to your suits at law.”

This position is not sustained by the authorities or founded in reason. De Forest v. Holum, 38 Wis. 516; Brown v. Brown, 124 Mo. 79; Koch v. Roth, 150 Ill. 212; Grove v. Miles, 58 Ill. 338. It is conceded that, if-the taxes are to be considered a part of the purchase price, the vendor has a lien therefor upon the timber. It is unnecessary to discuss cases of strict foreclosure or to enforce forfeitures. The bill is not framed for the sole purpose of declaring a forfeiture, or to enforce a strict foreclosure. It specifically prays that the defendants may “be decreed to pay to. your orator the amount of all taxes paid by your orator as aforesaid, together with the interest thereon by a day certain.” The bill did'not seek to deprive the defendants of any rights. It sought only to compel them to perform their contract after the court had decreed that they should, and had fixed a reasonable time for performance. It properly asked that they be restrained from revmoving the timber until they had made payment as the court should decree. The law in such case does not require the vendor to look to the pecuniary responsibility of his vendee. A court of equity is a proper forum in which the vendor’s right can be enforced and the performance of ■the contract secured.

Whether the defendants acquiesced in the jurisdiction of the court by answering and giving a bond by which the injunction was removed, and they allowed to proceed with their work, we need not determine. It is sufficient to hold that the court acquired jurisdiction by the original bill, and is not ousted of that jurisdiction by the fact that before the case was brought toa hearing all the property to which a lien might attach was removed by the defendants. 16 Cyc. p. 106; 11 Am. & Eng. Enc. Law (2d Ed.), p. 201; Lane v. Traction Co., 135 Mich. 70; Beal v. Chase, 31 Mich. 490, 534; Hall v. Nester, 122 Mich. 141; McLean v. McLean, 109 Mich. 258.

The terms of the contract upon payment of taxes and interest are explicit. The vendee agreed to pay them. The vendor might pay them, and, if it did, the vendee agreed to repay the amount, with interest from the date of payment by the vendor. There is nothing upon the record from which an agreement that interest should be waived during the pendency of the suits in the United States courts can be inferred. On the contrary, it appears from the correspondence that the Michigan Land & Iron Company and its successor notified the defendants from year to year of the payment of the taxes, and the demand for repayment. In all the letters that passed between the parties there is no claim of or reference to a waiver of the interest. The learned circuit judge was in error in finding that there was any such agreement. The suits brought in the United States court did not operate to waive any of the rights of the complainant in the contract. It was not responsible for those suits. The complainant and the defendants in them appeared by their own solicitors and counsel. The solicitors for complainant deemed it advisable to proceed before the department of the interior at "Washington. The solicitors for the defendants believed that their title was perfect, and at times strenuously insisted upon pushing the suit. The defendants might have done so regardless of the wishes or advice of the complainant’s solicitors. Why the proceedings in the interior department were pending so long without a decision does not appear. Mr. Thomas Nester was undoubtedly familiar with the title to the land. He assumed any risk of delay that might be caused by an attack upon the title. •There is no evidence that the defendants suffered any serious damage by the delay. On the contrary, the standing timber was rapidly increasing in value. In fact, it had doubled in value. The complainant was liable to the defendants upon its covenant of warranty, and it was expressly agreed in that covenant that upon—

“ A breach of said covenant the damage to be recovered shall in no case exceed the consideration price for said timber herein mentioned, with interest thereon; and, in case of a breach of said covenant as to any part of said timber, such damage shall not exceed a corresponding portion of said consideration price, with interest.”

In view of the rapidly increasing válue of the timber, the importance to the defendants of sustaining the title is apparent. It is a fair conclusion from the conduct of the parties, and as well from the evidence, that the defendants yielded to the opinion of the solicitors for the complainant in the course pursued by them. Whether that was the wiser and speedier remedy is not material for us to consider. Aside from this, there is no evidence in the record from which a court can fix the damages if any there were. Mr. Nester had other and adjoining lands he could lumber, and on January 8, 1890, his attorney wrote the manager of the Michigan Land & Iron Company:

“ If enjoined, he [Nester] has other lands in that vicinity upon which he is cutting, and upon which he could put all his force without causing him any great damage, I think.”

This question is, however, decided in Monroe v. Bowen, supra. In that case the grantor of the land reserved the timber if he should remove the same before a specified time. The land was attached by a third person and the owner of the timber enjoined from cutting it within the time specified. This court held that all contingencies and risks of embarrassment of this kind must be estimated by the parties in making their contracts. It is in evidence that the defendants could have obtained a dissolution of the injunction in the United States court by giving a bond. They insisted that the Michigan Land & Iron Company should furnish the surety. They claimed that at one time an agreement was made that they should furnish one surety and the Michigan Land & Iron Company the other. This was denied by the company, and no bond given. There was a tacit, if not an express, understanding that the matter of taxes should be adjusted on the termination of the suit in the United States court, and that meanwhile the Michigan Land & Iron Company should pay them. If complainant’s title to any of the lands was void, it was liable in- damages, and, if- the defendants had meanwhile paid the taxes, they could, under the limitation in the covenant of warranty, have •recovered them from the complainant only as a part of the purchase price. There is no equity in relieving the defendants from the payment of taxes or interest thereon. They have had the use of the money which they agreed to pay. The complainant has lost the use of its money which it was under no obligation to pay. Furthermore, the defendants were requested to pay the taxes on the lands the title to which was not in dispute. This they did not do. The payment of these taxes was permitted to rest in abeyance until the determination of the suit in the United States court. There is no reason in even a supposition that the vendor intended to waive the ultimate payment of these taxes, or the interest thereon, or that the defendants understood that payment of either was waived.

The court was in error in dismissing the supplemental bill. By the original bill -the court obtained jurisdiction of the parties and of the subject-matter of the litigation. Taxes assessed subsequent to the filing of the original bill were governed by the same contract and by the determination of the court in that case. In foreclosing a mortgage for nonpayment of one installment, if before the determination of the suit another installment falls due, the subsequent installment may be included in the final decree upon a supplemental bill. In that case it would make no difference that meanwhile the property had been totally destroyed. Having once obtained jurisdiction, the court will retain it to dispose of the entire controversy between the parties, and to ascertain and decree the amount due. The same principle applies here. The defendants are not prejudiced by the court’s retention of jurisdiction to settle the entire controversy. There are no material questions of fact in dispute to be submitted to a jury, and, if there were, it would make no difference. The sole advantage which these defendants could now obtain if the supplemental bill were dismissed would be an opportunity to plead the statute of limitations in a suit at law. Under the circumstances this would be most inequitable.

The first clause of the provision in regard to the payment of taxes would have required, the vendee to pay the taxes upon all the lands until all the timber was removed. The next clause, however, provided that the vendee might relieve himself from the payment of taxes by reporting in writing the fact that the lands specified in the notice had been cut over. By a previous provision of the contract it was arranged that the Michigan Land & Iron Company might enter upon and examine these lands for the purpose of ascertaining whether the cutting had been done pursuant to its terms. It was not contemplated that knowledge thus obtained or obtained in any other manner should be the equivalent of the notice or release provided. The vendee and his heirs thoroughly understood the contract, and gave notices as required. Knowledge of the extent of the cutting thus obtained by the vendor did not release the vendee or the defendants from the obligation to give the notice. The vendor’s agent, from time to time, appeared before the taxing'authorities, and reported, for the purpose of having the taxes reduced, the extent of the cutting. This was a favor' to the vendee, and is no legal excuse for failure to give the notice; neither does it constitute a waiver of the notice.

Furthermore, it is in evidence that the vendor’s agents talked with the respondents about releasing the land, that they replied that they would look it up and see what they could do, and that defendants made no replies, but that the only releases were those specified in the above statement of facts. The reason for such a notice is apparent. The vendor might desire to sell the remaining timber, or to sell the land to other parties. Any proposed purchaser would run the risk of buying a lawsuit with the defendants. They might insist that they had not completed their cuttings, and that their right to cut had not terminated until they had given the notice required. The defendants were under obligation to pay the taxes until they had absolved themselves from that obligation by giving the agreed notice.

It is further urged that the decree is erroneous because (1) it holds the heirs of Thomas Nester personally liable for his debts; (2) it establishes a claim against the estate of Thomas Nester. Thomas Nester paid all the taxes assessed upon the lands during his lifetime, except that of the year previous to his death. The bill alleges that the defendants were the heirs of Thomas Nester; that defendant George Nester was also the administrator of his father’s estate; that the defendants were proceeding to cut the timber under the contract, ignoring their duty to pay the taxes. The answers to both the original and supplemental bills admit that the defendants were cutting the timber under the contract, and claimed the right to do so. By the bill the defendants are placed in the position of assignees of the contract. The answers admit it. No claim in their answers or during the progress of the suit, or upon the hearing, was made that the defendants were not proper parties. The defendants by their pleadings have admitted that their rights are virtually the same as those of an assignee of the contract. They assumed the right to act under it. They have acted under it, and received the profits, which were very great. Neither law nor equity will permit them to receive the benefits without bearing the burdens imposed by the contract. By their pleadings and conduct they have made the obligations of the contract their own, and are personally liable for the performance of its conditions. Whether the administrator was acting under the order and direction of the probate court in performing this contract does not appear. If the administrator alone were performing it, whether by the direction of the probate court or without, he could not, neither could the estate, obtain the benefits of the contract without assuming its obligations. If, as we have held, a court of equity had jurisdiction to compel the performance of the contract, it would follow that the court could make a decree binding upon the estate. If the administrator and heirs have seen fit to perform this contract, both are estopped to now set up that the decree is not binding upon both. It is immaterial to these defendants whether the decree is certified to the probate court and paid by the administrator for the benefit of all, or whether it is paid by the defendants individually, or whether the administrator, who is a party defendant, pays it and charges it against the estate. Whatever method of payment is adopted, the defendant heirs of Thomas Nester pay it.

The decree will be modified in accordance with this opinion, with costs to the complainant.

McAlvay, C. J., and Blair, Montgomery, and Ostrander, JJ., concurred.


text:
    CUTLER v. GRAND RAPIDS, GRAND HAVEN & MUSKEGON RAILWAY CO.
    Street Railroads — Collisions—Personal Injuries — Motorman —Contributory Negligence.
    Plaintiff, a street-car motorman, running his car at the rate of three to four miles per hour, on a dark foggy morning, his headlight burning and gong continually sounding, saw defendant’s car coming on the same track when at the distance of 40 feet, but, despite his efforts to stop, a collision occurred, resulting in injuries to himself. Defendant’s car displayed no light and gave no signal. Plaintiff was accustomed to meet defendant’s car in the vicinity, but not always at the switch which he had just passed. Held, that plaintiff was not, as matter of law. guilty of contributory negligence in that he ran his car at such a rate o£ speed that he could not stop within the range of his vision, there being evidence that he could so stop, nor because he did not let down the windows of his vestibule at the switch and listen for defendant’s car.
    Error to Kent; Perkins, J.
    Submitted January 22, 1907.
    (Docket No. 30.)
    Decided March 26, 1907.
    Case by Otis E. Cutler against the Grand Rapids, Grand Haven & Muskegon Railway Company for personal injuries. There was judgment for plaintiff, and defendant brings error.
    Affirmed.

      Carroll, Kirwin & Hollway (Nims, Hoyt, Erwin & Vanderwerjp, of counsel), for appellant.

      Taggart & Taggart, for appellee.
   Carpenter, J.

Plaintiff was employed as a motorman upon a street railway operated in the city of Muskegon by the Muskegon Traction & Lighting Company. He was injured by a collision upon the tracks of said traction company between the.car he was operating and a car operated by the defendant. He brought this suit to obtain compensation for said injury, and recovered a verdict and judgment in the trial court.

The ground upon which we are asked to reverse that judgment is that the trial court erred in not directing a verdict in defendant’s favor, because of plaintiff’s contributory negligence. Can the court say, as a matter of law, that plaintiff was guilty of contributory negligence? That is the only question we are asked to determine. Its determination requires a more complete statement of the case — and we make this statement, as we should, most favorably to plaintiff. The collision occurred soon after 7 o’clock on the morning of the 3d of November, 1904, on Western avenue, at or near the point where it is intersected by Fifth street. There was at that time a dense fog which seriously interfered with the view of the motorman. The car operated by plaintiff was proceeding in a southwesterly direction on Western avenue. It was on its regular time, and it had the right of way. The car operated by defendant was proceeding in an opposite direction and on the same track. This car carried freight and mail between Grand Rapids and Muskegon. It had a schedule time for leaving Grand Rapids — that was 3:30 a. m. It had no schedule time for its return trip — and it was on its return trip when the collision occurred — for the reason (to quote from the testimony of defendant’s general manager) “that in doing their [the employes’] work of loading and unloading freight we cannot depend upon their making any specific timebut it was apparently customary to start on the return trip a little before 7 a. m.

“ Occasionally, about once each week, the traction company’s car upon which the plaintiff worked met and passed this car of defendant at the Fourth street switch (a switch which plaintiff had left just a moment before the collision occurred) at about the hour of 7 o’clock in the morning. At other times these cars met and passed at other points on the road within the city limits at or about the same hour in the morning.” (The above quotations are taken from the charge of the court to the jury.)

Plaintiff at the time of the collision was running at the rate of three or four miles an hour. The headlight of his car was lighted, and he was continually sounding his gong. He saw defendant’s car when it was about 40 feet away. It displayed no light, and it gave no signal. He immediately reversed his power and put on the brakes; but he was unable to avert the collision and the injuries which resulted to him in consequence thereof. That these facts afforded evidence of defendant’s negligence is apparent and conceded; but it is contended that plaintiff was guilty of contributory negligence for two reasons which we will discuss and consider separately:

(1) That he was running his car at the time the collision occurred at such a rate of speed that he could not stop within the range of his vision. We dispose of this contention by saying that this .was a question of fact for the jury. There was evidence that at the rate of speed plaintiff was running his car he could have stopped it within the range of his vision.

(2) It is contended that plaintiff should have stopped at the switch, and let down the windows of the vestibule —within which he was seated — and listened for the purpose of ascertaining whether defendant’s car was approaching. We answer this contention by saying that this, too, was a question for the jury.

Under the facts in this case we cannot say, as a matter of law, that there was such a probability of the approach of defendant’s car that plaintiff was bound to exercise this unusual precaution. Moreover, it is not certain that if plaintiff had taken this precaution he would have heard the car. He testified in answer to a question by defendant’s counsel: “ I don’t think I would have heard it unless they had blown their whistle.” The trial court very properly determined that this was a question for the jury.

The judgment is affirmed.

Blair, Montgomery, Ostrander, and Moore, JJ., concurred.