text:
    WELCH v. BRAINARD.
    1. Master and Servant — Injury to Employé — Assumption oe Risk.
    Every adult of ordinary intelligence must be held to know that ensilage, or any similar article, if undermined so that the pile overhangs its base, is to be expected to fall.
    2. Same.
    An employer does not become an insurer by requesting his employé to incur danger in his service, unless he conceals from the employé his knowledge of, or at least fails to make known to him, a latent danger.
    3. Same.
    Among the daily duties of a farm laborer was the removal of ensilage from his employer’s silo for the purpose of feeding stock. By direction of the employer, the ensilage was taken from the bottom of the pile, which became undermined, and a portion slid off, injuring the laborer. Held, that he assumed the risk, and that the employer was not liable.
    Error to Macomb; Eldredge, J.
    Submitted October 10, 1895.
    Decided December 30, 1895.
    Case by Charles L. Welch against Addison H. Brainard for personal injuriés. Erom a judgment for plaintiff, defendant brings error.
    Reversed.

      Dwight N. Lowell (James G. Tucker and Geer & Williams, of counsel), for appellant.

      Canfield & Spier, for appellee.
   Hooker, J.

The plaintiff was injured by the fall of a quantity of ensilage upon him while engaged in removing a quantity from the defendant’s silo for the purpose of feeding defendant’s stock, which was plaintiff’s daily duty, as farm laborer. He recovered a verdict in an action based upon the alleged negligence of the defendant— First, in not properly storing the ensilage, by reason of which it became rotten, and more likely to slide and cave off than it would otherwise have been; second, in not informing the plaintiff of the danger of undermining it, but, on the other hand, directing him to remove it in that manner. The defendant has appealed, and alleges error upon the court’s refusal to direct a verdict in his favor.

The silo consisted of a building about 21 feet square, and was filled with ensilage to the depth of 10 feet. According to the testimony of the plaintiff, a section 4 feet wide, extending across the room, was being taken down from the top, upon discovering which, the defendant directed plaintiff to remove it from the bottom, after which he did so, until the 4-foot section was taken out to the floor. In removing it from the bottom, he said that he used a fork, and dug into the mass for a foot or two, and the ensilage would drop down. He was asked if he began digging from the bottom after he had his talk with the defendant, and answered:

! ‘ I did, taking it right from the bottom.
‘ ‘ Q. And then you worked a section right up, did you?
“A. I kept working from the bottom, and taking a dungfork and jabbing into it, and I got enough that way. * * * It would naturally drop down. * * *
Q. What was the condition of the silo, or the ensilage, at the time you went there for your last basketful?
“A. The condition was that it was two feet under the bottom of the ensilage.
Q. How far did that extend?
“A. It ran up, probably, two or three feet.
Q. As I understand, it was worked in from one to two feet?
“A. Yes, sir.
Q. I asked you if the ensilage had been worked, from the front of the silo, back two feet, in a perpendicular manner. * * *
“A. It went up with a slant.”

He stated that he. was feeding 68 bushels a day, and that he was getting the last of 34 baskets when the slide came. He was stooping down, and had no warning, .and could not escape.

From this testimony, it is plain that the pile of ensilage overhung its base. He had taken out 34 bushels from the bottom of the new section; the first section having been finished that morning, and carried out, as he states in his testimony. This amounts to about 42 cubic feet,, in its loosened condition. It would doubtless be less when packed, but, after making due allowance, the conclusion is irresistible that a large quantity of ensilage was removed. But, if it was undermined no more than the plaintiff states, it is evident that a portion would necessarily break loose and fall, if its cohesiveness was overcome by the weight of the overhanging mass, in obedience to a law of nature that even children understand. The plaintiff admits that he would expect that ensilage would be likely to cave.

We think that the law does not hold the defendant liable in damages for the accident, by reason of his failure to so pack his ensilage as to prevent its rotting, or from caving down when undermined. Every adult of ordinary experience must be held to know that ensilage, or any similar article, is to be expected to fall under such circumstances, and a farmer who hires a laborer to do farm work has a right to suppose he knows and understands the law of gravitation. The defendant is said to have directed the plaintiff to remove this ensilage in this way, and that is urged as a reason for enforcing the plaintiff’s claim. An employer does not necessarily become an insurer because he requests his employe to incur danger in his service. It is only when he conceals his knowledge of, or at least fails to make known, a latent danger. But, if it were otherwise, we discover no testimony that shows that defendant asked the plaintiff to undermine this ensilage to a dangerous extent. He merely directed him to take it from the bottom. We may properly take judicial notice that when earth is to be removed, or stone quarried, it is a common and economical method to undermine it, causing it to loosen and fall by its weight, thus facilitating its removal; and, where good judgment is used, accidents rarely happen. Employer and employé understand that this practice is attended with more or less danger, and the latter assumes the risk, as one incident to the employment, when he consents to do such work in the face of an apparent danger. The defendant had no reason to suppose that plaintiff would be careless. The law does not impose upon the master the burden of this accident, and the court should have directed a verdict for the defendant, as requested.

The judgment is reversed. No new trial is ordered.

McGrath, O. J., Long and Montgomery, JJ., concurred. Grant, J., did not sit.


source: Caselaw Access Project

author: Hooker, J.

license: Public Domain

text:
    GUILLOZ v. FORT WAYNE & BELLE ISLE RAILWAY CO.
    1. Electric Railways — Negligence—Speed of Car.
    The mere occurrence of a collision between an electric car and a wagon is insufficient to show that the car was running at an improper rate of speed.

      2. Same.
    It is not presumptively negligent to run an electric car in the usual manner, in the absence of evidence that such manner is in itself improper.
    Error to Wayne; Carpenter, J.
    Submitted November 7, 1895.
    Decided December 30, 1895.
    Case by Caroline E. Guilloz, administratrix of the estate of Paul Guilloz, deceased, against the Eort Wayne & Belle Isle Railway Company, for negligently causing the death of plaintiff’s intestate. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Affirmed.

      James H. Pound, for appellant.

      Edwin F. Conely and Orla B. Taylor, for appellee.
   Hooker, J.

The plaintiff’s husband was killed by being thrown or in alighting from his vehicle, a bakeu’s delivery wagon, at the instant of a collision between said wagon and the defendant’s trolley car. The undisputed evidence shows that the deceased was driving eastward on Champlain street, in the city of Detroit, upon which street the defendant had two tracks. The deceased was south of the tracks. His wagon was covered, and had openings in front, and upon each side, between the wheels. He was overtaken and passed by a car upon the south track, at a point between two cross streets, whereupon he turned to cross the tracks, his horse being upon a trot; and upon discovering a car approaching from the east, upon the north track, he turned back to the south, but did not succeed in getting out of the way of the car, which struck the hind wheel of the wagon, breaking one or more spokes, but not tipping the wagon over. At this juncture he was thrown or jumped out, and received an injury from which he died. The trial court directed a verdict for the defendant, and the plaintiff has appealed.

The negligence alleged is an improper rate of speed, and failure to sound the gong. There is no evidence that the gong was not sounded, and much that it was sounded as soon as the deceased passed into view of the western-bound car. There is also evidence that it was sounded for the crossing. There is no evidence that the car was running at an unusual rate of speed. Susan Smith testified that the car was going at the same rate it always did, i. e., “very quick, unless you want to get off.” Mr. Manigold said he should judge that it was running between 10 and 12 miles an hour. Mr. MacAurell said •that they were going at a pretty good speed; could not say at exactly what rate. Myron Graves said: “It was just about the ordinary rate of speed. 'It might have been five or ten miles. I don’t know anything about speed.” Maggie Burke said: “They were not running very fast, on account of having to slack up at the corner, crossing the street.” There was no evidence that the rate of speed was dangerous, unless it is to be said that the fact of the injury proves it; and until there is something to show the real rate of speed, and that it was unsafe, there was no question of negligence to go to the jury. Grand Rapids & Ind. R. Co. v. Huntley, 38 Mich. 537. So long as the evidence does not show that the car was run in an unusual manner, and there is nothing to show that the usual manner was improper, there is no opportunity to presume that there was negligence. Grand Rapids & Ind. R. Co. v. Judson, 34 Mich. 506. We think, therefore, that the charge of negligence was not sustained, and that the circuit judge rightly withdrew the case from the jury.

Judgment affirmed.

The other Justices concurred.


author: Montgomery, J.

text:
    OMO v. BERNART.
    Corporations — Liability op Stockholders — Construction op Guaranty — Nonassessable Stock.
    A guaranty by the organizers of a corporation, who have issued the entire capital stock to themselves as fully paid, that stock purchased from them shall be “nonassessable” until the full par value of all of the stock shall have been expended in the enterprise, operates to indemnify subsequent purchasers against liability under a statute declaring that stockholders shall be individually liable to the creditors of the .corporation in an amount equal to their stock, such liability to be enforced by an action against all of the stockholders, in which the amount payable by each upon the total corporate indebtedness shall be found and determined.

      Error to Wayne; Carpenter, J.
    Submitted November 19, 1895.
    Decided December 30, 1895.

      Assumpsit by Arthur A. Omo against Mary T. Bernart, impleaded with Christian Budtz and Eliza Holzworth, upon a contract of guaranty. From a judgment for defendant, plaintiff brings error.
    Reversed.

      Moores & Goff, for appellant.

      Cyrus E. Lothrop, for appellee.
   Montgomery, J.

The defendants organized a corporation known as the Toledo, Sienna & Mineral Paint Company, caused the stock to be issued as paid up, and entered upon the books of the company the following-agreement and guaranty:

“We, the owners and stockholders of three hundred shares, of the value of $100 each, of the capital stock of the Toledo, Sienna & Mineral Paint Company, a corporation duly organized and now existing under and by virtue of the laws of the State of Ohio, do hereby agree by and between ourselves, as the owners of said three hundred shares of paid-up capital stock, and also agree with and guarantee to the purchasers of any of said capital stock, or each separate share thereof, issued by this company, is declared nonassessable, until we, the present owners of said capital stock, shall have expended in said enterprise the sum of $30,000.
[Signed] “Eliza Holzworth.
“ Christian Budtz.
“ Mary T. Bernart.”

At the time this agreement was made, the laws of Ohio (1 Rev. Stat. 1886) contained the following provisions:

“Sec. 3258. The stockholders of a corporation which may be hereafter formed, and such stockholders as are now liable under former statutes, shall be deemed and held liable, in addition to their stock, in an amount equal to the stock by them subscribed, or otherwise acquired, to the creditors of the corporation, to secure the payment of the debts and liabilities of the corporation.
“Sec. 3259. The term ‘stockholders,’ as used in the preceding section, shall apply not only to such persons as appear hy the books of the corporation to be such, but to any equitable owner of stock, although the stock appears on the books in the name of another.
“ Sec. 3260. A stockholder or creditor may enforce such liability by action jointly against all the holders or owners ■of stock, which action, shall be for the benefit of all the creditors of the corporation, and against all persons liable as stockholders; and in such action there shall be found and determined the amount payable by each person liable as stockholder on all the indebtedness of the corporation, in which adjudication no costs shall be taxed to nor collected of any stockholder to an amount which, together with the amount to be paid on said indebtedness, will exceed the amount of the stock on which he is liable.”

Plaintiff, as the jury has found, purchased fourteen shares of the stock of this corporation, of the par value of $1,400, in reliance upon this guaranty; and subsequently the plaintiff, with other stockholders, was proceeded against under the statute above quoted, and plaintiff was compelled to pay a sum which, including interest, costs, and expenses, amounted to $1,989.33. Plaintiff thereupon instituted suit against the three guarantors, and the jury gave a verdict in his favor for the sum of $1,989.33. The jury found, in answer to a special question, that the plaintiff’s cause of action arose solely from an assessment which he was compelled to pay by virtue of section 3,258 ■of the Eevised Statutes of Ohio, above quoted. The court based its action on this special finding, and entered a .judgment for defendant Bernart, notwithstanding the verdict. Plaintiff brings error.

Under the' instructions given to the jury, it was necessary for them to find that the defendants had not paid in the sum of $30,000. It will be seen, therefore, that the question is whether the guaranty that the stock of purchasers shall be nonassessable ujitil $30,000 is paid in may be construed as an indemnity against assessment or judgment under this Ohio statute. Defendants contended that the contract should be construed as undertaking—

“1. That the signers of the guaranty owned the entire capital' stock of the concern.
“2. That the stock was issued as fully paid up.
“3. That, although so issued, it was not in fact fully paid up.
“4. That, until the defendants should have expended in the enterprise an amount equal to the full par value of their capital stock, stockholders purchasing their stock from them should not be subject to any calls or assessments for the balance remaining unpaid on the stock.”

And it is contended that the word “nonassessable” means that the stock will not be assessed to make up the deficiency in the amount originally subscribed.

We do not think this the true construction of the agreement. The defendant’s counsel does not contend but that the word “call” would have been more appropriate to express this purpose than the word “assessment,” nor that the word “assessment” may not, and often does not, have a broader signification than the word “call.” Indeed, it is stated in his brief: “An assessment is more properly a call for a further contribution by stockholders after full payment of their stock subscriptions.” If this be so, such assessments are only possible if there be statutory authority for them, and the only statutory authority to which our attention has been called in this case is that under which the plaintiff’s liability was fixed. In Cook, Stock, Stockh. & Corp. Law, § 104, it is said: “ A.n assessment is a term often used to designate the same thing as a call, but sometimes refers to a payment sought to be recovered from the stockholders above and in addition to the par value of the stock.” See, also, 2 Beach, Priv. Corp. § 590; 23 Am. & Eng. Enc. Law, 803; Upton v. Tribilcock, 91 U. S. 45. It is seen, therefore, that the word “nonassessable” is susceptible of a construction which includes liability over and above the subscription price, and we think it altogether clear that such was the intention in this instrument. It is quite clear that the parties did not intend that calls for the unpaid subscriptions should be made; on the contrary, this was a device to avoid that necessity; but it was intended that, if it was necessary for, the protection of purchasers, the guarantors should bring up their payments into the treasury of the corporation to $30,000.

But it is suggested that the statutory proceeding in Ohio is not an assessment, and hence not a breach of the guaranty that the stock is nonassessable. The word “assess” is defined “to adjust or apportion; to fix or settle a sum to be levied or paid.” Burrill, Law Dict. See, also, Black, Law Dict., where the following definition is given: “To ascertain, adjust, and settle the respective shares to be contributed by several persons toward an object beneficial to them all, in proportion to the benefit received.” Section 3260 of the Ohio Revised Statutes provides that in the action under section 3258 “there shall be found and determined the amount payable by each person liable as stockholder on all the indebtedness of the corporation.” This certainly constituted an assessment within common definitions, and stock subject to this contribution is not ‘ ‘ nonassessable. ”

We have considered only the propriety of the order entering judgment for the defendant, as this is the only question discussed.- Our conclusion is that the circuit judge was in error. The judgment will be reversed, and a ' judgment entered on the verdict, with costs of both courts to plaintiff.

The other Justices concurred.


text:
      In re SNYDER.
    Constitutional Law — Title to Aot.
    Act. No. 99, Pub. Acts 1889 (8 How. Stat. § 9314d), entitled “ An act to provide for the punishment of crimes in certain cases,” which makes it a felony to take indecent liberties with male children, is in violation of section 20, art. 4, of the Constitution, requiring the object of an act to be expressed in its title.

      Habeas corptis by Leonard W. Snyder to inquire into the cause of his detention by George E. Mallory, sheriff of St. Clair county.
    Submitted November 19, 1895.
    Prisoner discharged December 30, 1895.

      Thomas H. Murphy (James A. Muir, of counsel), for petitioner.

      Fred A. Maynard, Attorney General, Lincoln A.very, Prosecuting Attorney, and Joseph Walsh, Assistant Prosecuting Attorney, for respondent.
   Hooker, J.

The petitioner is confined by reason of his conviction under Act 99-of the Public Acts of 1889, being section 9314c? of 3 How. Stat., entitled “An act to provide for the punishment of crimes in certain cases.”

This act created a felony. Its title gives no hint as to the character of the act to be punished, and therefore fails to comply with the provisions of section 20 of article 4 of the Constitution, requiring the object of the act to be expressed in its title.

The prisoner will be discharged.

The other Justices concurred.


author: Long, J.

text:
    WEBBER v. HOVEY.
    Corporations — Voluntary Dissolution — Unpaid Stock Subscriptions — Statute op Limitations.
    Under section 12 of the statute in relation to the voluntary dissolution of corporations and the appointment of receivers therefor (chap. 282, 2 How. Stat.), providing that, if there shall be any sum remaining due upon any share of stock subscribed in such corporation, the receiver shall immediately proceed to recover the same, the statute of limitations begins to run as against such right of action immediately upon the dissolution of the corporation and the appointment of a receiver.-
    Appeal from Ionia; Dodds, J., presiding.
    Submitted November 21, 1895.
    Decided December 30, 1895.
    Bill by Andrew J. Webber, receiver of the Ionia Manufacturing Company, against Silas P. Hovey and others, to recover unpaid subscriptions to the capital stock of said corporation. From a decree dismissing the bill, complainant appeals.
    Affirmed.

      McGarry & Nichols and M. A. Nichols, for complainant.

      William 0. Webster, Chaddock & Scully, and Ben Vosper, for defendants.
   Long, J.

The bill sets forth, in substance, that the Ionia Manufacturing Company was organized on of about the 29th day of November, 1882, for the purpose of manufacturing windmills and other articles, under an act entitled “An act for the incorporation of manufacturing companies,” and all acts amendatory thereto, being chapter 124, 1 How. Stat.; that the corporation continued to do a manufacturing business from the time of its incorporation until 1887, at which, time it became apparent to the stockholders that it would not be profitable to continue the business longer; that on the 17th day of May, 1887, Andrew J. Webber and others, constituting a majority of the board of directors, filed a petition in the circuit court for the county of Ionia for the dissolution of the corporation, under 2 How. Stat. chap. 282, being an act entitled “The voluntary dissolution of corporations, and the abatement of suits by and against them,” alleging the following reasons in their petition for its dissolution:

1. That the capital stock had been reduced until it was unsafe longer to continue business.
2. That the property, consisting mainly of machine shop, machinery, and foundry, was then stopped and idle, and could not, by said directors, be run and managed with profit to the stockholders.
3. That owing to the large indebtedness of the corporation, and its ill success in business, if continued, it would soon, as a corporation, become insolvent.

The bill further sets forth that on the 21st day of May, 1887, a decretal order was made by the court that all parties interested in the corporation should appear before a commissioner, and show cause why such corporation should not be dissolved and a receiver appointed;, that, on the hearing before the commissioner, it appeared that there was $4,650 of paid-up stock, and that there had been paid 80 per cent, on stock of the face value of $19,500, which was all of the stock issued by the corporation; that the total indebtedness amounted to $4,081.20; that upon the coming in of the report of the commissioner, and upon the 2d day of July, 1887, the court made an order dissolving said corporation, and appointing the complainant receiver, with the usual powers, etc., upon filing the requisite bond; that the complainant had complied with said order, and had been in the discharge of his duties as such receiver from such time up to the time of filing the bill of complaint; that the- inventory and appraisal of all the property of the corporation at the time complainant entered upon his duties as such receiver show it to have been worth $6,024.70, which was divided as follows: Personal property, $615.88; choses in action, etc.,‘$408.32, — the balance of said sum being in real estate.

The bill further sets forth that the complainant, immediately on entering upon his trust, proceeded to collect the debts owing to the corporation, as far as possible, but only succeeded in collecting $55.90 on the choses in action; that he sold certain of the personal property, amounting to $281.24; that the complainant and other stockholders of the corporation believed at that time that it would be possible to sell the real and personal property and accounts due the company, and realize sufficient to satisfy the indebtedness of the corporation and pay the expenses of the trust; that by reason of the irresponsibility of a large number of parties owing the corporation, and the dilapidated condition of the personal property, the complainant was able to realize from the sale of the same only $345.14; that on the 31st day of March, 1888, he obtained an order from the court giving him the right to sell any and all of the real estate in his possession for the purpose of paying the indebtedness of the corporation, and that by virtue of said order, on the 27th day of April, 1888, he sold the parcel described as “ No. 1 ” to Frederick Graff, one of the directors of the corporation; that on the day of the sale no one was present but the directors of said company, and no bids were made, except as it was understood that if the property could be sold, and time given, certain parties would buy the premises, and pay the sum of $3,000 therefor; that upon this understanding the property was struck off to said Graff; that it was understood that said Graff, with others interested in the settlement, would try to dispose of the property upon time, and apply the moneys received or securities taken upon the indebtedness of the corporation, in order to avoid making an assessment upon the stockholders for the balance of their unpaid stock subscriptions, and that this understanding was agreed to by all parties interested; that upon the 27th day of July, 1891, under an order of the court, the complainant sold the parcel of land designated as “ No. 2,” for the sum of $410, to John Baldie, another director and stockholder, under the same arrangement as was made with Graff, it being understood that in case a buyer could be found, upon time or otherwise, the property would be turned over to him, and the matter closed up in that manner; that the complainant had been making efforts at all times to sell and dispose of the property to the best advantage of all parties interested in the matter.

That upon the 1st day of May, 1894, the indebtedness had swollen to the amount of $6,400; that at that time complainant had no money in his hands with which to satisfy the indebtedness; that the said Graff anj Baldie refused to pay complainant the amount of their bids upon the real estate, claiming that they would have made no bids whatever, if they had believed that they would have to furnish the money; that upon the 3d day of May, 1894, complainant petitioned the court that a decree might be made setting aside the former sales to Graff and Baldie, and permitting complainant to dispose of both real and personal property remaining on hand at public vendue to the highest bidder, and gave notice to defendants of such application; that upon the 19th day of May, 1894, such sales were set aside by the court, and a decree made empowering complainant to sell any and all of said real estate or personal property as prayed in said petition; that, in pursuance of such order, complainant proceeded to advertise and sell parcel No. 1, which was sold to Asa Hoag for the sum of $1,000, he being the highest bidder therefor; that parcel No. 2 was sold to Herbert B. Webber for the sum of $200, he being the highest bidder therefor; that said sales were confirmed upon the 19th day of November, 1894, by the court; that, upon the confirmation, complainant was paid said sums, and was ready to dispose of the same as the court might direct; that, at the time of the filing of the bill of complaint, the debts of the company amounted to $6,400, together with the interest from May 3, 1894; that the expenses of the trust would be at least $1,000; that the complainant had in his hands only $1,200 with which to satisfy the indebtedness, leaving a deficit of $5,000 and upwards; that by virtue of chapter 282, 2 How. Stat., complainant filed his bill for the purpose of collecting the sums due upon the unpaid stock, there not being sufficient assets to pay the debts and expenses of winding up its affairs.

A number of the parties defendant appeared by their solicitors in the cause, and pleaded the statute of limitations, the others being brought in by publication. The case came on to be heard upon said pleas in the circuit court, and upon such hearing a decree was entered holding such pleas to be well pleaded, and dismissing the bill of complaint, from which the complainant appeals to this court.

It is admitted in the argument that no call was ever made by the directors of the company for the balance of the unpaid stock subscriptions. The contention of the complainant is that the unpaid subscriptions to the capital stock of the corporation are a trust fund in the hands of its members, against which the statute of limitations does not begin to run until a call has been made by the directors, or by an assignee under the authority of the court, or some adverse action has been taken on the part of the company. On the other hand, the defendants contend that the statute began to run immediately upon the appointment of the receiver. The court below, in entering a decree dismissing complainant’s bill, was of the opinion that under sections 8185 and 8199, 2 How. Stat., the subscriptions to stock became due at the time the receiver was appointed.

We must determine the question upon the phraseology of the statute. Chapter 282, 2 How. Stat., provides for the voluntary dissolution of corporations under certain circumstances; and the court, in making the decretal order in reference to the Ionia Manufacturing Company, found that the corporation should be dissolved, and appointed a receiver to wind up its affairs.

Section 12 of that chapter provides:

“If there shall be any sum remaining due upon any share of stock subscribed in such corporation, the receiver shall immediately proceed and recover the same, unless the person so indebted shall be wholly insolvent; and for that purpose may file his bill in any court having equity jurisdiction, or may commence and prosecute an action at law for the recovery of such sum, without the consent of any creditors of such corporation.”

Section 26 of that chapter provides that—

“After a final dividend is made, and the debts of any such corporation are paid, if there shall remain any surplus in the hands of the receivers, they shall distribute the same among the stockholders of such corporation, in proportion to the respective amounts paid by them, severally, on their shares of stock.”

The statute contemplates that when the order of dissolution is made, and a receiver is appointed to wind up the affairs of the corporation, he shall immediately call in the unpaid subscriptions to the stock. If not paid, he is authorized to bring suit at once upon his appointment, and the statute makes it his duty to do so “unless the person so indebted shall be wholly insolvent.” It is true that if a company is still in existence, and desires to use any portion of its capital stock, it can be called in only by action of the board as provided by the statute, and no right of action would accrue against a stockholder until such call had been made; but where the corporation has been dissolved, and a receiver appointed, quite another condition of things exists. The balance of the unpaid subscriptions to the capital stock is then due and payable; and the receiver, by the terms of the statute, is not only authorized, but it is made imperative upon him, to “immediately proceed and recover the same,” either in equity or at law, and this without the consent of any creditor. The stockholder holding unpaid stock is at all times indebted to the corporation for such unpaid balance. If an action at law has been commenced for a labor debt against the corporation, and judgment obtained, and execution returned unsatisfied, the creditor can at once sue the stockholder, and recover up to the amount of the unpaid balance upon his subscription to stock, and this without any formal call or demand for such balance. But in the present case there was no assessment to be made by the receiver. The amount of the unpaid subscriptions to the capital stock was fixed and certain. The aid of the court was not necessary in fixing the amount, or to make an assessment or call for the amount unpaid. All that remained to be done was for the receiver to sue for these amounts. The right of action, then, accrued against the stockholders immediately upon the dissolution of the corporation and the appointment of the receiver, which was July 2, 1887. The present bill was filed December 10, 1894,— more than seven years after the right of action accrued.

Rev. Stat. Mass. chap. 36, § 30, provides that, “if any loss or deficiency of the capital stock in any bank shall arise from the official mismanagement of the directors, the stockholders at the time of such mismanagement shall, in their individual capacities be liable to pay the same.” Under this provision, it was held in the case of Baker v. Atlas Bank, 9 Metc. 182, that, if the stockholders were liable to a suit of the creditors, it would be barred by the statute of limitations in six years from the time of the loss or deficiency of the capital stock.

In Com. v. Cochituate Bank, 3 Allen, 42, it was held that the legislature had the power to pass an act authorizing the receivers of a banking corporation, against which a perpetual injunction had been ordered, to make a ratable assessment upon the stockholders of an amount in their opinion sufficient to make up the probable deficiency of funds in their hands for the redemption of its bills, subject to the approval of the court, upon due notice to all parties, etc. It was held that a suit in equity for the confirmation of such assessment could not be brought more than six years after the injunction upon the bank was made perpetual.

In Garesché v. Lewis, 15 Mo. App. 565, 93 Mo. 197, it was held that the unpaid balance upon a subscription to stock in a corporation became due upon the dissolution of the corporation, and, where creditors sought to enforce payment of such subscription, the action must be brought within the statutory period from such dissolution.

In Franklin Savings Bank v. Bridges, (Pa. Sup.) 8 Atl. 611, it was held that the statute of limitations begins to run upon a subscription to the capital stock of a corporation, which afterwards becomes insolvent, from the date of its assignment for the benefit of creditors, and not from the time of a call for the unpaid balance of such subscription.

In Terry v. Tubman, 92 U. S. 156, it was held that, where the charter of a bank contained a provision binding the individual property of its stockholders for the ultimate redemption of its bills in proportion to the number of shares held by them respectively, the liability of the stockholders arose when the bank refused or ceased to redeem, and was notoriously and continuously insolvent; and that, such insolvency having accrued prior to June 1, 1865, an action against the stockholders not commenced by January 1, 1870, was barred by the statute of limitations of the State of Georgia.

We are aware that it was said'in Scovill v. Thayer, 105 U. S. 155, that—

“ It is well settled that when stock is subscribed to be paid upon call of the company, and the company refuses or neglects to make the call, a court of equity may itself make the call, if the interests of the creditors require it. The court will do what it is the duty of the company to do. But under such circumstances, before there is any obligation upon the stockholder to pay without an assessment and call by the company, there must be some order of a court of competent jurisdiction, or, at the very least, some authorized demand upon him [the stockholder] for payment; and it is clear the statute of limitations does not begin to run in his favor until such order or demand.”

But in that case the court was dealing with, and giving-construction to, a statute under which the only duty of the assignee was to collect in upon the unpaid stock a sum which, with the other assets of the company, would be sufficient to satisfy the company’s creditors; and it was said:

“If it should turn out that the other assets were sufficient, no action would lie against the stockholder for the balance due on his stock; for if, in a bankruptcy proceeding, any surplus remained after payment of debts, it would go to the company, and not to the stockholders, and we have seen that the company in this case would have no right to any surplus.”

In the present case, however, our statute requires the receiver to sue for and collect those unpaid subscriptions, and, if any surplus remains after the payment of the debts, then, by section 26 of the act, the receiver shall distribute it among the stockholders, “in proportion to the respective amounts paid by them, severally, on their shares of stock.”

We think it clear that the action is barred by the statute of limitations, and the court properly dismissed complainant’s bill. That decree will be affirmed, with costs.

The other Justices concurred.


author: Hooker, J. Montgomery, J.

text:
    TANNER v. MERRILL.

    1. Accord and Satisfaction — Part Payment — Disputed Claims.
    The doctrine that the receipt of part payment, to be effective in discharge of the entire debt, must rest upon a valid consideration, is limited to cases where the debt is liquidated, by agreement or otherwise; and a claim any portion of which .is in dispute cannot be said to be liquidated, within the meaning of the rule.
    2. Same.
    A receipt in full, given without protest upon payment of the undisputed part of a claim, after a refusal to pay another part which is disputed, is conclusive as against the right of the creditor to recover a further sum, in the absence of mistake, fraud, duress, or undue influence. Montgomery, J., and McGrath, C. J., dissenting.
    Error to Saginaw; Wilber, J.
    Submitted November 22, 1895.
    Decided December 30, 1895.

      Assumpsit by Frank A. Tanner against Thomas Merrill and others for work and labor performed. From a judgment for plaintiff, defendants bring error.
    Reversed.

      D. P. Foote, for appellants.

      Rowland Connor, for appellee.

       With the case of Fuller v. Kemp, (N. Y. Ct. App.) as reported in 30 L. R. A. 785, there is an exhaustive note on the subject of accord and satisfaction by part payment.

   Hooker, J.

The defendants appeal from a judgment recovered against them at circuit. They are lumbermen, and" the plaintiff worked for them at Georgian Bay, his transportation from Saginaw to that place having been paid by them. When he quit work, a question arose as to who should pay this, under the contract of employment, and defendants’ superintendent declined to pay any transportation. The plaintiff needed the money due him to get home, and showed a telegram announcing the illness or death of his mother, and said that he must go home, to which the superintendent replied that “he did not pay any man’s fare; ” whereupon a receipt in full was signed, and the money due, after deducting transportation, was paid. The plaintiff testified that they had no dispute, only he claimed the fare and the superintendent refused to allow it.

The most important question arises over a request to charge upon the part of the defendants, which reads as follows:

‘ ‘ The testimony of the plaintiff is that, at the time the receipt put in evidence in this case was signed by him, he claimed that his railroad fare should not be' deducted from his wages; that this was denied by the agents and superintendent of defendants, and it was taken out of his wages; that he then signed the receipt with full knowledge of its contents, and of the fact that his railroad fare had been taken out of his wages. This being so, the receipt in this case, upon the plaintiff’s own testimony, cannot be contradicted. While a receipt may be contradicted in certain cases, it must be in a case of mistake, ignorance of fact, fraud, or when some unconscionable advantage has been taken of one by the other party. Therefore, the receipt, in this case, shows a full settlement of all claims plaintiff had against the defendants.”

The only theory upon which it can be contended that this request should have been given is that the plaintiff accepted less than he claimed, but no more than defendants admitted, to be due, and gave a receipt in full when the defendants’ superintendent refused to pay more. We do not discover any testimony tending to show an agreement to accept as payment, either in full or by way of compromise, except the receipt, and the question resolves itself into this: Whether a receipt in full is conclusive of the question of defendant’s liability, when it is given upon payment of a portion of a claim admittedly due, accompanied by a refusal to pay more, in the absence of mistake, fraud, duress, or undue influence.

It is urged upon bebalf of the plaintiff that receipts are always open to explanation, and that there is no consideration to support the acceptance of a portion of a valid claim as full payment. The cases which counsel cite do not support the broad contention of plaintiff’s counsel, whichwould seriously derange business affairs if it should be sustained. The doctrine that the receipt of part payment must rest upon a valid consideration to be effective in discharge of the entire debt is carefully limited to cases where the debt is liquidated, by agreement of the parties or otherwise, which was not the case here. It was in dispute. In the case of St. Louis, etc., R. Co. v. Davis, 35 Kan. 464, the opinion says that “it is a well-settled principle of law that the payment of a part of an ascertained, overdue, and undisputed debt, although accepted as full satisfaction, and a receipt in full is given, does not estop the creditor from recovering the balance. In such a case the agreement to accept a smaller sum is regarded to be without consideration. ” The case of Day v. Gardner, 42 N. J. Eq. 199, was one where the agreement was to forgive a debt, implying its existence. In Hasted v. Dodge, (Iowa) 35 N. W. 462, the opinion of Mr. Justice Rothrock shows the debt not to have been in dispute. Moreover, the doctrine was not applicable to the case for reasons shown. See, also, American Bridge Co. v. Murphy, 13 Kan. 35. In Bailey v. Day, 26 Me. 88, the claim was liquidated by judgment. In Hayes v. Insurance Co., 125 Ill. 639, the court apply the doctrine relied upon, but expressly state that “this rule has no application where property other than money is taken in satisfaction, or where there is an honest compromise of unliquidated or disputed demands.” See, also, Bish. Cont. § 50; 2 Pars. Cont. 618. In Marion v. Heimbach, 62 Minn. 215, the court say: “But where the claim is unliquidated, it would seem to be true that if the creditor is tendered a sum less than his claim, upon the condition that, if it is accepted, it must be in full satisfaction of his whole claim, his acceptance is an accord and satisfaction.” See, also, Fuller v. Kemp, 138 N. Y. 231, where the same doctrine is held; Fire Ins. Ass'n v. Wickham, 141 U. S. 577.

The important fact to ascertain is whether the plaintiff’s claim was a liquidated claim or not. If it was, there was no consideration for the discharge. If not, the authorities are in substantial accord that part payment of the claim may discharge the debt, if it is so received. Upon the undisputed facts, the claim of the plaintiff, as made, was not liquidated. It was not even admitted, but, on the contrary, was denied, because the defendants claimed that it had been partially paid by a valid offset. While the controversy was over the offset, it is plain that the amount due the plaintiff was in dispute. If so, it is difficult to understand how'it could be treated as a liquidated claim, unless it is to be said that a claim may be liquidated piecemeal, and that, so far as the items are agreed upon, it is liquidated, and to that extent is not subject to adjustment on a basis of part payment. Cases are not numerous in which just this phase of the question appears. This would seem remarkable, unless we are to assume.that, in calling a claim unliquidated, the courts have alluded to the whole claim, and have considered that, where the amount is not agreed upon, the claim as a whole is unliquidated, and therefore subject to adjustment. If this is not true, no man can pay an amount that he admits to be due without being subject to action whenever and so often as his creditor may choose to claim that he was not fully paid, no matter how solemn may have been his acknowledgment of satisfaction, so long as it is not a release under seal.

The general rule is a technical one, and there are many exceptions. It has been said that it “often fosters bad faith,” and that “the history of judicial decisions upon the subject has shown a constant effort to escape from its absurdity and injustice.” Harper v. Graham, 20 Ohio, 105; Kellogg v. Richards, 14 Wend. 116; Brooks v. White, 2 Metc. (Mass.) 283 (37 Am. Dec. 95). Again, it is said to be “rigid and unreasonable,” and “a rule that defeats the expressed intentions of the parties, and, therefore, should not be extended to embrace cases not within the letter of it.” Wescott v. Waller, 47 Ala. 492; Johnston v. Brannan, 5 Johns. 268; Simmons v. Almy, 103 Mass. 35. See Milliken v. Brown, 1 Rawle, 391, where the rule is vigorously denounced. It has no application in cases of claims against the government. If one accepts the amount allowed, it is a discharge of the whole claim. U. S. v. Adams, 7 Wall. 463; U. S. v. Child, 12 Wall. 232. See, also, Wapello Co. v. Sinnaman, 1 G. Greene, 413; Brick v. County of Plymouth, 63 Iowa, 462; Perry v. Cheboygan, 55 Mich. 250; Calkins v. State, 13 Wis. 389. Again, it has been repeatedly held that part payment is a bar to a claim for interest. Another exception is found in composition with creditors.

It is believed that we may safely treat this claim as one claim, not as two, and as unliquidated, inasmuch as it was not admitted. In McGlynn v. Billings, 16 Vt. 329, the defendant, after an examination of accounts, claimed that he owed the plaintiff $82, and drew a check for that sum, and tendered it aá payment in full. It was refused and it was delivered to-a third person, with directions to deliver it whenever the plaintiff would receive it as payment in full. This was done, and it was held to discharge the debt. In Hills v. Sommer, 53 Hun, 392, the plaintiffs shipped lemons to dealers in St. Joseph, Mo., and were notified that some were defective, with a claim of a specific rebate, which plaintiffs refused to allow. A draft was subsequently sent for the amount which the defendants had previously expressed their willingness to allow, with a letter stating that it was in payment of the invoice. The draft was cashed, and action brought for the remainder of the claim. Verdict was directed for the defendants. Pierce v. Pierce, 25 Barb. 243, seems to be a similar case. In Potter v. Douglass, 44 Conn. 541, plaintiff refused $45, which was tendered in full payment of a claim. He took it, however, on account, as he said, and wrote a receipt to that effect, which defendant refused, for the reason that it stated that the money was received on account. . The plaintiff, however, kept the money. It does not appear that this amount of $45 was disputed. Apparently, it was not. Yet the court called the claim an unliquidated demand, and held it to have been discharged. In Perkins v. Headley, 49 Mo. App. 562, it is said: “But if there is a controversy between him [the creditor] and his debtor as to the amount which is due, and if the debtor tenders the amount which he claims to be due, but tenders it on the condition that the creditor accept it in discharge of his whole demand, and the creditor does accept it, that will be an accord and satisfaction as a conclusion of law.”

While no Michigan case decisive of this question is cited, and we recall hone, it was held in Houghton v. Ross, 54 Mich. 335, that—

“A receipt which states its purpose to be for a complete settlement, and which covers the whole period of dealing, is equivalent to an account stated; and though it is open to explanation as to errors or omissions, it cannot be treated as if it had not been meant to cover everything.”

And in Pratt v. Castle, 91 Mich. 484, it was said that—

“1. Settlements are favored by the law, and will not be set aside, except for fraud, mistake, or duress.
“2. A settlement evidenced by the execution of mutual receipts Of ‘one dollar, in full for all debts, dues, and demands to this date,’ except as to certain specified items, is conclusive, in the absence of fraud or mistake, as to all prior dealings between the parties not covered by the excepted items.”

See, also, Dowling v. Eggemann, 47 Mich. 171.

It therefore appears that- such settlements should have weight, and it seems reasonable to hold that the rule contended for does not apply, for the reason that this was an ■unliquidated demand, although, a certain portion of it was not questioned. Clearly, the claim was disputed, and, so far as this record shows, the defendants’ superintendent was given to understand that the money paid was accepted in full satisfaction, as plaintiff’s own evidence shows that he gave the receipt without protest, and without stating to the defendants’ superintendent what he said, aside, to his fellow laborers, that it would make no difference if they did give the receipts. To hold otherwise would be a recognition of the “mental reservation” more effective than just. Upon the plaintiff’s own testimony, he accepted the money, with the knowledge that the defendants claimed that the amount paid was all that was his due, and gave a receipt in full. There is nothing in the case to negative the inference, naturally to be drawn from this testimony, that there was an accord and satisfaction of an unliquidated demand.

The judgment must be reversed. No new trial should be ordered.

Long and Grant, JJ., concurred with Hooker, 'J.

Montgomery, J.

(dissenting). I think that the payment of an admitted indebtedness is no consideration for a discharge of a further claim by the creditor.

McGrath, C. J., concurred with Montgomery, J.


author: Grant, J.

text:
    VAN DER GROEF v. JONES.
    1. Evidence — Record of County Surveyor.
    The record of a survey by a county surveyor, whichshows neither the name of the person for whom it was made nor the variation of the magnetic needle from the true meridian, as required by section 619, 1 How. Stat., is inadmissible in evidence.
    3. Same.
    Under 1 How. Stat. § 616, the record of such a survey, if complying with the requirements of section 619, is presumptive evidence of the facts therein contained, and casts upon the opposing party the burden of producing evidence to rebut the presumption; but whenever other surveys, made by competent surveyors, are introduced, the survey of the county surveyor is of no more binding force than the others, unless it has been acquiesced in by the parties.
    3. Adverse Possession — Estoppel.
    In an action of trespass involving the true location of a boundary line, it appeared that, upon defendant’s removing a fence from the line as claimed by the plaintiff, where it had existed for many years, and building it upon the line as claimed by himself, the plaintiff stated that he would have a resurvey to determine where the true line was, and would not abide by the survey which the defendant had caused to be made, and in accordance with which he had erected his fence. Held, that the plaintiff was not thereby estopped from setting up title to the land in dispute by adverse possession.
    Error to Kalamazoo; Buck, J.
    Submitted December 4, 1895.
    Decided December 30, 1895.
    Trespass qucire clausum fregit by Adrian Van Der Groef against John W. Jones and Henry Knowles. From a judgment for plaintiff, defendants bring error.
    Heversed.

      H. 0. Bliss and Howard & Boos, for appellants.

      James H. Kinnane and Oscar T. Tuthill, for appellee.
   Grant, J.

The dispute in this case arises over the boundary line between the lands of the plaintiff and the defendant Jones, Knowles being the latter’s tenant. Their lands are situated in the N. W. ■£ of the N. E. i of section 11, in the township of Kalamazoo. Plaintiff made two claims: (1) That the true boundary line was outside the place where the alleged trespass was committed. (2) That, if it was not the true boundary line, he had obtained title by adverse possession.

1. Both parties introduced surveys made by competent surveyors. The principal errors arise over the admission of and the effect to be given to a record of a survey found upon the surveyor’s record of Kalamazoo county, made April 28, 1862, by the then county surveyor. A copy of this record was introduced, over the objection and exception of the defendants. It will be found below.

As to the effect of this survey, the learned circuit judge instructed the jury as follows:

“The jury is instructed that the United States government, in its original survey, fixed the section corners and quarter posts. The division of the section was afterwards done by surveyors, and points established thereon, from the original corners and quarter posts thereon; and if so done by a county surveyor, and a record made by him thereof in a book kept by him for that purpose, as required by law, then Such recorded survey is evidence of itself, and the points indicated there must be taken as true.”

After instructing the jury, as requested by the defendants, that a survey made by the county surveyor is of no greater weight as evidence than those of any other surveyors of equal ability and skill, the judge said:

“That is true, gentlemen, but it needs this modification, as I have already practically instructed you, — that is true whenever a county surveyor is called upon to make what-is practically a resurvey. The survey originally made by the county surveyor, having been recorded in the book, must be taken as true and correct, whether it be exactly done according to his mathematical skill, or the mathematical skill of his profession. * * :!: It appears by the undisputed evidence in the case that in the year 1862 Francis Stimson, then the county surveyor of this county, made a survey of part of section 11, and that by such survey he fixed and established a point he called a ‘ center ’ of said section 11, and noted the bearings of certain witness trees, as required by law. The center of the section, being thus fixed and established by the proper authority, could not afterwards be changed, whether the center thus established was the true geographical center or not; and any subsequent resurvey should be for the purpose of ascertaining where the original location of this central point was, and not to determine where it ought to have been.”

Other language of similar import was used. The practical result of this ruling was the establishment of the line as claimed by the plaintiff.

We think the learned circuit judge was in error in admitting this survey in evidence, and in his instruction as to the effect to be given to it, if it had been such a record as the law makes admissible in evidence. The statute upon which the plaintiff relies is as follows: “The certificate of the surveyor, or his deputy, of any survey made by him of any lands in the county, shall be presumptive evidence of the facts therein contained, unless such surveyor or deputy shall be interested therein.” 1 How. Stat. § 616. Section 619 provides what the record in the surveyor’s book shall contain, and unless those provisions are complied with, the record is inadmissible for any purpose. Smith v. Rich, 37 Mich. 549. The provisions of section 619 will there be found stated in full. The record of surveys in that case was held inadmissible, because, among other reasons, neither of them appeared to be a survey of any piece of land, nor did either show for whom the survey was made, or the variation of the magnetic needle from the true meridian. The record of the survey in this case does not show for whom it was made, nor the •variation of the magnetic needle from the true meridian. It contains no statement that point A is the center of the section. It simply says “at or near the center of the section.” This expression cannot be regarded as a permanent establishment of the center of the section, binding upon those who are not interested in or parties to the making of that survey. It was held in Hess v. Meyer, 73 Mich. 259, that a law providing that a record made and entered by the surveyor upon the surveyor’s book shall be received as evidence in all the courts of this State did not make a prima facie case, and it was error to so instruct the jury. The record of a survey which complies with the statute now under consideration is undoubtedly presumptive evidence .of the facts therein found, and casts the burden of proof upon the opposing party to produce evidence to rebut the presumption. Whenever, however, other surveys are introduced, made by competent surveyors, such survey is of no more binding force than any other, where parties have not acquiesced in it.

2. We think there was ample evidence for the consideration of the jury upon the question of adverse possession. The principles of law in such cases were correctly given, and there was a fair dispute upon the facts. It is, however, claimed on behalf of the defendant Jones that the plaintiff rented some of the disputed land from him, and that this broke the continuity of possession necessary to obtain title, and estopped him to assert such adverse possession. This also was disputed, and upon this point the court clearly instructed the jury that, if they found the fact as claimed by the defendants, the plaintiff had obtained no title by adverse possession.

When the defendants removed the fence from the line as claimed by plaintiff, and where it had existed many years, and built it upon the line as claimed by them, the plaintiff said he would have a resurvey to determine where the real line was, and would not abide by the survey which they had caused to be made. Such statement did not estop him from setting up, upon this trial, adverse possession. It was not a conclusive assertion that he did not rely upon it.

The judgment must be reversed, and a new trial ordered.

Long, Montgomery, and Hooker, JJ., concurred. McGrath, O. J., did not sit.


text:
    ANDERSON v. SMITH.
    1. Usury — Foreclosure oe Mortgage — Pleading.
    Where a contract sought to be foreclosed as a mortgage ' shows upon its face that it is usurious, that defense is sufficiently pleaded by an averment in the answer “that the claim of the complainant is usurious, and that the contract provides for a bonus in the nature of a usurious rate of interest,” although it is further averred that, by reason thereof, the complainant is not entitled to recover any interest upon the amount advanced under the terms of said contract, while in truth, under the statute in force when the contract was made, only the excess over the lawful rate of interest was forfeited.
    2. Same — Compensation por Services.
    A judgment debtor, whose interest in certain property had been levied upon, assigned his interest to a trustee, under an agreement that the latter should purchase the property at the execution sale with money to be furnished in part by the assignor and in part by third parties, and, after acquiring the legal title, should reconvey to the assignor upon payment of the sum of §2,000, together with the amount invested by such third parties, and the expenses by them incurred, with interest thereon, and such sum for their services, “rendered after the purchase,” as should be fixed by the trustee. It was further provided that, in case a purchase should not be made, the third parties should receive §150 for their services. Held, in a suit brought to foreclose the contract as a mortgage, that the provision for the payment of §2,000, to the extent that it exceeded the established value of the services rendered prior to the purchase, was usurious.
    3. Mortgage Foreclosure — Suspension op Interest.
    Prior to commencing a suit to foreclose a contract as a mortgage, the complainant, claiming to own the premises in question, had instituted summary proceedings to recover possession, but was defeated, the cqurt holding that the relation of the parties was that of mortgagor and mortgagee. Held, that the defendant in the foreclosure suit, not having tendered the amount due, was not entitled to a suspension of interest during the pendency of the former suit.
    4. Same — Order op Sale.
    Upon the foreclosure of a mortgage covering an hotel and the furniture used therein, the court may direct that the personal property be sold separate and apart from the realty.
    Appeal from Chippewa; Steere, J.
    Submitted December 4, 1895.
    Decided December 30, 1895.
    Bill by George Anderson, trustee, Levi L. Barbour, Dwight C. Rexford, and Henry T. Phillips, against William S. Smith and wife, to foreclose, as a mortgage, the contract set forth in Anderson v. Smith, 103 Mich. 446. From a decree for complainants, defendants appeal.
    Decree modified and affirmed.

      George A. Cady (Barbour & Rexford, of counsel), for complainants:
    Under the statute in force at the date of the agreement, interest was always recoverable on a usurious contract up to the highest legal rate not prohibited, if the contract so provided (1 How. Stat. § 1595; Smith v. Stoddard, 10 Mich. 148); and a contract to pay interest, if legal when made, will be enforced, notwithstanding a change in the statute reducing the rate of interest (Richardson v. Campbell, 34 Neb. 181). Therefore, under the pleadings, the claim of usury is not available, the only allegation with reference thereto being to the point that no interest can be recovered. Furthermore, it is essential to a plea of usury that it state the facts which are claimed to render the transaction usurious. Rainbolt v. Strang, 39 Neb. 339; Bell v. Stowe, 44 Neb. 210; Trammell v. Woolf oik, 68 Ga. 628; Woodall v. Kelly, 85 Ala. 368; Moses v. Building & Loan Ass'n, 100 Ala. 465; Hosier v. Norton, 83 111. 519; MatthiessenY. Kohlsaat, 15 N. Y. Supp. 836; 27 Am. & Eng. Enc. Law, 1041, 1044.
    To constitute usury, it must fee clearly established that there existed an intention to take usurious interest. Orr v. Lacey, 2 Doug. 230, 252; Case v. Fish, 58 Wis. 56; Myers v. Williams, 85 Ya. 621, and cases cited.
    Where usury is alleged as a defense to an obligation to pay money, the presumption is against the violation of the law, and in favor of the innocence of the party charged, and the usury must be established by clear and satisfactory evidence. Fldridge v. Reed, 2 Sweeny, 155; White v. Benjamin, 138 N. Y. 623; Van Beil v. Fordney, 79 Ala. 76; Morris v. Taylor, 22 N. J. Eq. 438; Security Co. v. Baxley, 44 S. C. 81; 27 Am. & Eng. Enc. Law, 1045.
    If a promise to pay a sum in excess of legal interest is dependent upon an uncertain contingency, the contract is not usurious. Truby v. Mosgrove, 118 Pa. St. 89; Spain v. Hamilton, 1 Wall. 604.
    Upon the facts in this case, the item of $2,000 was properly allowed as compensation for sérvices rendered. Case v. Fish, 58 Wis. 56; Bridges v. Sheldon, 18 Blatchf. 507; Hutchinson v. Hosmer, 2 Conn. 341; Smith v. Wolf, 55 Iowa, 555.

      Horace M. Oren (John W. Shine, of counsel), for defendants :

      All of the property covered by the mortgage should be sold together. 2 Jones, Mortg. § 1618; Hill v. Bank, 97 U. S. 450.
    There should be a suspension of interest during the time complainants were carrying on the prior litigation (Good-speed v. Dean, 12 Mich. 352; Lumber Co. v. Bates, 31 Mich. 158; McQueen v. Gamble, 33 Mich. 344; Jones v. Shaw, 56 Mich. 332; Toms v. Boyes, 59 Mich. 386), a tender of the amount due being unnecessary under the circumstances (Moore v. Smith, 95 Mich. 71; Soell v. Hadden, 85 Tex. 182; 25 Am. & Eng. Enc. Law, 899, and cases cited; Baumann v. Pinckney, 118 N. Y. 604).
    If, under our statute, usury must be specially pleaded in any case (which is doubtful), it is unnecessary when the contract shows upon its face that it is usurious. International, etc., Ass’n v. Biering, 86 Tex. 476; Krause v. Pope, 78 Tex. 478; Stockham v. Munson, 28 111. 51.
    While a fair and reasonable charge made by the lender for services actually rendered or expenses incurred in connection with the loan does not render it usurious, a very strict degree of proof is required as to the reasonableness of such charges and the bona fides of the lender, where a claim of usury is set up. 27 Am. & Eng. Enc. Law, 1013, 1014.
    Any sum exacted as compensation for the use of money, in excess of the legal rate of interest, is usury, no matter by what name it may be called. Garuthers v. Humphrey, 12 Mich. 270; Phelps v. Montgomery, 60 Minn. 303; Ferguson v. Sutphen, 8 111. 547; Meaker v. Fiero, 28 N. Y. Supp. 469; 27 Am. & Eng. Enc. Law, 922; But-trick v. Harris, 1 Biss. 442.
    The borrower in a usurious contract, under our statute, has no other remedy than the abatement provided by the statute. Graig v. Butler, 9 Mich. 21. And unlawful interest, even if paid, will be abated in a suit on the same contract under which it was exacted. Smith v. Stoddard, 10 Mich. 148, 151.
   Montgomery, J.

This is a suit to foreclose, as a mortgage, a contract which was considered in Anderson v. Smith, 103 Mich. 446. The terms of the contract are there set out at length. The most important question on this appeal is whether the item of $2,000 stipulated to be paid by Smith is usurious. The agreement, so far as it relates to this item, is as follows:

“That said first parties hereby agree, in consideration thereof, to pay said Andrew McLellan, trustee as aforesaid, the sum of $2,000, and, in addition thereto, the sum or sums said second and third parties shall have at any time invested in said property, and all expenses and sums of money whatever they may have at any time been put to or expended or laid out, in any way whatsoever, in connection with the said purchase and said property and any business arising therefrom, and such sum or sums as their services, rendered after such purchase, shall, in the opinion of said trustee, respectively be reasonably worth.”

It was determined in the former case between these parties that the transaction in question amounted to an advance or loan of money, and that the complainants Barbour, Rexford, and Phillips occupied the position of mortgagees. This must be taken as settled.

It was contended by the complainants that the defense of usury was not sufficiently pleaded. The answer did state “that the claim of said complainants is usurious, and that the instrument known as ‘ Exhibit B ’ provides for a bonus in the nature of a usurious rate of interest, and that by reason thereof said complainants are not entitled to recover against said defendants any interest upon the amount advanced under the terms of said Exhibit B.” It is true, this deduction as to the legal effect of usury is incorrect, as, under the statute in force when this contract was made (1 How. Stat. § 1595), the effect of providing for the payment of usury was only to forfeit the excess over the lawful rate of interest. The statement of facts was, we think, sufficient, inasmuch as the alleged usury appeared on the face of the paper itself. International, etc., Ass’n v. Biering, 86 Tex. 476; Stockham v. Munson, 28 Ill. 51.

It is also contended that there was no intention to exact usury; that the parties intended to engage in a joint venture in purchasing property, for a profit to be derived by them severally. But the legal effect of the transaction was an advance to the Smiths of a sum of money by Barbour, Rexford, and Phillips, at interest. This was determined by the former decision. The agreement did not provide for a sale of the property on joint account, but for the repayment of advances by Smith Bros.

It is also contended that the item of $2,000 may be treated as an agreed compensation for contemplated and necessary services, which were actually rendered. But it will be noticed that this is not stated in the agreement to be compensation for services. It does not include expenses, as these are fui’ther provided for; nor does it include services rendered after purchase, as these are also provided for, and to be compensated for in such sum as is deemed reasonable by the trustee. The only services, then, which could have been covered by this agreement, are those preceding the purchase of the property; and it is significant that the contract provided that, in case the purchase was not made, these should be paid for at the price of $150. There is no evidence in the record that the services were worth $2,000, and the inference, from the contract itself, is justified, that they were not worth that amount. We think that there is no escape from holding that this provision of the contract is usurious, to the extent that it exceeds the established value of the services; and, as the only tangible proof of value fixes the sum at $150, we think this item should be reduced $1,850.

It is further contended by defendants that there should be ’ a suspension of interest during the time the parties were litigating in the other case. We know of no principle which justifies any such holding. Defendants were in fault during all this time. They were at liberty to pay or tender the amount due, and there is no reason why, upon a failure to do so, the stipulated interest should not be allowed.

Nor do we think the decree should be modified in respect to the sale of the property. The decree provided that the personal property should be sold separate and apart from the realty. While the sales may be made at one and the same time, we see no reason to disturb the order that they must be made separately.

Complainants ask to have a further allowance of interest on another item which was disallowed in the court below, but, as they have not appealed, the question is not before us.

The decree will be modified by striking out the usurious item, and interest thereon, and defendants will be entitled to recover costs in this court.

The other Justices concurred.


author: Grant, J. Hooker, J.

text:
    DUNNEBACK v. TRIBUNE PRINTING CO.
    1. Libel — Privilege—Candidate for Public Office.
    Newspapers have a right to state, for the guidance of electors, any fact which affects the fitness of a candidate for a public office. While the law of libel requires, in such cases, that, in their statements of facts, they observe an honest regard for the truth, when they have done so, they are not responsible.
    3. Same — Justification.
    Plaintiff was a candidate for county treasurer. The defendant stated editorially that he was an unfit candidate; that he had been given reason to expect, two years before, that he would be appointed deputy in the same office; that the reason why he was not so appointed was that the treasurer’s bondsmen seriously objected, not wishing to be held in any way responsible for the public funds if plaintiff had any share .in the handling of them. On the trial, four of said bondsmen testified that, after investigation, they refused to sign the treasurer’s bond if he appointed plaintiff. Held, that the gist of the article was the refusal of the bondsmen to become responsible if plaintiff should be appointed, which was proved to be true; and that all else in the article was justifiable criticism based upon that fact. Hooker, J., dissenting.

      Error to Wayne; Hosmer, J.
    Submitted December 3, 1895.
    Decided December 30, 1895.
    Case by Joseph F. Dunneback against the Tribune Printing Company for libel. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Affirmed.

      William J. Gray (James H. Pound, of counsel), for appellant.

      Brooke & Spalding, for appellee.
   Grant, J.

I think the circuit court properly directed a verdict for the defendant. The declaration contains four counts. The first two contain no innuendoes, and are based upon the theory that the article is libelous per se. The third count contains an innuendo that the article meant that plaintiff was dishonest. The fourth count contains the innuendo that the article meant that plaintiff was not appointed deputy county treasurer because the bondsmen of the county treasurer objected upon the ground that he was dishonest. Defendant gave' notice, with its plea, that it would prove the truth of the facts stated in the article. Plaintiff rested his case upon proof of the publication, and that he was the nominee for county treasurer. Defendant then introduced Mr. Huebner, who was county treasurer for the term beginning January 1, 1891. He testified that he had promised the position of deputy treasurer to the plaintiff; that he did not appoint him, because he was not satisfactory to his proposed bondsmen; that they made an investigation, and, after such investigation, still objected. Collins B. Hubbard, Edwin F. Mack, Levi L. Barbour, and Richard H. Fyfe, four of Mr. Huebner’s bondsmen, testified that they refused to sign his bond if he appointed the plaintiff, and so refused after investigation. It thus appears that the truth of the statements made in the article was conclusively proven. Plaintiff was not sworn, and introduced no testimony, except as above stated.

Plaintiff was a candidate for a very responsible and important public office. Newspapers had the right to state, for the guidance of electors, any fact which affected his fitness for that office. The newspapers in such case are not responsible for the inferences to be drawn from such facts. The law of libel requires in these cases that newspapers in their statements of facts observe an honest regard for the truth, and, when they have done so, they are not responsible. This subject is fully discussed and authorities cited in Belknap v. Ball, 83 Mich. 583. See, also, McAllister v. Free Press Co., 76 Mich. 338, 356.

But it is insisted that the statement “they [the bondsmen] did not wish to be held in any way responsible for the public funds if Mr. Dunneback had any share in the handling of them,” is the statement of a fact, the truth of which is not proven. The chief duty of the county treasurer and his deputy is to have the care, custody, control, and disbursement of the public funds. For the faithful performance of this duty the bondsmen become responsible. The proposed bondsmen were officers of the Citizens’ Savings Bank, and it is the fair presumption that their sole desire was that their principal should select a deputy whose character in all respects would be a guaranty for the faithful management of the funds for which their principal was to become responsible. It is difficult to conceive that they would have objected to any one in whose hands they would consider these funds to be safe. The reasons why these men considered it unsafe for plaintiff to be appointed deputy are immaterial. It was unnecessary that they should make any direct charge of dishonesty, nor did they. There might be many reasons why they should not wish to be held responsible for the public funds in case of his appointment. These might relate to his financial standing, business ability, moral character, incompetency, and many other things. The gist of the article is the refusal of the bondsmen to become responsible if plaintiff were appointed. This was proven to be true. All else in the article is justifiable criticism based upon this fact. Belknap v. Ball, 83 Mich. 588.

The judgment should be affirmed.

Long and Montgomery, JJ., concurred with Grant, J. McGrath, O. J., did not sit.

Hooker, J.

(dissenting). Upon the trial of this cause (an action for libel), the circuit judge directed a verdict for the defendant. The plaintiff was candidate for county treasurer, and the following appeared editorially in the defendant’s newspaper:

“poor material for treasurer.
“The circumstances under which the Democrat county ticket was constructed were not such as to inspire great confidence in the nominees of the convention for any positions of official service. They were especially not calculated to bring to the front men fitted for places of the highest responsibility and trust. The purchase of votes was one of the open and notorious features of the convention, and, though the odium of these transactions does not attach to all the nominees, it places those who are not implicated in exceedingly bad company.
“Without reference to any possible share in the more scandalous proceedings of the convention, the outcome was, as might be expected, the nomination of some very unfit candidates. The nominee for county treasurer is one of these. He was given reason to expect two years ago that he would be appointed deputy in the same office. The reason why he was not so appointed was that the treasurer’s bondsmen seriously objected. They did not wish to be held in any way responsible for the public funds, if Mr. Dunneback had any share in the handling of them. If political feeling were left entirely out, it would be accepted by almost every one as a truism that the man who is to have care of public funds to the amount of several hundred thousand dollars a year ought to be one in whom anybody’s bondsmen would have confidence, and who could secure some of the best men in the city upon his own bond. If any private individual should intrust a business of the same amount to a man who was without financial responsibility of his own, and who lacked the confidence of other moneyed men, his friends would consider the advisability of having him placed under a guardian. It is safe to say that of the substantial business men who expect to vote the Democrat ticket next Tuesday there is not one who would place a business of $700,000 or $800,000 a year in the hands of Mr. Dunne-back.
‘ ‘ Fortunately, the voters of Wayne county are not driven to that necessity. The opposing candidate for the responsible office of county treasurer, Milton H. Carleton, of Canton, has shown his capacity for affairs by building up a large business of his own, and by accumulating a comfortable fortune. He is financially responsible in his own name for a large amount, and he will have no trouble in securing good bondsmen for any required sum. The position of county treasurer is in intent, if not in practice, a business, and not a political office. We believe the taxpayers of this large and wealthy county have sense enough to see that the incumbent ought to be a practical business man, who has demonstrated his capacity for public affairs by the successful conduct of a large private business.”

The evidence, which is all returned, shows beyond dispute that the plaintiff had on a former occasion been promised the appointment of deputy county treasurer by the county treasurer elect, but was not appointed, and that the reason was that the persons who became the treasurer’s bondsmen refused to sign such bonds if such appointment was made. But it is not so clear that the refusal was through an unwillingness to be held responsible if Dunneback was to handle the funds. Such an inference might be a natural, but not a necessary, one. If, as a matter of fact, it was true that the bondsmen were unwilling to be held responsible if Dunneback was to handle the funds, the truth of the statement would be a complete defense; but if, as a matter of fact, their unwillingness was based on another reason, the inference drawn by defendent may have been wrong, and the assertion a misstatement of fact, none the less actionable because based upon an inference, and, if the natural import of the language was to charge dishonesty, the language was actionable. The article clearly implies a want of confidence, and, while the general import may be that of a want of confidence in business ability, care, watchfulness, and the other attributes which are essential to make one a safe custodian of money, the term “want of confidence” is susceptible of application to the question of integrity of character. It therefore becomes a necessity to determine (1) whether the words implied a want of confidence in plaintiff’s honesty; (2) whether the bondsmen actually had such want of confidence. These were questions for the jury under proper instructions. Inasmuch as the court decided them, I think the judgment should be reversed, and a new’trial ordered.


text:
    FLINT & PERE MARQUETTE RAILROAD CO. v. WAYNE CIRCUIT JUDGE.
    1. Assumpsit — Common Counts.
    Money due upon a contract that has been fully performed is recoverable under the common counts; but the breach of a special contract cannot be shown in such action.
    2. Same — Amendment—Statute of Limitations.
    A common-count declaration may be amended by the insertion of special counts setting up a cause of action against which the statute of limitations has run, where proof of such cause of action could have been given under the original declaration; but not otherwise.
    3. Mandamus — When Lies.
    A writ of mandamus will not issue to vacate an order of the circuit court where the relator is only entitled to a modification of the order.

      Mandamus by the Mint & Pere Marquette Railroad Company to compel Joseph W. Donovan, circuit judge of Wayne county, to vacate an order permitting the filing of an amended declaration.
    Submitted December 3, 1895.
    Denied December 30, 1895.

      Henry M. Campbell, for relator.

      Dickinson, Thurber & Stevenson, for respondent.
   Hooker, J.

The firm of Moore & Moore, as plaintiffs, commenced action against relator, filing a declaration upon the common counts. Subsequently, and after the expiration of the period of the statute of limitations, they filed, by leave of court, an amended declaration, consisting of four special counts and the common counts. Two of these special counts alleged the making by plaintiffs, and submission to defendant, of certain plans for a union depot; a promise by defendant, if it should accept and use them, to pay a price named; and the subsequent acceptance and use, and refusal to pay. The other two alleged the submission of said plans to defendant; its agreement, if they should be accepted, to employ plaintiffs in securing the property for said depot and the necessary tracks, for a price named; the subsequent acceptance, and refusal to employ plaintiffs; and a claim for damages for the breach of said agreement.

The two counts last mentioned do not cover causes of action that could be proved under the common counts, being for breach of special contract. The other two counts state causes of action which apparently might be so proved, inasmuch as the contract is alleged to have been fully performed, and nothing remained but the payment of the contract price in money. Phippen v. Morehouse, 50 Mich. 537; Thomas v. Caulkett, 57 Mich. 392; Shaw v. Bradley, 59 Mich. 199; Bush v. Brooks, 70 Mich. 446. Hence the last two counts mentioned introduced a -new cause of action. The others did not. It was therefore within the discretion of the circuit court to permit the filing of the first two, but not the last two counts mentioned herein.

The writ should not issue, inasmuch as the relator is not entitled to the order asked, viz., that the order of the circuit court be vacated; but we have no doubt that the circuit court, upon a proper application, will make the order to which the relator is entitled. Neither party will be allowed costs.

The other Justices concurred.