text:
    PIXLEY v. BERRIEN CIRCUIT JUDGE.
    Arrest — Capias ad Respondendum — Sufficiency of Service.
    The provision of Act No. 168, Pub. Acts 1899, requiring an officer, in making an arrest under a capias ad respondendum, to serve on defendant a copy of the writ and of the affidavits on which it is founded, is directory merely, and a failure to make such service, where defendant is not prejudiced, will not deprive the court of jurisdiction.

      Mandamus by Frank L. Pixley to compel Orville W. Coolidge, circuit judge of Berrien county, to vacate an -order quashing a writ of capias ad respondendum.

    Submitted October 3, 1899.
    Writ granted November 7, 1899.
    The relator brought suit, by the writ of capias ,ad respondendum, against one Calvin Totman. The writ was issued July 1st. The sheriff made return July 3d that he had arrested the defendant by virtue of the writ, and had him in custody as therein commanded, the defendant not having executed and delivered to him a requisite bond. Totman moved to quash the writ on two grounds: (1) That the affidavit was not sufficient; (2) that there had been no service of the writ. The court quashed the writ upon the ground of defective service. Relator now seeks the writ of mandamus to compel the vacation of that order.

      O’Hara & O’Hara, for relator.

      Lawrence O. Fyfe, for respondent.
   Grant, C. J.

(after starting the facts). 1. The facts set forth in the affidavit fully j ustify the order to hold to bail. It is not important to set them forth.

2. There was a service of the writ, but it was a defective one. The statute in existence prior to June 23, 1899, provided that the writ should be served “by arresting the body of the defendant, and keeping him in his custody until discharged according to law.” Act No. 168 of the Public Acts of 1899, approved June 23d, and given immediate effect, required that the officer making the arrest should also “serve a copy of the writ, and of the affidavit or affidavits upon which said writ is founded, upon said defendant.” Undoubtedly, neither the officer nor the attorney knew of the act at the time of the arrest; but this would not avail if this provision of the statute were mandatory. A similar provision has been held directory merely. Barker v. Cook, 40 Barb. 254. So a delay in serving a copy of the writ and affidavits is not fatal. Ilsley v. Harris, 10 Wis. 95. These authorities are cited in 1 Stevens, Mich. Prac. 484. The objection is purely technical, and the failure to serve the copies did not prejudice the defendant in the writ. Either he or his attorney very soon obtained copies of them, for a motion to quash was immediately made, and notice served for hearing upon the 10th of July. We think the service was not fatally defective, and did not deprive the court of jurisdiction to proceed with the case.

The writ will issue.

The other Justices concurred.


source: Caselaw Access Project

author: Grant, C. J.

license: Public Domain

text:
    CHASE v. MICHIGAN TELEPHONE CO.
    1. Corporations — Sale op Assets — Assumption op Obligations.
    Where one corporation acquires in good faith, by purchase, all of the property and franchises of another corporation, — the transaction not amounting to a consolidation, — the purchasing corporation is not liable upon the obligations of the seller, unless made so by statute or by the terms of its agreement.
    2. Same — Consolidation—Evidence.
    Evidence that the property and franchises of a telephone company were purchased by another company, which was the owner of nearly all of the seller’s capital stock, and that after the sale the business was conducted in the same manner as before, without a change of employés, does not show that the new company was a consolidated company, liable for the payment of the obligations of the old.
    3. Same — Refunding Capital Stock — Liability of Stockholders.
    The mere fact that a corporation has sold all its property and franchises to another corporation, owning nearly all of its stock, is not evidence that any of the capital stock has been withdrawn or refunded, within the meaning of 3 How. Stat. § 4161c, providing that, if the capital stock shall be withdrawn and refunded to the stockholders before payment of the debts of the corporation, they shall he liable to creditors for the amount refunded.
    4. Same — Fraudulent Transfer of Assets — Liability of Transferee.
    Before one who claims to have been injured through the negligence of a corporation can obtain satisfaction out of its assets fraudulently transferred to another corporation, he must establish the liability of the transferrer in an action against it.
    Error to Ionia; Davis, J.
    Submitted October 4, 1899.
    Decided November 7, 1899.
    Case by Rivington S. Chase, an infant, by William F. Soule, his nest friend, against the Michigan Telephone Company, for personal injuries. From a judgment for plaintiff, defendant brings error.
    Reversed.
    Plaintiff, in July, 1894, when 16 years of age, was employed by the Telephone & Telegraph Construction Company at Ionia as a night operator and day messenger. He continued in its employ till May 27, 1895, when he was injured. One Miss Kimball was in charge of the office. During his employment he had been sent out with a lineman to assist in placing and repairing the wires. On May 27, 1895, he had climbed a pole, and stepped out upon the cross-arms, to find a dead wire. He had accomplished his object, and was descending, when he fell and was injured. For that injury he seeks to recover in this case, on the ground of negligence. The Telephone & Telegraph Construction Company had done business in Ionia from 1883 up to August 31, 1895, when it sold and transferred all its property to the defendant. The original declaration was drawn upon the theory that plaintiff was employed by, and was injured while in the employ of, the defendant, and that its negligence caused the injury. Upon the trial, plaintiff was allowed to amend his declaration, charging that plaintiff was employed by the construction company; that, the injury occurred through its negligence; that that company had been consolidated, or transferred all its rights, franchises, etc., to the defendant; and that the defendant had assumed all the obligations of the former company, including its liability for torts. Three questions are raised in the case: (1) Does the record show that defendant assumed all the liabilities of the construction company ? (2) Was the construction company guilty of negligence ? (3) Was the plaintiff •guilty of contributory negligence? It is unnecessary to determine the last two questions, as the case must be disposed of upon the first. The court instructed the jury that the defendant was liable for the torts of the construction company.

      Keena & LigMner {Morse & Loche, of counsel), for -appellant.

      George E. & M. A. Nichols {A. A. Ellis, of counsel), for appellee.
   Grant, C. J.

{after stating the facts). 1. Plaintiff introduced a certified copy of a report made by the construction company, filed with the secretary of state, as the law required, that that company had “sold and transferred all of its property and franchises, at private sale, to the Michigan Telephone Company.” He also introduced evidence showing that the Michigan Telephone Company owned all but eight shares of the stock of the construction ■company at and prior to the sale, that all the employés of the construction company were continued in the employment of the Michigan Telephone Company after the sale, and that the business was conducted in the same manner as before. It appeared, however, that billheads and other stationery were changed from the construction company to the Michigan Telephone Company. This constitutes all the evidence in the record in regard to the sale and transfer from the construction company to the defendant.

The fact that the same employés were continued in the employment of the defendant after the transfer, and that its business continued to be carried on the same as before, is without significance, and has no tendency to show consolidation, or assumption of the obligations of the old company. Naturally, there would be no change of employés upon a bona fide sale and transfer by corporations of this kind to others. The fact that defendant owned a majority of the stock in the construction company does not tend to show consolidation, or an assumption of the obligations of the vendor. There is no testimony tending to show the terms of that sale. For all that appears, the consideration for the sale had been paid into the treasury of the construction company, to pay its debts and to be divided among its stockholders, and it may still possess ample assets to meet all its obligations. 3 How. Stat. §§ 4904e, 4904/, authorize one corporation to sell to another, and provide that the selling corporation shall not be released from any or all of its liabilities previously contracted. By section 4867, 1 How. Stat., a corporation is continued for three years after dissolution, for the purpose of suing and defending suits and for winding up its affairs. The law is well settled in regard to liability of the consolidated or purchasing corporation for the debts and liabilities of the consolidating or selling corporation. Such obligations are assumed (1) when two or more corporations consolidate and form a new corporation, making no provision for the payment of the obligations of the old; (2) when by agreement, express or implied, a purchasing corporation promises to pay the debts of the selling corporation; (3) when the new corporation is a mere continuance of the old; (4) when the sale is fraudulent, and the property of the old corporation, liable for its debts, can be followed into the hands of the purchaser. Austin v. Bank, 49 Neb. 412. Plaintiff produced no evidence tending to bring the defendant within any of these cases.

Although one person owns a majority of the stock, or all but two shares, or all of it, he does not thereby acquire the right of acting for the corporation, or as the corporation, independently of the directors. 2 Cook, Stock, Stockh. & Corp. Law, § 709; McLellan v. File Works, 56 Mich. 579, 584; New Haven Wire Co. Cases, 57 Conn. 352; Richmond, etc., Construction Co. v. Railroad Co., 15 C. C. A. 289, 68 Fed. 105. A coi’poration, by virtue of being a stockholder in another corporation, is not liable for the acts of the other. Atchison, etc., R. Co. v. Cochran, 43 Kan. 225 (19 Am. St. Rep. 129). Nor is that fact evidence of merger. Jessup v. Railroad Co., 36 Fed. 735. It follows that the defendant, as a stockholder in the construction company, could not act for that company in making this purchase. It could only act through the board of directors of that company. The eight other stockholders were as fully entitled to their share of the property as would be 800, or 1,000, or half of the stockholders. Even though the shareholders and officers of both corporations be the same, where no intention appears to transfer the old obligations to the new company, the new company is not liable, but creditors must look to the assets of the old company. 2 Mor. Priv. Corp. § 812.

In Whipple v. Railway Co., 28 Kan. 474, in January, 1880, three companies consolidated to form the defendant. The articles of consolidation expressly stipulated that the consolidated company should not be liable for the individual debts of the constituent companies, but that such companies should continue in existence for the purpose of adjusting all claims and demands. ■ Plaintiff sued the consolidated company for a tort of one of the consolidating companies. Held, that the original company was alone liable for the demand, and that, if plaintiff had any right against the new company, it was only after judgment rendered against the old. That decision was rendered in 1882. In 1889 the legislature of that State passed an act authorizing the consolidation of railroads, and expressly made the consolidated company “subject to all the obligations and liabilities to the State which belonged to, or rested upon, either of the companies making such consolidation.” It was said in the case of Berry v. Railroad Co., 52 Kan. 759 (39 Am. St. Pep. 371), that the term “all obligations” might with propriety be applied to all claims, debts, or demands of the original companies; but the court held that, if the statute is not so construed, where two or more railroads consolidate under the statutes of the State, the new company is answerable for all the obligations of the old, in the absence of all evidence or stipulations to the contrary. That was a case of consolidation, and does not overrule the Whipple Case. On the contrary, it expressly approves it. Counsel for plaintiff cite New Bedford R. Co. v. Old Colony R. Co., 120 Mass. 397. That was a purchase under a statute which expressly made the purchasing company “subject to all the duties, liabilities, obligations, and restrictions of the old company.” We have examined all the authorities cited in support of the plaintiff’s contention, and we find that they are cases of consolidations of railroad corporations under statutes, or of purchases pursuant to statute. None of them discuss or determine a question similar to this. None of them support the proposition that a purchasing corporation is responsible for the liquidated or unliquidated claims of the selling corporation, in the absence of statute or agreement. If A. sell his manufacturing plant or business of any kind to B., B. does not thereby assume the debts of A., unless he agrees to. B.’s liability is not affected by the fact that A. or B., or both, are corporations. . The same rule of law applies to both. The mere fact of sale does not establish liability. In Grenell v. Gas Co., 112 Mich. 70, the bill was filed to establish a trust in the property of the Michigan Gas Company, transferred to the defendant, which was held liable because it paid nothing for the plant, but gave to the stockholders of that company stock in the new company in payment. Such an arrangement was held to be a diversion of a trust fund. That case does not apply to this. The record is barren of evidence to show a consolidation. It shows only a sale. The onus probandi was on plaintiff to show that the purchase was made subject to the obligations of the construction company. Upon this point the record is also barren of evidence. The court should have directed a verdict for defendant.

2. 3 How. Stat. § 4161c, provides :

“If the capital stock of any such corporation shall be withdrawn, and refunded to the stockholders, before the payment of all the debts of the corporation for which such stock would have been liable, the stockholders of such corporation shall be jointly and severally liable to any creditor of such corporation, in an action founded on this statute, to the amount of the sum refunded to him or them respectively.”

Plaintiff’s counsel urge that the defendant is liable under this statute. There are two obvious replies to this contention: (1) The declaration is not based upon any such liability; (2) there is no evidence to show that the defendant withdrew its stock from the construction company, or that any of the stock of that company was refunded to it. What the consideration was for the sale, or how it was paid, does not appear. It is left to conjecture. The mere fact that a corporation has sold all its property and franchises to one of its stockholders is not evidence that any of the capital stock has been withdrawn or refunded, under the meaning of this statute.

3. It is unnecessary to discuss the question of negligence. The party upon whom negligence is charged is entitled to be heard in court before negligence is fixed upon it. If this defendant is liable because property of the construction company has heen fraudulently transferred to it, then defendant can only be held liable when that liability has been established against the other company by a judgment, which can then be enforced against this defendant, as was done in Grenell v. Gas Co., supra, and Grenell v. Ferry, 110 Mich. 262. If it is liable because it has assumed that liability, that fact must first be established. For these reasons, we decline to discuss the question of negligence.

Judgment reversed, and new trial ordered.

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


author: Montgomery, J.

text:
    HYATT v. ALBRO.
    Waters — Mill Owners — Riparian Rights — Reclaiming Land-Deepening Stream — Injunction.
    The owners of property abutting upon a lake will be enjoined from deepening the channel of the stream serving as an outlet for the lake, in order to reclaim overflowed lands, wjiere the effect of such action would be to leave a mill owner below without power sufficient to run his mill at certain seasons, and at other seasons to carry down the water in such volume as to endanger his dam.
    Appeal from Genesee; Wisner, J.
    Submitted October 5, 1899.
    Decided November 7, 1899.
    Bill by Fanny J. Hyatt and Charles M. Howe against Jarvis E. Albro, county drain commissioner, and others, to enjoin the deepening of the channel of a stream. From a decree dismissing the bill,' complainants appeal.
    Reversed.

      Clarence Tinker and Everett L. Bray, for complainants.

      Roberts & Crane and Brennan & Cook, for defendants.
   Montgomery, J.

Complainants are the owners of a flour and grist mill in the village of Linden, Genesee county. A dam has been maintained across the Shiawassee river by complainants and their grantors for upwards of 30 years, and the water-power thus provided has been the only power used in or about this mill. The bill alleges that above the dam in Shiawassee river are two lakes, known, respectively, as “Tupper Lake”and “MudLake,” the two being connected by a river known as the “Middle River,” and the upper lake being fed by Shiawassee river, -which has it's origin at a point farther up. The two lakes are, therefore, really enlargements of Shiawassee river. It is, alleged that the defendants are about to deepen the natural channel of the Shiawassee river about' two feet, •and it is alleged that the purpose of this is to lower the level of the two lakes referred to, for the purpose of reclaiming the lands which are overflowed by these lakes a portion of the year at least. It is further alleged that these lakes furnish a natural reservoir, which furnishes complainants’ power, and that, if the water is lowered in the lakes, the effect will be to leave complainants without power for a large portion of the year, and, furthermore, that the deepening of the channel will carry down the water in greater volume during times of freshet, endangering complainants’ dam. The circuit judge was of the •opinion that any interference with complainants’ rights which limits the power to be derived or its duration through the seasons of the year would be a proper subject for the consideration of a court of equity, and that if the defendants, by this contemplated proceeding, would, in its prosecution, work an injury to the rights of the complainants, it would be the duty of the court to restrain' such action.

The complainants have the right to have the water flow naturally, without being accelerated or impeded, except to the extent that the concurrent rights of the upper riparian proprietors may effect such results. In so far as the proper use of the stream above results in inconvenience, •or impedes the use of the stream by complainants, it is damnum absque injuria. Has the upper riparian owner the right to reclaim a portion of this lake by so accelerating the flow of the stream as to lower the water in the lake, thereby narrowing the area so as to reclaim overflowed lands ? This accumulation of water from the overflow of the banks of the lake, fed by the Shiawassee river above, cannot be called surface water. West v. Taylor, 16 Or. 165; Schaefer v. Marthaler, 34 Minn. 48? (57 Am. Rep. 73); Macomber v. Godfrey, 108 Mass. 219 (11 Am. Rep. 349); Gould, Waters, § 264; Stock v. Township of Jefferson, 114 Mich. 357 (38 L. R. A. 355). The right to drain surface water is clear. Gould, Waters, § 265. But the right to drain any portion of the waters of these lakes above, which constitute the source of supply to the complainants’ water-power, would unquestionably be a wrong against complainants if the water were diverted from the stream. Is it any the less an interference with the complainants’ property rights if the water be precipitated in an artificial manner by means of a deepened channel through the stream itself ? We think not. On the contrary, this increasing of the flow, it is alleged with much force, would work an additional injury by imperiling complainants’ dam. The circuit judge was of the opinion that the flow of water would not be diminished by the deepening of the river. We think it clear, however, that by the deepening of the channel the water will be carried off more rapidly than it now is. Indeed, if it is not expected that this will be the result of the improvement, we are at a loss to understand why it was undertaken.

The decree dismissing the bill of complaint is reversed, and a decree will be entered enjoining the proposed deepening of the river, with costs .of both courts to complainants.

The other Justices concurred.


author: Moore, J.

text:
    COMMERCIAL BANK OF BAY CITY v CHATFIELD.
    1.Jury — Excusing Qualified Juror.
    A judgment will not be reversed because the court excused a qualified juror who was acceptable to appellant, where it does not appear that appellant exhausted his peremptory challenges, that talesmen had to be summoned, or that he was otherwise prejudiced.
    2. Banks — Negligence of Officers — Evidence.
    In an action by a bank against one who had been its president and director to recover for moneys lost to it by reason of his negligence in permitting the cashier to borrow a large sum on inadequate security, testimony that the cashier informed the president that he wanted the money to invest in a mining venture is competent as bearing on defendant’s good faith.
    3. Same — Instructions.
    Where, in an action by a bank, one who had been its president and director was charged with negligence in permitting the cashier to borrow a large sum of money on inadequate security, thereby involving the bank in loss, the court properly refused to give requested instructions, relating to his negligence in consenting to the loan, which ignored his claim that the matter was presented in the usual course of business to the directors of the bank, and was approved by them.
    4.Same — Conduct of Affairs — Degree of Care Required.
    A director and officer of a bank is bound to exercise that degree of care in the business affairs of the bank that a careful man would exercise in his own affairs of like importance; and if, by reason of his neglect to exercise such care, the bank loses money, he is liable therefor.
    5.Same — Defense—Good Faith.
    Where a bank has suffered loss through the negligence of an officer thereof in permitting the cashier to borrow a large sum of money on inadequate security, the mere fact that in' so doing he acted in good faith does not relieve him from liability to the bank.
    Error to Bay; Maxwell, J.
    Submitted October 5, 1899.
    Decided November 7, 1899.

      Case by the Commercial Bank of Bay City against 'Clarence B. Chatfield and Ira H. Wilder for negligence in the management of the bank’s funds. From a judgment for defendants, plaintiff brings error.
    Reversed.

      T. A. E. & J. C. Weadock, for appellant.

      John L. Stoddard, for appellees.
   Moore, J.

The plaintiff has appealed from a judgment rendered in the court below in favor of defendants. The case was tried by a jury. The plaintiff sued the defendants to xecover the sum of $6,000, taken by defendant Wilder, who was then its cashier. The money was obtained as follows: $1,500 in September, 1895, $3,500 in April, 1896, and $1,000 in June, 1896. It is claimed that because of the negligent acts of defendant Chut field, who was a director of the bank, and part of the time its president, he is liable to the bank for this money.

T?he record discloses that prior to June, 1895, defendant Wilder had been connected with various banks, and had been a bank examiner. He lived at Flint. At the request of the directors of the bank, he met them at their place of business to confer with them about becoming the cashier of the bank. In June, 1895, he was employed as cashier of the bank, and entered upon his duties. The bank had nine directors. It does not appear to have had a discount committee, who passed upon the loans before they were made, but, after the loans had been made by the cashier, they were reported to the board of directors at its next meeting. One of its by-laws required its directors to elect “a committee of three persons, whose duty it shall be to examine, at least every three months, the affairs of the bank, count its cash, and compare its assets and liabilities with the general ledger,” etc., and report to the board of directors. It is the claim of the bank that Mr. Chatfield, knowing that the cashier was irresponsible, allowed him to take these various sums of money without adequate security, and without consulting his fellow directors; that the directors did not know, until in January, 1897, that these sums of money had been taken; and, while they do not charge Mr. Chatfield with profiting by the transaction, they claim he did not exercise that care and prudence that the law required him to exercise. It was the claim of Mr. Chatfield that he did not know Mr. Wilder until he entered upon his employment as cashier; that he (Chatfield) had nothing more to do with loaning the funds of the bank or managing its assets than the other directors; that, before the first $1,500 was obtained, Mr. Wilder said he desired to borrow some money, and assign as collateral a life-insurance policy of $7,500, and would like Mr. Chatfield to hold the collateral for the bank, as it would not be proper for the cashier to do so. He says he believed Mr. Wilder was entirely responsible, and informed him it would be all right, so far as he was concerned ; and later Mr. Wilder gave his note to the bank for the sum of $1,500, stating in the note the collateral was with Mr. Chatfield. He claims the money was checked out by Mr. Wilder in the usual course of busi ness, and the note was put with the other notes of the bank. It was entered in the bank books just as all other notes were, including the collateral loan register; and this note, among others, was on the list which was read to and approved by the board of directors at its next meeting, which was substantially the course with reference to the additional loan of $3,500. He says the renewals of these notes were made according to the usual course of business, and were read to the board of directors from the list of notes; that the notes given by Mr. Wilder were among the other assets of the bank when' the examining committee made its examinations. He also claims, as to the last $1,000, that he had no knowledge Mr. Wilder had taken it, or proposed to take it, until after it was taken. He insists he had no portion of the money, and had no interest in Mr. Wilder’s business affairs, and that he acted in the utmost good faith; and that the other directors knew, or should have known, about these loans to Mr. Wilder.

The first assignment of error relates to the excusing of a juror for cause when fie was not disqualified. The record does not show that because of this act the plaintiff was prevented from having a jury drawn from the regular panel, or that it had exhausted its peremptory challenges. It is not shown it was prejudiced by the fact that the juror was excused. The case is ruled against the appellant by Atlas Mining Co. v. Johnston, 23 Mich. 36; People v. Carrier, 46 Mich. 442; Torrent v. Yager, 52 Mich. 506; People v. Barker, 60 Mich. 277 (1 Am. St. Rep. 501); People v. Aplin, 86 Mich. 393.

Plaintiff sought to show that Wilder informed Chatfield he wanted the money to put into a mining venture, but was not permitted by the court to do so. We think the testimony was competent, as bearing upon the good faith of Mr. Chatfield, and whether he had exercised the care and prudence required of a director in approving a loan.

Exception was taken to the remarks of the court during the trial, which are said to have prejudiced the plaintiff. As the case must be reversed for other reasons, which will appear herein, we do not think it necessary to discuss this feature of the case, because on the new trial no such thing is likely to again occur. The rule is stated in Mine v. Bank, 119 Mich. 448.

The other questions necessary to be considered grow out of the refusal of the trial court to give certain of plaintiff’s reqúests to charge, and to the general charge of the court. Request No. 4 reads as follows:

“If you find that the defendant Chatfield consented to the defendant Wilder’s taking money from the bank upon his note, with the insurance policy mentioned as collateral, and that such collateral was not, in the exercise of ordinary judgment, believed by said Chatfield to be good for such amount of money, then, for just so much as you find was permitted to be taken, you will find a verdict for the plaintiff.”

The court refused to give this request, and several others, which read much like it. We think this refusal was proper, for the reason that the requests ignore the claim of defendant Chatfield that the loan was presented in the usual course of business to the board of directors, and approved by them. If Mr. Chatfield’s claim is true, he cannot be held liable for the negligent acts of the other directors, if the acts were negligent.

The court refused to give the following requests:

“As a director and president of the bank, the defendant Chatfield was charged with a duty of fidelity and prudence such as a careful man would exercise in his own affairs of like magnitude and importance; and if you find that, by reason of his neglect to exercise such fidelity and prudence, the bank has lost, then you will find the amount, and for such amount a verdict for the plaintiff.
“Mr. Chatfield, as director, was required to exercise such degree of supervision and diligence as the situation and nature of the business of the bank required. It was his duty to watch over and guard the interests committed to him. In fidelity to his oath, and the obligation he assumed, he should do all that a prudent and careful man ought to do for the protection of the interests of others intrusted to his charge; and if he failed to do this, and by reason of such failure the bank suffered a loss, you will find the amount of such loss, and a verdict therefor for the plaintiff.”

The court charged the jury:

‘£ There has been much law cited here in this case on both sides of it, and I find myself unable to agree with the attorneys on either side; and I charge you, as a matter of law, that if Chatfield acted in good faith, believing that Wilder would pay that note, and was fairly responsible for it, that he is not liable. * * * Now, gentlemen of the jury, you will retire to your room, and determine the simple question if Mr. Chatfield, in this matter, has acted in good faith. If he did, you will find a verdict in his favor.” .

We think the court erred in his understanding of the law. We also think counsel’s requests ignore the claim of defendants that the loan to Wilder came to the knowledge of the other directors, and was ratified by them. As before suggested, Mr. Chatfield can be held only for his own negligence, and is not liable for the negligence of his co-directors. If the requests had been modified so as to allow the jury to take cognizance of the defendants’ claim, by way of defense, that the directors had knowledge of the loan, and ratified it, they should have been given as a correct statement of the law. Briggs v. Spaulding, 141 U. S. 132; Stearns v. Lawrence, 28 C. C. A. 66, 83 Fed. 738; Dykman v. Keeney, 154 N. Y. 483; Williams v. McDonald, 42 N. J. Eq. 392; Williams v. McKay, 46 N. J. Eq. 25; Horn Silver Mining Co. v. Ryan, 42 Minn. 196; First National Bank of Sturgis v. Reed, 36 Mich. 263; Ang. & A. Corp. (11th Ed.) § 314; 3 Thomp. Corp. § 4104; 1 Reid, Corp. Finance, § 223; Elliott, Priv. Corp. (2d Ed.) § 239. While we do not regard it as error that the requests, as framed, were not given, for the reason before stated, we do think it was error for the court to say, in effect, that, if Mr. Chatfield acted in good faith, he would be excused from liability, whatever his negligence.

We do not deem it necessary to discuss the other questions. Judgment is reversed, and new trial ordered.

The other Justices concurred.

        Brennan v. O’Brien, ante, 491, is to the same effect.


author: Long, J.

text:
    BLUMBERG v. BEEKMAN.
    1. Deeds — Optional Redemption — Mortgages.
    An instrument in the form of a warranty deed, which reserves to the grantor the privilege of “redeeming ” the premises by repayment of the purchase price, with interest, at any time within 10 years, and forbids the grantee to cut timber during the period of redemption, such repayment not being obligatory upon, but merely optional with, the grantor, constitutes a conditional sale, and not a mortgage.
    2. Same — Construction by Aot oe Parties.
    The character of an instrument designed at its inception as one of conditional sale cannot be changed by an assignment indorsed thereon in which it is termed a mortgage.
    Appeal from Oakland; Smith, J.
    Submitted October 5, 1899.
    Decided November 7, 1899.
    Bill by Rachel E. Blumberg against George H. Beekman and others to remove a cloud from title. Defendants filed an answer in the nature of a cross-bill, praying that a certain deed be declared a mortgage, and asking for an accounting. From a decree for defendants, complainant appeals.
    Reversed.

      John H. Patterson, for complainant.

      James H. Lynch, for defendants.
   Long, J.

The bill in this cause was filed to remove a cloud from the title to premises which complainant claims to own in fee. It appears that on September 14, 1859, Samuel D. Beekman and wife executed and delivered an instrument in writing, in the form of a warranty deed, to George Blumberg, conveying 20 acres of land for the consideration of $700 mentioned therein. The deed contained the following condition:

“This deed being made under the following condition, viz.: That said party of the second part shall* not cut any standing timber, or allow to be, within the period of ten years from the date hereof, on said twenty acres; and, furthermore, that said parties of the first part, for themselves, their heirs, executors, and administrators, do hereby reserve the privilege of redeeming the said above-described twenty acres any time within the period of said ten years, by paying to the said party of the second part, his heirs, administrators, or assigns, the above-mentioned seven hundred dollars, with interest at seven per cent., which shall make this instrument void and of no effect.”

This instrument was duly recorded, and the grantee went into immediate possession of the premises, and proceeded to build a line fence between the 20 acres and other land owned by the grantor, and continued to occupy until he conveyed the premises to his son, A. C. Blumberg, May 23, 1872. This and other land had been levied upon by the First National Bank of Detroit, in 1869, as the property of George Blumberg, on an execution issued on a judgment against George Blumberg. The son paid $600 of this judgment, and took the deed in consideration thereof. On October 2, 1873, A. C. Blumberg sold and conveyed the land to one Miles Everts, who on the next day, October 3d, conveyed the land by deed to Rachel E. Blumberg, the complainant in this proceeding. All these deeds were duly recorded. The complainant and her grantors have been in possession of the land under these several conveyances since September, 1859, immediately after the conveyance from Beekman and wife to George Blumberg. They have paid all taxes, improved the land, and exercised all the acts of ownership over it as the real owners. It appears that at the time George Blumberg executed the deed to his son, A. O. Blumberg, the wi'fe of George did not join in the deed. A. C. Blumberg, in deeding to Everts, who was his father-in-law, apparently did so for the purpose of placing the title in his wife, the complainant; and Everts on the next day conveyed to her. On March 26, 1875, George Blumberg and his wife made an assignment in writing upon the back of the instrument received from Beekman, in the following form:

“For value received, we hereby sell, transfer, and assign all our right, title, and interest of, in, and to the within mortgage to Rachel E. Blumberg, and authorize her to collect and receive the same, either at law or in equity, as fully as we can or could do.”

This assignment was properly witnessed, and acknowledged by George Blumberg and wife.

Samuel D. Beekman died in 1868. The defendants are his widow and heirs at law. No claim was ever made by the defendants, or any of them, to the complainant, that they had any interest in these lands, until shortly before the bill was filed. Complainant then tendered to each of them a quitclaim deed of the premises, and asked them to execute such deed, to remove the cloud from the title. They refused to execute the deed, whereupon the complainant filed the bill in this cause.

The defendants answered, claiming the benefit of a cross-bill, and asked for an accounting, on the theory that the instrument was a mortgage. The testimony was taken in open court, and the court found (1) that Rachel E. Blumberg and her grantors have had undisputed and adverse possession of the land since September 14, 1859; (2) that the consideration mentioned in the deed ($700) was the fair value of the land at the time; (3) that no one, to the time of bringing this suit, has offered to redeem the land; (4) that there is no liability mentioned in the deed, or affirmatively proved, against the grantor, Samuel D. Beekman, to repay this $700 as a debt. The court thereupon decreed that the conveyance was a mortgage, and directed an accounting to be had to determine the amount due upon it, in which accounting the complainant is to be credited with the amount of money paid by George Blumberg to Samuel D. Beekman, with interest at 7 per cent, from September 14, 1859, and also credited with all amounts paid for taxes «on the land, with interest on the moneys so paid from the time of such payment, and also credited with the value of any permanent improvements now existing; the complainant to be charged with the rental value of the premises from September 14, 1859, with interest upon the same computed annually, and charged with the value of all timber and trees' taken therefrom, with interest upon the value thereof from the time of such taking. Complainant appeals.

It nowhere appears from the evidence that a loan was intended by any of the parties to the original transaction. There was some testimony given, however, by the complainant, which tends to show that it was a conditional sale. Theron M. Blumberg testified:

“ I know father bought the land, and paid $700 for the 20 acres, in 1859.
Q. Was there any particular purpose in buying that land?
“A. Yes, sir; he bought it for the water privilege. That had springs on the land, and we had to drive across the land to get to the water. Father bought this 20 acres of land to get the water, and we finally dug a spring on this land, and run pipes across Perkins’ 40 onto our land. That is^what it was bought for.”

The intention of the parties is the vital question in determining the character of the instrument. It is in form a warranty deed (with the exception of the condition inserted therein), containing all the usual warranty clauses, and the condition itself does not create the relation of debtor and creditor. There is no provision in the condition by which the first party is bound to pay the $700. It is merely an option on his part to redeem the premises at any time within 10 years by paying $700 and interest at 7 per cent. There are no characteristics of a mortgage in this deed. It appears to be an absolute sale, upon its face, with an option to the grantor to repurchase at any time within 10 years, at a stipulated price. There is no showing in the case that the $700 was loaned to Beekman, and no such claim is made. On the other hand, what testimony there is in the case shows that it was paid to Beekman on a sale of the premises. When we take into consideration that for nearly 40 years the grantee in the deed and those claiming under him have been in undisputed and undisturbed possession of the premises, without any claim being made by Beekman or his heirs that they had any interest in them, and that the court below found as a fact that the $700 was the fair value of the land at the time, it seems conclusive that the parties themselves must have regarded the instrument of conveyance as a deed, and not as a mortgage. If the Beekmans regarded this as a mortgage from which they might redeem within 10 years, why have they let 30 years more go by without making any effort to redeem from it ? On the theory that the parties regarded the transaction as an absolute sale, with an option to repurchase if it were exercised within the 10 years, the long silence on the part of the Beekmans can be accounted for. We need not, however, go into any extrinsic evidence to ascertain what this instrument is. It appears upon its face to be a conditional sale, and nothing more, under well-settled rules. The debt was extinguished by the deed, and it was left optional with the grantor to refund the money. In Swetland v. Swetland, 3 Mich. 482, it was held that where it appears that, by express agreement of the parties, a debt due from the grantor to the grantee was extinguished by the deed, or that the money paid was not advanced by way of loan, or that it is at the option of the grantor to refund or keep the money, the transaction is a conditional sale, and not a mortgage, but if the remedies of grantor and grantee are reciprocal, — the former bound to repay the money, and the latter to reconvey the premises, — then the instrument will be construed a mortgage. The deed here contains no provision which would make it a mortgage under this rule. The principle laid down in the Swetland Case wTas referred to and approved in Emerson v. Atwater, 7 Mich. 23, and Reed v. Bond, 96 Mich. 139.

In 1 Jones, Mortg. § 264, it is said:

“The rights of the parties to the conveyance must be reciprocal. If the transaction be in the nature of a mortgage, so that the grantor may insist upon a reconveyance, the grantee at the same time may insist upon repayment; but if it be a conditional sale, so that the grantor need not repurchase except at his option, the grantee cannot insist upon repayment.”

And at section 265 it is said:

“If an absolute conveyance be made and accepted in payment of an existing debt, and not merely as security for it, an agreement by the grantee to reconvey the land to the grantor upon receiving a certain sum within a specified time does not create a mortgage, but a conditional sale, and the grantee holds the premises subject only to the right of the grantor to demand a reconveyance according to the terms of the agreement. A debt either preexisting or created at the time, or contracted to be created, is an essential requisite of a mortgage. * * * Where there is no debt and no loan, it is impossible to say that an agreement to resell will change an absolute deed into a mortgage.”

The case of Cornell v. Hall, 22 Mich. 377, is also an illustration of the principle. There Mr. Justice Graves said:

“The conduct of complainant was for several years accordant with the notion that a conditional sale had been made, and was radically inconsistent with the idea that he was a mere mortgagor. The surrender of the property upon default in payment, and the omission for so many years to whisper to defendant that he claimed any right inconsistent with defendant’s absolute ownership, when he had frequent opportunities to do so, and knew that the latter was making improvements as owner, and under the belief that the title derived from the transaction in question was indefeasible, are facts extremely persuasive against the validity of the present claim.”

The cases of Jeffery v. Hursh, 58 Mich. 257, and Clark v. Landon, 90 Mich. 83, relied upon by the circuit judge in determining the question, do not warrant the assumption that the conveyance in the present case was a mortgage, and not a conditional sale. In the Jeffery Cyse there was extraneous evidence showing the intent of the parties that the transaction should amount to a mortgage. In the Clark Case it appeared that a deed was given, and in the contract taken back the relation of debtor and creditor was created. The second party agreed'to purchase the premises, and to pay therefor the sum of $10,225. Upon the payment of this sum, with interest, the first party agreed to deed the premises back. The deed and contract together were construed as a mortgage, as it was found that an agreement existed under which the vendor might insist upon a reconveyance and the vendee could insist upon repayment. But in the present case the grantor need not repurchase, except at his option, and the grantee could not insist' upon repayment. This very distinction is made by 1 Jones, Mortg. § 264, above quoted.

Some claim is made that the Blumbergs treated this as a mortgage between themselves. This has no force in determining the character of the transaction. If it were merely a conditional sale at its inception, as we have found it was, the mere fact that the elder Blumberg assigned it to the complainant to perfect the title in her, after all the deeds were made, and in such assignment called it a “mortgage,” cannot change the character of the instrument. The following cases support the rules here laid down, under which we have construed this instrument as a conditional sale: Henley v. Hotaling, 41 Cal. 22; Jay v. Whelchel, 78 Ga. 786; Evans v. Enloe, 70 Wis. 345; Hubby v. Harris, 68 Tex. 91; Perdue v. Bell, 83 Ala. 396; Nesbitt v. Cavender, 27 S. C. 1.

It follows that the decree' of the court below must be reversed, and a decree entered here in accordance with the prayer of the complainant’s bill, with costs of both courts in favor of complainant.

The other Justices concurred.


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      LANGSTON v. SCHOOL DISTRICT NO. 3 OF SPRINGWELLS TOWNSHIP.
    School Teachers — Contract or Hiring — Liability or District.
    Under 2 How. Stat. § 5065, providing that school teachers’ contracts shall be in writing, and signed by a majority of the district board, and'shall specify the wages, etc., a resolution of a school board authorizing the employment of a specified person, though supplemented by conversations between such person and individual members of the board with respect to the terms of employment, and by the action of the person designated in appearing at the school at the opening of the term, and teaching for two days without objection, does not constitute a contract of hiring binding upon the district.
    Error to Wayne; Erazer, J.
    Submitted October 24, 1899.
    Decided November 7, 1899.

      Assumpsit by Isabella Langston against school district No. 3 of Springwells township upon a teacher’s contract. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Affirmed.
    Plaintiff sued to recover for a year’s services as a school teacher, claiming that she had a contract with the defendant, and was prevented from carrying it out. She had been employed the year previous under a written contract. She had some talk with two of the officers of the school district in February about employment for the next year. This talk was with Mr. Collins and Mr. Frink, two of the trustees. She testified that they stated “that I would be given a school for the following year, — that is, the year beginning September, 1895, — and also that I would be made principal of the school at the time.” About the close of the school year, in the latter part of June, she had a conversation with another trustee, Mr. Roulo, in which she testified he asked her what wages she wanted; that she replied $50 per month; that he said he did not think the board would pay that, and that she then said to him that she would leave it with the board, and let them settle the matter; that, in a subsequent- conversation with Roulo, he stated that they had decided to give her $45. She also testified that Mr. Collins, who was the director of the school board, told her that she was engaged for the next year; that in August she saw Mr. Frink, who told her that they had decided to pay $45, and “wanted to know if I would accept the school for a year; I made no reply, because I knew he was going out of office;” that, on Wednesday before the 1st day of September, she saw Mr. Addison, who was a member of the school board, and asked him when the school would open; that she told him she would be there; that-she “demanded the signature of the contract that day, and I asked him to tell the other members of the board I demanded the signature of the contract.” She appeared at the school-house, and, it appears, taught two days, after which she was informed that she had not been employed, and was forbidden to teach. The only action of the board appears from the record of a meeting held July 23d, in which the board “ordered the proper officers to hire Miss Pardee, Miss Cumming, and Miss I. Langston as teachers for the ensuing year.” The court directed a verdict for the defendant, upon the ground that the statute requires a contract in writing, that the resolution did not fix the rate of wages, and that there was not such action as would bind either Miss Langston or the defendant.

      E. S. Clarkson, for appellant.

      Alexander Brown (James H. Pound, of counsel), for appellee.
   Grant, C. J.

(after stating the facts). The statute provides:

“The district board shall hire and contract with such duly-qualified teachers as may be required; and all contracts shall be in writing, and signed by a majority of the board on behalf of the district. Said contracts shall specify the wages agreed upon, and shall require the teacher to keep a correct list of the pupils, and the age of each, attending the school, and the number of days each pupil is present, and to furnish the director with a correct copy of the same at the close of the school. Said contract shall be filed with the director, and a duplicate copy of the contract shall be furnished to the teacher.” 2 How. Stat. § 5065.

If it be held that plaintiff had a valid contract with the defendant, then this statute is of no force or effect. There was no contract in writing; and her version of the material conversation is contradicted by the members of the board. The case furnishes an apt illustration of the purpose of this statute. The resolution of the board did not constitute a hiring or fix the terms of a contract, but simply delegated the authority to the proper officers to hire and execute the necessary written contract. As late as August, when asked if she would accept the school, she made no reply. Counsel cites and relies upon Holloway v. School District, 62 Mich. 153; Crane v. School District, 61 Mich. 299; Farrell v. School District, 98 Mich. 45. In Holloway v. School District, plaintiff had taught the full term provided by the written contract, except the holidays, and the officers knew that plaintiff was teaching. In Crane v. School District, plaintiff had taught 10 weeks, — half of the term. In Farrell v. School District, plaintiff was employed by a resolution of the school board. In all these cases contracts were made, and signed by the teachers and all the officers but one. It was held that an officer had not the power to defeat the action of the boards by refusing to sign contracts authorized by them.

The judgment is affirmed.

The other Justices concurred.


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    MANHARD HARDWARE CO. v. ROTHSCHILD.
    1. Fraudulent Conveyances — Defense—Indefinite Answer.
    Where a conveyance by a debtor to his wife is attacked by creditors as without consideration, an allegation in the answer that the grantor was indebted to the grantee “for several hundred dollars that she from time to time had loaned him ” is too indefinite to form the basis of any legal or equitable right as against creditors.
    2. Same — Husband and Wife — Failure to Testify — Presumptions.
    The failure of a husband and wife, defendants in a creditor’s bill, to take the stand and explain the transactions complained of as fraudulent, justifies the court in drawing a presumption against them.
    8. Same — Appealable Interest — Costs.
    A decree setting aside conveyances as in fraud of creditors, and providing that costs shall be paid from the property, is not appealable by the grantor, although the grantee makes no contest.
    4. Partnership Associations — Trustees in Liquidation — Pleadings.
    A bill by a partnership association, signed by the person bringing the suit in its behalf as “trustee in liquidation,” and with a jurat stating that he is trustee in liquidation, and makes oath as such, and is authorized to sign its name to the bill, sufficiently alleges that complainant is in liquidation; such description being as effectual in the signature and jurat as elsewhere.
    5. Same — Death of Trustee — Abatement of Suit.
    A trustee in liquidation, who signed and swore to the bill in a suit brought by a partnership association, is not a party, and the status of the suit is not affected by his death.
    Appeal from Manistee; McMahon, J.
    Submitted October 25, 1899.
    Decided November 7, 1899.
    Judgment creditor’s bill by the Manhard Hardware Company, Limited, against Solomon Rothschild, Max Simon, Charles Van Pelt, Rosa Rothschild, Simon Wetzler, David Sax, and Alexander Thai. From a decree for complainant, defendants Rothschild and Simón appeal.
    Affirmed.
    Complainant is a partnership association, limited, organized under chapter 160, 2 Comp. Laws 1897. In March, April, and May, 1893, it was a creditor of defendants Solomon Rothschild, Max Simon, and Charles Van Pelt, copartners doing business under the firm name of the Northern Cedar Shingle Company. The indebtedness was for goods sold and delivered, and for which two notes were given, dated March 1st, due June 1st, two dated April 1st, due July 1st, and one dated May 5th, due August 5th. Upon these notes complainant obtained a judgment in the circuit court for the county of Schoolcraft on September 6, 1893, for $1,662.80. On February 16, 1894, after the due issue and return of an execution nulla bona, it filed this, a judgment creditor’s bill, alleging that certain transfers of real and personal property by the defendants in that suit were fraudulent and void as to creditors. The complainant was in liquidation, and the bill was signed by “David H. Jerome, Trustee in Liquidation.” The jurat states that Mr. Jerome was a trustee in liquidation of said company; that he made the oath as said trustee, and was authorized to sign its name to said bill. Decree was rendered for the complainant. All The defendants, except those forming the partnership, and Rosa Rothschild, the wife of Solomon, were nonresidents. Personal service was had upon Solomon and Rosa Rothschild, Simon, and Van Pelt. The other defendants did not appear. The defendants Rothschild, Simon, and Rosa Rothschild alone answered and appealed. The appealing defendants filed an unsworn answer, in which they deny the fraudulent character of the transactions. Rothschild and Simon allege in their answer that they have no property whatever to be applied on the payment of the debts of the copartnership. The answer, as to the transfers to defendant Rosa, alleges “ that said defendant Rothschild was indebted to his wife, Rosa Rothschild, for several hundred dollars in cash that she from time to time had loaned him. ” The defendants introduced no testimony. In 1890 Rosa was a member of the firm of Rothschild & Co., composed of herself and another. That firm failed, and a receiver was appointed. The assets paid but a small per cent, of the debts, and Rosa applied to have her exemptions set aside for her. The transfers alleged to be fraudulent are as follows:
    “On April 15, 1893, Rothschild assigned to David Sax a mortgage for $2,500, known as the ‘Bolling Mortgage,’ and dated January 10, 1891.
    “April 10, 1893, Rothschild assigned to defendant ■ Wetzler a mortgage for $1,900, known as the ‘Weaver mortgage.’
    “On the date last mentioned, Rothschild also assigned to Wetzler another mortgage for $800, and on the same day assigned to Wetzler a decree calling for $3,000, dated June 13, 1893.
    “On June 3, 1893, Rothschild assigned to Sax a mortgage for $500, known as the ‘Schroeder Mortgage,’ and on the same day also gave a mortgage on other property for $3,800.
    “On June 6, 1893, Max Simon gave a mortgage for $450 to Wetzler.
    “ On June 5, 1893, Rothschild gave a quitclaim deed of certain property to Thai for a nominal consideration of $400.
    “On February 1, 1893, Rothschild gave to his wife, Rosa, a bill of sale of his meat-market for a consideration of $500. This bill of sale was filed and recorded July 17, 1893.
    “ On June 28, 1893, Rothschild gave Wetzler a chattel mortgage for $750 on certain personal property. This mortgage was filed for record July 21, 1893.
    “ On February 28, 1893, Rothschild gave his wife a bill of sale of certain horses and wagons for a consideration named therein as $1,200. This bill of sale was filed September 5, 1893.”
    In April, 1893, Mr. Smurthwaite, an attorney, upon request of a business house, interviewed Mr. Rothschild in regard to his financial standing. Mr. Rothschild said at first that he was not in the habit of making statements as to his standing. Mr. Smurthwaite informed him that he was asked to make a report. Being asked if he was worth more than twenty or twenty-five thousand dollars, he replied, “I would hate to sell out for that.” About this same time he became surety on a liquor bond in which he made affidavit that he was worth $3,000 in unincumbered real estate situated in Manistee county. He made similar affidavits in 1894, 1895, and 1896 upon other saloon bonds. He was the attorney-in-fact for his wife and defendant Sax.

      hovel & Smith (Thomas S. Jerome, of counsel), for complainant.

      McAlvay & Grant, for appellants.
   Grant, C. J.

(after stating the facts). 1. The appealing defendants first contend that there was no evidence of fraud in these transactions. We cannot concur in this contention. Rosa Rothschild was a bankrupt shortly before. She does not in her answer give dates or amounts, or state where she obtained the moneys which she claims to have loaned to her husband. What she means by “ several hundred dollars ” is conjectural. This allegation is too indefinite to form the basis of any legal or equitable right as against creditors. Felker v. Chubb, 90 Mich. 26. According to the finding of the judge, which is supported by the testimony, Rothschild, about the time this indebtedness was incurred, represented himself as worth $20,000. Shortly afterwards he had nothing to apply in payment of his debts. He and his wife could have shown the bona fides of the transaction by their testimony, had they chosen to do so. Some of these conveyances were kept off record for a long time. The bill of sale to Rosa, of February 28th, was recorded just the day before the judgment sued upon in this case was rendered. These facts were sufficient to authorize a decree in favor of complainant, unless the defendants chose to take the stand and explain the transactions. It was in their power to place the bona fides beyond question. They chose to remain silent. The failure to produce this evidence, so peculiarly within their knowledge, justifies courts in drawing a presumption against them. Lake v. Nolan, 81 Mich. 112; Warren v. Holbrook, 95 Mich. 185 (35 Am. St. Rep. 554); Schaible v. Ardner, 98 Mich. 70. Complainant showed sufficient to oast the onus probandi upon the grantees and vendees in these conveyances. Schaible v. Ardner, supra.

2. Rothschild and Simon have no interest in the property which is the subject of this controversy. They have parted with it, and have no legal interest to be protected. They can derive no benefit from a reversal of the decree. They therefore have no pecuniary interest in this suit. They do not represent their vendees, who are not before this court, and are not making a defense. They are nonresidents, were not served with process, and the statute provides a remedy for them if they choose to avail themselves of it. When they choose to appear in court, their rights will be considered. But Rothschild and Simon have no appealable interest. Abbott v. Alsdorf, 19 Mich. 157; 2 Enc. Pl. & Prac. 157; Fairbairn v. Middlemiss, 47 Mich. 372; Adams v. Woods, 8 Cal. 315; Hemmenway v. Corey, 16 Vt. 225. The decree provides that the costs shall be satisfied and paid out of the property. Thb appealing defendants therefore have no interest in this respect.

3. Appellants contend, also, that there is no allegation in the bill, nor any proof, that the complainant is in liquidation, and that trustees have been appointed to wind up its affairs. They contend that such trustees can act only by authority of sorbe court of competent j nrisdiction, and that their authority must be proven. The statute provides for these trustees without the intervention of courts. 2 Comp. Laws 1897, § 6087. The association is continued in existence for the beneficial winding up of its affairs. Section 6086. Suits mus’t be brought by and against the association in the name thereof. Section 6088. Whether, under this statute, it is essential to allege and prove the decision of the corporation to go into liquidation, quaere. Whether it is in liquidation or is in active operation does not concern the defendants. In either event the association is the party bringing the suit. There is no danger that the defendants will be subjected to another suit. It is difficult, therefore, to see what interest they have in raising the question. However this may be, the signature and the jurat are a sufficient statement that the association is in liquidation. The bill commences as follows: “Your orator, the Manhard Hardware Company, Limited, a corporation duly organized under the laws of this State, and doing business at the city of Marquette, complainant, respectfully shows,” etc. If to this had been added the words “in liquidation,” it would have described the status and character of the association. Such description is as effectual in the jurat and signature as elsewhere in the bill. The defendants, if they desired to contest the existence of the corporation as alleged, should have raised the question by plea in abatement. 3 Comp. Laws 1897, •§ 10471.

4. It was admitted upon the record that, before the hearing, the trustee who signed and swore to the bill in behalf of the corporation had died, and it is claimed that his death should have been suggested upon the record, and another appointed to take his place. Mr. Jerome was not a party to the suit. The party complaining is the association. The death of an officer of a corporation does not affect the status of a suit.

Decree affirmed, with costs.

The other Justices concurred.


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    GATES v. JOHNSON.

    1. Tax Sales — Right to File Objections to Tax — Sessions oe Court.
    A taxpayer cannot be said to have been deprived of the right, given him by section 66 of the tax law of 1893, to appear and ask leave to file objections to the tax at any time within five days after the day fixed for hearing the auditor general’s petition for the sale of the land, on the ground that the court did not remain in session during that period, where it appears that, although the judge was not present, the court was, pursuant to his instructions, convened by the clerk and sheriff every day, for the purpose of permitting such applications to be filed, and adjourned until the following day, up to the fifth day, at which time, no one having appeared, an adjournment was had for the term.
    3. Same —Failure to Attach Certified Copy of Decree to Tax Record.
    A tax sale is not void for failure to attach a certified copy of the decree to the tax record, as required by section 67 of the tax law.
    3. Same — Collateral Attack on Decree.
    A tax sale cannot be collaterally attacked by showing that the figures in the tax record indicating the amount decreed against the land were inserted after the decree was signed. Wilkin v. Keith, ante, 66, followed.
    Error to Sanilac; Beach, J.
    Submitted October 6,1899
    Decided November 7, 1899.
    Ejectment by Charles E. Gates against Freeman B. Johnson. From a judgment for plaintiff on verdict directed by the court, defendant brings error.
    Affirmed.
    This is an action of ejectment. Plaintiff’s title rests upon a deed made by the auditor general upon a sale of the land for the taxes of 1891. By what title defendant claims, does not appear; the record simply showing that he was in possession of the land. Three objections are urged against the validity of the tax deed:
    1. That the court was not in session for five days after the date set for hearing in tax matters.
    2. That there was no certified copy of the decree attached to the tax record.
    3. That the extension of the taxes opposite the lands of the defendant was made after the decree was signed.

      IT. O. Babcock and J. S. Crandell, for appellant.

      Charles IP. Gates, in pro. per.

       Rehearing denied February 7, 1900.

   Grant, C. J.

{after stating the facts). 1. The hearing upon the petition of the auditor general was fixed for November 13, 1893. Court was in session upon that and the following day. The circuit court journal shows that this was a special term; that the court had a hearing in tax matters; that an adjournment was duly had from the 14th to the 15th. On the 15th, court was opened in due form by the sheriff, and, the circuit judge not appearing, court was adjourned at 6 o’clock p. m. until the following day. The like proceeding was had on November 16th and 17th, and on the 18th, the judge not appearing, the court was adjourned without day. It was shown by the clerk of the court that the judge instructed the clerk to thus adjourn the court for the purpose of receiving and filing protests. None were filed, and on November 23d •the decree was made and filed as of November 18th.

It appears from the record that these adjournments were had from day to day for the purpose of allowing taxpayers to file their protests. Evidently they would have been considered if they had been filed. It was not necessary for the court to be actually in session in order that a taxpayer might file his protest, or petition for further time to do so. While he could present it to the court without filing, it is customary to file all such papers before the hearing. This is not a case where the court had closed the term and adjourned sine die. Defendant could have had his day in court, had he seen fit to file his objections •within the five days. He was not deprived of the right so to do. He did not appear at the court-room to present his paper, or at the clerk’s office to file it. It is a fair inference that the judge was ready to appear in court and hear him or any other taxpayer who desired to present his claim. The judge is not required to actuary sit upon the bench, so as to enable the taxpayer to make his application. Had the judge actually been present every morning, and, there being no business, had adjourned the court to the following morning, there would have been a session of the court, within the meaning of the law. There is no time fixed by the law, as there is for boards of review, to be in actual session.

2. The statute provides that, “immediately after the entry of such decree, the county clerk shall make a certified copy thereof, and annex the same to the tax record.” Act No. 306, Pub. Acts 1893, § 67. A tax deed cannot be collaterally attacked except in cases where it appears upon the face of the record that the court had no jurisdiction. It is not the certified copy of the decree that confers jurisdiction to sell the lands, but the decree itself. Counsel cite, to support their contention, Hall v. Mann, 118 Mich. 301, and Hooker v. Bond, Id. 355. The question was not passed upon in either of these cases. The statute provides “that no sale shall be set aside after confirmation, except in cases where the taxes were paid or the property was exempt from taxation.” Act No. 306, Pub. Acts 1893, § 70. In Spaulding v. O’Connor, 119 Mich. 45, we said of this provision: .

“ If we hold that a sale may be set aside for irregularities, other than the two excepted, upon petition filed after confirmation, we shall have difficulty in finding a purpose for this provision, and in such case it might as well have been omitted from the law.”

Section 99 of the law also provides that no sale “shall be held invalid by any court of this State on account of any * * * irregularity, informality, or omission, or want of any matter of form or substance, in any proceeding, that does not prejudice tbe property rights of the person whose property is taxed.” The failure to attach the certified copy is not an irregularity which prejudices the property rights of the defendant.

3. This point is ruled against the defendant by Wilkin v. Keith, ante, 66. This point cannot be raised in a collateral proceeding.

Judgment affirmed.

The other Justices concurred.


author: Per Curiam.

text:
    GOLDEN v. McCABE.1
    Lou Liens — Statement oe Amount Due — Excessive Claim.
    Log liens are subject to be defeated by an intentional overstatement, in the statement of lien filed, of the amount claimed to be due.
    Error to Baraga; Haire, J., presiding.
    Submitted October 25, 1899.
    Decided November 7, 1899.
    Proceedings under the log-lien law , by John Golden against Michael J. McCabe. Joseph W. Fordney and Aaron T. Bliss intervened as owners of the logs. From a judgment for plaintiff, on verdict directed by the court, against defendant McCabe, but denying a lien upon the logs, plaintiff brings error.
    Affirmed.

      Button & Culver, for appellant.

      Chadboúrne & Bees, for appellees Fordney and Bliss.
   Per Curiam.

We are of the opinion that this case is ruled by Gibbs v. Hanchette, 90 Mich. 657. See, also, Estlow v. Hanna, 75 Mich. 219; Auditor General v. Prescott, 94 Mich. 190; Auditor General v. Chandler, 108 Mich. 571; Auditor General v. Hutchinson, 113 Mich. 249; Pioneer Iron Co. v. City of Negaunee, 116 Mich. 435.

The judgment is affirmed.


text:
      In re KOCH’S ESTATE.
    1. Estates op Decedents — Allowance to Widow — Appeal.
    An order of allowance to a widow pending the settlement of her husband’s estate is not appealable. Bordwell v. Saginaw Circuit Judge, 119 Mich. 421, followed.
    2. Same — Executor’s Appeal — Personal Liability por Costs.
    It being well settled that an order of allowance to a widow is not appealable, an executor who appeals from such an order, and who brings error from an order of the circuit court dismissing such appeal, renders himself personally liable for the costs of both courts.
    Error to Wayne; Hosmer, J.
    Submitted October 27, 1899.
    Decided November 7, 1899.
    Louis Koch, executor of the last will and testament of Eelix Koch, deceased, appealed from an order of the probate court making an allowance for the support of Katherine Koch, widow of decedent. Erom an order dismissing the appeal, he brings error.
    Affirmed.

      James H. Pound, for appellant.

      Lemuel H. Poster, for appellee.
   Per Curiam.

The appellant is executor and legatee of Eelix Koch, deceased. An allowance having been made by the probate court for the support of the widow, the appellant appealed to the circuit court. On motion the appeal was dismissed, and he has brought the case to this court by writ of error. It has been repeatedly held that there is no right of appeal from such an allowance, and the circuit court did not err in dismissing the appeal. Bordwell v. Saginaw Circuit Judge, 119 Mich. 421.

The order of dismissal is affirmed. Costs of both courts are granted against the appellant personally, the same not to be a charge upon the estate.

       Rehearing denied April 3, 1900.


text:
    WEBSTER v. AUDITOR GENERAL.
    1. Taxation — Interest on Delinquent Taxes — Retroactive Laws.
    The amendment of section 59 of the tax law of 1898 by Act No. 262, Pub. Acts 1899, changing the rate of interest payable on delinquent taxes from 8 per cent, per annum to 1 per cent, per month, and increasing the charge for advertising from 70 cents to §1, applies to all taxes delinquent at the time of such amendment.
    2. Same — Vested Rights.
    One who owes delinquent taxes has no vested right to have the rate of interest thereon remain unchanged.

      Mandamus by Simon G. Webster to compel Roscoe D. Dix, auditor general, to accept a certain sum as payment in full for certain taxes.
    Submitted October 24, 1899.
    Writ denied November 7, 1899.

      Horace M. Oren, Attorney General, for relator.

      Bussell C. Ostrander, for respondent.
   Moore, J.

This proceeding is to obtain a construction of certain provisions of the tax law. The facts shown by the record are that the relator owned certain real estate in Big Rapids, which, in the year 1897, was assessed to him, the total of the taxes assessed being $2.68. Failing to pay the tax, the land was returned delinquent to the county treasurer, and afterwards to the auditor general. The law (Act No. 206, Pub. Acts 1893) in force when the land was assessed and the tax levied, in section 59, provides that any person may pay the taxes returned, with interest computed from the 1st day of March next after the same were assessed (in this case March, 1898), at the rate of 8 per cent, per annum, with 4 per cent, as a collection fee; this section having also a proviso that, if the taxes remain unpaid at the time of sale prescribed in the act, an additional 70 cents shall be charged to cover the cost of advertising and selling. The time for sale under the law of 1893, as amended in 1895, is the first Monday in December. The last legislature amended certain sections of the tax law, and, among them, section 59, just referred to. The time for sale of lands is fixed for the first Tuesday in May. Section 70. The title to the act of 1893 reads:

“An act to provide for the assessment of property and the levy [and collection] of taxes thereon, and for the collection of taxes heretofore and hereafter levied; making such taxes a lien on the lands taxed, establishing and continuing such lien, providing for the sale and conveyance of lands delinquent for taxes, and for the inspection and disposition of lands bid off to the State and not redeemed or purchased; and to repeal act number two hundred of the Public Acts of 1891, and all other acts and parts of acts in anywise contravening any of the provisions of this act.”

Section 59 of the law of 1893 reads as follows:

“Any person may pay the taxes, or any one of the several taxes, on any parcel or description of land returned as aforesaid, or any undivided share thereof, with interest computed thereon from the first day of March next after the same were assessed at the rate of eight per cent, per annum, and office charges, with four per cent, as a collection fee, to the county treasurer of the county in which the lands are situated, at any time before they are sold: Provided, that, on all descriptions of land on which any of the several taxes remain unpaid at the time prescribed for the sale of such delinquent tax lands, there shall be charged an additional seventy cents to cover the cost of advertising and selling the same.”

In 1899 this section was amended to read as follows:

“Any person may pay the taxes, or any one of the several taxes, on any parcel or description of land returned as aforesaid, or on any undivided share thereof, with interest computed thereon from the first day of March next after the same were assessed at the rate of one per cent, per month or fraction thereof, with four per cent, as a collection fee, to the county treasurer of the county in which the lands are situated, at any time before they are sold: Provided, that, on all descriptions of land on which any of the several taxes remain unpaid on the first day of October next preceding the time prescribed for the sale thereof, there shall be charged an additional one dollar for expenses, and which shall thereafter be a lien on said land, and, when collected, shall belong to the general fund of the State.” Act No. 262, Pub. Acts 1899.

The amended section became law September ■ 23, 1899. Relator, on the 2d day of October, 1899, applied to pay his tax. He tendered the original tax, the collection fee of 4 per cent., the dollar charge provided for in the section as amended, and interest at the rate of 8 per cent, per annum from March 1, 1898. The auditor general demanded interest at the rate of 1 per cent, per month or fraction thereof. The question, therefore, is whether or not the relator tendered a sufficient amount of interest, since, having tendered the one dollar for expenses, required by the amended section, he has, in effect, determined for himself that, while the enacting clause of the section referred to is not in force, the proviso thereto is in force. It is the claim of the relator that, if the construction of the statute which is contended for by the auditor general is to prevail, it will make the law retroactive, and that there is nothing in the law, as amended, indicating that the legislature intended it should be retroactive. In this connection our attention is called to Smith v. Auditor General, 20 Mich. 398.

The answer of the auditor general states, among other things:

“For a number of years last past, the expense to the State for collecting delinquent taxes has been greater than the sum received by the State for the interest and other charges which by law have been added to the original tax, so that the amount of the State tax levy has not been received, with the result that a considerable deficit exists and has existed, to supply a portion of which deficit the last legislature added to the State tax levy the sum of $450,000.”

It is his claim that section 59, as amended, took the place of the section before it was amended, and to construe it prospectively only is to defeat the entire claim of the State for interest upon all delinquent taxes existing when the amendment took effect. He says the purpose of the legislature in making the change was to meet the cost of collecting taxes. Treated as retrospective legislation, it would accomplish the purpose the legislature had in view; it would violate no provision of the State Constitution or the Constitution of the United States; it would invade no vested right of an individual.

It is conceded courts are required to construe statutes as prospective, and not retrospective, unless constrained to the contrary course by the rigor of the phraseology of the statute itself. It becomes important, then, to determine, if we can, from the statute as it now reads, what was the purpose of the legislature in its enactment. The title of the original act stands as the title of the act as now amended. In Smith v. Auditor General, supra, it was said that the title of the act (Act No. 169, Laws 1869) made it very apparent that the provisions of the act related to the future. That construction, however, cannot be given to the title of this act. If any inference is to be drawn from the title of this act, it would be that its provisions related to the “taxes heretofore” as well as the taxes hereafter levied. As this, however, is not a new tax law, but is an amendment to an existing law, and, to identify the section it was proposed to amend, it was necessary to refer to the title of the act in which the section was found, we do not think the title of the act affords much light upon the purpose of the legislature in making the amendment.

The provisions of the law of 1893, up to section 59, remain substantially as they were prior to the amendment. They relate to the assessment, levy, and collection of the taxes, and to the return of the land for delinquent taxes. All these things were to be done in substantially the same way subsequent to the amendment as they had before. There is no suggestion in section 59, as amended, that it was to apply only to lands thereafter assessed and returned, but it provides, not only as to those bands, but “on any land.returned as aforesaid,” that any person may pay the tax, with the interest and fees provided for in the amended section. Had the legislature intended the amended section should apply only to future assessments, it would have been easy to say so; but, as they have not done so, if we are to construe the law according to its terms as it now reads, it is difficult to come to any other conclusion than that it was intended to apply to all lands upon which the taxes had not been paid. It is urged that, if this is the construction to be given to the law, the law is invalid, as interfering with vested rights. It must be conceded that, in relation to this construction, the rulings of the courts are not harmonious. It is claimed the case of Smith v. Auditor General, 20 Mich. 398, sustains the position of the relator. As we have already seen, the court found that, when the language of the act and the title of the act were construed together, it became very apparent that the provisions of the act related wholly to the future. In that case Justice Cooley said:

“We do not understand it to be questioned that it was competent for the legislature to make the general provisions of the act of 1869 apply to the taxes previously assessed and returned, so far as the subsequent proceedings to be taken by the State were concerned, if they had seen fit to do so. The question is whether they have expressed an intention to that effect. Unless that intention distinctly appears, the familiar rule of construction which presumes that legislation is designed to have prospective operation only will require the court to hold that the legislative purpose was that this act should apply only to the taxes subsequently assessed. For, although to apply it to taxes previously levied would not, so far as the course of official proceeding for the enforcement thereof is concerned, be strictly retrospective, in the proper sense of that term, yet so far as it increased penalties, or in any manner affected the taxpayer’s rights or interest as they depended upon previous acts or delinquencies, it would be plainly so, and the purpose of the legislation to give it that operation is not to be presumed where the words are ambiguous, or reasonably susceptible of a different construction.”

In People v. Saginaw County Treasurer, 32 Mich. 260, it was held that the law of 1871 in relation to the redemption of lands sold for taxes was amended by the law of 1875, and —

“That the amended section took the place of and repealed the original one, and, being the only act in force providing for redemption, it must govern; that it must be assumed that such was the intention of the legislature, as the only alternative would be to infer an intention to cut off all right of redemption as to prior sales, which would not only be contrary to the uniform State policy in that regard, and therefore not to be deduced by slight inference, but it would affect injuriously the rights of those who before were entitled to redeem.”

That case is on all fours with the present, except in that case the law of 1875 reduced the amount requisite to redeem, while in the present the law of 1899 increases it. That case must be held to rule this case, provided the legislature had the power to make the change. The latter question is ruled by Muirhead v. Sands, 111 Mich. 487. See, also, Humphrey v. Auditor General, 70 Mich. 292.

The relator urges that section 125 of the tax law of 1893 negatives the idea that the law is retroactive. It reads as follows:

‘c All rights which may have accrued to any person, as well as all rights which have accrued or become vested in any individual corporation, municipality, or the State, under any of the heretofore existing tax laws of the State which have been amended, modified, changed, or repealed, shall not be affected, changed, or destroyed, but the same shall remain in force, subject to review and enforcement in the courts of this State, and for the completion of all proceedings heretofore begun for the collection of taxes or the enforcement of all the requirements of such laws.”

It was doubtless the purpose of this section to make the provisions of the law of 1893 prospective, rather than retroactive; but, in view of the fact that no mention was made in the title of the act of 1899 of this section, when section 59 of the law of 1893 was amended, and the further fact that section 125 was not re-enacted, it is difficult to see how it gives to the language used in section 59 any other meaning than would be drawn from the wording of the section itself.

It is the duty of the landowner to pay his taxes, and to pay them when they become due. Incidental to the power to tax is the power to enforce payment. Because the State has been liberal in making provision for the redemption of the lands from the lien created by the tax, it does not foljow it cannot change the terms upon which the lands can be redeemed. See Muirhead v. Sands, 111 Mich. 487. We do not think it can be longer said in this State that the taxpayer has a vested right to have the interest charged in order to redeem remain at the same rate it was when the land was assessed, so long as he chooses to be delinquent in the payment of his taxes. It is, as we have shown, within the power of the legislature to change the rate of interest due from the relator and all others in his position. By the amendment to section 59 it has done so.

The auditor general properly construed the law. The application for the writ of mandamus is denied. '

The other Justices concurred.