text:
    WILLIAMS v. BOLT.
    1. Mortgages — Bedemption —Deed as Security — Debtor and Creditor — Accounting.
    Complainant borrowed money from defendant, giving him a deed that defendant agreed to hold without recording as security for the debt, which was later increased by an additional loan on the same security, amounting to about one-third the value of the property. Defendant recorded said deed without complainant’s knowledge. Becoming indebted to third parties, who' obtained a judgment against complainant and levied execution upon the property in question, complainant, having in the meantime paid his indebtedness to defendant and received back his deed, without obtaining any quitclaim from defendant, borrowed a further sum from defendant, and redelivered the deed as security. Said judgment creditors sold the property levied upon, and bid it in for such judgment. For complainant’s benefit and with his approval, defendant filed a bill to set aside the levy, claiming to own the lands, but before the final determination of the proceedings defendant purchased the interest of said judgment creditors, whose title had become absolute. He subsequently gave a statement to complainant showing the amount he claimed, including the amount of the last loan, interest, taxes and the sum paid to such judgment creditors, and admitted having received money from complain- . ant on the indebtedness, also giving him an option to repurchase the premises. Held, that the relation of mortgagor and mortgagee had never terminated and complainant was entitled to redeem.
    2. Same — Equity—Deeds.
    In the case of a transaction which one of the parties claims to have amounted to a mortgage, equity will, in case of doubt as to the actual intent of the parties, be inclined to give the debtor the benefit of the doubt and preserve to him his equity of redemption.
    Appeal from Muskegon; Sessions, J.
    Submitted April 12, 1912.
    (Docket No. 93.)
    Decided May 31, 1912.

      Bill by John Williams against Orin T. Bolt and others for an accounting and redemption from a deed given as security for a loan. From a decree for defendants, complainant appeals.
    Reversed.

      Turner & Turner, for complainant.

      Philip W. Kniskern and Walter I. Lillie (Charles B. Gross, of counsel), for defendants.
   Stone, J.

The bill of complaint in this cause was filed to obtain an accounting from the defendant Orin T. Bolt of all moneys received by him either for rent of lot 5, block 47, of the city of Muskegon, or the money paid to him by complainant on account of indebtedness, as well as on account of any moneys expended by said defendant for maintaining and repairing the buildings on said lot, and the insurance and taxes thereon, etc.; also that the deed from complainant and wife to said defendant, bearing date December 30, 1901, and recorded October 25, 1902, in Liber 115 of Deeds, on page 196, in the office of the register of deeds for Muskegon county, may be declared to have been, and to be, a mortgage, or a mortgage lien on said lot, and that, upon complainant’s paying to said defendant Bolt any indebtedness or liens found to be due him, said defendant may be decreed to release and forever quitclaim to complainant all interests and claims that he may have in said described premises derived under said deed, or under a deed from Samuel Woolner, Jr., and wife and Alfred C. Woolner to said defendant Bolt, bearing date June 8, 1905, and recorded in the office of said register of deeds on July 17, 1905, in Liber 35 of Deeds, on page 410; and that the said defendants Libby M. Bolt, Alice I. Ragen, John A. J. Ragen, Mary Ragen, Mary Ragen Gordon, and Walter I. Lillie may severally be decreed to release and quitclaim to complainant all interest which they, or any of them, may have or claim in and to said property by virtue of their respective deeds, or in any other manner from or through the said defendant Orin T. Bolt.

It is the claim of complainant by his bill of complaint, and the evidence offered by him tends to show: That he has been the owner of said premises since 1870, and has occupied the same, except as hereinafter stated, and that there are upon said premises valuable buildings, and that said property was on December 31, 1901, worth the sum of $4,000; that at or about the last-named date complainant borrowed from defendant Orín T. Bolt the sum of $900 without any definite arrangement as to the date of the repayment of the same, and that, in order to secure said defendant for said loan, complainant and his wife executed and delivered to said Bolt a warranty deed of said premises, which was taken and held by said defendant solely for security for said loan, and for no other purpose; that said defendant Bolt agreed that he would not record said deed, but that, in violation of said- agreement, he at the date above stated caused the same to be recorded as a deed, which was unknown to complainant; that on or about the 1st day of May, 1902, complainant borrowed the further sum of $500 from said defendant Orin T. Bolt, and that he executed and delivered to said Bolt at said time his check on the National Lumberman’s Bank of the city of Muskegon, made payable to the order of the county treasurer, for said sum, which check was delivered to and accepted by said defendant Bolt as evidence of the loan of the $500 aforesaid; that complainant at the time of the delivering of said check was lawfully indebted to defendant Bolt in the sum of $1,400 together with the interest on said $900 from the 31st day of December, 1901; that at the time of borrowing said $500 and giving said check, it was expressly agreed between said parties that the afore- ■ said deed so delivered to said Bolt should be held by him as security also for the repayment of said $500; that some time prior to the 3d day of January, 1903, complainant paid to said defendant Bolt the entire amount of said indebtedness of $1,400, together with the interest thereon, and that, upon paying the same, the said defendant Orin T. Bolt delivered to complainant the deed so held by him as security for the payment of said sums of money; that complainant accepted the deed, but did not notice at the time, nor until a long time thereafter, that the same had been recorded, and complainant supposed that, inasmuch as the deed had at all times been considered as a mortgage, a reconveyance to complainant was not necessary from said Orin T. Bolt; that in the month of February, 1903, complainant was indebted to the firm of I. Trager & Co. upon a judgment rendered against him in the circuit court of said county in the sum of $1,112.50 and on or about the 12th day of February, 1903, for the purpose of obtaining means to satisfy said judgment, he borrowed of defendant Orin T. Bolt the sum of $1,100, which was then and there agreed to be repaid to said Bolt as soon as complainant was able to do so, but that no particular time of payment was specified, and that for the purpose of securing said Bolt for the repayment of said $1,100 complainant handed and delivered again to said Bolt the deed of said premises of date December 30, 1901, complainant not having observed at the time that said deed had been recorded; that said defendant Orin T. Bolt then and there accepted the same and held the same as security for said loan of $1,100, and for no other purpose, and that said defendant has ever since continued to hold the same as such security; that said sum of $1,100, together with a small sum added thereto by complainant, was paid on February 12, 1903, in satisfaction of the judgment of said I. Trager & Co.; that on December 10, 1904, the defendant Orin T. Bolt, without the knowledge or consent of complainant, executed and delivered a warranty deed of said lot to the defendants Libby M. Bolt and Ragen, hereinbefore named; that the same was in effect a mortgage, and that said defendants were all fully aware of the conditions under which said Orin T. Bolt held the paper title to said property, and that defendant Orin T. Bolt admits that said purported conveyance was intended as a mortgage; that upon the 2d day of April, 1906, without the knowledge or consent of complainant, said Orin T. Bolt and his wife executed and delivered to defendant Walter I. Lillie a warranty deed, which is admitted to be a mortgage; that Walter I. Lillie fully understood the relations existing between complainant and the defendant Orin T. Bolt at the time he received said deed; that the money so borrowed, as set out above, by said complainant of Orin T. Bolt has been repaid by complainant, except it may be some small sum for taxes or improvements upon said property; the complainant offering to pay any sum found due the said Orin T. Bolt upon an accounting.

It further appears: That on December, 22, 1902, a judgment was rendered in the circuit court of said county against the said complainant as defendant, and in favor of Samuel Woolner, Jr., and Alfred C. Woolner, copartners under the firm name of Woolner & Co., of Peoria, 111., for the sum of $1,189.56, together with costs of suit; that execution was issued upon said judgment against this complainant as defendant, and on January 14, 1903, a levy of said execution was made and perfected upon the premises in question; that.a sale under said execution was made on November 11,1903, and said property was bid in by said Woolners; that in the month of September, 1903, the said defendant Orin T. Bolt, as complainant, filed a sworn bill in the circuit court for the county of Muskegon, in chancery, against said Woolners to set aside said levy, in which bill said Orin T. Bolt represented to the court that he was the owner in fee of the property involved in this suit; that subsequently, and on the 8th day of June, 1905, the said Orin T. Bolt, in consideration of the sum of $211.83 actually paid, received in his own name a quitclaim deed from the said Samuel Woolner, Jr., and wife and Alfred C. Woolner, which was duly recorded as above stated; that said Bolt now claims to own said premises by virtue of said deed. On June 17, 1905, and after receiving the deed last above mentioned, the said Orin T. Bolt gave to complainant the following statement:

“Statement. Muskegon, Michigan, June 17,1905. Mr. O. T. Bolt to John Williams, Dr. [That is the way it reads.] Principal $1,162.50; interest $208.32; taxes $417.35; Lovelace $211.83.”

In his testimony the defendant Orín T. Bolt testified relative to said statement as follows with reference to the Lovelace item; it appearing that Mr. Lovelace was the attorney for the Woolners in the judgment matter:

“Q. That is what you paid for that deed ?
“A. Yes, sir.
“Q. You figured that all in, and gave it to Mr. Williams as the amount due you, didn’t you ?
“A. I presume so; yes.
“Q, Well, you did, didn’t you?
“A. I probably gave it to him as the amount that he would have to pay in order to clear up the property, and get a deed from me if he wanted it.
“Q. That $211.83 is what you paid for the deed ?
‘A. Two hundred eleven dollars and eighty-three cents is what I paid for the Woolner deed; yes, sir.
“Q. He was asking you then how much he was indebted to you, wasn’t he, when you made this statement ?
“A. Probably was asking me how much it would cost him to buy the property and clear up the taxes. I made those figures for Mr. Williams’ information.
“Q. There wasn’t any option then ?
“A. Why, no; June 17, 1905.
“Q. That item you figured, amount due $417.35, hadn’t ever been paid ?
“A. No; those were back taxes. Those were the taxes of 1902, 1903, and 1904.
“Q. During the time you made these figures, you didn’t mention anything about any mortgage being on the premises that you gave before that date ?
“A. No, sir.
“Q. Kept him in absolute ignorance of that, did you?
“A. Yes, sir.
“Q. Now, you were in for fighting the Woolner claim, wasn’t you ?
“A. Williams was.
“Q. You were the man that filed the bill, weren’t you, to fight the claim ?
“A. Really, at his request.
“Q. Didn’t Williams tell you to go and pay Woolner ?
“A. No; Mr. Williams desired, as a matter of fact, to take the stand, and testify that my title was absolute. I afterwards considered that that was not a very good deal and went up and settled for what it cost me to quit. That is the inside of it.
“Q. That was after the bill was filed ?
“A. Yes; sir.
“Q. Mr. Williams was not sworn, was he ?
“A. Not that I know of.'
“Q. Didn’t he tell you to go and settle the Woolner claim, that he owed so much ?
“A. No, sir.
“Q. Wasn’t it on that, that you did it ?
“A. No, sir; I never bought the Woolner claim until after redemption had expired.
“Q. Didn’t you have $130 of Mr. Williams’ money about that time you negotiated for this Woolner deed that he overpaid you on licenses ?
“A. No, sir; I did not.
“Q. But you did receive at the hands of Mr. Williams $130 — did receive it at the end of the year ?
“A. Yes, sir. And credited it to him on account December 31, 1904.”

It further appears that on or about the 11th day of November, 1905, said Orín T. Bolt prepared and caused to be delivered to complainant an option for the repurchase of said property within 12 months—

“For $1,632.65, with interest from June 17, 1905, at the rate of 7 per cent, per annum, together with such taxes or insurance premiums which I may hereafter be obliged to pay on account of said property, less the net Tent which I may hereafter receive from said property. On payment or tender to me of said cash at any time within said period of 12 months I agree to execute and deliver to said John Williams or his heirs or assigns a good and sufficient conveyance for said premises.”

It is the claim of the complainant that this option was not made or delivered in pursuance of any agreement or understanding between the parties; that complainant did not know the nature of the paper when it was handed to him by defendant Bolt, but claims that Bolt said it was a statement of their account. This claim of complainant is denied by defendant Bolt, wbo claims that the option was made and delivered in pursuance of a full and complete understanding between the parties. It might be stated in this connection that the complainant claims and testified that defendant Bolt acted for him in obtaining the deed from the Woolners, that the attorney for the Woolners and Bolt had talked it over, and that Bolt was then owing the complainant $130 in an outside matter, and that Bolt had told the complainant the amount that Lovelace would accept for a deed. • When asked if he knew that Bolt was to get a deed or pay the account, the complainant testified that he was to pay the account and get the judgment released, and that he did not ask Bolt in what form it was to come.

It is the claim of complainant that Bolt was acting as his agent in thus dealing with the Woolners, and by reason of his holding the deed as a mortgage, and recognizing the relation of mortgagor and mortgagee, in buying in this outstanding claim or title, to the property, Bolt’s relation to complainant was such that he could not claim the title in himself, and thereby cut off the complainant’s right to redeem the property. It should be stated that there is much conflict in the evidence of these parties. The defendant Orin T. Bolt admits that he received the deed and held it as security for the moneys loaned to the complainant. He denies, both in his answer and testimony, that the original loan of $1,400 was ever paid by complainant. He also denies, or at least does not remember, that he ever made the loan of $1,100 claimed by complainant. In considering the relation between the parties, this difference is not important except as it bears on the credibility of the parties, and the amount due, because the defendant Bolt admits that he received the deed of December 30, 1901, as security for money loaned, and that he held it as security. He does claim, however, that at the time of obtaining the Woolner deed, the redemption period having expired, the title of complainant and the claim of said defendant had both become extinguished by the sheriff’s deed to the Woolners after the expiration of the redemption period, and that from the time he obtained the deed from the Woolners he became the owner of this property. We shall have occasion to inquire whether this position is consistent with his conduct and with the circumstances surrounding the matter. Upon the hearing the circuit judge dismissed the bill of complaint, and the complainant has appealed.

It is the claim of complainant that, applying the rule <conce a mortgage always a mortgage,” the defendant could not in the manner indicated acquire the title as against him. It will be noted that Bolt admits that at the time he filed the bill of complaint against the Woolners in September, 1903 (therein claiming that he was the absolute owner of the premises), he was, in fact, the holder of a mortgage only. He did not press that suit, but allowed the sale on execution to be made, and the redemption to expire, before he took his deed from the Woolners. If he was acting for complainant when he filed the bill, as he testified he was, will equity permit him thus to change his relation from that of a mortgagee to that of an owner ? As between him and the complainant, was Bolt any the less a mortgagee, after the purchase from the Woolners, than he was before. Did not the relation of debtor and creditor still exist between them ? The subsequent conduct of defendant Bolt should be noted, in view of the claimed ignorance of complainant as to the transaction relating to the Woolner deed. The statement of June 11, 1905, given by defendant Bolt to complainant, is significant. The deed from the Woolners to the said defendant bore date June 8, 1905. There is attached to the deed, however, a clerk’s certificate dated at Peoria, 111., June 16,1905. It is only fair to say that at the date of the statement defendant Bolt understood all about the deed for he includes in the statement the amount paid for it, to wit, $211.83, which he testified was the consideration paid. We think that it can be said that at the time of making this statement defendant Bolt recognized the relation of mortgagor and mortgagee, and that in the buying in of the Woolner title he had simply added the amount paid to the former indebtedness, and treated the whole as an indebtedness secured by the mortgage. Not only may we say that the relation of debtor and creditor still existed between the parties, but by the testimony of the defendant Bolt it may well be urged that in buying in the Woolner title he was acting as the agent of the complainant. Had he been furnished with a part of the money by complainant, with which to make the purchase, the claim of complainant upon this point would be almost conclusive. This, however, is denied by defendant. About the time of the giving of the written option defendant Bolt seems to have got possession of most of the premises, and gave directions later to complainant about the rents.

We are impressed with the claim of complainant that, after obtaining the Woolner title, defendant Bolt, by his statement and conduct, still recognized the relation to be substantially the same as it had been before, which was confessedly that of mortgagor and mortgagee and debtor and creditor. The complainant’s position is strengthened by his claim that he furnished a part of the consideration, and that he supposed that Bolt was simply to pay the Woolner claim and get the judgment released. It must be conceded that the complainant exhibited a woeful ignorance of business affairs. We should, however, look at the entire situation. The fact being admitted that Bolt took and held the deed of December 30, 1901, as a mortgage, and that in getting the deed from the Woolners he really acted for complainant, we should look at the transactions in the light of all the surrounding circumstances, and view the position occupied by the parties at the time, as they probably understood it. Applying this test, is there really any doubt that, when the statement of June 17th was made, defendant Bolt considered himself a creditor and mortgagee ? We think not. If so, we see no reason for saying that he could arbitrarily change that relation later, and thus subsequently cut off the right of redemption.

In Ferris v. Wilcox, 51 Mich. 105 (16 N. W. 252, 47 Am. Rep. 651), a mortgagor of land that was worth considerably more than the mortgage debt (as seems to be the case here) deeded it to the mortgagee and took back a contract of sale, which provided that, in case of default in payment, the party of the first part should be entitled to immediate possession, and should also have a lien on the crops. It was held that the deed and contract together should be construed as a mortgage, amounting only to a change in the form of security for a continuing liability. In that case Justice Cooley said:

“ If, upon the face of the papers, examined in the light of surrounding facts, there were any doubt of the intent, the law, taking notice of the advantage the creditor must always have over his debtor whose property hie holds in mortgage, would give the debtor the benefit of the doubt, and hold his equity of redemption to be still existing.”

See cases cited in the opinion.

If defendant Bolt was acting in the interest of, and on behalf of, complainant in buying in the Woolner title, then the reasoning applied by this court in Backus v. Cowley, 162 Mich. 585, 592 (127 N. W. 775, 778), applies, and the defendant is in no position to invoke the statute of frauds. As was there said by Justice McAlvay :

“The relations between Mrs. Backus and defendant company relative to this transaction have been called fiduciary. Strictly speaking, they were not, but were such as required loyalty on the part of the agent, and a duty resting upon it to deal in good faith with its principal, and is one of the relations within the statute and recognized by the authorities cited.”

See, also, Kimball v. Ranney, 122 Mich. 160 (80 N. W. 992, 46 L. R. A. 403, 80 Am. St. Rep. 548); Walling v. Poulsen, 160 Mich. 392 (125 N. W. 373). We are of opinion that the learned circuit judge erred in dismissing the bill of complaint, and that complainant is entitled to an accounting, and that, upon payment to defendant Bolt of any sum of money found to be due him from complainant, the latter is entitled to a reconveyance of the property, as against all of the defendants, as prayed for in the bill of complaint.

The decree of the circuit court is reversed, with costs, and the case will be remanded to the circuit court for an accounting between complainant and defendant Orin T. Bolt. In default of the immediate payment by complainant of any amount found due to the defendant Orin T. Bolt upon such accounting, the title to said premises shall thereupon stand confirmed in said defendant Orin T. Bolt, and the complainant shall thereupon be foreclosed from any interest therein.

Moore, O. J., and Steers, McAlvay, Brooke, Blair, and Ostrander, JJ., concurred. Bird, J., did not sit.


source: Caselaw Access Project

author: Stone, J.

license: Public Domain

text:
    SCHMEDDING v. NORTHERN ASSURANCE CO.
    Insurance — Default—Extension—Grace.
    After insured, who defaulted in the payment of premiums on his life insurance policy, had given notes extending the time of payment for upwards of four months, again defaulted, failing to pay one of the notes, he was not entitled to a further period of one month under provisions of Act No. 187, Pub. Acts 1907.
    Certiorari to Wayne; Donovan, J.
    Submitted April 9, 1913.
    (Calendar No. 24,926.)
    Decided May 31, 1912.
    Mandamus by Jan Schmedding against the Northern Assurance Company to secure relator’s reinstatement under a policy of insurance. An order granting the writ is reviewed by respondent on writ of certiorari.
    Eeversed.

      Thomas A. E. Weadock (Fred H. Aldrich, of counsel), for appellant.

      Edwin Henderson, for appellee.
   Stone, J.

Tbe return of the circuit judge to the writ of certiorari issued herein shows that the relator applied to the circuit court for a writ of mandamus to compel the respondent to issue a receipt for the annual premium due December 31, 1910, upon a certain policy of insurance issued by the respondent upon the life of relator, and also directing the said respondent, its officers and agents, to hold and deem the said policy of insurance upon the life of relator to be in full force and effect. The facts as stipulated and found by the circuit court upon the hearing, so far as here material, are as follows:

On December 31, 1908, the relator was insured by the respondent by policy No. 1,363. A premium became due on said policy on the 31st day of December, 1910. Said relator, being unable to pay said premium in cash, gave to the respondent two promissory notes, bearing date December 31, 1910, and payable, respectively, April 35,1911, and May 33, 1911. The first of said promissory notes was in the words and figures following:

“$36.01. Detroit, Mich., December 31, 1910.
“ April "35th, 1911, after date I promise to pay to Northern Assurance Co. of Michigan, at its home office, in Detroit, Mich., for value received, the sum of twenty-six and 01 /100 dollars. Same being \ of the amount of the......annual premium due and payable the 31st day of December, 1910, on policy No. 1,363, of said company.
“ I understand and hereby agree that neither this note, nor any extension thereof, is given or. accepted as a payment of said premium. And 1 agree that the non-payment of this note, or any extension thereof, at maturity, shall ipso facto lapse said policy, and there will be due the proportionate part of the face of this note, with interest, that the time from the date to the maturity of this note, or any extension thereof, bears to the whole time covered by said premium. I also agree that upon nonpayment of this note, or any extension thereof, if said policy should have any cash value, the company may charge the proportionate part of this note, or any extension thereof, that may be due as above provided, against such cash value, and any extended insurance value it may have shall be accordingly reduced.
[Signed] “ Jan Schmedding.”

The second of said promissory notes was exactly like the one above set forth, except that it was due May 23, 1911.

On May 2, 1911, relator tendered to the respondent the amount of the first-named note. Respondent accepted the money, upon condition that relator furnish to it a health certificate; said respondent claiming that on said date the nonpayment of said note at maturity had lapsed the policy. Relator failed to furnish a satisfactory health certificate, and thereupon respondent tendered back the money, which relator refused to accept. On May 25, 1911; relator tendered to respondent the amount due upon the second note. The respondent refused to accept the said money, and claimed that said policy had lapsed and was void because of the nonpayment of said notes at maturity. Thereupon relator filed a petition for mandamus, an order to show cause was granted, and upon the final hearing the writ of mandamus was issued, as above indicated.

The policy provides as follows:

“No premium shall be considered as paid unless and until a receipt shall be given therefor signed by the president or secretary, and countersigned by an agent authorized to receive such premium.”
“ A grace of thirty-one days will be allowed in the payment of all premiums, excepting during the first year, subject to an interest charge at the rate of five per cent, per annum, the policy to remain in force for its full amount during such period.”

Act No. 187, Pub. Acts 1907, provides:

“Section 1. No policy of insurance shall be issued in this State unless the same shall contain the following provisions : “
“First. A provision that all premiums shall be payable in advance, either at the home office of the company or to an agent of the company, upon delivery of a receipt signed by one or more of the officers who shall be named in the policy.
“Second. A provision for a grace of one month for the payment of every premium after the first year, which may be subject to an interest charge, during which month the insurance shall continue in force, which provision may contain a stipulation that if the insured shall die during the month of grace the overdue premium will be deducted in any settlement under the policy.”

The provisions of this statute were before this court and received a construction in the following cases: Mutual Benefit Life Ins. Co. v. Commissioner of Insurance, 151 Mich. 610 (115 N. W. 707); Franklin Life Ins. Co. v. Commissioner of Insurance, 159 Mich. 636 (124 N. W. 522). The policy before us in this case appears to have complied with the statutory scheme of contract.

In ■ his petition for mandamus, the relator states that when the annual premium became due on December 21, 1910, he was unable to pay the same, and gave to the respondent two promissory notes for the sum of $26.01 each, one payable April 25, 1911, and the other payable May 23, 1911. He admits that he did not pay either of these notes at maturity. When his annual premium became due on December 21, 1910, and he was unable to pay it, relator was entitled to 31 days of grace, subject to an interest charge of 5 per cent, per annum, during which time his policy was to remain in full force for its full amount. By his own showing by an agreement with it, he was granted by respondent, not only the contract period of grace, but many months beyond that period.

We are of opinion that" he is in no position to complain that he did not have all the grace which is contemplated either by the statute or the contract of insurance. We do not think that he was entitled to two periods of grace. We do not think there is anything in the statute or contract of insurance that prohibits the respondent from giving the extended grace that was granted to relator in the manner it was in this case, so long as the policy was kept in full force for its fujl amount during the grace period. Certainly the relator is in no position to complain of it. To hold otherwise would be to punish the respondent for its apparent attempt at fairness in extending the grace. Koehler v. Modern Brotherhood of America, 160 Mich. 180 (125 N. W. 49, 136 Am. St. Rep. 424).

In our opinion, his petition did not state such a case as entitled him to the writ of mandamus, or any other relief. Having reached this conclusion, it is not necessary to consider the other questions discussed by counsel.

The judgment of the circuit court is reversed, with costs.

Moore, C. J., and Steere, McAlvay, Brooke, Blair, and Ostrander, JJ., concurred. Bird, J., did not sit.


text:
    REED v. McCREADY.
    1. Appeal and Error— Questions Review able — Capias—Affidavit.
    The sufficiency of an affidavit for capias ad respondendum. cannot be raised on error after pleading and trial on the merits.
    2. Same — Sufficiency of Affidavit for Arrest.
    Upon a record showing that the affiant, who secured defendant’s arrest on capias, knew from admissions of defendant a part of the facts sworn to, and that other jurisdictional facts appeared by another affidavit which was not included in the record, it could not be held that an abuse of process was made to appear.
    8. Principal and Agent — Public Policy — Conversion.
    In trover for the conversion of a promissory note that defendant claimed plaintiff held in trust to be used in satisfaction of an existing and prior lien upon premises for which the note was part consideration, that the note was worthless in the hands of the payee, having no value until transferred to a holder in good faith, and that defendant was authorized to negotiate it in order to secure to himself commissions owing to him from plaintiff, defendant could not defend against plaintiff’s claim on the theory that to negotiate the notes was a breach of trust on plaintiff’s part or that it was against public policy to permit a recovery for the money obtained thereon.
    4. Same — Title—Bills and Notes — Indorsement.
    The court did not err in charging the jury as to defendant’s claim that the note was not plaintiff’s, but belonged to a partnership of which he was a member, that the indorsement of the instrument in blank and the delivery to a third person is prima fade evidence of the transfer of title, but the question of ownership should be determined from the evidence in the case.
    5. Same — Presumptions—Evidence.
    Such presumption might properly be rebutted by showing that title remained in the indorser.
    6. Same — Instructions to Jury — Trial.
    Nor did the trial court err in refusing defendant’s request to charge the jury that defendant’s uncontradicted evidence concerning a conversation with one of the firm was conclusive; there being a sharp conflict in the testimony of defendant with that of other witnesses, the jury was not bound to accept as true any particular part of defendant’s testimony.
    7. Same — Charge.
    The court did not err in charging the jury that if the note belonged to plaintiff, who transferred it to the firm of which he was a member, for collection, he was entitled to recover; if the note was partnership property plaintiff could not recover; that if the note was in defendant’s hands to discount and apply the proceeds on his claim against the copartnership, his possession of the note and the disposition thereof was lawful.

      Error to Kent; Perkins, J.
    Submitted April 11, 1912.
    (Docket No. 111.)
    Decided May 31, 1912.
    Rehearing denied July 22, 1912.
    Trover and case by Ernest C. Reed against LaMott R. McOready for the conversion of a promissory note. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      IS. A. Maher, for appellant.

      Rodgers & Rodgers, for appellee.
   Stone, J.

The statement of facts in this case does not comply with the requirements of rule 40 because the same is not distinct from argument. It appears that the subject-matter of the suit was a promissory note made by one Edward B. Downing bearing date May 9, 1908, for the sum of $642.40, payable to the plaintiff or order, and due on or before three years from date, with interest from date until paid at the rate of 6 per cent, per annum. This note was No. 3 of a series of three vendor’s lien notes given by Downing to the plaintiff as part of the purchase price of some Texas land which had been deeded to Downing by the plaintiff.

The defendant had been in the employ of a copartnership known as the Reed-Allen Realty Company of Chicago, 111., composed of the plaintiff, Oscar O. Reed, and Alexander C. Allen. The note in question was delivered to the defendant at Chicago on September 16, 1908, by the Reed-Alien Realty Company, and defendant signed a receipt therefor in the words and figures following:

“Chicago, September, 16, 1908.
“Received of Reed-Allen Realty Company one vendor’s lien note No. 3, dated May 9, 1908, for $642.40 due on or before three years after date, with six per cent, interest signed by E. B. Downing of Grand Rapids, Michigan.
“L. R. McOready.”

It will be noted that the receipt did not state the object and purpose for which the note had been delivered to the defendant.

The defendant sold the note to one Merrill November 11,' 1908, for $607, and retained the proceeds, claiming a right to do so by virtue of his relations and dealings with said copartnership. It is the claim of the plaintiff that the defendant was given authority by the said copartnership in writing to discount this note not to exceed 3 per cent, of the face value, on which writing the discount was figured at $34.40, leaving the net price of the note $607. It is the further claim of the plaintiff that the note was to be sold and cashed by the defendant for the said copartnership, and the proceeds thereof returned to the copartnership. The note at the time it was delivered to the defendant had been indorsed by the plaintiff and was at the time taken from a note box containing papers, which box was in the vault in charge of said firm.

This is an action commenced by capias ad respondendum in trover and case for the alleged unlawful conversion of the proceeds of the promissory note after demand made. To obtain an order that the defendant be held to bail, the plaintiff made an affidavit which was attached to the writ. It was the claim of the defendant upon the trial that the affidavit was untrue in many essential particulars, and the defendant introduced the affidavit in evidence upon the trial. The writ of capias was also offered in evidence by defendant, but was excluded by the court, to which ruling defendant excepted, and error is assigned upon the ruling. It appears that there was at least one other affidavit attached to the writ which is not in the record.

An important and much controverted question upon the trial was the ownership of the note delivered to the defendant. It was claimed by the defendant that the note was the property of said copartnership, that the note was delivered to the defendant by such copartnership to enable him to obtain payment of an admitted indebtedness to him from the copartnership, and that he could not be held liable for the proceeds of the note in any action unless a balance should be established against him in favor of the copartnership upon an accounting between them.

The defendant further claimed that at the time he received the note, and when he disposed of it, it was utterly without value in the hands of the copartnership or the plaintiff except as it might be fraudulently disposed of to a good-faith purchaser; that the disposition made of the note by the copartnership constituted a fraudulent breach of trust with respect to Downing, the maker of the note, because of certain vendor’s lien notes that had been given by the plaintiff to one Frazier, from whom plaintiff purchased the land he conveyed to Downing which were still outstanding — hence that the transaction could not afford a basis for an action to recover damages either for a disposal of the note or the retention of its proceeds.

The testimony upon the trial of the case took a wide range, covering grounds relating to the ownership of the note, the agency of the firm as to the plaintiff, and the manner of conducting the business of the copartnership and its members, the dealings of the defendant with the copartnership, and the condition of the accounts between defendant and the firm. There are 70 exhibits, and a record of 228 pages is presented. The trial resulted in a verdict and judgment for the plaintiff.

After the denial of a motion for a new trial based on many grounds, involving the refusal of requests to charge and the charge of the court, the defendant has brought the case here by writ of error, assigning many errors in the rulings on the introduction of evidence, and the refusal of the motion for a new trial. Counsel for appellant has discussed the many questions raised under four heads, and we shall consider them in the order presented.

(1) It is urged by defendant that upon grounds of public policy the plaintiff had no right to submit his case to the jury for two reasons: (a) Because jurisdiction of the defendant’s person was obtained in an unlawful manner. (b) Because the delivery of the note in question .to the defendant, for the purpose of having the same sold or discounted, constituted a fraudulent breach of trust on the part of the Reed-Allen Realty Company as to the maker of the note, Edward B. Downing.

(a) The defendant claims that from the evidence on the part of the plaintiff it appears that the affidavit made by the plaintiff for the purpose of obtaining an order that the defendant be held to bail was untrue in every essential particular which authorized the making of such order; that to warrant the making of an order that the defendant be held to bail it was necessary that the affidavit should show that the defendant received the note under circumstances that made him liable to the plaintiff for its proceeds when disposed of by him, and that such affidavit could not be made upon information and belief. It is urged that because the evidence upon the part of the plaintiff showed that the plaintiff was not present and could not have had personal knowledge relative to the circumstances of the delivery of the note to the defendant, or the terms or conditions upon which the note was delivered to him, that the affidavit was untrue as a matter of fact. .

A perusal of the affidavit discloses that the plaintiff had seen and talked with the defendant concerning the facts and circumstances set forth, and that the same had been admitted by defendant to deponént, with the exception of the sale of said promissory note to Merrill, which latter fact we gather was supplied by another affidavit. We are not prepared to say after reading this record that there was no evidence in support of the statement contained in the affidavit. It should be borne in mind that no issue of any kind was framed or presented to the court or jury relating to the affidavit, only as its contents were embraced in the declaration and were involved in the trial of the merits of the case. The affidavit was introduced in evidence by the defendant for the purpose of furnishing evidence as an admission of the plaintiff, and the affidavit does not purport to set out the whole case. There being another affidavit which does not appear in this record, it is not possible to determine from the record how much of plaintiff’s affidavit was essential to support the writ of capias. This court has held that the sufficiency of the affidavit cannot be raised by writ of error after pleading and trial on the merits. Wiest v. Luyendyk, 73 Mich. 661 (41 N. W. 839); Graham v. Cass Circuit Judge, 108 Mich. 425 (66 N. W. 348). We cannot say from this record that there was here an abuse of process as is claimed by defendant, nor that public policy has been infringed upon as is claimed. We do not think that the court erred in refusing to admit in evidence the writ, as no question was raised that the writ had not performed its office and was not in due form.

(5) Upon this point the defendant claims that the act of the Realty Company in directing a sale of the note was flagrantly fraudulent and a breach of the trust upon which the plaintiff or the company received the note; that that trust was to use the note to satisfy an incumbrance against the land conveyed to Downing, which was created by vendor’s lien notes given by the plaintiff to Frazier; and that the note was utterly worthless in the hands of the Realty Company or any of its members unless incumbrances amounting to three times the amount of the note were satisfied and discharged. The defendant’s contention seems to be that this note was held in trust by plaintiff or his company to satisfy the Frazier note against this same property.

We do not so understand the record. We find no agreement anywhere that this note or its proceeds would be turned over to Frazier to satisfy his notes. In fact, it would seem that the Frazier notes were before the trial paid in full and the lien discharged. It should be borne in mind that the claim of the plaintiff was that the money to be realized on this note by the defendant was to be remitted to the plaintiff or the copartnership. If this had been done, there was nothing to prevent the proceeds being used by plaintiff to satisfy the Frazier notes the same as though they had waited until maturity and collected it from Downing. Of course, if the note was turned out to defendant to pay him his commission, the proceeds could not be used to pay the Frazier notes, but the jury must have found that such was not the fact. Again the record shows distinctly that the defendant sold this note for money. And it would be a strange doctrine of public policy that would permit a defendant to sell a piece of paper belonging to plaintiff, even had plaintiff violated a trust, and then permit the defendant to appropriate the proceeds. Again the record shows that the original deal with Downing was made by defendant who had full knowledge of the Frazier liens. The record shows that the Frazier notes were paid before maturity. We are unable to see any merit in the claim of the defendant that upon the grounds of public policy the plaintiff had no right to the submission of his case to the jury.

The next proposition presented by defendant is that there was no competent evidence that the plaintiff was the owner of the note in question at the time it was delivered to, and disposed of by, the defendant. We cannot say from this record that there was no competent evidence that the plaintiff was the owner of the note in question at the time stated. It appeared that the note was given to the plaintiff with others for part of the purchase price of land conveyed to Downing by the plaintiff, that the notes were payable to the plaintiff or order, and the testimony of Oscar O. Reed, one of the partners, was quite full and complete upon the question of the title to the note. It is true that the note in question was indorsed by the plaintiff and may be said to have been found in the possession of the copartnership of which he was a member at the time of its delivery to the defendant. Presumptively it may be said it had become the property of the copartnership. Much stress is laid upon the fact that neither the plaintiff nor the other partner, Allen, testified in the case, and that the books of the copartnership were not produced upon the trial. It is only fair to say that there had been no notice served upon the plaintiff or his attorneys to produce the books of the copartnership. We shall not quote the testimony contained in the record with reference to the ownership of this note. In our opinion there was enough to carry the case to the jury, and we think the rights of the defendant upon this subject were properly guarded by the court in its charge wherein it said: •

“ Secondly, the question arises as to the ownership of this note at the time it was delivered to the defendant. The plaintiff claims that it belonged to him; the defendant claims that it belonged to the Reed-Allen Realty Company. The indorsement of a note in blank and the delivery thereof to a third person as in this case is prima facie evidence of the transfer of title and would justify a verdict to that effect, but it is not conclusive. Notwithstanding an indorsement and delivery, the question of ownership and title still remain questions of fact to be determined under all the evidence in the case. In determining this question of title and ownership, you will consider all of the evidence in the case.”

We think that this statement of the law is correct. Our decisions are uniform that the indorsement and delivery of a negotiable instrument to another is presumptive evidence of his ownership. But this presumption is not conclusive. It may be rebutted by showing that the title is still in the original maker. Hovey v. Behring, 24 Mich. 232 (9 Am. Rep. 122); Barnes v. Peet, 77 Mich. 391 (43 N. W. 1025); Hogan v. Dreifus, 121 Mich. 453 (80 N. W. 254).

This question was urged before the court in the motion for a new trial, and in its opinion denying the motion the court distinctly covers the question in the following language:

“For the reasons stated, also, I do not think any error was committed in submitting to the jury the question as to the terms and conditions upon which the plaintiff received this note. As between himself and the Reed-Allen Realty Company, the plaintiff had a right to show as a fact that he was the owner of the note. The circumstances, however strong they may have been, were for the consideration of the jury under proper instructions. * * * I do not understand that if, as a fact, this note and the proceeds thereof belong to the plaintiff, the Reed-Allen Realty Company could defeat his right thereto by failing to inform the defendant of its agency.”

There was a sharp conflict between the testimony of the plaintiff’s witnesses and that of the defendant upon nearly every material matter in issue. Defendant’s twenty-seventh request to charge was in the following language:

“ It appears from the undisputed evidence in the case that, after the delivery of the note in question to the defendant and before he had disposed .of the same, he had a conversation with Alexander C. Allen of the Reed-Allen Realty Company in which he asked for payment of commissions due him from said company, and that Allen said to the defendant in substance that if he got any money he would have to get it from that note. The jury are therefore instructed that the plaintiff cannot recover against the defendant in this cause by reason of anything done by the defendant with or on account of said note.”

This request was refused, and its refusal is made one of the grounds for the motion for a new trial. In his reasons for refusing the motion the circuit judge said:

“Whether the statement of Alexander C. Allen was made or not, as specified in the twenty-seventh request, was for the jury to determine, and the request should not have been submitted as containing the undisputed fact, as the request implies.”

In a case where there is a sharp conflict in the testimony of witnesses upon many material points, we do not think it can be said that the jury are bound, as matter of law, to accept as true any particular part of the testimony of a witness. The whole subject was fully submitted to the jury in the charge of the court, and we find no error in this branch of the case.

The next point urged by defendant for the reversal of the judgment is that the undisputed evidence in the case showed that there was an open and unsettled account between the defendant and the Reed-Allen Realty Company at the time the defendant received the note in question, and that this account was still open and unsettled at the time of the trial. And it is claimed that for this reason the plaintiff should not have recovered. This proposition might be answered by saying that the jury have found as matter of fact that the note was the property of the plaintiff. We think that the question of an accounting was by the charge of the court eliminated from the case. The evidence of commissions claimed to be due defendant was introduced by defendant to support his claim that the note was given to him that he might reimburse himself for money due him from the company. Upon this branch of the case the trial court charged the jury as follows:

“ If you find that the plaintiff, Ernest C. Reed, was the owner of this note and that it was turned over to the Reed-Allen Realty Company for collection only, as the plaintiff claims, and that the arrangement with the defendant was, as the plaintiff claims, namely, that the defendant was to take the note, discount it, and account for the proceeds to the Reed-Allen Realty Company, the plaintiff can recover the amount you may find the defendant received for the note together with interest at the rate of 5 per cent, from November 11, 1908. The same would be true, and I so instruct you, if it was turned over to the defendant without any instruction as to what should be done with the proceeds, if you find that the plaintiff was the owner of the note.
“On the other hand, should you find first that the note was partnership property as the defendant claims, there can be no recovery. Second, should you find that the note was Ernest C. Reed’s as a matter of fact, but that the agreement between the Reed-Allen Realty Company and the defendant was that the defendant should discount the note and apply the proceeds upon any commission then due him, as the defendant claims, then the plaintiff cannot recover.
“ This question of commissions has been brought into this case incidentally and to show that, if the claims of the defendant are true, there is a controversy between the defendant and the Reed-Alien Realty Company as to the amount of those commissions, and that controversy should be settled between the parties in interest and not between .the defendant and a third party.
“If this note was turned over to the defendant, as the defendant claims, to discount and apply the proceeds upon any amount that might be due him from the Reed-Allen Realty Company, his possession of the note was lawful. The contract between him and the Reed-Allen Company in relation to its disposition was proper and right. The question of fraud would be eliminated from the case. His conversion of the note is a matter which rests between him and the Reed-Allen Realty Company. The determination of the balance due one way or the other is a matter that must be determined in a suit between the real parties in interest and not between the defendant and a third party. So you can see that if the defendant’s claims are true, the questions of fraud and conversion are eliminated from the case, and no recovery can be had because this is a fraud case. So, should you reach this point in your deliberations, there would be no necessity on your part to determine the amount that may be due the defendant for commissions and set off that amount against the amount he may have collected upon this note. That would be a matter that must be determined in some other case, should you find the claims of the defendant to be true.” '

We think this portion of the charge fully as favorable to the defendant as could be reasonably asked. We have examined all the other assignments of error embraced in this branch of defendant’s argument and are of opinion that there is no merit in his claim.

Lastly, it is urged by defendant that the court below should have set aside the verdict and judgment as being against the law and evidence, upon the ground that the verdict was clearly against the weight of the evidence. We have in a measure covered this branch of the case in what we have already said. As we had occasion to say recently in the case of Gardiner v. Courtright, 165 Mich. 54 (130 N. W. 322), the rule is well settled that this court will only reverse a case upon the question of the weight of the evidence when the verdict is against the overwhelming weight of the evidence. The verdict must be clearly against the great weight of the evidence to require this court to overrule the decision of the circuit judge refusing a new trial. This rule has been repeatedly stated by us. See other cases there cited.

We are of opinion that the circuit judge did not abuse his discretion in refusing a new trial upon the ground that the verdict was against the weight of the evidence.

The other assignments of error not here specifically referred to have all been examined by us, and we are of opinion that there is no reversible error in the record, and the judgment of the circuit court is affirmed.

Moore, C. J., and Steers, McAlvay, Brooke, Blair, and Ostrander, JJ., concurred. Bird, J., did not sit.


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    DONOGHUE v. SHAW.
    Negligence — Dentists — Malpractice — Physicians and Surgeons.
    Evidence that plaintiff had a number of teeth pulled by defendant, -who, after the operation, assured her that apparent inability to close her j aw would pass off in a short time; that plain • tiff, eight days later, being unable to close her mouth, again consulted defendant, who advised her the jaw was not dislocated, that it was shortly afterwards found by another physician to be dislocated and was treated and cured; that such dislocation can be detected by an ordinarily skillful physician, was sufficient to require the submission to the jury of the question of defendant’s negligence in failing to discover the dislocation on her second visit, the testimony of plaintiff being disputed by that of defendant.
    Error to Wayne; Murfin, J.
    Submitted April 12, 1912.
    (Docket No. 19.)
    Decided May 31, 1912.

      Case by Mary Donoghue against James H. Shaw for malpractice. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      O’Neil & Command (Geo. F. & Peter J. Monaghan, of counsel), for appellant.

      William P. Lane, for appellee.
   Stone, J.

This is an action on the case wherein the plaintiff alleged that she employed the defendant, who is a dentist, to extract all of her teeth; that in the performance of this work on January 18, 1909, the defendant negligently dislocated the lower jaw of the plaintiff, and allowed the plaintiff to suffer from such dislocation until, I to wit, April 6, 1909. The plea was the general issue.

Upon the trial, the plaintiff gave evidence tending, to show the employment of the defendant as alleged; that she was put under an angesthetic — chloroform—and her teeth extracted, 22 or 24 in number; that when she came out from under the influence of chloroform she could not close her mouth; that she managed to make defendant understand her condition, and he replied that it was a natural thing, as a rule, after pulling so many teeth, for the muscles of the jaw to contract; but that in a few hours, after the effects of the chloroform wore off, the jaw would close. She testified that she continued to suffer intensely; that, not being able to close her mouth, she went to the defendant eight days after he extracted the teeth, and he examined the jaw thoroughly and said it was not out; that he advised her to rub her face with liniment several times a day, and maybe that would relax the muscles; that defendant advised her to try and loosen the muscles by chewing gum; that she asked the defendant when she. should come again; that he replied that he could not do anything about taking an impression until the mouth closed; and that there was no necessity of her coming to him again until it closed. The plaintiff testified .that the condition continued; that she continued to suffer greatly and could not eat hard food; that on April 2d, following, she called upon the defendant again; that he called in Dr. C. G. Burgess, who at once said the jaw was dislocated, that it was a forward dislocation;” that upon being told of the dislocation she went to Harper Hospitál on April 5th, and Dr. Baffin reduced the dislocation by manipulation.

Dr. Baffin, a practicing physician and surgeon, was sworn on behalf of plaintiff. He testified as to the manner in which he reduced the dislocation; that he immediately detected that the jaw was dislocated, upon seeing her; that she had her mouth open, and lips apart. Upon cross-examination he testified: That dislocation of the jaw was not frequent, but that it did sometimes occur in extracting teeth; that he would not say, from his experience with reference to the dislocation of the lower jaw, that it would be an indication of improper treatment on the part of a dentist, that is, not. necessarily; if upwards of 22 teeth were extracted at this one sitting, it might be difficult to detect readily the fact that the jaw was dislocated; that the jaw might be dislocated after the extraction of that many teeth, and still it might not be perceptible to a lay person; it might be that immediately after such an operation, as the extracting of teeth, a doctor could not detect a dislocation of the jaw; that the fact that she was under chloroform at the time the teeth were extracted, and that the muscles of the jaw were, consequently, relaxed, would make the tendency greater for the jaw to become dislocated ; that he diagnosed dislocation just as soon as he saw the plaintiff, without putting his hand on her to find the dislocation.

The plaintiff was corroborated by other witnesses, but no other medical testimony was offered in her behalf.

There was a sharp conflict in the testimony of the plaintiff and defendant, especially as to the claim that defendant examined the plaintiff eight days after the teeth were extracted. The defendant and his wife positively denied that any such examination took place, or, in fact, that any examination at all took place until April 2d, when she first called for an examination; that the plaintiff called to return a shawl two days after the teeth were extracted, but that no examination was made; that she then reported that she was feeling better; and that he had told her to come in from time to time so he could look at her mouth. And the defendant offered testimony tending to show that plaintiff’s jaw was not dislocated at the time the teeth were extracted.

The defendant offered as a witness Dr. Don N. Graham, a practicing dentist, who testified, among other things, that it was not an unusual happening to have dislocation of the jaw while extracting teeth, especially where from 20 to 30 teeth were extracted at one sitting.

“I will say it is comparatively unusual. If I may explain m'yself, I would say that while practically every person has extraction of teeth, comparatively few have dislocation of the jaw through extraction of the teeth; but it is not uncommon at all to have a dislocated jaw from extraction of teeth. I would not put it so strongly as to say it is a frequent occurrence. It occurs. It is not any surprise when it does occur, because it does occur. A dislocation of the jaw while a dentist is extracting teeth is not necessarily any indication of the application of excessive force. A dislocation may be the result of a number or factors. It might be the result of a shallow socket, glenoid cavity, promoting an easy displacement of the condyle, or the upper part of the lower jaw.”

He further testified that the extraction of all the teeth would cause pain throughout all the head in a vast majority of cases; that the mere statement by the patient that she had pain in her jaw would be no evidence to the dentist that her jaw was dislocated. The witness further testified that, assuming the facts to be as claimed by the defendant relating to the operation, there was no indication of carelessness or unskillfulness on the part of defendant.

Dr. James E. Burgess, a practicing physician, testified to the good standing of defendant; that he had known the jaw to be dislocated by yawning; that he did not have any trouble diagnosing such a case; that the ordinarily skillful man can immediately detect a complete dislocation.

Dr. Claude Q. Burgess, a practicing physician, testified, in behalf of defendant: That he was called by defendant to see the plaintiff on April 2d. That when he came in the defendant said he thought he had a patient with a dislocated jaw. He examined the plaintiff and agreed that the jaw was dislocated. That he did not have any trouble diagnosing it. And that the reputation of defendant was that of a careful and skillful dentist.

The case was submitted to the jury in a full and careful charge, in which the circuit judge used the following language:

“ Now, gentlemen, in this case I think I should say to you, the mere fact, alone, that this woman’s jaw was dislocated— if you find that it was dislocated during the pulling of those teeth — does not alone raise any question of negligence on behalf of this doctor, for you will recall, from the undisputed testimony of experts here produced, that it is not an unusual occurrence. But, gentlemen of the jury, I think I should say the same thing possibly, with a little modification, as to the failure of this physician to afterwards discover that this jaw was dislocated. Possibly there are some cases where that failure to discover a dislocation would be pardonable and justifiable; other cases in which it would not. I think that question is peculiarly for you, gentlemen, to determine. I think, after all, in the view this case has taken, that that is the one and only inquiry in this case. If there has been any negligence on behalf of this physician, as I have outlined my idea of negligence, it is in the failure to have discovered this condition, if he brought it about, in the first place, and that, gentlemen, will be your inquiry and upon that, gentlemen, will depend your verdict. If you find therefore, gentlemen, that this man did cause this dislocation, and that he was negligent, as I have outlined to you, in failing to discover this dislocation, and therefore a condition resulted which has been detailed to you, then he is liable, and you will pass to a consideration of the question of what amount of money will compensate "this plaintiff for the damage which she has sustained.”

The jury returned a verdict for the plaintiff in the sum of $300, and a judgment was entered. The defendant has brought error, and by his assignments of error he alleges that the court erred in its rulings relating to the admission of evidence, in refusing to give defendant’s requests to charge, and in the charge to the jury.

The defendant assigns error upon that part of the charge above quoted, upon the ground that there was no evidence tending to show that there was any negligence in defendant’s failure to discover the dislocation, and that the court should not have allowed the question to go to the jury. In this contention we cannot agree with defendant’s counsel. If the jury believed the testimony of the plaintiff that defendant made an examination of her mouth on the eighth day after the teeth were extracted, we think that it was a fair question for the jury whether the defendant was not negligent in failing to discover the dislocation at that time. That question appears to have been fairly and clearly submitted to the jury in the language above quoted.

We have examined the other assignments of error. There is no merit in those relating to the admission of testimony. Those relating to the refusal to charge, as requested, present no reversible error. Those that were not properly covered by the general charge were rendered inapplicable by the restricted charge, which only submitted the question of negligence in failing to discover the dislocation at the subsequent examination which it was claimed was made by defendant. The facts relating to that branch of the case were in dispute, and were properly submitted to the jury.

We find no reversible error in the record, and the judgment of the circuit court is affirmed.

Moore, C. J., and Steere, McAlvay, Brooke, Blair, and Ostrander, JJ., concurred. Bird, J., did not sit.


text:
    WEBER v. DRAPER.
    Corporations — Individual Liability op Direotors — Filing Report — Neglect to Make Annual Report — Statutes—Debt Contracted — Words and Phrases.
    Although a judgment may be. a debt, it is not a “debt contracted ” within the meaning of the statute providing a personal liability of the directors of a corporation which neglects to file its annual report with the secretary of State (Act No. 137, Pub. Acts 1907), as to debts contracted during such default, and directors of a corporation in default under said statute are not liable for breach of a contract upon which liability was incurred before any default took place, judgment for an unliquidated liability being subsequently rendered during a period of default.
    Case-made from Jackson; Parkinson, J.
    Submitted April 15, 1912.
    (Docket No. 103.)
    Decided May 31, 1912.
    Assumpsit by Andrew W. Weber against Fred R. Draper and others, as directors of the B. R. Parrott Company, a corporation, for a debt of the corporation under Act No. 137, Pub. Acts 1907. A judgment for defendants is reviewed by plaintiff on case-made.
    Affirmed.

      Grove H. Wolcott, for appellant.

      Albert O. Reece, for appellees.
   Stone, J.

This is a suit to obtain a judgment against the individual directors of the B. R. Parrott Company, a corporation, upon a judgment rendered against said corporation upon a contract between the plaintiff and said corporation entered into on September 27, 1909. Upon the date stated the plaintiff entered into a written contract with said corporation for the construction of a hot water heating plant. Work was commenced on the contract on or about November 15, 1909, and the job was completed and the final payment of the contract price was made on May 28, 1910. Plaintiff made trial of the heating plant at the beginning of cold weather in the autumn of 1910, and, claiming that it was not constructed in accordance with the specifications and guaranty of the B. R. Parrott Company, made certain changes and additions at a cost of about $175, which work was finished on or about February 7, 1911. Plaintiff commenced suit in the circuit court against said company on March 31, 1911, claiming damages on account of breach of the aforesaid contract.

After personal service on, and upon default of, said defendant company, the plaintiff was awarded a judgment as damages for breach of said contract on April 26, 1911, in the sum of $175.33 and costs taxed at $23.30. An execution was duly issued which was returned unsatisfied on June 3, 1911.

Plaintiff, on June 7, 1911, commenced the present suit against the directors of the B. R. Parrott Company upon their statutory liability for debts contracted by the corporation, ás he claimed, while defendants were in default as to the making and filing of the annual report of the corporation for the year 1910. Upon the issue joined, the case came on for trial, and the plaintiff, after showing the due incorporation of said company on June 3, 1909, introduced in evidence the judgment rendered against the B. R. Parrott Company for damages and costs aforesaid, and the due issue and return unsatisfied of the execution aforesaid. Plaintiff also introduced in evidence the certificate of the secretary of State showing that the corporation, the B. R. Parrott Company, had not filed, in the office of said secretary for the year 1910, its annual report required by statute; also a letter from the treasurer of said company bearing date February 28, 1911, to the secretary of State, asking for another report blank, and stating that the annual report of the company had been made out on blanks furnished by said secretary, but that in some unaccountable manner it had been mislaid, and that the writer had been unable to locate it, with a memorandum indorsed, “Blank sent March 1, 1911. No answer.” And thereupon plaintiff rested his case.

Counsel for defendants then moved the court to direct a verdict for the defendants for the reason that the judgment rendered April 26, 1911, aforesaid, was not a debt contracted by the B. R. Parrott Company during any default of the said corporation or its directors in the making or filing of the annual report of said corporation for the year 1910, within the meaning of the statute requiring the making and filing of such report, and also for the further reason that there was no evidence showing that defendants had neglected or refused to join in the making of the annual report of such corporation for the year 1910. The court thereupon directed a verdict for the defendants upon the ground first above stated, and a judgment for the defendants was entered.

The plaintiff has brought the case here upon a case-made after judgment, and by proper assignments of error he claims that the trial court erred in charging that the judgment of the plaintiff against the B. R. Parrott Company recovered on April 26, 1911, was not a debt contracted by said corporation at a time when it and a majority of its directors were in default in making and filing the annual report required by statute, and that the court erred in instructing the jury that the case was not such as, under the statute, made the defendants, as directors of said corporation, personally liable to the plaintiff, and that the court erred in directing a verdict in favor of defendants.

It is the claim of the plaintiff that there was no debt contracted by the company until the rendition of the judgment of April 26,1911, because up to that time no one could ascertain or determine the loss the plaintiff had suffered by reason of the failure of the corporation to construct the heating plant according to the terms of the contract. We think that the question fairly presented is: Was the judgment for unliquidated damages rendered on April 26, 1911, a “ debt contracted ” by the corporation within the meaning of the statute ?

The clause of the statute involved is a part of section 12 of Act No. 137, Pub. Acts 1907, and reads as follows:

“If any corporation neglect or refuse to make and file the reports required by this section within the time herein specified, and shall continue in default for ten days thereafter, its corporate powers shall be suspended thereafter until it shall file such report, and it shall not maintain an action in any court of this State upon any contract entered into during the time of such default; and any director of such corporation so in default, who has neglected or refused to join in the making of such report, shall be liable for all the debts of such corporation contracted since the filing of the last report of such corporation, and shall also be liable to such corporation for any damages sustained by it by reason of such refusal or neglect.”

It must be conceded that after March 10, 1911, the default referred to in the statute had occurred, but the vital question is, Was this judgment a “debt contracted?” All will agree that a judgment is a debt, but it does not follow that it is a “ debt contracted ” within the meaning of this statute. Counsel for plaintiff cites in support of his position the following cases: Van Etten v. Eaton, 19 Mich. 187; Lockhart v. Van Alstyne, 31 Mich. 76 (18 Am. Rep. 156); Bohn v. Brown, 33 Mich. 257.

The case of Van Etten v. Eaton, supra, does not aid us, for the reason that it does not appear, and the question was not raised or passed upon, whether the cause of action was a “ debt contracted ” during the time of the default or not; no issue being presented upon that question.

In Lockhart v. Van Alstyne, supra, the principal point involved was a guarantee of dividends upon stock, which guarantee was sought to be enforced regardless of whether there were any legitimate profits out of which to pay dividends. We are unable to see how the doctrine there stated aids the plaintiff. Justice Cooley said:

“ The statute which the plaintiff relies upon is section 1821 of Comp, Laws of 1857, which, on the neglect or refusal of tne directors of manufacturing companies to comply with certain provisions of law regarding the filing of their articles of association, and of annual reports showing their financial condition, declares that such directors ‘ shall be jointly and severally liable in an action founded on this statute, for all the debts of such corporation contracted during the period of such neglect or refusal.’ This statute, it will be perceived, only makes the directors personally liable for ‘debts.* Liabilities of a company which may give causes of action against it and result in judgments are not within the statute unless they constitute present debts. A debt is that which one person is bound to pay to another, either presently or at some future period; something which may be the subject of a suit as a debt, and not something to which the party may be entitled as damages in consequence of a failure to perform a duty or keep an engagement. A right to a dividend from the profits of a corporation is no debt until the dividend is declared.”

In Bohn v. Brown, supra, the plaintiff sought to recover of individual stockholders the amount of a judgment recovered against a corporation for personal injuries received on a street railway. Justice Graves, speaking of the liability of a stockholder of unpaid stock, said:

“ In observing upon this point we cannot help seeing that the legislature evidently designed to limit the liability of stockholders to a portion only of the kinds of liabilities the company would be subject to incur; that, necessarily contemplating there would be claims arising out of contract, and also out of wrongful and tortious acts, and deciding to provide that for some of these liabilities the stockholders should be individually responsible, but not for all, the legislature proceeded to word the provisions as we find them. Instead of enacting in general terms that stockholders should be individually responsible for all valid claims against the corporation to one extent or another, the legislature cautiously and guardedly specified charges for labor and claims for debts contracted.” was in default in not filing its report was a “debt of such corporation contracted since the filing of the last report.”

We are unable to see wherein these authorities aid the position of the plaintiff. In fact we are unable to find any authorities that support the claim that the judgment obtained against the corporation, while the corporation

At page 859 of 10 Cyc. is the following:

"A judgment is certainly a ' debt ’ within the meaning of such a statute (referring to the statutory liability of directors generally) since under all definitions it is a debt of record; and this is equally so where it is founded upon a demand for a tort, and a judgment for costs is plainly a ‘ debt ’ within this rule, although founded on an unsuccessful action by the corporation for a tort; but this is not so where the statute uses the words ‘ debt contracted ’ ”— citing Armstrong v. Cowles, 44 Conn. 44.

Turning to this case we find that a statute of Connecticut provided:

“If the president, directors or secretary of any such corporation shall intentionally neglect or refuse to comply with the provisions of this act, and to perform the duties therein required of them respectively, such of them as so neglect or refuse shall be jointly and severally liable, in an action founded on this statute, for all debts of such corporation contracted during the period of any such neglect or refusal.”

That court said :

“ The first question is, whether the plaintiff’s judgment in the scire facias can be regarded as a * debt contracted’ within the meaning of the above statute.
“We think not. There cannot be a ‘debt contracted’ without two or more contracting parties, one of whom in this case must be the corporation. The phrase therefore necessarily implies some act on the part of the corporation with some party dealing with it, whereby an obligation is incurred, the company receiving and the other party giving credit on the faith of their solvency and proper organization as a corporation; and if the directors intentionally withhold a knowledge of the condition of the corporation, persons dealing with* them and giving them credit may have protection by resorting to the personal responsibility of the directors for the debts so contracted.”

See, also, 8 Am. & Eng. Enc. Law (2d Ed.), p. 991, and cases cited.

The statute relates to corporations of a certain class and prescribes the powers and fixes the duties and liabilities of such corporations, and it seems to have been the purpose of the legislature to provide that, during the time a corporation should neglect or fail to file its annual report, its corporate powers should be suspended, and it should cease to do business during the time of such default; and the provision relating to holding the individual directors personally liable is in the nature of a penalty for their neglect or refusal to join in the making and filing of such report. The liability of the corporation for failure to perform the contract in question was incurred at a time when it was not in default respecting its annual report. The fact that the judgment for damages for the breach of the contract was rendered when the corporation was in default does not make such judgment a “debt contracted since the filing of the last report” within the meaning of the statute.

It is also contended by the defendants that, under the showing made by the plaintiff, it appeared that defendants-had not neglected or refused to join in the making of the annual report of such corporation for the year 1910, and that the trial court would have been justified in directing a verdict for the defendants upon the authority of the case of Ford River Lumber Co. v. Perron, 148 Mich. 399 (111 N. W. 1074). We do not find it necessary to pass upon that question.

We are of the opinion that the trial court properly disposed of the case, and the judgment of the circuit court is affirmed.

Moore, C. J., and Steere, McAlvay, Brooke, Blair, and Ostrander, JJ., concurred. Bird, J., did not sit.


author: Moore, C. J.

text:
    SULLIVAN v. SULLIVAN.
    Divorce — Alimony—Amount.
    Taking into consideration the fact that the wife was possessed of more property than defendant, whose property was claimed by him to be worth about $1,800 and by complainant to be worth $4,000 above his liabilities, a decree of $500 permanent alimony and $20 a month for the support of minor children is entered on appeal.
    Appeal from Monroe; O’Mealey, J.
    Submitted April 12, 1912.
    (Docket No. 116.)
    Decided May 31, 1912.
    Bill by Leonora Sullivan against Daniel F. Sullivan for divorce. From a decree for complainant, for insufficient alimony, she appeals.
    Modified and affirmed.

      Patrick J. Kelaher (McHugh, Gallagher & Me Gann,. of counsel), for complainant.

      18. B. Gilday and Willis Baldwin, for defendant.
   Moore, C. J.

Complainant filed a bill of complaint praying for an absolute divorce, the custody of two minor children, and alimony for the support of herself and the children. From a decree granting an absolute divorce, the care of two of the minor children, and permanent alimony in the sum of $500, complainant appeals because of the insufficiency of the alimony awarded her. The defendant filed an answer in the nature of a cross-bill. He served notice of an appeal, but has not prosecuted his appeal.

The material parts of the decree read as follows:

“ (1) That the cross-bill of the defendant be dismissed.
“ (2) That the complainant be granted the relief prayed for in her amended bill of complaint, as follows, to wit:
" (a) That the marriage between the complainant, Leonora Sullivan, and the defendant, Daniel F. Sullivan, be dissolved, and the same is hereby dissolved accordingly, and the said parties are, and each of them is, free from the obligations thereof.
“(6) That the complainant is a fit person to have the care, custody, and education of the two minor children named in said bill, Verna Sullivan and Lawrence Sullivan, and that they, and each of them, are hereby awarded to the said complainant until they are 14 years of age, and the said complainant shall provide said children with support, maintenance, and education, provided that at any time the said complainant may choose to surrender the custody and control of said minor children, as above named, to defendant, either or both of them, it shall be the duty of the defendant to receive, support, maintain, and educate either or both of them so surrendered; and also provided that the said complainant shall not remove her home, while in the custody of said children under this decree, from said county of Monroe, and the said defendant shall have the right to visit said minor children at the home of the complainant each alternate Monday of each month, beginning with the third Monday in September, 1910, and that he shall be properly treated while there by complainant, providing he conducts himself in a proper manner, said visits to continue at the option of the defendant, not to exceed two hours.
“(c) The care and custody of the minor child, Hendrick Sullivan, is awarded to said defendant, Daniel F. Sullivan, until he reach the age of 14 years.
“(3) For permanent alimony, and in lieu of all dower rights and interest in all real estate of the defendant, the defendant shall pay to the complainant the sum of $500, said sum to include and be in satisfaction of all temporary alimony now due and unpaid from defendant to complainant in said cause; said sum to be paid as follows: Two hundred dollars on or before January 1, 1911, $200 on or before July 1, 1912, and $100 on or before January 1, 1913; and this sum of $500 shall constitute a first lien upon the homestead farm of the said defendant until paid, which farm is described as follows. * * *
“ On the full payment of the sums aforesaid, the complainant shall execute a full release, by quitclaim deed, duly acknowledged by her, suitable for record, of all dower and homestead rights and interest she may have or hold in and to all lands now and then owned by defendant.
“ (4) Within 30 days after the filing of this decree, the said defendant shall pay to the said complainant, or her solicitors, a fee of $100.
“ (5) The said complainant shall deliver to the said defendant personal wearing apparel of his and the said boy, Hendrick, and his two older girls, now in the possession or under the control of complainant. She shall also deliver to defendant his books, which were left in her possession at the time of the separation. Said older girls now being and living with defendant.
“ (6) It is further ordered that each party hereto pay their own costs, excepting that the defendant pay the solicitor’s fee, as aforesaid. The defendant shall not' be required to pay any temporary alimony.”

As before stated, the only question before this court is whether a proper allowance was made to the complainant for alimony and expenses.

The claim of counsel is stated in their brief as follows:

“That the decree shall be modified by this court as to the allowance to complainant’s solicitors of a solicitor’s fee of $100, likewise as to the allowance of $500 to complainant for permanent alimony, and likewise as to the requiring of complainant and defendant to pay their own costs incurred in connection with the hearing of the cause, by directing defendant to pay to complainant, in place and stead of the foregoing sums of money set forth in the decree, the sum of at least $3,000 in bulk as permanent alimony for the support and maintenance of herself and her two children; likewise the sum of $331.60 for expenses incurred by complainant in connection with the prosecution of her cause in the lower court; likewise the sum of $96, balance due complainant for temporary alimony; likewise the sum of about $1,000 as a solicitor’s fee to complainant’s solicitors for services rendered by them in the prosecution of complainant’s case in the lower court and likewise in this court; and likewise the usual costs of this cause to be taxed in this court.”

In view of the showing made in the record, we think this claim is not a reasonable one. The case is not a complicated one. The judge found very properly that defendant was guilty of extreme cruelty. While the defendant served notice of an appeal, that was as far as he went in that direction.

The record is at least twice as large as it needs to be, in order to present the only questions here. The brief, also, is unnecessarily long. In it are recited 153 acts which counsel claim are acts of cruelty and a long list of what they call good deeds on the part of the complainant, and a long argument follows in relation thereto. Much of this was wholly unnecessary. Counsel very properly call attention to the financial condition of the parties. We again quote from the brief of the solicitors of complainant:

(1) Defendant’s assets, as shown by complainant. $10,434 00
Defendant’s liabilities, per his own showing_____ 6,405 05
Leaving his net worth____________________$4,028 95
(2) Defendant’s assets, per his own showing____$8,162 50
Defendant’s liabilities, per his own showing..... 6,405 05
Leaving his net worth....................$1,757 45

The testimony as to the net worth of defendant is contradictory, and counsel are not agreed about it. It is clear, however, that defendant has a very large indebtedness in proportion to his assets, and this proceeding does not help his financial status.

The trial judge found that complainant had much more property of her own than is possessed by defendant, with very little indebtedness on her part. This finding is supported by the record. This was a proper matter to be taken into consideration in fixing alimony. Ferguson v. Ferguson, 147 Mich. 673 (111 N. W. 175). We think, however, if the complainant is to have the custody of the two girls, that the allowance for permanent alimony and the maintenance of the mother and the two children is too small. The amount of $500 is decreed to complainant for permanent alimony to her, and an allowance is made to her of $20 a month, until the further order of the court, for the support of the two children. In all other respects, the decree of the court below is affirmed. A solicitor’s fee of $100 in this court may be taxed. Complainant to recover the costs of this court; but in taxing them the allowance for printing the record and briefs shall be limited, for the reasons before stated, to one-half the number of pages thereof.

As thus modified, the decree of the court below will be affirmed.

Steere, McAlvay, Brooke, Blair, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.

       Husband’s prospects as basis for alimony, see note in 4 L. R. A„ (N. 8.) 909.


text:
    KRUSINSKI v. KRUSINSKI.
    1. Divorce — Extreme Cruelty — Intoxication.
    Frequent intoxication of a husband, accompanied by charging his wife with infidelity, and by vile epithets in the presence of others, and ill treatment, constitutes extreme cruelty.
    3. Same — Alimony.
    Alimony amounting to $3 per week is awarded for the support of the wife and one child, as against a defendant who was capable of earning $3 a day.
    Appeal from Wayne; Murfin, J.
    Submitted April 11, 1912.
    (Docket No. 114.)
    Decided May 31, 1912.
    Bill by Helena Krusinski against Wladislaus Krusinski for divorce. From a decree dismissing complainant’s bill, she appeals.
    Reversed.

      James H. Pound, for complainant.

      August Cryowski, for defendant.
   Moore, C. J.

This is a bill filed in chancery by the complainant for an absolute divorce. The charge is extreme cruelty and excessive use of intoxicants.

No testimony was offered on the part of defendant. From a decree dismissing the bill of complaint, the case is brought here by appeal.

During the 2£ years the parties lived together, two children were born to them. Soon after their separation, a third child was born. Next to the oldest child died. The proofs disclose that defendant frequently became intoxicated, and was cruel to his wife, calling her vile names and accusing her, in the presence of her mother and others, of a want of chastity. The case is clearly within Berryman v. Berryman, 59 Mich. 605 (26 N. W. 789), and the recent case of Murray v. Murray, 169 Mich. 388 (135 N. W. 262).

The record shows that when defendant is willing to work he earns $2 a day. The custody of the two children should be given to the mother, who has them. The defendant should pay to her, to help support them, the sum ■ of $3 each week until the further order of the court.

The decree is reversed, with costs of both courts. A decree may be entered in this court in accordance with this opinion.

Steere, McAlvay, Brooke, Blair, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.


text:
    OSTROWSKI v. WAYNE CIRCUIT JUDGE.
    Judgment — Modification— Amendment of Record — Costs.
    Upon motion to amend a judgment by adding to it a clause awarding oosts to plaintiff, it was not error to deny the motion when it appeared that the original entry was not entered by fraud, mistake, or neglect of the officers of the court or attorneys, and it was shown that plaintiff’s attorneys prepared and entered the judgment with the assent of defendant’s counsel.
    Mandamus by Annie Ostrowski against Joseph W. Donovan, one of the circuit judges for the county of Wayne, to require respondent to vacate an order denying relator’s motion to amend a judgment entry.
    Submitted April 16, 1912.
    (Calendar No. 24,910.)
    Writ denied May 31, 1912.
    McHugh, Gallagher & McGann, for relator.
    Cullen, Casgrain & Hanley, for respondent.
   Moore, C. J.

This is a proceeding to review the action of the circuit judge in refusing to vacate a judgment. We quote from the brief for relator:

“Delator brought suit in the Wayne circuit court against the city of Detroit and James Hanley, in an action on the case. She recovered a joint verdict against them in the January, 1911, term of said court, and in April, 1911, term, judgment was entered thereon. The form of the judgment was prepared under the supervision of relator’s attorneys, was approved by the attorneys for the defendant, and did not provide for the recovery of costs. The judgment was paid as entered, and satisfaction thereof was filed. A motion was made in the September, 1911, term of court to amend the judgment by adding a clause allowing costs against defendant city of Detroit, to set aside the satisfaction of judgment, and to credit the amount paid upon the judgment as amended. This motion was argued and denied. In addition to the foregoing facts, the respondent returns the opinion that the judgment as entered was not ‘ entered through any mistake, carelessness, or fraud on the part of the clerk of said court, or on the part of the attorneys for plaintiff or defendants.’ Question involved: Has a circuit court power to amend its judgment after the term in which it is entered and after the filing of a satisfaction of judgment ? ”

Counsel then make an elaborate argument to the effect that a circuit court has power to amend its judgments.

We do not think that question is controlling. Conceding it has the power, ought the court to exercise it in this case ? The circuit judge found that there was no mistake, carelessness, or fraud in the entry of the judgment. The judgment was paid. The judge also found the judgment was entered by the clerk just as requested by counsel for both parties.

We think the action of the circuit judge should be affirmed, with costs.

Steere, McAlvay, Brooke, Blair, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.