author: Stone, J.

text:
    SHEPARD v. SHEPARD.
    1. Witnesses — Competency — Matters Equally Within Knowledge op Deceased.
    In a suit to obtain an accounting of securities given by a decedent to defendant, in which complainant claimed rights by virtue of a prior gift from deceased, his father, testimony of both parties relating to matters equally within the knowledge of deceased was incompetent.
    2. Judgment — Res Judicata — Gifts.
    The judgment of the Supreme Court, in a case involving the mental competency of deceased to execute a will, and alleged undue influence of defendant in securing its execution (In re Shepard’s Estate, 161 Mich. 441 [126 N. W. 640] ), is not res judicata of the question whether valid gifts were made by testator to his sons of securities claimed by defendant to have been transferred as a revocable, testamentary disposition.
    3. Gifts — Execution—Delivery.
    A gift inter vivos, to be valid, requires a gratuitous and absolute transfer of the property from the donor to the donee, taking effect immediately; and fully executed by the delivery of the property by the donor, and an acceptance thereof by the donee: there must be an absolute delivery with the intention of making a gift and passing title; and the delivery must be according to the nature of the property.
    4. Same — Chose in Action — Assignment.
    In the case of a gift of a chose in action, the law requires a written assignment, or some equivalent instrument to effect the transfer.
    5. Same.
    Delivery of a written assignment of a chose in action is a good delivery of the property.
    6. Same — Delivery.
    Where donor and donee reside together, as in the case of husband and wife, or parent and child, it is not required that the thing given should be removed from the common residence.
    7. Same — Trusts—Personal Property.
    Under some circumstances the donor may constitute himself a trustee for the donee, and in such case no further delivery is necessary.
    8. Same — Execution—Possession.
    Although delivery is essential to perfect the gift, the donee is not required to retain possession of the property, and while the subsequent possession by the donor may, in some cases, tend to throw suspicion on the transaction as being in fraud of creditors, it is not necessarily incompatible with the donee’s dominion over the property, and, if satisfactorily explained, will not divest the donee of title.
    9. Same — Use by Donor — Possession.
    Nor is a gift necessarily defeated because the donor reserved to himself the use or income from the subject-matter of the gift.
    10. Same — Parent and Child.
    Where a father delivered securities to his sons, who placed marks upon them, and the parties dealt for some years with the property as belonging to the sons, who left the gifts in the safe of the donor, to which both had full access, a completed gift of the property was executed:
    11. Same — Evidence.
    That the parent credited his sons with interest on notes remaining in his possession, or that the notes were taken in the names of the sons, or indorsed to them, is not sufficient evidence of a delivery of the instruments.
    Appeal from Calhoun; North, J.
    Submitted November 15, 1910.
    (Docket No. 36.)
    Decided December 30, 1910.
    Rehearing denied April 1, 1911.
    Bill by Alfred Shepard against Freedom G. Shepard for an accounting. From a decree for complainant, defendant appeals.
    Modified and affirmed.

      Arthur B. Williams (Harrison Geer, of counsel), for complainant.

      George W. Mechem, Dallas Boudeman, and Bernard J. Onen, for defendant.
   Stone, J.

The bill of complaint in this case was filed to obtain an accounting on the part of the defendant with respect to certain mortgages, promissory notes, stocks, and other securities, and the renewals thereof, and the income therefrom. The complainant and defendant are brothers, and are the only children of David Shepard, deceased. This court, in the case In re Shepard's Estate, 161 Mich. 441 (126 N. W. 640), passed upon the proceeding to probate the will of David Shepard, in which proceeding the defendant was the proponent, and the complainant the contestant of said will. The issue in that case was the mental competency of David Shepard, and whether he had been unduly influenced by the defendant in the making of said will. We may, from time to time, refer to that case, as it contains copies of certain documents which we may not find it necessary to insert here.

It is the claim of the complainant that the securities above referred to were given to him and to his brother, the defendant, at different times before the death of David Shepard, or that they were given to the two sens jointly, and that David Shepard afterwards, in the month of August, 1902, attempted to give these same securities to the defendant, which, securities are now largely in defendant’s possession. We shall not even state the substance of the lengthy pleadings in this case, but it is sufficient to say that the essential facts with respect to the question, whether these alleged gifts were made as claimed by the complainant, are sufficiently set forth in the bill, and are answered by the defendant.

Under the issue made by the pleadings, the question for this court to determine is, whether there were gifts inter vivos and a sufficient delivery, with the intent on the part of David Shepard to give these securities to the complainant. If there was such a delivery intending to vest title in prcesenti, then there were gifts on these occasions, otherwise not.

The record in the will case, comprising some five large volumes and an index, has been stipulated as a part of the record in this case, and, with an additional volume containing the pleadings and additional evidence, they comprise the printed record in this case.

Some matters in the case are not controverted, and among them are the following: David Shepard died March 16, 1904, at the age of 83 years. His wife died in 1898. He was survived by two sons, Alfred and Freedom, the parties to this suit, then aged respectively about 62 and 59 years of age, each of whom was married and had one daughter. David Shepard had a long, active, and honorable business career as a manufacturer, being connected with the Nichols & Shepard Co., of Battle Creek, and other business enterprises. About 1880 he withdrew from an active part in the business of the said company (which business was then carried on by the older corporation of Nichols, Shepard & Co.), although he retained a passive connection with that company as a stockholder, director, and officer. Thereafter he devoted himself principally to the business of investing his money in various loans, bonds, and stocks. In the course of his career, he accumulated a considerable fortune. From time to time he made gifts to his two sons, to their wives, and to their daughters. Invariably, when he made a gift to one son, his wife, or daughter, he made a like gift to the other son, his wife, or daughter. These gifts, whatever they may have been, down to August, 1902, had been characterized by the most scrupulous impartiality, it apparently being his settled purpose during that period to treat these parties absolutely alike. The largest gifts which he made them, prior to the alleged gifts in question in this suit, were in 1890. He then gave complainant and defendant securities and other property amounting to over $60,000 each, and it is claimed that he gave them jointly securities and other property amounting to over $150,000. We shall have occasion to refer later to certain of the securities included in these gifts of 1890.

The first real controversy in this case has to do with the alleged gifts of 1896. It is the claim of the complainant that on this occasion his father, David Shepard, gave to him bonds and mortgages amounting to $56,858.42, and that on the same occasion he gave to the defendant bonds and mortgages amounting to $56,848.71, a check for $9.71 being given by the complainant to the defendant with the object of making the gifts equal, and that on the same occasion he gave to them jointly mortgages and notes and certain bond coupons amounting to $21,415.05. The defendant admits that on this occasion David Shepard “ made ostensible transfers ” of these securities as claimed by complainant, but denies that there was a completed and absolute gift.

Entertaining the views which we do respecting the admissibility of certain testimony of the parties in this suit (all of which seems to have been considered by the circuit judge)', we find it somewhat difficult to even make a statement of the matters in evidence in the case. However, we may say that it appears that the matter of this transaction was under consideration by David Shepard and the sons for a considerable time before it was finally consummated. There was a great number of securities, and it is undisputed that they were all figured up and adjusted as to their value as of January 1,1897, and lists of those that were to go respectively to the complainant and defendant, and to them jointly, were made. Some of the securities were assigned by simple indorsements, and as to some there were foi’mal assignments. The complainant and defendant prepared the formal assignments, which were duly executed by David Shepard. At this time the defendant resided in Battle Creek, and near his father’s home. The complainant lived elsewhere, but for many years there had been a family gathering at David Shepard’s home near the Christmas season of each year. On this occasion Mr. Fred M. Wadleigh, an attorney, was called in to act merely as a notary public, and he took David Shepard’s acknowledgments to the assignments of the securities that required formal assignment. These assignments were signed by David Shepard on December 29, 1896.

Up to this point there is no substantial dispute between the parties as to what was done. The complainant, however, claims that the securities indorsed and assigned to him were placed in one basket, and those which were indorsed and assigned to the defendant were placed in another basket, and that the respective baskets were handed, one to complainant, and one to defendant, by David Shepard, who said: “I give these to you,” and, “I give these to you.” The wife of complainant testified that she placed her initials on some of the papers at the request of the parties; that Fannie L. Shepard, the wife of defendant, also, at a like request, placed her initials on some of the papers referred to. It is also the claim of complainant that the formal assignments which had been acknowledged, as we have stated, by David Shepard, were taken away by the complainant and the defendant, each taking those which were assigned to him, respectively. It may as well be stated here that the defendant denies that there was any such formal delivery, or the use of baskets, as is claimed by the complainant, and in this he is corroborated by his wife, Fannie L. Shepard. It is undisputed that the securities themselves were put back into the safe of David Shepard, in his house, but that all of the parties, including David Shepard, had equal access to this safe, at all times, for years thereafter. It is pertinent to say that on or about the 29th of December, 1896, a contract was made and executed by and between the complainant and the defendant, which provided for the adjustment between them of interest, expenses, and losses, in connection with these securities, with the evident purpose of making the amounts that should be realized upon the alleged gifts to them absolutely equal. This contract commences as follows :

“Whereas, our father, David Shepard, has assigned and delivered to each of us a large amount of personal property consisting of notes, mortgages, bonds, trust deeds, stocks, and other evidence of indebtedness, and it being his intention to divide the whole amount equally between us,” etc.

This contract was signed by the complainant and defendant only.

Certain letters referred to in the opinion of the court in Re Shepard's Estate, supra, were written by com'plainant to defendant, and to David Shepard, which we shall have occasion to refer to later.

It is the claim of the complainant that it was agreed that David Shepard should look after the securities for the complainant and the defendant, and it is significant that for years all the parties had access to, and had more or less to do with the handling of, these securities; it being the claim of the defendant that David Shepard was handling them for himself; and this becomes a somewhat important question in the case. It appears to be undisputed that these securities were entered in a new book called “Bills Receivable,” under different headings, those entered as belonging to complainant in one list, and those headed as belonging to the defendant in another list. This book was left with David Shepard, and entries were made in it, from time to time, by him, indicating payments that were made, either on principal or interest, with date and amount. We think that it is really undisputed that, in accordance with the contract between the parties above referred to, yearly settlements were made between the complainant and defendant during the Christmas season, and that David Shepard accounted to these parties for his handling of these securities. Statements showing the amount collected, the amount of interest paid, and any reinvestment by David Shepard, were prepared. This appears in settlement sheets for the years 1897 and 1898, and following years, until a disagreement occurred between the brothers, the parties hereto. For instance, at the settlement at Christmas time, 1897, as shown by recapitulation in evidence, it was found that, including their respective individual and joint matters, David Shepard had collected for Alfred, or on Alfred’s list, $12,980.33, and for Freedom, or on Freedom’s list, $12,071.97; that David Shepard had made reinvestments for complainant of $2,425, and for defendant $2,512, which it is claimed were turned over to them, and were left with David the same as the other securities. It appears from this statement that David Shepard paid complainant $9,575.73, by turning over to him certain certificates of deposit aggregating that amount; and that he paid to defendant, by turning over to him certificates of deposit for $7,514.14 and a check for $1,045.83. The settlement sheets show that each of the parties hereto allowed to David Shepard $1,000, which was entered as salary.

It would further appear by the exhibits that by taking certificates of .deposit in odd amounts, as above stated, complainant was overpaid to the extent of $20.40, and that he gave a check to his father for that amount. There is no evidence in the record of any prior agreement to pay David Shepard a salary, but it is not disputed that such salary was entered and allowed to him for that year.

The documentary evidence further shows that at the settlement at Christmas time, 1898, it was found that David Shepard had collected $14,234.65 for complainant, and $12,057.40 for defendant. That complainant was paid $11,683.85 in certificates of deposit, and the check of David Shepard for $10.85, and was given one-half of the reinvestments for that year, or $2,500. There was turned over to the defendant the other one-half of the reinvestments, of $2,500, and the balance was paid to him in certificates of deposit or checks, which amounted to $98.20 more than he was entitled to by virtue of collections made for him by the father, and to make it correct he gave back to his father a check for that amount. Nothing appears to have been allowed David Shepard for salary at this settlement.

At the settlement of Christmas time, 1899, the documentary evidence shows that it was found that David Shepard had collected for complainant $15,084.04, and for defendant $14,375.08, or $708.95 more for complainant than for defendant. An examination of the exhibits indicates that all the moneys collected for the two sons that' year had been put into new loans or reinvestments, and by the entries would seem to have been accepted by the sons in lieu of cash, and were scheduled upon their settlement sheets for that year as belonging to the joint account of A. & F. G. Shepard. These appeared for the first time on settlement sheets, these loans which, according to the entries, had been made for the joint account during the fear covered by that settlement. These new loans had been placed in the “Bills Receivable ” book. They were taken in the name of either complainant or defendant, or David Shepard, as the case might be, and apparently without regard to the matter of ownership; the loans all being scheduled and accounted for as belonging to the joint account. David Shepard seems to have given the complainant a draft for $708.96 to balance the account.

At the attempted and uncompleted settlement at Christmas, 1900, occurred some trouble between the brothers over what is termed in this record the “Hofer loan,” which we shall hereafter refer to, and after which time no further settlements were had. The documentary evidence indicates that it had been David Shepard’s custom to make yearly inventories of his property. There were two inventories under date of January 1, 189?. The first includes the property which, it is claimed, was given to the complainant and defendant at the Christmas season of 1896, and which appears to have been initialed to the complainant and defendant. The total was $213,392.58.

After the alleged gift was made, another inventory, under date of January 1, 1897, was made, which did not include the securities claimed to have been given to the complainant and defendant, and they are not included in the subsequent inventories. It will be noted from the second inventory, above referred to, that after the claimed gift of December, 1896, David Shepard had property left of the value of $67,838.46, besides accrued interest, and besides the homestead, which was not listed. The matter of inventories made by David Shepard in his name is somewhat confusing. As we have already indicated, part of the entries in these books, after the alleged gifts, with reference to these securities, were made by David Shepard, and part of them by the complainant, and a part by the defendant. This is significant as showing that David Shepard knew of the manner in which the books were kept. We cannot in this opinion attempt to refer to all the numerous exhibits which appear in this record, and which have been examined by us. Defendant’s letter to complainant January 5, 1898, relating to excess interest and commissions, shows his understanding of matters.

There seems to be little controversy about the nature of the transaction of 1900. On that occasion the brothers seem to have taken possession of the securities that were given to them, and to have carried the same away. This was not true, however, as to the Nichols & Shepard Co. note of $50,000. We do not understand that there is any dispute that that note was given absolutely to the complainant and the defendant in 1890, but that for several years David Shepard was allowed to retain the interest from it, and the complainant gave defendant written authority to pay to David Shepard such part of the interest from this note as he might desire.

We come now to the claimed gift of 1899, involved in this suit. The complainant claims that on November 8, 1899, David Shepard made a gift and delivery to the defendant and himself jointly of 360 shares of stock in the Nichols & Shepard Co., of the par value of $9,000, but of the actual value of $27,000. Also of 100 shares of stock in the National Bank of Battle Creek, of the par value of $10,000, and of the actual value of that amount and upwards; and also of 25 shares of stock in the Merchants' Savings Bank of Battle Creek, of the par value of $2,500, but of the actual value of upwards of $3,750; and that at the same time David Shepard made a gift to complainant of 200 shares of the Nichols, Shepard & Co. stock (the old corporation), and to the defendant of 200 shares of that stock by executing and delivering to them assignments on the certificates therefor. The defendant admits that David Shepard indorsed assignments on the certificates for this stock, as alleged by complainant, but denies that David Shepard delivered them to the parties as claimed by the complainant. The certificates were put back in the safe with the other papers. The wives testified upon this subject, each corroborating her husband’s claim. Photographic copies of these assignments appear in evidence.

This brings us to the Nichols & Shepard Co. notes for $16,000, $10,000, and $3,000, in which complainant claims one-half interest. He also claimed a one-half interest in a $5,000 Nichols & Shepard Co. note, but the circuit judge found against him in that, and as he has not appealed, we shall not refer further to that note. Complainant claims that at the Christmas season of 1900, Freedom said to him: “Alf, father has given us all the notes, which takes about everything now.” That the defendant and he then went into the sitting room where his father was, and that a certain conversation there occurred. Further testimony of the complainant upon this subject cannot be considered, for the reason which we shall hereafter state. The $16,000 loan appears to have been made in 1899, and was first evidenced by a note which was made payable to A. & F. G. Shepard. This note was renewed at least twice; both renewals being made payable to A. & F. G. Shepard. The $10,000 loan was evidenced by a note dated November 6, 1899, made payable to David Shepard, and was by him indorsed to A. & F. G. Shepard. This note was renewed probably twice, and first seems to have been made payable to David Shepard, and by him indorsed in blank; again renewed, payable to David Shepard, and indorsed to the defendant, and the notes seem to have remained with the other papers. The last indorsement was probably made in connection with the transaction of 1902. ■The $3,000 loan was evidenced by a note dated July 27, 1900, which was made payable to David Shepard, and was by him indorsed to A. & F. G. Shepard. This was renewed, probably twice; the renewals being payable to David Shepard. The first renewal seems to have been indorsed in blank, and the second renewal was indorsed to A. & F. G. Shepard. This note seems to have been in existence, having been renewed at about the time of the claimed gift of Freedom in August, 1902, and is indorsed to defendant.

The defendant denies absolutely the testimony of the complainant as to his statement of what David Shepard had said to him as to putting those notes on their lists. The notes appear to have been listed. The only interest payment on any of these notes that was turned over to complainant and defendant, so far as is traceable, is the interest on the $16,000 note, which came due December 20, 1900. That interest payment appears to have been entered in David Shepard’s cash book, in his own handwriting, under date of December 24, 1900, and seems to have been initialed by him as belonging to “A. & F.,” which would seem to mean Alfred and Freedom. This payment is then posted in his ledger, in his own handwriting, under date of December 21, 1900, to the credit of the account of A. & F. G. Shepard. The circuit judge seems to have had some difficulty in reaching a conclusion as to this matter, which will be referred to later.

The assignment to the defendant by David Shepard, bearing date August 2, 1902, and the extract from the will of David Shepard, which was made a few days later, appear in the opinion in Re Shepard's Estate, supra, and will not be repeated here.

There is also in controversy here a note for $10,386. This note grew out of stock earnings of the Nichols & Shepard Co. stock, included in the gift of 1890. That stock we do not understand to be in controversy here, but it appears that this $10,386 note grew principally out of the dividends on that stock. We do not understand that there is any question as to the ownership in complainant of the certificate of stock known as No. 3 for 1,833 shares of that stock. The complainant claims $3,-360 interest in the principal of this note, together with his proportion of the interest on his share of the same. Of the principal so claimed, $3,000 arises out of dividend No. 5, paid on or about April 16, 1901, and $360 arises out of dividend No. 6, paid on or about April 16, 1902. As we understand it, complainant received all of dividend No. 6 on certificate No. 3 (which belongs to him, it being the original certificate given to the two sons in November, 1890, the whole of such certificate No. 3 being assigned to the complainant when the stock dividend represented by certificate No. 26 was paid in 1891, defendant thereupon taking and holding certificate No. 26), but did not receive his one-half of dividend No. 6 oh certificate No. 181, evidencing the $9,000 of Nichols & Shepard stock in controversy in this suit, the one-half of said dividend on certificate 181 being $360, the amount decreed to the complainant by the trial court, growing out of this dividend.

In the letter from the defendant to the complainant, bearing date January 11, 1904, the defendant said:

“ I would also suggest that you have the Nichols & Shepard Co. stock issued direct to you, so that all future dividends may go direct to you. If you will tell me the date of the last dividend you have had, I will try to get them straightened out and sent you.”

The “Hofer loan” of $17,000 was taken in the name of the complainant. The circuit judge found that the complainant owned in his own right nine-seventeenths of this loan. He also found and decreed that eight-seventeenths thereof belonged to the defendant out of money which he borrowed from his father, which was charged to him, and advanced to the complainant by defendant. We shall have occasion to speak of this later.

It is apparent that the principal questions in this case are whether the transactions of 1896 and of 1899, and with respect to the Nichols & Shepard Co. notes, constitute gifts inter vivos, as claimed by the complainant and found by the circuit judge; and it follows that the principal point to be considered in determining this question is, whether these gifts were consummated by delivery of the securities, with intent on the part of David Shepard to make them a then present gift. In determining this question we are met at the outset with the inquiry as to whether the testimony of the parties to this suit, or that of either of them, as to matters equally within the knowledge of David Shepard, is admissible under our statute.

Our statute, section 10212 (3 Comp. Laws), as amended by Act No. 30, Pub. Acts 1903, reads as follows:

“When a suit or proceeding is prosecuted or defended by the heirs, assigns, devisees, legatees or personal representatives of a deceased person, the opposite party, if examined as a witness on his own behalf, shall not be admitted to testify at all to matters which, if true, must have been equally within the knowledge of such deceased person. * * * Provided, that whenever the words * the opposite party’ occur in this section it shall be deemed to include the assignors dr assignees of the claim, or any part thereof in controversy.”

We have here a complainant claiming to be the assignee of his deceased father, prosecuting, and a defendant claiming by a later assignment from, and as sole legatee of, his deceased father, defending. It seems clear to us that this suit cannot be maintained against the defendant, if it could not have been maintained against the father. The defendant therefore stands in his father’s shoes, in so far as this statute is concerned. So we have here a case not only within the very letter, but within the whole spirit, of this statute. The true test of every transaction in issue is the intent of David Shepard in the particular transaction. Alfred Shepard may have intended a full and completed gift. Freedom G. Shepard may have intended a full and completed gift, but that will not avail complainant, unless David Shepard intended to part with dominion and control over the property. Under the statute, the lips of David Shepard being sealed by death, it is very clear to us that the lips of complainant are sealed by law. Taylor v. Bunker, 68 Mich. 258 (36 N. W. 66); Schuffert v. Grote, 88 Mich. 650 (50 N. W. 657, 26 Am. St. Rep. 316); Lloyd v. Hollenback, 98 Mich. 203 (57 N. W. 110); O'Neil v. Greenwood, 106 Mich. 572 (64 N. W. 511); Harris v. Cable, 113 Mich. 192 (71 N. W. 531); Bailey v. Holden, 113 Mich. 402 (71 N. W. 841); Michels v. Underwriters' Ass'n, 129 Mich. 417 (89 N. W. 56); Sparling v. Smeltzer, 133 Mich. 454 (95 N. W. 571); Great Camp K. O. T. M. v. Savage, 135 Mich. 459 (98 N. W. 26); Campbell v. Sech, 155 Mich. 634 (119 N. W. 922); Beadle v. Anderson, 158 Mich. 483 (123 N. W. 8); Union Trust & Sav. Bank v. Tyler, 161 Mich. 561 (126 N. W. 713); Ripley v. Seligman, 88 Mich. 177 (50 N. W. 143).

In the last-cited case, Justice Champlin, speaking for the majority of the court, used language which, in view of our later amendments to this statute, has increased significance. He said:

“ The word ‘ assigns ’ is used here in its legal sense, and signifies a person to whom any property or right is transferred by a deceased person in his lifetime. The statute is broad enough to cover successive transfers, or where the controversy depends upon the acts or dealings with the property of the deceased in his lifetime; and any one, who is called upon to prosecute or defend some interest which is affected by the act or agreement of the deceased party through whom he claims, may invoke the protection of the statute to shield his interest from the testimony of the opposite party to matters which, if true, were equally within the knowledge of the deceased person through whom he claims.”

Under this statute, in our opinion, the testimony of the parties, complainant and defendant, is inadmissible as to transactions and communications with the common ancestor, or, in other words, which were equally within the knowledge of such deceased person; and the testimony of both these parties as to such matters must be eliminated in the consideration of this case.

/fan the consideration of this case, due weight should be given to the advantage which the circuit judge had in seeing and hearing the witnesses give their testimony in open court; and therefore his finding, under competent testimony, is entitled to due weight under our repeated decisions. This, however, does not relieve this court from the duty of the exercise of its own judgment in passing upon the questions involved in a case.^The circuit judge found in favor of the complainant on substantially every proposition claimed by him. The defendant has appealed.

We shall not attempt to review the evidence in this case, covering as it does nearly 2,000 pages. We do not consider that the opinion of this court in the will case, where the issues were mental competency and undue influence, is res adjudicata of the questions here presented. Reed v. Whipple, 140 Mich. 7 (103 N. W. 548).

In this case much depends upon the conduct of the parties, complainant and defendant, taken in connection with the conduct and acts of David Shepard. In weighing questions of this nature, we must often place more dependence upon the conduct and action of parties, than upon the testimony of witnesses, as to transactions long passed. While it is true that the crucial point in the case is as to the intent and conduct of David Shepard, much also depends upon the conduct of the parties to this suit, where the rules of evidence relating to estoppels and admissions should be applied with their usual force. Upon the question of gifts inter vivos, we have many decisions in this State. We refer to the following: Love v. Francis., 63 Mich. 181 (29 N. W. 843, 6 Am. St. Rep. 290); O’Neil v. Greemvood, supra; Harris v. Cable, supra; Holmes v. McDonald, 119 Mich. 563 (78 N. W. 647, 75 Am. St. Rep. 430); Peninsular Sav. Bank v. Wineman, 123 Mich. 257 (81 N. W. 1091); Reed v. Whipple, supra; Snyder v. Snyder, 131 Mich. 658 (92 N. W. 353); Poppleton v. Poppleton, 143 Mich. 208 (106 N. W. 703); Bangs v. Browne, 149 Mich. 478 (112 N. W. 1107); State Bank of Croswell v. Johnson, 151 Mich. 538 (115 N. W. 464); Union Trust & Sav. Bank v. Tyler, supra. We also refer to the following: Tucker v. Tucker, 138 Iowa, 344 (116 N. W. 119); Candee v. Savings Bank, 81 Conn. 372 (71 Atl. 551, 22 L. R. A. [N. S.] 568); McNally v. McAndrew, 98 Wis. 62 (73 N. W. 315); Bone v. Holmes, 195 Mass. 495 (81 N. E. 290); Gonnon v. McGuire, 160 N. Y. 476 (55 N. E. 7, 73 Am. St. Rep. 694); Beaumont v. Beaumont, 152 Fed. 55, 81 C. C. A. 251; James v. Aller, 68 N. J. Eq. 666 (62 Atl. 427, 2 L. R. A. [N. S.] 285, 111 Am. St. Rep. 654, 6 Am. & Eng. Ann. Cas. 430); 14 Am. & Eng. Enc. Law (2d Ed.), p. 1014 et seq.

The authorities are agreed that, to constitute a valid gift inter vivos, there must be a gratuitous and absolute transfer of the property from the donor to the donee, taking effect immediately, and fully executed by the delivery of the property by the donor, and an acceptance thereof by the donee.

As was said by the Supreme Court of Vermont in Williamson v. Johnson, 62 Vt. 378 (20 Atl. 279, 9 L. R. A. 277, 22 Am. St. Rep. 117):

“All the definitions come to this: That' to constitute a valid gift it must be voluntary, gratuitous, and absolute.”

All that is necessary to constitute a valid transfer of property by parol is an expression to that effect by the donor, accompanied by a delivery of the thing to the do-nee. This proposition seems to be well supported by authority, that no. absolute rule can be laid down as to what will constitute a sufficient delivery to support a gift in all cases, for in each case the character of the delivery requisite to sustain the transaction as a gift will depend very largely upon the nature of the subject-matter of the gift, and the situation and circumstances of the parties. There are, however, certain well-settled general principles governing the question. Among them are the following: There must be an absolute delivery, with the intention of making a gift, and passing title. The delivery must be according to the nature of the property.

In accordance with the general rule, that delivery of the property is necessary to perfect a gift, the doctrine has been laid down by an eminent authority that, in the case, .of the gift of a chose in action, the law requires a written assignment, or some equivalent instrument to effect the transfer, and this doctrine seems to be well supported by both reason and authority.

It has been held, however, that where a gift of stock has been fully executed so as to transfer to the donee the legal title, the fact that the donor retains the certificate in his possession is immaterial. Roberts's Appeal, 85 Pa. St. 84.

And it has also been held that the delivery of the written assignment of the chose in action is a good delivery of the chose in action, and is sufficient to support a gift. The question as to what change of possession is required to support a gift is often necessarily a relative one. The mere open and visible change of possession is obviously not possible in all cases. Thus, where the donor and donee reside together, as in the case of husband and wife, parent and child, etc., it is not required that the thing given should be removed from their common residence. It is sufficient, if it clearly appears that the donor had relinquished, and the donee had acquired, all dominion over, and control of, the property. Many cases are cited in support of this doctrine on page 1024 of the volume of encyclopedia above cited, including Davis v. Zimmerman, 40 Mich. 24, and Colby v. Portman, 115 Mich. 95 (72 N. W. 1098).

And it has been held in this State that under some circumstances the donor may constitute himself a trustee for the donee, and in such case no further delivery is necessary. See Love v. Francis, supra. We have cited cases where the donor acted as the agent of the donees in handling the property. Although delivery is essential to perfect the gift, it is not necessary that the donee should retain the property in his possession. The subsequent possession by the donor, while it may in some cases tend to throw suspicion upon the transaction as being in fraud of creditors, is not necessarily incompatible with the donee’s dominion over the property; and, if satisfactorily explained, will not divest the donee of the title to the property when once it has been acquired by him.

An examination of the cases above cited will show that the several statements of the rule vary in language, but not in substance. In the application of this rule, it is well settled that if there has been an actual or constructive delivery of the subject-matter of the gifts, with the intent to vest title, the fact that the donor retains possession of the same for any purpose is not sufficient to defeat the gift; nor is the gift defeated by the fact that the donor reserved to himself the use or income from the subject-matter of the gift.

In Beaumont v. Beaumont, supra, the owner of certain bonds rented a box from a safety deposit company in the name of himself and his two brothers, whom he took to the company, introduced them there, and had them sign the contract of renting, and then went with them to a room, taking the box and the bonds. He then handed one-half of the bonds to each brother, stating that they were a gift, and that he desired them to give him the coupons therefrom which should mature during his lifetime. Some of the coupons next maturing were then cut off and given to him. The bonds and the coupons were then placed in the box, which was put back in the vault; he taking one key and giving them the other. Held, that the fact that he retained a key, and that he afterwards visited the vault and took coupons from the box, was not such a retention of control over the bonds as to invalidate the gift. Gray, J., said:

“The underlying question of these assignments is, What are the essentials required by the law to constitute a valid gift of personal property inter vivos, in a case like the present ? Undoubtedly there must be shown an intention to give; thát is, an expressed purpose to divest the donor of title in, and ownership of, the thing given, carried into effect and evidenced by a delivery of possession to the donee, and acceptance by him. It, of course, inheres in the conception of the possession essential to a completed gift, that the donee should have such control, and such control only, of the subject-matter of the gift as is consistent with the ownership purported to be transferred to him. What shall constitute the essential delivery, possession, or control, must depend always on the circumstances of each case and the environment of the parties. Where delivery of the property has once been made, and possession transferred, the gift is irrevocable, and is not affected by the fact that the donor immediately thereafter comes into the physical possession and control of the property, without any retransfer of the ownership by the donee. Corle v. Monkhouse, 50 N. J. Eq. 546 (25 Atl. 157); Matthews v. Hoagland, 48 N. J. Eq. 455 (21 Atl. 1054). This being so, we see no reason why a gift should not be affected by a condition requiring ternporary or partial control of the thing given by the donor, where the intention to transfer the ownership is made clear, and a possession commensurate with that ownership conferred upon the donee.”

We must desist from further quotation from these authorities for want of space. We cite only the following in conclusion: Crittenden v. Insurance Co., 41 Mich. 442 (2 N. W. 657); Mutual Benefit Life-Ins. Co. v. Savings Bank, 68 Mich. 131 (35 N. W. 853); Whitford v. Horn, 18 Kan. 455; Ivey’s Adm’r v. Owens, 28 Ala. 641.

In the last-cited case the donor repossessed himself of the gift until the donee was older, and upon that subject the court said:

“Although an actual delivery is indispensable to perfect a parol gift of a slave, yet it is not necessary that the actual possession should be afterwards retained by the do-nee. Subsequent possession by the donor is not necessarily incompatible with the donee’s dominion over the property; nor is it conclusive evidence that there was no delivery, or that the dominion did not pass to the donee.”

Much depends upon the circumstances of the case. We are dealing here with transactions between a father and his sons, in both of whom he had implicit confidence at the time of the transactions of 1896 and 1899 in question, and for years thereafter. The safe in which these securities were placed and kept was accessible at all times to both donor and donees. They all placed their marks upon these transactions in such a way as to indicate, in our judgment, the intention of the father to then make absolute gifts to the sons of these securities. We are unable to find an indication, for years, by any of the parties dealing with these papers, of any other intention than that the sons were the owners of these securities. They dealt with them as their own. The father dealt with them as belonging to the sons. It is undisputed that both the complainant and the defendant had access to the securities, or alleged gifts of 1896 and 1899, at all times, and that they looked them over whenever they wished; and, in fact, carried away a considerable part of them, as is evidenced by documents in evidence. Their letters show that they treated them as theirs.

The conduct of the defendant with reference to the transaction of 1896, as evidenced by the account kept by him and called his “Present Acct.,” is significant. Beginning with 1858 and closing with January 1, 1897, upon one page, only, that is before us, of his private account, there are entered numerous gifts by the father to him, down to and including the 1896 transaction. After the breach between the complainant and defendant much correspondence took place between them, which we have not space to quote. A settlement was desired. The complainant was clamoring for an adjustment of his matters, as claimed by him. At this time he knew nothing of the assignment, or the will of 1902, so far as appears of record. In fact, it seems to be conceded that at that time he supposed that the will made by the father in 1890 was still in force, in and by which will the property was to be equally divided between the sons, and full confidence in them both is there expressed, by making them executors of the will without bond, and trusting to their honor and integrity to look after their mother’s interests. We think it clear that in August, 1902, the father had changed his mind. He may not have understood the legal effect of the prior transactions.

In a letter, dated Battle Creek, February 20, 1904, the defendant writes the complainant the following:

“Alf: Yours of the 16th received. We supposed you had copies of all transactions, as you had use of the books and have done about all of the work. If you will tell me what information you lack we will see if we can figure it out. Bend a statement as far as you can and we will try to complete it. It is necessary that you give this immediate attention. Father has worried about this until his nerves are about exhausted; can’t sleep nights; and on Wednesday became paralyzed on his right side, for about three hours we could not guess at the result. There must be some basis of settlement, and I would like your understanding of wbat father was to have of the last lot of papers he gave us. Write us fully. If your understanding agrees with ours, I will go ahead and see if I can figure out a satisfactory settlement. You are aware that it is a big job. If you want me to do so, I wish you would send me copies of the papers you have drawn off from the books, as it will be easier to check up than draw them off, and besides I can call your attention to mistakes, if any. When father gave us the papers he was to have $2,500 from each of us, or $5,000 a year for caring for the papers and for his own use. It will be impossible to tell how much to carry down each year unless it is settled as to the amount he was to have, and there is no use in undertaking a settlement unless we can finish it. I just handed this to father and he said that it is all right, excepting he thought he was to have all he wanted. Yours truly, F. G. S.”

In passing, it is proper to say that there is no competent evidence in the case of any agreement to pay the father any sum as an annual salary or allowance, although it had been proposed by complainant in a letter to his father of December 15, 1896. But if we were to find that the father was to have a stated sum, or so much as he saw fit to take of the income, from time to time, of these securities, we do not understand that that would be inconsistent with the giving to the sons of all the principal sum and so much of the interest or income as he passed over to them, or placed to their credit from time to time.

The circuit judge, in his written opinion filed in the case, first referred to the transaction of 1896. He used upon that subject the following language:

“After a careful consideration of all the testimony given in this case relative to this matter, I am of the opinion that it has been thoroughly established that this transaction was intended to be, and, in fact and in law, was a gift then and there fully consummated between the father and the sons. During the course of this hearing, there has been much controversy between counsel as to the admissibility of the testimony of either of the parties to this action relative to certain phases of this transaction, particularly the question as to whether or not there was delivery made by the father to the sons; but I am of the opinion that whether we include or exclude the testimony of the parties to the suit, the fact of this transaction resulting in a consummated gift is established by a very decided preponderance of the evidence.”

He then proceeds to deal with the transaction of 1896.

We are in accord with the circuit judge upon this branch of the case, except in so far as he deals with the ‘ ‘ Hofer loan. ” He finds that it appears from the evidence in the case that the complainant is the owner of $9,000 of the principal sum of this loan, and that the defendant is the sole owner of the remaining $8,000 of the principal sum, and yet he proceeds to find a sum due the complainant upon this transaction, and charges the defendant $6,080.50. We are unable to understand why this charge was made. In this we cannot agree with the circuit judge. We think that the amount which he carries against the defendant growing out of the “ Hofer loan ” should be eliminated from the finding. The circuit judge then deals with the transaction of 1899, and with his conclusion in that matter we are content.

There remains, however, to be noticed the controversy between the parties as to matters grouped together in the opinion, and known as the Nichols & Shepard notes, aggregating in principal $29,000. In regard to this matter, the court uses the following language:

“It has been somewhat difficult to determine from the evidence in this case as to whether or not there has been a consummated gift of these notes, or any portion of them, for the reason that testimony is less satisfactory as to there ever having been an actual or a constructive delivery by David Shepard of any of these chattels.”

The circuit judge, however, allows the complainant, and requires the defendant to account to the complainant for, one-half the principal sum of these three notes, together with interest thereon, aggregating the sum of $17,638.84. Holding, as we do, that the testimony of both complainant and defendant, relating to the alleged conversations with the father touching these matters, should be eliminated and not considered, we are unable to find evidence in the case to warrant us in following the circuit judge in the conclusion which he reached in regard to these notes. The evidence of record respecting the dealing of the father with these notes shows that they were not treated as were the transactions of 1896 and 1899. That he may have passed to them a credit for an installment of interest upon these notes, which installment he intended to give to them, and that these notes may have been indorsed by him to them, or taken in their names, would not of themselves be sufficient acts to comply with the rule which we have attempted to lay down. We are constrained, therefore, to hold that the circuit judge should not have allowed this credit to the complainant.

This leads us to the conclusion that the decree of the circuit court should be modified as herein indicated in the matters of the Hofer loan,” and of the notes known as the Nichols & Shepard Co. notes, that we have just referred to. In all other respects the decree of the circuit court will be affirmed, except that appellant will recover costs of both courts.

Bird, C. J., and McAlvay, Brooke, and Blair, JJ., concurred.


source: Caselaw Access Project

author: Blair, J.

license: Public Domain

text:
    MORRISON v. SEMER.
    1. Taxation — Redemption—Equity—Maxims.
    In a suit by the owner of land to quiet title as against a purchaser for taxes of certain years, the complainant will be required to do equity by refunding, as a condition to relief, the validly assessed taxes for the years which the defendant had purchased.
    2. Same — Notice to Redeem.
    A notice to redeem from a tax sale which omits the State and county in which the land is situated, is void.
    3. Same — Equity—Relief.
    But the complainant will be required to pay only the amount which defendant paid for a quitclaim deed of a prior tax purchaser, not the entire amount of the tax and interest.
    4. Same — Payment—Purchase of State Bid.
    The purchaser of a tax title, who went into possession without serving the statutory notice to redeem, was entitled to purchase of the State the tax title for the year when he went into possession, where the tax was assessed to the owner and constituted a lien on the land when the purchaser went into possession; but was not entitled to compensation for improvements made or taxes paid while he was in wrongful possession.
    5. Same — Duty to Pay Tax — Redemption.
    Where the tax title purchased was void, the holder was under no obligation to pay the tax and might buy the State’s title based on an assessment made before he took possession.
    6. Same — Burden of Proof — Validity of Tax Deed.
    A complainant who seeks to quiet his title to land by attacking a tax deed has the burden of proving its invalidity.
    7. Same.
    The holder of a tax deed seeking to enforce it must prove its validity; and the deed is not prima facie evidence thereof.
    Appeal from Delta; Stone, J.
    Submitted November 16, 1910.
    (Docket No. 98.)
    Decided December 30, 1910.

      Bill by Charles A. Morrison and Dayton W. Closser against Barbara Semer to remove a cloud from the title of certain lands. From a decree awarding to complainants less than the relief claimed, they appeal.
    Modified and affirmed.

      D. W. Closser, for appellants.

      Frank D. Mead, for appellee.
   Blair, J.

Complainants, the owners of the original title to certain lands in Delta county, filed their bill of complaint in this cause to quiet their title to, and to remove clouds upon their title to, said lands caused by the purchase of certain tax titles by the grantors of defendant, and for the determination of the amount which they should pay to redeem. Complainant Closser acquired his title March 21, 1908.

The defendant is the widow of Charles J. Semer, and claims under tax titles acquired from her husband, which he had acquired from John McLaughlin and Ezekiel De Camp, for taxes for the years 1892,1893, 1894, 1897, 1898, 1899, 1900, and 1901, together with rights for taxes of 1895, 1896, 1902, and 1903, by reason of said taxes having been paid as a condition of purchase. The McLaughlin tax deed, for taxes of 1892 and 1893, was dated December 18, 1897, stating the date of purchase as October 11, 1897. At the same time, State bid was purchased for taxes of 1894, and 1895 and 1896 taxes were paid. For taxes of 1897, a tax deed was issued to John McLaughlin dated in October, 1904. The defendant offered in evidence a quitclaim deed from John McLaughlin, conveying the land in controversy to Charles J. Semer, for a consideration of $1 and other considerations, and also offered a quitclaim deed from Ezekiel De Camp, conveying the land in controversy to Charles J. Semer, for a consideration of $150.

The files in the various proceedings involving the tax sales for 1892, 1893, and 1894 were offered in evidence, together with the circuit court journal. For taxes of 1893, sold in 1894, these records showed that court was in session but four days. For taxes of 1893, sold in 1895, these records showed that court was only in session four days besides the day of hearing. For taxes of 1894, sold in 1896, the records.showed that court was in session but four days. The tax records were also introduced in evidence, showing that the land in controversy was included in the petition, decree, and tax records as four separate and distinct 40-acre parcels in the several proceedings for taxes of 1893, 1893, and 1894.

Certain tax notices were also put in evidence by complainants. With reference to these notices, complainant Closser stated:

“Mr. Closser: I will offer those served upon myself, and those served upon Mr. Morrison are like them: For 1893 and 1893, gross amount, #39.60; for 1894, gross amount, #17.80; for 1895, gross amount, $19.03; for 1896, gross amount, $13.03. That is the first notice. For 1897, another notice, shows $5.07 for each forty, and the amount separate.
“ The Court: Any description of the county there?
“Mr. Closser: Yes; on this notice, the county and State are in. * * * In the 1903 tax, the forties are separate, and the amount is $6.61 for each forty. The one served on myself was filed February 35, 1909, and the one served on Morrison filed February 10, 1909. I offer these for the purpose of showing that no valid notice has been served on which the time has expired, which has cut off the rights of the complainants.
The Court: When was the bill filed?
“Mr. Closser: The bill was filed March 3, 1909.”

On the 4th day of February, 1898, McLaughlin served a tax notice on Morrison, then the owner, to redeem within six months, and such redemption not having taken place, and after the expiration of the six months, McLaughlin entered into possession and he and, afterwards, his grantee, Semer, held such possession until Semer’s death, May 3, 1907. This notice was void in that the State and county in which the land was situated did not appear therein. Tucker v. Van Winkle, 142 Mich. 210 (105 N. W. 607).

The court held and decreed:

“ That the complainants should pay the defendant the taxes for the years 1892 to 1896 inclusive, paid by her grantor, John McLaughlin, amounting to $89.4$, with interest thereon at 5 per cent, from October 11, 1897, the date of payment, to July 24, 1909, the date of the decree, amounting to $142.92; he also held that the complainants should pay the tax title acquired by the defendant McLaughlin for the year 1897, with the statutory penalty added as a condition of redemption, amounting to $61.66; he also held that complainants should pay to the defendant the sum of $150, with interest at 5 per cent, from March 9, 1906, to July 24, 1909, amounting to $175.32.”

From this decree complainants appeal.

The only question presented to the court below, and to us on appeal, is as to the amount which complainants should pay to redeem.

Complainants offered in their bill to reimburse defendant with the amount expended in redeeming from the De Camp tax title, viz., $150, also with the amount paid John McLaughlin for his tax titles, viz., $5; but claim that they should not be required to reimburse defendant with $89.46, under the theory that it was paid by McLaughlin, and interest, making a total of $142.92. They also claim that they should not be required to pay $61.66 for the McLaughlin title for 1897 taxes.

The circuit judge held that the various decrees for the sales for taxes of 1892, 1893, and 1894 were void, for the reason that they were prematurely entered; the court not being in session the requisite five days after the first day of the term, as required by statute. There having been no evidence offered, however, in support of the charge of the bill of complaint showing the invalidity of the taxes for those years, the court held that, in accordance with the maxim that he who seeks equity must do equity, and this being a bill of complaint to quiet title, the complainants should be required to repay these taxes as a condition of relief — citing Croskery v. Busch, 116 Mich., at page 289 (74 N. W. 464); It is contended, however, by complainants, that since the defendant’s grantor paid to McLaughlin only $5 for a quitclaim deed of his tax titles, that is all she is entitled to recover in any event, atid that, furthermore, there was no evidence in the case showing the amount that was actually paid by McLaughlin. We are of the opinion that, since it must be held to be admitted by th9 pleadings that McLaughlin only received, and Semer only paid, $5 for the tax titles, defendant is equitably entitled to no more; her title having failed, aB correctly held by the circuit judge.

As to the tax title for 1897, itdoesnot appear thatthe title was invalid, and the bill of complaint does not allege its invalidity nor the invalidity of the tax, but alleges the fact to be that:

“ Said land after the purchase thereof by said John McLaughlin in October, 1897, was assessed to said John McLaughlin, while he occupied it, and thereafter to said Charles J. Semer, and that the said John McLaughlin and the said Charles J. Semer occupied said land up to the time of the death of said Charles J. Semer, and were therefore in duty bound to pay the taxes on said land; * * * that the various amounts expended by said John McLaughlin for taxes of 1897, 1898, and 1899 were merely payments of said taxes, and that he acquired no further title to said land by reason of his neglect to pay said taxes, and then letting them go to sale and then buying them in.”

And again:

“That the sales for taxes of 1897, 1898, 1899, 1900, and 1901, together with the deeds issued pursuant thereto, ought to be set aside so far as the deeds purport to convey any title, and be decreed to be payments of the respective taxes.”

And again, in the prayer for relief:

“(3) That the various tax deeds running to John McLaughlin for taxes of 1897, 1898, and 1899 be decreed to be evidences of payment of said taxes only, and not of title.”

It was the contention of complainants, as stated in their bill, that defendant McLaughlin having gone into possession of the land in August, 1898, it was his duty to pay these taxes of 1897. The court held, however, that the taxes of 1897 being a lien upon the land when McLaughlin went into possession, there was no reason why he might not purchase and hold title for that year. The bill .alleges that the land was assessed to McLaughlin after he went into possession, which was in August, 1898. We are therefore justified in inferring that the taxes for 1897 were assessed against complainant Morrison, whose duty it was to pay them. The defendant’s grantors were trespassers, and were therefore entitled to no compensation for improvements made or taxes paid while in wrongful possession of the property, but must content themselves vtith such benefits as they obtained from the land during their occupancy. Corrigan v. Hinkley, 125 Mich. 125 (83 N. W. 1020); Taylor v. Roniger, 147 Mich. 99 (110 N. W. 503); Cook Land, etc., Co. v. McDonald, 155 Mich. 175 (118 N. W. 959).

McLaughlin, however, owed no duty either to the State or to Morrison to pay the 1897 tax. His tax title was void, and the notice based thereon was void. He had no lien to protect when he entered into possession, and we see no good reason why he was not at liberty to purchase the State’s title, based upon an assessment made before he took possession. The tax sale was valid as to this assessment for 1897, the .deed was valid, and a valid notice to redeem was served upon defendants. We are therefore' of the opinion that the court’s decree was correct as to this item.

The title of defendant having failed as to the tax titles for 1892, 1893, and 1894, the payments must be treated as voluntary, and not recoverable by direct proceedings for that purpose. Croskery v. Busch, 116 Mich. 288 (74 N. W. 464); Corrigan v. Hinkley, 125 Mich. 125 (83 N. W. 1020); Bateson v. City of Detroit, 143 Mich. 582 (106 N. W. 1104). When, however, the holders of the original title seek to vacate the tax deeds, the equitable maxim above referred to will be enforced. Croskery v. Busch, supra.

The title of defendant did not fail as to the tax deed for the taxes, of 1897. The sale is treated as valid in the bill of complaint, and the ground assigned for relief against the tax deed is that it was the duty of defendant’s grantor to pay the taxes, which the circuit judge properly held to be incorrect.

If the bill of complaint could be construed to attack the validity of the deed, the burden would be upon the complainants to prove the averment of the bill. Where a party seeks to avoid a tax deed by direct proceedings for that purpose, it is for him to substantiate the charge of its invalidity; but where the holder of the tax deed seeks to enforce it, he must prove its validity, and the deed itself will not be prima facie evidence thereof. Taylor v. Deveaux, 100 Mich. 581 (59 N. W. 250); McKinnon v. Meston, 104 Mich. 642 (62 N. W. 1014); Dawson v. Peter, 119 Mich. 274 (77 N. W. 997); Morse v. Auditor General, 143 Mich. 610 (107 N. W. 317).

The decree, as modified by this opinion, is affirmed.

Bird, C. J., and Hooker, McAlvay, and Brooke, JJ., concurred.


author: Brooke, J.

text:
    COMMERCIAL NATIONAL BANK v. GAUKLER.
    Appeal and Error — Stay op Proceedings — Bond.
    On a motion for permission to file an appeal bond in a foreclosure suit in which, after a decree of foreclosure, the defendant appealed without giving the statutory bond, and complainant proceeded to sell the premises and bid them in, and, on a showing that the premises were worth nearly three times the amount of the mortgage lien, and that the defendant had tried to bring her appeal on for hearing at the present term of court, but the cause could not be heard because of the failure of the attorneys for the mortgagee to file their brief, an order was entered permitting the filing of the bond nunc pro tunc and staying the proceedings under the authority of Act No. 299, Pub. Acts 1909, and Ooeling v. Barnard, 159 Mich. 634 (124 N. W. 533).
    Foreclosure proceedings by the Commercial National Bank against Josephine Gaukler. From a decree for complainant, defendant appeals. On motion of appellant for leave to file an appeal bond as of the date of appeal and for a stay of proceedings.
    Submitted November 18, 1910.
    (Calendar No. 24,010.)
    Granted December 30, 1910.

      George W. Badford, for the motion.
    Angelí, Boynton, McMillan & Bodman, contra.

   Brooke, J.

This case is pending in this court on appeal from a decree of foreclosure. That decree was entered in the Wayne circuit court December 11, 1909. Defendant perfected her appeal and gave notice thereof March 31,1910, but gave no bond to supersede the decree. After the time allowed for payment by the terms of the decree had expired, the mortgaged premises were sold on July 15, 1910, and bid in by complainant. On August 3, 1910, defendant filed exceptions to the report of sale in the circuit court, which exceptions are still undisposed of.

Appellant now moves this court for leave to file a bond nunc pro tunc as of January 3, 1910. Many reasons are urged by appellant why this relief should be granted. She shows by affidavit that the mortgaged premises are worth about three times the amount of the incumbrance, and that for this reason she did not believe complainant would proceed to sale pending the appeal. She also shows that she desires to redeem from the mortgage, by the payment of such sum as this court may hold to be legal, just, and equitable. She further avers that her appeal was noticed for hearing at the October term, 1910, of this court, and that it could not be heard at that term by reason of the failure of complainant’s solicitors to file their brief in due season.

The statute (section 4, Act No. 299, Public Acts 1909) provides:

“No appeal shall operate to stay proceedings in said cause unless the party taking such appeal shall, within the time allowed for perfecting such appeal, file with the register of said court, a bond to the appellee or appellees, with sufficient surety or sureties to be approved by the circuit judge or a circuit court commissioner of said county, or a justice of the Supreme Court, and with such penalty as such judge or commissioner shall approve, conditioned for the performance or satisfaction of the decree or final order of the Supreme Court in the cause, and payment of all costs of the appellee, or appellees in the matter of the appeal. * * * Provided, further, that the Supreme Court or any justice thereof may, on special motion and proper showing, after such appeal has been perfected, order an additional bond and fix the penalty thereof and approve the sureties thereto.”

This proviso, under the authority of Coeling v. Barnard, 159 Mich. 634 (124 N. W. 533), is broad enough to. warrant the granting of the 'relief asked, if, in the opinion of the court, a proper showing were made. While there may be doubt as to the sufficiency of the showing, we are of opinion that the relief should be granted, if it can be done without injury to the .rights of the appellee.

On behalf of appellee it is shown that the value of the property covered by the mortgage is barely equal to the amount of the lien, and that to defer appellee’s right of possession by permitting the appellant to file a nominal bond would, in all probability, result in loss to the appellee. Appellant will be permitted to file a bond in this court in the penal sum of $5,000, with two sureties to be approved by the clerk of this court, conditioned for the performance or satisfaction of the decree or final order of this court in the cause, and the payment of all costs of the appellee. Upon the filing and approval of said bond, an order will be entered in this court staying all proceedings in the cause until final determination thereof.

Bird, C. J., and Ostrander, Blair, and Stone, JJ., concurred. ‘ •


author: McAlvay, J.

text:
    BARNES v. TIBBITTS.
    1- Husband and Wife — Alienation of Affections — Evidence— Adultery.
    In an action for the alienation of the affections of plaintiff’s wife, testimony of the husband relating to the presence of defendant at his home late at night with the wife, and their conversation together, and the testimony of other witnesses as to similar acts, was erroneously excluded, since adultery would not be necessarily inferable from the facts.
    2. Same — Pleading—General Issue.
    Evidence was admissible on behalf of defendant to show plaintiff’s prior treatment of his wife, and the state of her affections towards the husband, although no special notice was pleaded with the general issue alleging that her affections had been previously withdrawn from her husband.

      3. Same — Subsequent Quarrels — Evidence.
    And it was error to permit the introduction of evidence, on. cross-examination of plaintiff, to show that his wife abandoned him after a quarrel over a request of plaintiff, to their daughter, to quit work and to go to school; as it was not an unreasonable request on plaintiff’s part, and not sufficient cause for her leaving, and occurred after the affections of the wife had been alienated.
    4. Same — Evidence.
    It was error to strike out plaintiff’s testimony, as a conclusion, that there was a change in the wife’s feelings towards him about seven years previously, and she always acted more-sociable towards defendant than towards plaintiff.
    5. Same.
    Evidence of a quarrel between plaintiff and his wife nearly 30-years before was too remote, in view of the policy of the law to encourage the settlement of marital disputes, and upon the uncontradicted evidence that plaintiff and his wife had adjusted that grievance and lived together.
    Error to Lapeer; Smith, J.
    Submitted November 14, 1910.
    (Docket No. 15.)
    Decided December 30, 1910.
    Case by John P. Barnes against Chauncey Tibbitts for the alienation of the affections of plaintiff’s wife. Judgment for defendant. Plaintiff brings error.
    Reversed.

      William E. Brown, for appellant.

      Geer, Williams & Halpin and B. E. Reed, for appellee.
   McAlvay, J.

In this suit, brought by plaintiff against defendant for alienation of his wife’s affections, by secret and clandestine meetings, by furnishing her with intoxicating beverages, by taking her riding, by meeting her at plaintiff’s house and at other places in his absence, and by other acts and devices, covering a period of time between 1901 and 190?, the result of a trial was a verdict and judgment against plaintiff. The case is here for review upon errors assigned to the rulings of the court during the trial, upon admission and rejection of evidence, charge of the court, and refusal to charge, and also upon the refusal to grant a new trial. No adultery was charged or claimed in the case. Plaintiff was a carpenter and was intimately acquainted with defendant for several years, and their relations had always been friendly. It will not be necessary or profitable in this case to make a detailed statement of facts. The facts necessary to be stated more particularly will appear as discussion may require.

One of the principal questions is, whether the court was in error in excluding certain testimony, because in his opinion it tended to establish adultery, and was therefore under the pleadings inadmissible. Several errors are assigned to the exclusion of such testimony. The first instance relates to an occurrence in August, 1907, just before plaintiff’s wife and daughter left his home, when defendant came to plaintiff’s house. He was watched by plaintiff and another, who went into the basement of the house, and finally upstairs into the room where plaintiff’s wife, his daughter, and defendant were. From the testimony of both plaintiff, defendant, and all other witnesses, it appears that on the night in question, after defendant had left plaintiff’s house, he investigated the cause of a noise in the cellar which had been heard while he was there; that he went to the basement door, struck a match, and saw the witness Wilder in the basement. He then went back to the front of the house, called several times to plaintiff’s wife, who raised a window and wanted to know what was the matter, and defendant said he had a message ^for her, and was then admitted. The wife and daughter, who had gone upstairs to retire after defendant first went away, came down and the three went into the cellar. They did not see the men there, but discovered plaintiff’s shoes, which had been removed by him to avoid making a noise. They went back upstairs and were followed immediately by plaintiff and Wilder. This was when the women were seen in their nightclothes. Before defendant left the house and discovered Wilder, nothing was said from which an adultery could be inferred. The two women and defendant were in the sitting room together all of the time. The principal conversation was with the daughter relative to an excursion she intended to take next day. They disagreed as to the time the train went next morning. Defendant told her to go to bed and get a good rest, and if he was not right about the train he would give her $2, but she or the mother did not go to bed, and defendant went away in a few minutes and then made the discovery of Wilder in the cellar. Plaintiff’s testimony indicates the presence of defendant in his house, with his wife and daughter at a late hour, and no legitimate inference of adultery can be drawn from that fact, or from the testimony of the other witnesses to this occurrence. This testimony was therefore admissible under the pleadings, and the court was in error in excluding it. Extended consideration has been given to the facts of this particular instance for the reason that the case, as to the above facts, is distinguishable from the case of Merrill v. Leisenring, 149 Mich. 423 (112 N. W. 1072), where it is said of the testimony discussed:

“ The reasonable, and practically the only, inference to be drawn from this testimony, is that it tended to show adultery.”

Both opinions recognize this fact, and both hold that under the pleadings such testimony was inadmissible. The minority opinion also holding that under the statute plaintiff was not a competent witness to testify at all to any facts tending to show adultery on the part of his wife. The other instances where the court made the same ruling relative to testimony construed as tending to show adultery were none of them testified to by plaintiff, and with one exception none of that testimony could be so construed. What the testimony would have shown had the witness Wilder been allowed to testify relative to a circumstance when defendant went alone with plaintiff’s wife to a room over his saloon, we cannot say. If it was no more than this record discloses, it would be admissible.

The rule as to the admissibility of such evidence is laid down in Merrill v. Leisenring, 157 Mich., at pages 137 and 138 (121 N. W. 820), which is distinguishable from Perry v. Lovejoy, 49 Mich. 529 (14 N. W. 485), in that, in the latter case the testimony of acts of adultery was substantive and direct, and in the former merely inferential. The testimony of the several witnesses offered should have been received with the exception above made, which must be determined when it is disclosed to the court. No opinion is required or expressed upon the question as to whether plaintiff could testify at all, if his testimony tended to show adultery on the part of his wife. This does not extend to the other witnesses, and the case as to the admission of their testimony and any inference to be drawn therefrom is ruled by Merrill v. Leisenring, supra. Under the findings such testimony was material to show the conduct of defendant toward plaintiff’s wife, as charged.

The court was not in error in allowing evidence on the part of the defendant, under the general issue, tending to show the state of the wife’s mind and affections towards the plaintiff, and his treatment of her. Perry v. Lovejoy, 49 Mich., at pages 532 and 534 (14 N. W. 485), and numerous authorities cited.

We think, however, the court erred in allowing testimony in support of such showing on the part of defendant relative to some disagreement between plaintiff and his wife more than 30 years before this trial. This includes all the testimony connected with such disagreement. It was too remote. These parties had married in 1876, and this disagreement was soon after marriage. They became reconciled and ever afterward lived together as husband and wife until this trouble arose. This daughter, now 17 years old, was born years after the reconciliation, and it is claimed several other children were born, who have since died. It is the policy of the courts to encourage the settlement of marital misunderstandings and disputes in the interest of both public and private good. Any other course would be contrary to a well-settled public policy.

There was testimony admitted relative to an incident which occurred about the time the plaintiff and his wife separated, relative to the refusal of the daughter to go to school, because she preferred to continue work in a cigar factory. She had theretofore been affectionate and obedient and was under 16 at the time. The father insisted that she should go to school. She said she would not, and was told she must obey him or leave. She left nest day with her mother, after an altercation with her father. The demand of the father was not an unreasonable one. We cannot see how this testimony was material to the issue of alienation of the affections of the wife by defendant. It occurred after the claimed alienation of affections had been brought about by defendant. If the wife had left on that account, it was not sufficient cause. To allow this testimony was prejudicial error.

It appeared without dispute in this ease that plaintiff and his wife had, in effect, lived apart for four or five years before suit was brought. She during all this time had slept upstairs separate and apart from plaintiff. Plaintiff’s testimony as to a change in her regard for him after the time it is claimed defendant began to pay marked attention to her was stricken out. It is contended that this was error on the par.t of the court. He testified:

“There was a change in her feelings towards me.after 1901, that commenced about seven years ago, somewheres about 1902. She always acted more sociable to him than she would to me.”

The court was in error in striking this out. It was not a conclusion, as objected by defendant’s counsel, nor did it cover more than the time limited by the question, as held by the court. The witness should also have been allowed to testify as to whether such treatment by his wife continued.

There are many other errors assigned, several of which are well taken, but we think there is no necessity for discussion, because of our conclusions upon questions already discussed. In following our views herein expressed, they will probably be eliminated and avoided upon a new trial.

The judgment is reversed, and a new trial granted.

Bird, C. J., and Brooke, Blair, and Stone, JJ., concurred.


author: Ostrander, J.

text:
    CENTRAL BITULITHIC PAVING CO. v. VILLAGE OF HIGHLAND PARK.
    1. Appeal and Error —Injunction—Questions Reviewable — Restraining Acts Already Accomplished.
    In a suit to enjoin a municipal corporation from interfering with the performance of a contract with complainant for paving a street, after the accomplishment of the work by the contractor, complainant is, nevertheless, entitled to review on appeal a decree in which its contract was declared void upon defendant’s cross-bill, and complainant restrained from enforcing the contract in an action at law.
    2. Municipal Corporations — Public Improvements — Contracts —Statute of Frauds.
    It is a general rule that where the specification of a public "improvement fully describes the work to be done, and a bid in writing is made to do the work, is accepted and entered of record, sufficient evidence of a contract exists to satisfy the statute of frauds.
    3. Same — Execution of Contract — Form.
    If, in such case, the execution of a written contract is provided for, in terms, in the charter of a municipality, is not executed, and materials are furnished and used in execution of its terms, the neglect to execute it will not prevent the recovery of the reasonable value of whatever is furnished.

      4. Same — Contracts.
    A contract is not made so long as both parties contemplate the doing of something in addition to what they have done, to ’ establish contract relations; nor does the law make a contract when the parties intend none, or regard as complete an arrangement which the parties regard as incomplete.
    5. Same — Villages—Contracts.
    Under the provisions of 1 Comp. Laws, § 2836, requiring the collection of special assessments before making the improvement for which it is levied, where a village, by resolution, accepts a bid for paving and directs the mayor to execute a contract in accordance therewith, but fails to provide by a sufficient assessment for the cost of the improvement, and, on finding that such assessment would exceed the legal limit, rescinds its previous action, no valid contract is shown to have been intended by the parties or completed, although the contractor thereafter proceeded to complete the work under its contract.
    Appeal from Wayne; Donovan, J.
    Submitted November 28, 1910.
    (Docket No. 49.)
    Decided December 30, 1910.
    Bill by the Central Bitulithic Paving Company against the village of Highland Park, to restrain defendant from interfering with the performance of a contract for a public improvement. Prom a decree granting defendant affirmative relief and declaring the contract invalid, complainant appeals.
    Affirmed.

      Arthur Jones (J. M. Head, of counsel), for complainant.

      Rowland M. Connor, for defendant.
   Ostrander, J.

Complainant claims to have made a contract with the defendant to pave a street, to have entered upon the performance thereof, and to have been denied the right to continue performance and complete the contract by the action of defendant. The relief prayed for in the bill of complaint is:

“That upon the hearing of this cause a decree may be entered ordering and directing that a permanent writ of injunction issue out of and under the seal of this cotírt directed to the said defendant, and to its officers and agents, commanding them, and each of them, to absolutely desist and refrain from interfering in any manner with your orator in its construction of the work required by it to be done under its aforesaid contract with the said village of Highland Park.”

There is the usual prayer for other and further relief. The bill was answered, and defendant prayed, as affirmative relief, that complainant be permanently restrained from claiming any benefit or advantage, or from bringing any suit at law, under the alleged contract; that the court determine and decree that a certain special assessment, called No. 47, is illegal and void. There was an answer to the cross-bill, replications, a hearing in open court, and a decree adjudging the alleged contract to be null and void, restraining the complainant from enforcing in equity, or at law, any claim or demand under or by virtue thereof, and determining that special assessment No. 47 is illegal and void.

Counsel for defendant states in the brief, and stated orally in argument, that the street has been paved. In the reply brief for complainant, the fact that the street has been paved is admitted, with the statement that nevertheless the fact ought not to be considered by this court, but a decision should be made of the points presented to the court below, after which, if the decision is favorable to complainant, the fact that the street has been paved may be considered in the framing of the decree. We assume that complainant can in no event now have relief by injunction. Relief by injunction might well have been refused in the first instance on the ground that an action for damages would afford adequate relief. But the decree determines, upon the contention and at the request of the defendant, that the contract relied upon by complainant is illegal and void and restrains complainant from asserting it in an action at law. In consequence, complainant is entitled to have that question re-examined by this court.

Some further statement of the facts is required. The bid of complainant was accepted and the village attorney instructed to prepare the necessary contract in conformity with said bid, and submit the same to the council for consideration and approval. This was on August 30, 1909. At a meeting held September 8, 1909, the contract prepared by the city attorney was read and amended. Thereupon a resolution, reciting that, as amended, the contract be approved and the president and clerk instructed to execute the same for the village, and that the bonds submitted by complainant be approved and filed, was declared by the presiding officer to be out of order. The resolution was withdrawn, the bonds of complainant were read, the form of the contract was again amended, and the resolution theretofore withdrawn was again offered, again declared to be out of order, and an appeal from the decision of the chair was sustained. Thereupon by a vote of four to two the resolution was adopted. At a regular meeting of the council held September 13, 1909, a communication from the president, dated September 11, 1909, was read, in which, after a recital of some of the proceedings of the council relating to the improvement, is the following:

“ There is also to be considered the fact that while you propose to let a contract which shall involve an expenditure of approximately $120,000, you have never at any time given fnotice to the taxpayers of the village nor afforded them a hearing upon any improvement involving such an amount, nor have they had a hearing as to the manner in which such a proceeding will affect their property rights. For these reasons, as well as others before stated to you, I consider the action of the council irregular, illegal, and beyond the powers delegated to council by legal enactment, and I desire to urge upon you that you should rescind all action heretofore taken in this matter, subsequent to the confirmation of the assessment on district No. 47, and the resolution of August 30th, accepting the bid for paving, and that you proceed in an orderly and regular manner in accordance with the advice of your attorney heretofore given to you, in order that the rights of the taxpayers of the village of Highland Park may not be violated or jeopardized, and that you may fulfill the purposes for which you were elected as representatives of the village. I desire to advise you that unless steps are taken by this body to cure the defects and irregularities which I believe make the action of the council illegal, as I have stated in this communication, and to you verbally before this time, and if it be the determination of- this council to proceed along the lines outlined as being its purpose heretofore, without any attempt to cure the defects to which I have called attention, believing this action to be illegal and in violation of the rights of the citizens of this village and an usurpation of powers not delegated to this council by law, I must decline to sign the contract.”

Thereupon the council, by a vote of three to one, rescinded the action theretofore taken as above set forth, and other actions, including that of August 30th, accepting the bid of complainant. The complainant, on September 11, 1909, filed in the circuit court for the county of Wayne a petition for an order to the president and clerk of the village to show cause why the contract should not be signed. The order was issued and served, and on September 14, 1909, the said proceeding was discontinued. In his testimony in the case at bar, the attorney for complainant in that proceeding gave, as a reason for dismissing the proceeding, his opinion that the action of the council of September 13th deprived the president and clerk of all authority to execute the contract.

The statute does not require that such contracts shall be reduced to writing and signed by a representative or officer of the village. It is the contention of complainant that a valid contract existed on and after August 30, 1909. The objections to the validity of the contract which are made by defendant are (1) that it was not signed; (2) that complainant by instituting the mandamus proceeding is estopped to deny the necessity for signing; (3) the contract was ultra vires the village, because (a) it called for an expenditure of money beyond all available funds on hand or which could be raised, (5) there was no assess - ment to pay for that portion of the cost directed to be raised by special assessment, either levied or collected; (4) the special assessment No. 47, which had been made, was insufficient to pay the cost of the portion directed to be raised by special assessment, and was also for various reasons invalid.

It is the general rule that where the specification of a public improvement fully describes the work to be done, and a bid in writing is made to do such work and is accepted and entered of record, sufficient evidence of a contract exists to satisfy the statute of frauds. Smith’s Modern Law of Contracts, § 727; Argus Co. v. Mayor, etc., of Albany, 55 N. Y. 495 (14 Am. Rep. 296). And if, in such a case, the execution of a written contract is provided for, in terms, in the charter of a city, is not executed, and the materials are furnished and used, the neglect to execute the contract will not prevent the recovery of the reasonable value of whatever is furnished. Carey v. City of East Saginaw, 79 Mich. 73 (44 N. W. 168). See, also, East Jordan Lumber Co. v. Village of East Jordan, 100 Mich. 201 (58 N. W. 1012); Corliss v. Village of Highland Park, 132 Mich. 152, 159-162 (93 N. W. 254, 610, 95 N. W. 416); City of Fort Madison v. Moore, 109 Iowa, 476 (80 N. W. 527). We assume that if the street had been paved in accordance with the specification and bid, the mere fact that the contract was not signed by the president and clerk of the village would not support the contention, if it was made, that there was no contract. But a contract is not made so long as, in the contemplation of both parties thereto, something remains to be done to establish contract relations. The law does not make a contract when the parties intend none, nor does it regard an arrangement as completed which the parties thereto regard as incomplete.

The statute governing the defendant village provides, among other things (1 Comp. Laws, § 2836), that— “ Special assessments, to defray the estimated cost of any improvement, shall be levied or collected before the making of the improvement.” While it is true that the complainant was not seeking, and in the course of things would not have, contract relations with a special assessment district and would have them with the defendant village (Corliss v. Village of Highland Park, supra), it is also true that the defendant village proposed, as its records showed, to collect the greater part of the cost of the paving by means of a special assessment. The estimated cost of the improvement was considerably less than the complainant’s bid. The assessment ordered July 6, 1909, was based upon an estimate of a total cost of $106,738.44, of which more than $81,000 was ordered to be raised by a special assessment upon abutting property. The remainder was ordered to be paid from the general highway fund. Complainant’s bid was $115,669.49. It was estimated that the cost of engineering and inspection would be $3,470.08. The total prospective cost was therefore $119,139.57. Of the amount which had been ordered assessed upon abutting property, the assessors reported that they had actually assessed $80,083.75 and could not lawfully assess more because of certain statute limitations. It seems to now be admitted that as to some lots which were assessed the lawful limit of assessment was exceeded. The council on September 8th ordered a supplemental special assessment to provide for a deficiency of $8,759.66 and ordered $2,735.96 of the same deficiency paid out of the general highway fund, as well as $1,184.64 which the assessors had reported they were unable to spread on the first special assessment roll.

It appears, further, that the combined general and highway funds of the village, assuming that they contained all that had been appropriated for them, would be overdrawn more than $17,000, if charged with the amounts necessary to do the paving outside of that raised by special assessments. To these two funds and the special assessment the council was obliged to look for means to defray the expense of the proposed improvement. There was no power to add to the amount in the funds during the current year. The special assessment was levied under the powers conferred by Act No. 707, Local Acts 1907. The validity of this act is questioned by the defendant.

We have referred to these matters, not for the purpose of determining the validity of the special assessments, but for the purpose of showing what every one interested in the matter must have understood, that the council, as it was bound to do, was trying to provide the means to defray the cost of the proposed improvement in advance of making the improvement. It was a single proceeding and the receiving of bids and the acceptance of one of them was a necessary incident thereto. With this statement of facts, the basis of the communication made to the council by the president appears, as does the reason for the action of the council in rescinding the various resolutions theretofore adopted. The precise limit of the powers of the council need not be determined. Whether the contract, if it had been entered into, could have been enforced, is unimportant. It is apparent that the council did not propose to enter into a contract for paving until it was satisfied that provision had been made for discharging the contract obligation. Becoming satisfied that it had not made the necessary provision, it refused to enter into a contract, the form of which it had approved, but which it had not, finally, bound the village to perform. We do not believe that either the complainant or the common council supposed that, upon the acceptance of complainant’s bid, on August 30, 1909, contract relations were established. The evidence supports the affirmative conclusion that neither party supposed that contract relations would be established until the formal contract was executed.

Finding no contract, we find no reason for disturbing the decree upon this appeal, and we therefore affirm it, with costs to appellee.

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