author:
Bird, J.
      Fellows, J. Ostrander, J.

text:
    AUDITOR GENERAL v. MacKINNON BOILER & MACHINE CO.
    1. Taxation — Exemption—Powers op Legislature.
    There is no constitutional restriction on the power of the legislature to exempt land from taxation, and it can exercise the power of exemption as it chooses.
    2. Same — Special Assessments — Property Owned but Not Used by Governmental Agency.
    Vacant, unimproved lots, not being used for governmental purposes of the State university, are subject to a special assessment for local improvements. Ostrander, Stone, and Fellows, JJ., dissenting.
    Appeal from Bay; Tappan, J., presiding.
    Submitted January 11, 1917.
    (Docket No. 9.)
    Decided December 28, 1917.
    Petition by Oramel B. Fuller, auditor general, for the sale of land delinquent for taxes: On objection filed by the MacKinnon Boiler & Machine Company. From a decree for plaintiff, defendant appeals.
    Affirmed.

      S. G. Houghton, for plaintiff.

      Kinnane & Lane, for defendant.

      On the question of liability to local assessments for benefits of property exempt from general taxation, see notes in 18 L. R. A. (N. S.) 451; 32 L. R. A. (N. S.) 303; 44 L. R. A. (N. S.) 57; L. R. A. 1916F, 864; 35 L. R. A. 33.

   Bird, J.

In the year 1905 C. A. Kent of Detroit conveyed certain lands in Bay City to the regents of the university, the same being a gift, for the use and benefit of the university. Subsequently the regents sold a portion thereof to petitioner. Prior to the sale, however, a special assessment for sewer purposes had been made thereon by the local authorities. The assessment remaining unpaid the premises were ineluded in the auditor’s annual petition filed in the circuit court of Bay county for the sale of lands for delinquent taxes. Petitioner intervened and made the objection that at the time the assessment was made it was the property of the university, and therefore invalid, as no valid tax or assessment could be levied thereon. This objection was overruled at the hearing, and petitioner has appealed.

The one question presented for solution is whether vacant real estate owned by the university, but not actually used for any purposes in connection with its affairs, can be subjected to a special assessment for local improvements. Counsel for relator argues that the assessment is invalid on the ground that the board of regents is a constitutional body, has independent control of the affairs of the university, and therefore its property is not subject to the acts and control of the legislature.

We think it is clear that if this property is exempt from the assessment in question it must be so by force of some legislative acts. The Constitution does not deal with’ exemptions from taxation. There being no constitutional restriction on this power of the legislature, it follows that it can exercise the power of exemption as it chooses. It has exercised this power by declaring in section 7 of the tax law that “all public property belonging to the State of Michigan shall be exempt from taxation.” 1 Comp. Laws 1915, § 4001. This and similar language has been the subject of much construction by the courts, and in the majority of cases it has been held not to include special assessments for local improvements. Chicago Schools v. City of Chicago, 207 Ill. 37 (69 N. E. 580); State v. Robertson, 24 N. J. Law, 504; School District of Ft. Smith v. Board of Improvement, 65 Ark. 343 (46 S. W. 418); Sioux City v. School District, 55 Iowa, 150 (7 N. W. 488); City of Atlanta v. Presbyterian Church, 86 Ga. 737 (13 S. E. 252, 12 L. R. A. 852); Hassan v. City of Rochester, 67 N. Y. 528; Sewickley M. E. Church’s Appeal, 165 Pa. 475 (30 Atl. 1007); Inhabitants of Essex County v. City of Salem, 153 Mass. 141 (26 N. E. 431); Cooley on Taxation (2d Ed.), p. 172.

The holding in most of the cases is that these words of exemption apply only to general taxation. It appears, however, to have been settled in this State that these words of exemption protect public property from local assessments (City of Big Rapids v. Board of Sup’rs of Mecosta Co., 99 Mich. 351 [58 N. W. 358]); but this has been construed to mean such property as is used for governmental purposes (Newberry v. City of Detroit, 164 Mich. 410 [129 N. W. 699, 32 L. R. A. (N. S.) 303]). In this case it was held that a public park was not exempt from special assessment for paving purposes because not being used for governmental purposes. If the general words of exemption in the statute do not apply to property owned by a municipality which is not used for governmental purposes, a like reasoning seems to lead to the conclusion that real estate owned by the university, but not used for governmental purposes, would not be included within the exemption. The university as well as the municipality is a corporate entity, made so by force of the Constitution, and both are State agencies.

The reason which underlies the exemption of public property from general taxation is that it would be without profit to assess public property as the tax would have to be paid out of the general fund to which all contributed, but this reason does not exist when special assessments are made for local improvements. Whenever property is exempt from special assessment the remaining property owners included within the special assessment district must pay for the benefits which accrue to the exempt property. This is so manifestly unfair that I am of the opinion that it was not the intention of the legislature to exempt property from special assessments which was owned but not used by the public authorities for governmental purposes. This question was before the California court on a similar state of facts involving its university, and the same arguments were urged in support of the exemption. But that court held that inasmuch as the property of the university was not made use of in connection with the affairs of the university, it was subject to the special assessment. It was there said in part:

“The principle is well established that' where any of such lands are not directly and necessarily used for a public purpose they may be subjected to the payment of special assessments for benefits. And this is in consonance with justice and equity. For to assess certain lot owners upon a street for all the cost of the work, part of which is for the benefit of a public institution, is to enhance the value of the university property at the expense of the few, instead of by taxation upon all the people at the expense of all. So it is said in Hassan v. City of Rochester, 67 N. Y. 528:
“ ‘A different rule would compel individual lot owners to pay-assessments levied for improvements which, were a benefit to the State lands, without any adequate advantage, and in many instances impose a burden which would be extremely onerous and produce great injustice.’ ” City Street Imp. Co. v. Regents of the University of California, 153 Cal. 776 (96 Pac. 801, 18 L. R. A. [N. S.] 451).

In view of the fact that the record discloses that the property in question was vacant unimproved lots in the city of Bay City, and that they were not being used for governmental purposes of the university, we think the conclusion of the trial court should be affirmed.

Kuhn, C. J., and Moore, Steere, and Brooke, JJ., concurred with Bird, J.

Fellows, J.

(dissenting in part). I am for affirmance, but not for the reasons stated by Mr. Justice Bird, and by the learned trial judge. I do not agree that a municipal unit of the State may enforce by sale for delinquency a special assessment upon the property held by its creator, the sovereign, the State, even though such property be not in use for governmental purposes, nor that this court committed itself to such doctrine by the case of Newberry v. City of Detroit, 164 Mich. 410 (129 N. W. 699, 32 L. R. A. [N. S.] 303). That case involved a special assessment for paving purposes, and the question involved was whether the city should assess upon property owned by itself and not used for governmental purposes its proportion of the costs. The charter provision was as follows:

“For the purpose of such assessment, the lots and parcels of real estate situated on said street, and fronting the portion thereof ordered to be improved, shall constitute one local assessment district”; * * * the cost and expense of the paving to be assessed according to frontage. Detroit Charter 1904, §§ 266, 267, pp. 182-184.

It was held that the municipality should assess upon its own property, not used for governmental purposes, its proportion of the cost of the local improvement, and that such property was not exempt from such special assessment. This- was the question there before the court and there decided. That case is not authority to the point that property owned by the State is subject to sale for failure to pay local assessments, but only to the point that property owned by the municipality, and not used for governmental purposes, should pay its proportion of the cost of local improvements made under the provisions of its charter. In the instant case the State parted with its title to the property on June 24, 1912. On March 24, 1913, the tax roll for this special assessment was approved by the board of public works, and the certificate of the comptroller was attached and the entire assessment approved May 1, 1913. The ordinance ordering the improvement was passed July 3, 1911, but this special assessment did not become due until nearly a year after the State had parted with its title and the property had become subject to private ownership. In the case of Case v. City of Saginaw, 196 Mich. 687 (163 N. W. 115), the writer expressed the view:

“That the lands were not liable for special assessments falling due while they were owned and held by the State, but were liable for such special assessments as became due after they became subject to private ownership.”

I am unable to distinguish the facts in that case from those in this case. There, as here, the property was vacant city property, used for no governmental purpose; it had been, bid off by the State for delinquent taxes. One of the special assessments in that case, as was the assessment in the instant case, was for the construction of a sewer. -Entertaining the views there expressed, I think this case should be affirmed.

Ostrander, J.

(dissenting). It is a sound rule, approved by this court (City of Big Rapids v. Board of Sup’rs of Mecosta Co., 99 Mich. 351 [58 N. W. 358]), that property owned by the State, or by the United States, or by a municipality for public uses, is not subject to taxation, unless so provided by positive legislation. The rule is the same whether the tax sought to be imposed is a general or a special tax, an exaction for general or for special local purposes. The application of the rule is not affected by the fact that the legislature may have expressly exempted such property from, taxation.

In Iron Mountain Public Schools v. O’Connor, 143 Mich. 35 (108 N. W. 426), it appeared that after land had been listed for taxation, the roll completed, approved by the board of review, and returned to the board of supervisors for equalization, the petitioner bought the land for school purposes. Subsequently, the tax was spread thereon and not paid. The land was returned delinquent and sold at the annual tax sale under the usual decree. The school district filed its petition to vacate and set aside the decree and cancel and set aside the deed made upon the sale. There was a demurrer to the petition, which was overruled. The order overruling was set aside by this court upon the ground that the land was subject to the assessment when it was made and when the township .board of review passed upon and reviewed the assessment, and no power was lodged in any person to thereafter take from the roll property listed therein; that there must be some definite period when, a purchaser, whose property is generally exempt, must purchase property subject to the tax levied or to be levied thereon. Usually, the question whether a tax must be paid by one person or by another arises in cases where the land is subject to taxation, and between the vendor and the purchaser. No such question is involved here.

The land here was not liable to assessment when the proceeding to assess it was begun because it belonged to the State. The title, it is true, was in the regents. But as affecting the question here involved the beneficial owner was the State. Auditor General v. Regents of University, 83 Mich. 467 (47 N. W. 440, 10 L. R. A. 376). Under the rule stated, it was. not liable to be assessed for a special improvement because it belonged to the State, and there was no law which permitted land so owned to be subjected to assessment and sold for a tax or levy for special improvements. The title to the land passed to the regents of the university in 1905. The regents sold it to appellant in June, 1912. Before that time the city of Bay City had ordered the construction of the sewer, a survey and estimate of cost had been made, reported and approved, a contract for the construction of the sewer had been let, and the sewer was completed in the summer of 1912. The roll of the special assessment was made and approved in March, 1913. The proceeding was a single one; the validity of the assessment depending upon the lawfulness of the first quite as much as upon the legality of the last step or act taken therein. As. between the municipality instituting the proceeding and its officers and the land in question, jurisdiction to subject it and its owner to' the exaction attached when the proceeding was instituted. Appellant bought it subject to no lien. It purchased it from an owner in whose hands, it was not liable to the assessment.

It is my opinion, therefore, that the decree should be reversed and one entered annulling the tax complained about.

Stone, J., concurred with Ostrander, J.


source: Caselaw Access Project

author: Bird, J.

license: Public Domain

text:
    STEWART v. LAWSON.
    1. Landlord and Tenant — Eviction—Conduct oe Cotenants.
    There is no eviction of a tenant in a flat building, barring recovery for rent, because the landlord, upon notice, fails to compel other tenants to cease offending such tenant by the use of offensive language and conduct, under a covenant for quiet and peaceable possession and a clause in the tenant’s lease forbidding the use of foul and abusive language so as to become a nuisance to other tenants and neighbors, where the tenants causing the disturbance have no title interest in the premises and their conduct is not encouraged by the landlord, even though the leases of the other tenants contain similar clauses against the use of such language, and the offending tenants might have been ejected because thereof.
    2. Pleading — Court Rules — Notice.
    Under Circuit Court Rule No. 23, if the defendant, in an action on a lease, desires to rely upon a release he must set it up in a notice under the general issue.
    Error to Wayne; Van Zile, J.
    Submitted January 12, 1917.
    (Docket No. 124.)
    Decided December 28, 1917.
    Assumpsit in justice’s court by M. Frances Stewart against Joseph G. Lawson for rent. There was judgment for plaintiff, and defendant appealed to the circuit court. Judgment for defendant. Plaintiff brings error.
    Reversed.

      Edward, A. Barnes, for appellant.

      John D. Barger (James Swan, of counsel), for appellee.
   Bird, J.

Defendant became a tenant of plaintiff on the 1st day of September, 1914, in a four-family flat building on Lathrop avenue in the city of Detroit, under a written lease for one year. The lease was in the ordinary form, with the addition of the following clause:

“Nor shall any of the family or its visitors use foul, abusive, or offensive "language, or become a nuisance to other tenants or neighbors, but, on the contrary, shall at all times conduct themselves peaceably and in a ladylike or gentlemanly manner during the term of this lease.”

Defendant occupied the premises and paid the rent to March 1, 1915, when he removed therefrom. This suit was instituted to recover the rent for the balance of the year. Defendant claimed that he removed from the flat under circumstances amounting to an eviction; that the conduct and language of some of the other tenants in the flat were so intolerably offensive that he could not remain; that he called plaintiff’s attention to it, and she consented that he might move out if it did not abate within a stated time; that matters did not improve within the stated time, and in consequence thereof he removed from the flat.

Plaintiff denied the authority of her agent to release defendant, and the agent denied doing so. She also took the position that, if defendant were evicted, it was by reason of the act of third parties, for whose acts she was not responsible.

Defendant based his defense on the covenant in his lease for quiet and peaceable possession of the premises, and upon the additional clause heretofore referred to. He contends, that it was the duty of plaintiff, when notified, to abate the nuisance, and her failure in this respect makes her liable for the eviction, and bars her right to recover the rent for the balance of the term. The question, therefore, is how far the landlord is chargeable to one tenant for the misconduct and unlawful acts of other tenants. The law on this question does not appear to be involved in much doubt. It is said in Jones on Landlord & Tenant, § 361, that:

“Under a contract for quiet enjoyment the lessor does not covenant against the acts of wrongdoers; and to constitute a breach of this covenant the person who does the act must have some lawful interest or right in the realty whereby the tenant is evicted.”

In 18 Am. & Eng. Enc. Law (2d Ed.), page 220, the general rule is stated to be that:

“As a general rule a landlord is not liable to one tenant for the improper use of a part of the building by another tenant. If, however, the landlord authorizes one tenant to do upon the premises wrongful acts whose effect is to injure another tenant, which result is the natural and proximate consequence, of such acts, he is liable therefor.”

At page 625 it is said:

“The covenant for quiet enjoyment merely protects the lessee from disturbance of his possession by the lessor or persons claiming under him, or by the owner of the paramount title; the lessor incurs no liability for disturbance through the wrongful or tortious acts of third persons.”

The rule is stated in 24 Cyc. at page 1132:

“Trespasses or other acts of third persons impairing the usefulness or enjoyment of the premises demised do not amount to an eviction by the lessor, unless the acts from which the eviction is asserted to result were committed under the direction of, or at the instance or with the consent of, the lessor.”

Quoting again from Jones on Landlord & Tenant, § 360, it is said:

“From the doctrine that the landlord is not responsible for the acts of strangers, it would follow that an act done by one tenant in a tenement house without the authority, consent, or connivance of the landlord cannot be treated as an eviction by other tenants.”

It is clear under this rule that no eviction took place which would bar a recovery of the rent, there being no evidence that the tenants causing the disturbance had any title interest in the premises or that plaintiff in any way encouraged it. The most that can be said, if the testimony of defendant is to be believed, is that plaintiff suffered it to continue. This would not be sufficient to bind her, unless she gave some active support or encouragement to their wrongful acts. But it is said the additional clause in the lease heretofore referred to changes this rule; that plaintiff under this clause might have ejected them, as their leases contained the same clause, but defendant could not. This might be true if sufficient cause existed, even if that clause had not been inserted. The fact that the leases of the other tenants contained this clause would not so affect the contract between plaintiff and defendant as to render the general rule inapplicable. It has been held several times by this court that any act or acts of the landlord which deprive the tenant of the beneficial enjoyment of the premises would amount in the law to an eviction. Pridgeon v. Boat Club, 66 Mich. 326 (33 N. W. 502); Adams v. Werner, 120 Mich. 432 (79 N. W. 636); Grove v. Youell, 110 Mich. 285 (68 N. W. 132, 33 L. R. A. 297); Kuschinsky v. Flanigan, 170 Mich. 245 (136 N. W. 362, 41 L. R. A. [N. S.] 430, Am. & Eng. Ann. Cas. 1914A, 1228); Bamlet Realty Co. v. Doff, 183 Mich. 694 (150 N. W. 307). In the cases cited the act or acts of the landlord were involved; whereas in the present one it was the act or acts of third parties which deprived defendant of the beneficial use of the premises. It follows that, so far as this question was concerned, plaintiff was entitled to a directed verdict.

Testimony in support of defendant’s second defense, that plaintiff’s agent consented to and did release him, was strenuously objected and excepted to by plaintiff on the ground that it was an affirmative defense, and consequently could not be raised without notice under the general issue. Counsel’s objection was overruled, the court being of the opinion that the notice was broad enough to admit it. The notice filed by defendant sets out quite fully his first defense, but it gives no hint that a release would be shown or insisted upon. Under Circuit Court Rule No. 7b (new Rule No. 23, § 2), this was necessary. Sunlin v. Skutt, 133 Mich. 208 (94 N. W. 733); R. K. Carter & Co. v. Weber, 138 Mich. 576 (101 N. W. 818). The objection should have been sustained.

Other errors are assigned; but, as they are not likely to arise upon a retrial, they will not be considered.

The judgment must be reversed, and a new trial granted, with costs to the plaintiff.

Kuhn, C. J., and Stone, Ostrander, Moore, Steere, Brooke, and Fellows, JJ., concurred.


text:
    KNISELY v. PEOPLE’S SAVINGS BANK OF SAGINAW.
    1. Banks and Banking — Partnership—Power of Trustee — Ratification.
    The trustee, for a partnership, of an interest in a private bank, who has power to loan money, has also power to ratify the unauthorized act of one of the partners in depositing a draft drawn by the bank in favor of another bank in the latter in the name of a company in which such partner is interested and in loaning the funds to the company.

      2. Same.
    The unauthorized act of the member of the partnership was ratified where the trustee made no objection to the course pursued by such member and the bank accepted the notes of the company, accepted interest when due, renewed the notes, and when they went to protest, took steps to collect them from the maker and such partner, and, when the trustee in bankruptcy was appointed, upon the bank becoming insolvent, he, with full knowledge of the matter, attempted to collect the notes from such partner, and the bank did not complain of the irregular procedure of the bank receiving the deposit for nearly four years thereafter.
    3. Evidence — Admissibility—Fraud.
    Evidence of fraud upon the seller and depositors of the bank in the purchase of the interest in the private bank by the partnership, legal title to which was held in a trustee, was properly excluded where defendant bank receiving the unauthorized deposit of a draft of the private bank from a member of the partnership did not know of, and was not a party to, the fraud.
    Error to Saginaw; Gage, J.
    Submitted April 18, 1917.
    (Docket No. 140.)
    Decided December 28, 1917.
    Assumpsit by Samuel H. Knisely, trustee in bankruptcy of O. F., Thom and others, against the People’s Savings Bank of Saginaw for the amount of a draft. Judgment for defendant on a directed verdict. Plaintiff brings error.
    Affirmed.

      C. M. Browne. (R. L. Crane, of counsel), for appellant.

      Humphrey, Grant & Humphrey, for appellee.
   Bird, J.

This is a proceeding to recover from defendant the proceeds of a draft for $8,000 drawn in its favor by the Chippewa County Bank, in December, 1909. The Chippewa County Bank was a small private bank located at Detour, and in December, 1909, was owned by S. H. Knisely. On the 29th of that month Knisely sold and assigned his interest in the bank to Thomas F. Sullivan,,as trustee for O. F. Thom, J. D. McCann, and J. E. Thom, and the bank passed into their possession early in January, 1910. Among the assets of the bank was a deposit of $3,000 in the Sault Savings Bank, which had been carried as a reserve. Soon after taking possession of the bank Sullivan directed the cashier to draw a draft on the Sault Savings Bank for $3,000 in favor of defendant bank, giving as a reason that a larger yate of interest could be secured from defendant. J. E. Thom was in Detour at the time and about to return to Saginaw, and he was requested to take the draft and deposit it with defendant. He took the draft, and upon arriving at Saginaw went to the defendant bank and made a deposit slip showing that the draft was to be placed to the credit of the Flint Improvement Association (a company in which he himself was an officer), and tendered the same for deposit. The cashier hesitated because it was not indorsed by the Chippewa County Bank, but after some explanation as to how it came to be drawn in that way, and after compliance with the suggestion of the cashier that Thom sign his name on the back to show the source through which it came, the deposit was accepted and credited to the account of the Flint Improvement Association. Thom at once wrote to the Chippewa County Bank, stating that the defendant would not pay 3 per cent, interest in accordance with their understanding, and therefore he had loaned it. to the Flint Improvement Association and taken their promissory notes bearing 7 per cent, interest, and inclosed the notes therewith. The notes appear to have been accepted by the bank and entered upon its books among the loans and discounts in the usual way. When they became due the interest thereon was paid by the Flint Improvement Association and the same were renewed for three months. When the notes, again became due, in June, 1910, they were not paid, and the Chippewa County Bank sent them to an attorney at Saginaw for collection against Thom and the Flint Improvement Association. Prior to this, the deposit had been drawn upon and exhausted by the Flint Improvement Association. The attorney was not successful in making the collection from either one. In August, 1910, the Chippewa County Bank was adjudged a bankrupt, and in December, 1911, plaintiff was appointed trustee in bankruptcy of the assets of the bank. After becoming trustee plaintiff appealed in vain to Thom to pay the $3,000, and the collection was again placed in the hands of the Saginaw attorney for collection. He being unable to make the collection from Thom, demand was made upon defendant for the deposit, and upon its being refused this suit was instituted.

It was plaintiff’s claim upon the trial that Sullivan and his cohorts were financially irresponsible; that they deliberately entered into a scheme to defraud Knisely, the owner, and the depositors of the bank, and that no copartnership was ever formed between them; that the proceeds of the draft in question could not be passed to the credit of a third party without the indorsement or consent of the Chippewa County Bank. And it being conceded that it was never so indorsed, the proceeds of the draft were still owing to the estate which the plaintiff represented.

The defendant insisted that the transaction was a legal one, but argues that if it were not and Thom had no authority to order the proceeds placed to the credit of the Flint Improvement Association, the unauthorized act of Thom was ratified by the bank, and also by the trustee. The trial court took this view of it, and directed a verdict in favor of the defendant, and the question is: Was the trial court right in disposing of the matter as he did?

It is conceded that Knisely owned the Chippewa County Bank in December, 1909. He was offered $1,329.13 for his equity therein. He accepted the offer, received payment, and assigned his equity to Sullivan as trustee, and gave the purchasers possession of the bank and its assets. Thereafter the purchasers had the management and control of the affairs of the bank until some time in August, when it was adjudicated a bankrupt. Sullivan appears to have been in control, and being in control had a right to transfer its reserve from the Sault Savings Bank to the defendants. He ordered this to be done. His orders were not complied with, but the fund was converted into a loan by one of the copartners to an irresponsible concern. At this stage of affairs Sullivan had a right to insist that the loan be credited to the Chippewa County Bank, but he did not do so. The bank accepted the notes of the Flint Improvement Association, and entered them in their books in the way that other loans were entered. When they were due it accepted the interest thereon and renewed the notes for an additional 90 days, and after they went to protest in June the bank took steps to collect them from the maker, and also from Thom. Later when plaintiff became trustee, with full knowledge of the affair, he attempted to collect them from Thom. The Chippewa County Bank did not then, nor did it for nearly four years thereafter, complain to defendant that its action in placing the draft to the credit of the Flint Improvement Association was irregular. Had the draft been credited to the bank, in accordance with instructions, it could have loaned it on the following day to the Flint Improvement Association, if it saw fit. If Sullivan, as manager of the bank, had the power to loan it he had the authority to affirm and ratify the unauthorized act of Thom in making it. Mechem’s Outlines of Agency, p. 45. As defendant’s counsel point out, the act of Thom was ratified by every one who had any authority to do so. We think the conceded facts bring the case within the rule of implied ratification. Peninsular Bank v. Hanmer, 14 Mich. 208; Carpenter v. Rodgers, 61 Mich. 384 (28 N. W. 156, 1 Am. St. Rep. 595); Ballston Spa Bank v. Marine Bank, 16 Wis. 120; Whitney v. Union Trust Co., 65 N. Y. 576; J. I. Case Threshing Machine Co. v. Meyers, 78 Neb. 685 (111 N. W. 602, 9 L. R. A. [N. S.] 970).

Complaint is made by plaintiff because the court would not admit testimony tending to show a fraudulent intent upon the part of Sullivan and some of his associates to defraud Knisely and the depositors of the bank. This testimony would appear to be immaterial, unless defendant was a party to the fraud or had some knowledge of it, and we do not understand that there was any offer to show this. The owner sold his interest to the purchasers and placed them in, possession. They apparently had the right to conduct the affairs of the bank, and did so conduct them from January until the following August, when the copartnership was adjudicated a bankrupt. If there were fraud in the purchase to the extent that title to the bank did not pass to Sullivan and his associates the transaction with defendant would not be thereby affected, unless defendant was a party to or knew of the fraud. 35 Cyc. p. 359, and cases. We think the trial court was right in holding that the testimony was immaterial.

In view of this conclusion, the other assignments of error which are argued in plaintiff’s brief are rendered unimportant. We think the trial court took the proper view of it, and the judgment will be affirmed.

Kuhn, C. J., and Stone, Ostrander, Moore,Steere, Brooke, and Fellows, JJ., concurred.


text:
    LEE v. LEE.
    1. Novation — Parties—Waiver.
    A father entered into an oral agreement with his son whereby the latter was to stay on the farm with his parents and work it, and both parties were to live out of the undivided profits, and any cash obtained was to be divided one-third to the father and two-thirds to the son, and the son was to pay a certain sum to each of the other children upon the father’s death, and have the farm and all the personal property. The father made his will in accordance with the agreement and the son lived on the farm in accordance with the agreement until his death, and his widow continued to live on the farm and operate it the same as her husband had done for two years, when they all left the farm and rented it, the widow receiving the rent. The father left and lived with one of his children and made a new will by which the widow and the children were to inherit the farm at his death and the other children to receive a larger sum each than provided by the first will. The mother died during the life of the son. Held, that the father waived any right of homestead or the right to terminate the contract because of no mutuality after death of the son, and that ■ the effect of such waiver was to create a new contract with the widow under the same terms as the original contract with the son.
    2. Specific Performance — Oral Contracts — Novation—Equity.
    Where a father waived his right to have a contract, whereby his married son agreed to live .on the farm with the parents and run it, and both parties were to live out of the proceeds of the farm, and all cash received was to be divided between them, one-third to the father and two-thirds to the son, and the son was to have the farm after the father’s death, but was to pay each of the other children a stated sum, declared invalid because of lack of mutuality after the death of the son, by allowing the son’s widow to live on the farm and manage it the ■same as the son for two years, when they all left the farm and lived in a home provided by the widow, the mother having died during the son’s lifetime, and rented the farm, the widow receiving the proceeds, and the father left and lived with another child and gave his son-in-law a power of attorney to look after the farm and collect the rent, and changed his will in favor of the widow and her children, hut gave each of the other children a larger sum, specific performance of the contract with the widow was decreed, but the father was allowed the rent of the farm during his lifetime and the widow was required to pay interest on the proceeds of personal property sold on leaving the farm, but, at the expiration of the lease, the father was to he allowed the option to require the widow and children to live on the premises under the contract.
    Appeal from Livingston; Miner, J.
    Submitted April 16, 1917.
    (Docket No. 83.)
    Decided December 28, 1917.
    Bill by Gertrude D. Lee and others against Joseph B. Lee for the specific performance of a land contract. From .a decree for plaintiffs, defendant appeals.
    Affirmed.

      William P. Van Winkle & Son and Louis E. Homlett, for plaintiffs.

      Francis J. Shields (Person, Thomas, Shields & Silsbee, of counsel), for defendant.
   Bird, J.

The bill of complaint was filed in this cause for the purpose of enforcing an oral contract to convey a farm of 180 acres, situate in Marion township, Livingston county. The case made by the bill is very well stated by counsel, as follows:

“The plaintiffs are the wife and two sons and sole heirs at law of George W. Lee, deceased. The defendant is the father of George W. Lee, deceased. Defendant, during his active life, was a farmer living in the township of Marion, Livingston county, Mich., and is now 87 years of age. His farm in the township of Marion consisted of 180 acres, upon which he lived for nearly 60 years, and is the property in dispute in this case. His wife died July 12, 1906. They had six children, five girls, Martha Burnett, Lucy Winchell, and Ida Backus, of Howell, Mich., May Potter, of Lansing, and Lettie Force, of Fowlerville, and one son, George W. Lee. All of these children are now living with the exception of the son. George W. Lee died July 15, 1912, of blood poisoning following the extraction of a tooth, having been a strong, able-bodied man up to within a few days of his death. He was married October 3, 1894, and was then 29 years old. Prior to his marriage George W. Lee had always lived at home and worked for his father upon his farm. After his marriage he and his wife continued to live with his father and mother, all living in the house as members of one family. At that time (1894) all of defendant’s daughters had married and left home, except the youngest daughter, Lettie Force, who married and left home about one year after George’s marriage. George was working his father’s farm on shares, one-third to himself and two-thirds to his father.
“About the year 1896 George Lee became dissatisfied with the arrangement under which he was working, and told his father that unless he could make a .more favorable arrangement he would be obliged to leave the farm and start out for himself. His father was then nearly 70 years old, and wished his son to stay on the farm. For the purpose of inducing George to stay, he made the following agreement with him; George was to work the ^farm, and both families to live out of the undivided products of the farm. The cash from whatever was sold was to be divided two-thirds to George and one-third to his father.
“At his father’s death George was to have the farm and all of the personal property and pay to each of the five daughters the sum of $400. George accepted the proposition and remained on the farm continuously thereafter until his death several years later. Immediately following this agreement the house on the farm was made into a double house. George assumed the management of the farm, and both families lived out of the undivided products thereof, and whatever cash was obtained was divided between the father and the son, according to their agreement. Defendant’s last will was in accord with this agreement in which he left all his property to his son, George, subject to the payment of $2,000 to the five daughters. This will was shown to his son and his son’s wife, who read it in the presence of the mother, and thereafter it was kept in a drawer in the house, where all the family might see it at any and all times for some 17 years, or up to and until after the death of George W. Lee.
“During the years from 1896 until 1912 George W. Lee operated and managed the farm as if it was his own, remodeled the house, rebuilt and enlarged the barn, put up new small buildings, such as comcrib, granary, wagon shed, built a silo, put in a system of running water, built fences, and put in some tile ditch. He paid all the taxes, and did all the work on the place except such light work as the defendant was able to do.
“Mrs. Joseph B. Lee, wife of the defendant, died of a cancer in the year 1896. Prior to her death she was cared for largely by George W. Lee and his wife. After her death the defendant closed his home and lived with his son, George, as a member of his family until his death, which occurred July 15, 1912. After George’s death the plaintiffs and the defendants continued to live on the farm as members of one family, working the farm with the assistance of hired help. Gertrude E. Lee (Mrs. George W. Lee), plaintiff, operated the farm, hired the help, paid the taxes, looked after the repairs, and did all things connected with the farm with the consent, advice, and counsel of the defendant. In the fall of 1914 plaintiff and defendant concluded that they could not operate the farm successfully, and decided to rent and leased, it to one Cameron for a period of three years from November 1, 1914, for money rent; both plaintiff and defendant signing the lease. Mrs. Lee’s parents lived in Lennon, Mich., and she concluded to build a house in Lennon and go there to live, and defendant was to go with her; he consenting to the arrangement and participating in the preparation of the home. She did build her house and go there to live, and defendant went with her.
“Before leaving the farm an auction was held in the name of Gertrude E. Lee, who advertised the sale by the usual auction bills. All of the cash and notes realized from the sale of the personal property were turned over to Mrs. Lee with the consent and under direction of defendant. The defendant also directed the tenant to pay the rent to Mrs. Lee and caused bills for fencing and other repairs to the farm to be sent to her.
“After the parties to this suit had been Jiving in Lennon a few weeks defendant left to visit his daughter, Mrs. Backus, of Howell. He never returned to the home of plaintiff, but shortly thereafter gave his son-in-law, Mr. Backus, a power of attorney to look after his farm. He changed his will so that the plaintiffs should inherit this farm at his death, but charged with the payment of $5,000 to his daughters instead of $2,000, as previously provided. Later Mr. Backus ordered the tenant on the farm not to pay the rent to Mrs. Lee and made some effort to sell the farm.
“The bill of complaint in this cause was then filed on January 31, 1916, to enforce the oral agreement; they offering to continue in the performance of the said agreement so long as defendant should live. The estate of George W. Lee was duly probated in the probate court of Livingston county, and a decree of assignment .made by said court transferring all property owned by him at the time of his death to his widow and two sons (the plaintiffs here) in equal shares to each.”

At the hearing which followed considerable testimony was taken. A study of the record discloses that there was very little disagreement between the widow and defendant as to what was done in fulfillment of the contract after the death of George. It is worthy of comment in this connection that the hearing before the chancellor was not characterized by the usual ill feeling and bitterness which usually attends the litigation of family affairs. The chancellor was persuaded that the contract had been established as alleged, and that whatever right the defendant may have had to object on the ground that the premises in-eluded a homestead had been waived by him. After reviewing the testimony and acts of the parties at some length his final conclusions are as follows:

“Therefore the court is of the. opinion that he has waived any defense which he might have had by reason of the homestead or by reason of his son’s death, and that the complainants in this case are entitled to a decree as prayed for in the bill of complaint. But it appearing that the defendant was to have one-third of the net proceeds of the farm, and it also appearing that it was understood that complainant’s husband should live on the farm and work it, therefore the court is of the opinion that the defendant should have the rent of the farm now due from the tenant and to become due, he, said defendant, to pay the taxes and to keep the buildings insured for the joint benefit of himself and complainants, and that defendant should have the right to rent said premises or occupy the same and have the net proceeds of the same after paying the taxes and the insurance aforesaid, and this should continue during the life of said defendant.
“The evidencé in this case is not clear as to the exact amount of personal property that was on said farm at the time that complainant’s, husband entered into this contract and began working the farm under the same, and it does not show clearly the amount of personal property belonging to the defendant at the time of the auction sale, but there is some evidence that at the time that complainant’s husband took possession of said farm under said agreement the personal property at that time was of the value of $1,000. So in the opinion of the court it is proper that the defendant should receive interest upon the same at 5 per cent, from the date of the auction sale during his lifetime, to be paid by complainants.
“Defendant has the option at the expiration of the lease of said premises by the tenant occupying the same to require complainants to live upon said premises and work the same and live in the house with him, and receive his portion of the net proceeds, being one-third, as originally provided in said contract; but in this case during said time he is to receive no other income except one-third of the net income of said premises.
“If the defendant shall elect to have said complainants live on said premises at the termination of the-lease now in existence by the tenant occupying said premises, he shall make such election within 90 days after the filing of the decree, and file such election with the clerk of said court, and serve a copy of the same upon complainant Gertrude Lee.”

We have read the record in this case with much interest, and we think the testimony amply sustains the conclusions of fact arrived at by the chancellor, and if there are no legal barriers in the way, his conclusions should be accepted and approved by this court. The record impresses us that the oral agreement was made as claimed, and that defendant was pleased with it while George lived. They appeared to have gotten along with very little friction of any kind, and it does not appear that defendant changed his mind after George was gone as to where the title should go. He did change his mind as to the amount the daughters should receive from his estate, but he still wished the farm to go to George’s family. In pursuance of this he altered his will, and substituted George’s family as beneficiaries instead of George, and for two years by word and act recognized them as parties to the contract and accepted their efforts and services as a fulfillment of the terms of the contract. But it is said that after George’s death there was no mutuality in the contract. True, upon the death of George the mutuality of the contract disappeared, and had defendant then insisted upon his legal rights the case would now present a different aspect and be more easy of solution, but instead of doing so he substituted new parties in place of George. The new parties accepted the responsibilities and obligations and after-wards paid, and defendant accepted the portion reserved in the contract as his portion. After doing this ought he now to say that there is no mutuality of contract? After consenting to be substituted in place of George and carrying out the terms of the contract for two years, could the widow be heard to say that she was not bound to carry the contract to completion? We think not.

The situation is no different in my opinion than it would have been had defendant made a written agreement with plaintiffs after the death of George, agreeing therein to do the things he had agreed to do in the original contract, in consideration of their doing the' things which were incumbent upon George to do. This, then, is a new agreement with plaintiffs to carry out the terms of an incompleted contract. This new agreement was made after the death of defendant’s wife, and therefore involves no question of homestead. The testimony shows that this new agreement was performed upon the part of plaintiffs until interrupted by the act of the defendant, and that they stand ready to go forward and complete it. While it is not usual to grant relief against one who has agreed to convey property under such circumstances, it is permissible where great injustice may follow if relief be denied. We think this case comes within that class, and that relief therein is justified by our recent holding in Hogan v. Hogan, 187 Mich. 278 (153 N. W. 678).

As the chancellor reached the right conclusion, the decree will be affirmed, with cbsts to plaintiffs.

Kuhn, C. J., and Stone, Ostrander, Moore, Steere, Brooke, and Fellows, JJ„ concurred.


author: Bied, J. Ostrander, J.

text:
    CROZE v. QUINCY MINING CO.
    1. Adverse Possession — Evidence—Burden of Proof.
    Whether entry is made on land as a cotenant or as a stranger the burden of establishing title by adverse pos- ' session is on the person making the entry.
    2. Same.
    The quantum of evidence necessary to establish the defense of title by adverse possession is much less in case of entry as a stranger than as a tenant in common.
    3. Same — Tenants in Common — Intent.
    In case of cotenants ap ouster is not effected, unless the possession asserted as adverse has been taken and continued with the intent to oust the other tenants.
    4. Same.
    Where a cotenant claiming title by adverse possession knows that an interest in the property was assessed for 15 years before suit to a claimant of such interest and the taxes paid by him, and, during the time, through its attorney, attempted to buy claimant’s interest, such facts constitute a recognition of claimant’s title and tend to show the holding of possession of such cotenant without the intention of ousting claimant.

    5. Evidence — Admissibility.
    Evidence that defendant attempted to purchase plaintiff’s interest as cotenant was inadmissible, in an action of ejectment, on the question of adverse possession, where the authority of an attorney to represent defendant in the purchase was not shown.
    6. Tenants in Common — Adverse Possession — Inconsistent Uses.
    The use by a cotenant, a mining company, of cut-over lands, for the purpose of obtaining water for use on its adjoining land and in the locomotives of its railroad passing over a corner of the land, is not a use inconsistent with the possession as cotenant.

      Error to Houghton; O’Brien, J.
    Submitted April 5, 1917.
    (Docket No. 47.)
    Decided December 28, 1917.
    Rehearing denied March 28, 1918.
    Ejectment by John M. Croze against the Gjuincy Mining Company. Judgment for defendant on a directed verdict. Plaintiff brings error.
    Reversed.

      J. F. Hambitzer, for appellant.

      Hanchette & Lawton, for appellee.

      On the question of presumption of ouster of one tenant in common from long continued undisturbed possession of another, see note in 10 L. R. A. (N. S.) 185.

   Bied, J.

This is an ejectment case in which plaintiff sought to establish his right in fee to a one-third interest in and to the northwest quarter of the southwest quarter of section 23, township 55 north, range 33 west, in Houghton county. Defendant had judgment by direction of the court, and plaintiff assigns error.

It appears from the record that Robert Metzner, owner and common grantor of the parties, in 1873 conveyed an undivided one-third interest in the premises to John Ellenbecker, and in the same year conveyed a two-thirds interest therein to Frederick Voss. Ellenbecker, in March, 1890, conveyed the one-third interest to Peter Primeau, who, in turn, conveyed the same to plaintiff, in October, 1914. Voss conveyed the two-thirds interest to Charles D. Hanchette in July, 1888. In May, 1888, one Shelton, who had received deeds from the auditor general for delinquent taxes for the years 1876 to 1881, also conveyed his interest to Hanchette. Hanchette immediately thereafter conveyed his interest to defendant. Defendant went into possession soon after its purchase, and now claims to own the entire 40 acres. This 40 is what is termed “cutover lands,” and has never been cultivated. The stamp mill of defendant is located on an adjoining 40, and its boilers are supplied by water from a creek which runs through one corner of the land. Defendant’s railway as well as the Copper Range Railway passes over one corner of it, and their locomotives are supplied with water from the same source. Aside from these uses no other use appears to have ever been made of the premises. From the date of its purchase to the year 1900 defendant paid the taxes on the entire tract. Since 1900 the taxes have been assessed, two-thirds to defendant, and one-third to the plaintiff, and both have paid their respective taxes. The plaintiff learned, in August, 1915, that defendant questioned his title to the one-third interest, and soon thereafter he brought this suit to have it determined.

Defendant claims it went into possession under a quitclaim deed purporting to convey the entire fee, that its possession has been exclusive and hostile for upwards of 20 years, and that whatever rights plaintiff had therein have lapsed by force of the statute of limitations. Plaintiff claims that defendant’s quitclaim deed conveyed only a two-thirds interest in the premises, and that its entry thereon was lawful, and that it thereby became a tenant in common with his grantors and afterward with himself; that its use during the years of possession has not been inconsistent with the fact of cotenancy; that it has never claimed to own the one-third interest, and has never expressly or impliedly given him, or his predecessors in title, notice that it was holding possession adversely to them, and therefore the statute of limitations never commenced to run — citing Donahue v. Vosper, 189 Mich. 78 (155 N. W. 407). It is further insisted by plaintiff that- during the time defendant has had possession it has recognized plaintiff’s title by permitting him to pay the taxes thereon and by attempting to purchase the one-third interest of his grantor, Mr. Primeau.

Defendant’s counsel concede that had defendant entered into possession under a quitclaim deed conveying an undivided two-thirds interest therein, it would have become a tenant in common with plaintiff, and before it could have set in motion the statute of limitations it would have had to notify plaintiff that it disputed his title, but it is insisted that it did not so enter; it entered under a quitclaim deed which was placed of record, purporting to convey the entire fee, and that this amounted in the law to a disseisin of plaintiff. The distinction counsel make appears to be supported by the authorities. But whether defendant entered as a cotenant or as a stranger, the burden was upon it to establish the fact of adverse possession. The quantum of evidence, however, necessary to establish, that defense, would be very much less if it entered as a stranger. This distinction is well pointed out in Foulke v. Bond, 41 N. J. Law, 527, where it was said:

“In the acquisition of title by adverse possession the distinction between strangers and tenants in common relates to the character of the evidence necessary to prove that the possession was adverse. The relations between the joint owners are presumed to be amicable rather than hostile, and the acts of one affecting the common property are presumed to be done for the common benefit. Freeman, Cotenancy, § 166. This presumption is liable to be overcome by the circumstances of the particular case. It is a rule of evidence merely, which enters into the question whether the possession is in fact adverse, and not a rule of law, which forbids the application of the statute of limitations to persons who occupy to each other the relation of tenants in common.
“It is with respect to those two essential qualities of the possession, on which title by lapse of time is founded — hostility in fact to the title of the true owner, and notoriety of the adverse claim — that the fact of a cotenancy between the parties becomes an important element. If the parties are strangers in title, possession and the exercise of rights of ownership are in themselves, in the absence of explanatory-evidence, proof of an ouster of the true owner; whereas, in cases of privity of title such as subsists between tenants in common, the acts of possession of one tenant will, in the absence of satisfactory evidence to the contrary, be referred to the community of title, and there must be clearer and more decisive evidence of an ouster by one tenant in common of his associate than is necessary to prove that a person having no right to possession had ousted an owner in severalty. Doe, ex dem. Reed, v. Taylor, 5 Barn. & Ad. 575, 2 Nev. & M. 508, L. J. 3 K. B. (N. S.) 67; Prescott v. Nevers, 4 Mason (U. S.), 330 (Fed. Cas. No. 11,390); Freeman, Cotenancy, § 221. An ouster by a tenant in common does not differ in its nature from any other ouster, in any respect, except in the degree of evidence required; in other cases the assumption of ownership is more clearly adverse; in case of a tenant in common such assumption of ownership, and the acts which indicate it, may be consistent with an acknowledgment of the rights of the cotenant, and therefore, acts which are decisive in the one case are equivocal and insufficient in the other.”

There is, however, a well-recognized exception to the foregoing rule, in the rule that in case of cotenants an ouster is not effected, unless the possession asserted as adverse has been taken and continued with the intent to oust the other tenants. Price v. Hall, 140 Ind. 314 (39 N. E. 941, 49 Am. St. Rep. 196); Maple v. Stevenson, 122 Ind. 368 (23 N. E. 854); Peter v. Stephens, 11 Mont. 115 (27 Pac. 403, 28 Am. St. Rep. 448); Evans v. Templeton, 69 Tex. 375 (6 S. W. 843, 5 Am. St. Rep. 71); Flynn v. Lee, 31 W. Va. 487 (7 S. E. 430); McDonald v. Fox, 20 Nev. 364 (22 Pac. 234); La Frombois v. Jackson, 8 Cow. (N. Y.) 589 (18 Am. Dec. 463); Miller v. Myers, 46 Cal. 535; Culver v. Rhodes, 87 N. Y. 354; Newell v. Woodruff, 30 Conn. 492; Cummings v. Wyman, 10 Mass. 464.

■ Applying this exception, if defendant knew that the one-third interest was assessed for 15 years before suit to plaintiff and the taxes paid by him, and if defendant, during the time, through its attorñey, attempted to buy plaintiff’s interest in the premises, these facts would be a recognition of plaintiff’s title and have a tendency to show that defendant was not holding possession with the intention of ousting plaintiff. Van Ormer v. Harley, 102 Iowa, 150 (71 N. W. 241).

But counsel say the testimony offered to show that defendant attempted to purchase plaintiff’s interest was inadmissible and, upon motion, was stricken out. We think the ruling of the trial court was right in excluding the testimony on the ground that the authority of the attorney to represent defendant in the purchase had not been shown, but we are of the opinion that there was sufficient in the case to make defendant’s intention a question of fact. There is no claim that defendant at any time claimed to own this one-third interest. Its limited use by defendant was not inconsistent with its possession as a cotenant. If defendant' had in good faith intended to claim the entire title it is difficult to understand why it should have permitted one-third of the premises to be assessed to plaintiff and his predecessors for 15 years, knowing, as it must have, that when they paid the taxes they did so in the belief that they were the undisputed owners thereof. The fact that defendant permitted this to be done for 15 years is very persuasive that it did not intend, during that time, to claim the entire title. While it is not conclusive of the intent, it is a circumstance to be taken into consideration in determining defendant’s intention. Rayner v. Lee, 20 Mich. 387; Murray v. Hudson, 65 Mich. 676 (32 N. W. 889); Sauers v. Giddings, 90 Mich. 50 (51 N. W. 265); Whitaker v. Shooting Club, 102 Mich. 460 (60 N. W. 983); Kastl v. Arthur, 135 Mich. 278 (97 N. W. 711).

In the first case cited in considering a like question the court said:

“And on this point, the evidence given by the complainant that the land ’was continuously assessed on the township roll as resident lands, and the taxes paid by some one in complainant’s chain of title, was not only admissible, but very significant.”

It is asserted by plaintiff that the tax deeds are void because of the absence of the dollar mark or sign or anything to indicate the value of the premises assessed, and that the court was in error in refusing to so charge the jury. The trial court.did not pass upon the validity of the deeds. The record in this court is not very satisfactory with reference to the tax record, from which the sales were made. The plaintiff does, not brief the question, and we do not understand defendant seriously contends they were valid. The use defendant sought to make of them was to characterize it§ entry on the premises under its defense of adverse possession, and counsel insist that for this purpose it would be immaterial whether they were valid or invalid. Under this theory we are unable to see how it would become important whether the deeds were valid or invalid. We think the trial court was in error in directing the verdict.

The judgment must be reversed, and a new trial ordered, with costs to plaintiff.

Kuhn, C. J., and Stone, Moore, Steere, Brooke, and Fellows, JJ., concurred with Bird, J.

Ostrander, J.

I think there was a quéstion for the jury, and therefore concur in the reversal of the judgment.


author: Bird, J. Bird, J. Kuhn, J.

text:
    MAURER v. GREENING NURSERY CO.
    1. Contracts — Statutes—Construction.
    A contract in violation of a statute is void, although not expressly declared so, and it is immaterial whether that which is forbidden is malum in se or merely malum prohibitum.

    2. Statutes — Partnership Certificates — Assumed Names.
    Act No. 101, Pub. Acts 1907 (2 Comp. Laws 1915, § 6349 et seq.), requiring the filing of certificates by persons doing business under assumed names, and Act No. 164, Pub. Acts 1913 (2 Comp. Laws 1915, § 6354 et seq.), requiring the filing of certificates by copartnerships, were intended to inform the public as to whom it was dealing with and'thereby serve its convenience, and to prevent imposition and fraud.
    3. Contracts — Payment—Noncompuance with Statute.
    Payment under a partnership contract cannot be enforced by the partnership which, although it does not come within the proviso in Act No. 164, Pub. Acts 1913, has not filed the certificate required by such act, and it is immaterial that the debtor actually knew who the members of the copartnership were. Kuhn, Moore, and Brooke, JJ., dissenting.
    4. Appeal and Error — Constitutional Law- — Questions Not Raised on Trial.
    The question of the constitutionality of a statute will not be considered by the Supreme Court, where such question was not raised in the court below.
    Error to Monroe; Gilday, J.
    Submitted April 3, 1917.
    (Docket No. 20.)
    Decided December 28, 1917.
    Resubmitted April 19, 1918. Former opinion affirmed July 18, 1918.
    Assumpsit by John Maurer and Charles A. Maurer, copartners as Maurer Brothers, against the Greening Nursery Company for an amount due on a building contract. Judgment for defendant on a directed verdict. Plaintiffs bring error.
    Affirmed.

      Thornton Dixon (Fred A. Baker, of counsel), for appellants.

      Oliver J. Golden, for appellee.
   Bird, J.

The plaintiffs entered into a contract to construct an office building for defendant in the city of Monroe. When the building was constructed and the final payment was due some controversy arose concerning certain set-offs which defendant claimed. Being unable to adjust their differences amicably this suit was instituted. Among other defenses made by defendant was the failure of plaintiffs to comply with either Act No. 101, Pub. Acts 1907 (2 Comp. Laws 1915, § 6349 et seq.), or Act No. 164, Pub. Acts 1913 (2 Comp. Laws 1915, § 6354 et seq.), requiring certificates to be filed with the county clerk by copartnerships and persons doing business under an assumed name. Nothing was claimed for plaintiffs’ failure to comply with Act No. 101, except to show that plaintiffs were not excused from compliance with Act No. 164 by having previously complied with Act No. 101. The case went off on this question, the trial court holding that plaintiffs’ failure to comply with Act No. 164 was a bar to any recovery.

It is conceded by plaintiffs that they never complied with either act, and they recognize the fact that this court has held in Cashin v. Pliter, 168 Mich. 386 (134 N. W. 482, Am. & Eng. Ann. Cas. 1913C, 697), that a failure to comply with Act No. 101 was a bar to any recovery by the person in default, but an effort is made by counsel to distinguish the aims and purposes of this statute from those which gave rise to Act No. 164. Counsel say in their brief:

“The act of 1913 requiring partnerships to register was not enacted to protect the public against fraud and imposition or to safeguard the public health or morals. It has no such object; it is a mere regulation, designed to have record evidence of the membership of partnerships; it is nothing more than a convenience, to enable those who are not aware of the names of partners, composing a firm, to readily ascertain them.”

And they argue that where the act prohibited is not malum in se, a contract made in violation thereof will not be declared void. The general rule appears to be that:

“Where a statute expressly declares that certain kinds of contracts shall be void, there is then no doubt of the legislative intention, and an agreement of the kind voided by statute is unlawful. The same is true where the contract is in violation of a statute, although not therein expressly declared to be void. It is immaterial whether the thing forbidden is malum in se or merely malum prohibitum. 9 Cyc. p. 475, and cases.”

The obvious purpose of both acts was to inform the public with whom it is dealing, and thereby serve its convenience and to prevent imposition and fraud. Prior to the passage of the acts it was neither wrong for one to do business under an assumed name, nor to trade under a copartnership name without disclosing his identity. It is wrong now only because it is prohibited by statute. It is true that contracts in violation of Act No. 164 are not therein expressly prohibited, but they are impliedly. The statute has imposed a penalty for the failure to file the required certificate, and by so doing it impliedly prohibits the making of any contract during the period of default. Harris v. Runnels, 12 How. (U. S.) 79; Dudley v. Collier, 87 Ala. 431 (6 South. 304, 13 Am. St. Rep. 55); Buxton v. Hamblen, 32 Me. 448; Vanmeter v. Spurrier; 94 Ky. 22 (21 S. W. 337); Levinson v. Boas, 150 Cal. 185 (88 Pac. 825, 12 L. R. A. [N. S.] 575, 11 Am. & Eng. Ann. Cas. 661); Watrous v. Blair, 32 Iowa, 58; Despres, Bridges & Noel v. Zierleyn, 163 Mich. 399 (128 N. W. 769).

Inasmuch as there is nothing, in the language of Act No. 164 indicating that the legislature intended the penalty imposed should be the sole punishment for its violation, we are of the opinion that the general rule implying a prohibition from the imposition of the penalty should be applied and a like construction given to it as has been given to Act No. 101.

The argument is made that defendant was fully informed who constituted the plaintiff firm, and therefore it is estopped from raising this defense. The following cases are cited in support of this contention: Missaukee Farm & Investment Co. v. Ferris, 193 Mich. 286 (159 N. W. 490); Sauer v. Construction Co., 179 Mich. 624 (146 N. W. 422). We think that neither of these cases supports the contention of counsel. In the first one cited it was held that Act No. 101 did not apply to copartnerships doing a banking business, but that such copartnerships were controlled by Act No. 160 of the Laws of 1859, and that what was done under that act was a substantial compliance with its provisions. In the second case cited it was held that the copartnership name was not an assumed name, and therefore did not come within the provisions of the act. The mere fact that a person dealing with a copartnership might know who the members of a co-partnership were would not relieve them from filing a certificate in compliance with Act No. 164. To hold otherwise would be to destroy the usefulness of the act.

The constitutionality of the act is attacked under the “due process” clause of the Constitution, on the specific ground that the penalties imposed by the act are excessive. This question does not appear to have been presented to nor passed upon by the trial court. In view of our rule that trial courts must be given an opportunity to pass upon questions before being raised in this court, we shall not consider it.

Being of the opinion that the trial court reached the right conclusion, the judgment must be affirmed.

Kuhn, C. J., and Stone, Ostrander, Moore, Steere, Brooke, and Fellows, JJ., concurred.

On Rehearing.

Bird, J.

The construction of Act No. 164 of the Public Acts of 1913, which is involved in this controversy, provides in section 1 that:

“No two or more persons shall hereafter be engaged in and harrying on any business as copartners, unless such persons shall first make and file with the county clerk of the county in which such copartnership business is or shall be located, a certificate in writing, to be signed by each, and verified by the affidavit of one of the members of said copartnership, setting forth the full name of each and every person composing said co-partnership, and the residence of each, the name and style of the firm and the length of time for which it is to continue,” etc.

Section 6 provides that:

“No two or more persons owning, carrying on or conducting or transacting business as aforesaid who shall fail to comply with the provisions of this act, shall each be guilty of a misdemeanor and upon conviction thereof shall be punished by fine of not less than ten dollars nor more than one hundred dollars, or by imprisonment in the county jail for a term not exceeding thirty days, or by both such fine and imprisonment, in the discretion of the court; and each day any person or persons shall violate any provision of this act, shall be deemed a separate offense.”

After having admittedly violated this act and incurred its penalty plaintiffs ask the courts to enforce their contract made in violation thereof. That is the question to be determined. In the opinion heretofore filed we declared the contract void because made in violation of law and declined to enforce it. Ante, 522 (165 N. W. 861). The question is one upon which there is some variance of opinion among the courts. The variance has been defined as follows:

“By some courts it is held that an agreement founded on or for the doing of such penalized act is void; in accordance with the view of Lord Holt in an old case: ‘Every contract made for or about any matter or thing which is prohibited and made unlawful by any statute, is a void contract, tho’ the statute itself doth not mention that it shall be so, but only inflicts a penalty on the offender because a penalty implies a prohibition, tho’ there are no prohibiting words in the statute.’ ”
Other courts have “regarded the question as one of legislative intent and declared the proper rule to be that the courts will look to the language of the statute, the subject-matter of which, the wrong or evil which it seeks to remedy or prevent, and the purpose sought to be accomplished in its enactment; and if from all these it is manifest that it was not intended to apply a prohibition or render the prohibited act void, the courts will so hold and construe the statute accordingly.” 9 Cyc. p. 476.

This court, at least as early as the 98th Michigan, ranged itself upon the side of the courts which hold such contracts void, and refuse to enforce them. In Niagara Falls Brewing Co. v. Wall, 98 Mich. 158, this court refused to enforce a contract made in violation of the liquor statutes. In Re Reidy’s Estate, 164 Mich. 167, a contract made in violation of the State pharmacy laws was denied enforcement and in so doing Mr. Justice McAlvay said:

“It is a well-settled principle of law that all contracts which are founded on an act prohibited by statute under a penalty are void, although not expressly declared to be so.” Citing'cases.

Later Mr. Justice Steere cited this language with approval in Cashin v. Pliter, 168 Mich. 386, and therein refused to enforce a contract made in violation of Act No. 101, Pub. Acts 1907.

In Ferle v. City of Lansing, 189 Mich. 501, this court refused to enforce a contract made in violation of the charter of the city of Lansing, and the case of In re Reidy’s Estate was cited with approval by Chief Justice Brooke, who said inter alia:

“The charter does not, in so many words, say that a contract made by the city shall, be void if any member of the council or city official is interested in it; but it is void, nevertheless, inasmuch as the charter imposes a penalty for the making of such a contract.”

For similar constructions see Beemer v. Hughes, 179 Mich. 110; Sloman v. Bender, 189 Mich. 258.

After taking the position for many years that such contracts are void and unenforceable, a position which is in keeping with the holdings, of most of the State courts, we are of the opinion that no exception to the rule should be made in this case.

■ But it is suggested that if we are to construe this statute in this way it will open the door to designing and dishonest persons to make contracts with copartnership contractors, who have not complied with the law, and after the work is done no compensation can be recovered therefor. The same fears could be entertained as to the existence of our usury statute. One desirous of a loan could apply to a person, who is unfamiliar with the law, and agree to pay the tax on the loan in addition to the highest rate of interest allowed by law, and after the term has ended could thereby avoid 'the entire interest. Because this might be done it would hardly furnish a reason for the abrogation of the usury law. Under this police regulation, as under many others passed for the protection of the public, some hardships necessarily result from its enforcement, but the construction which holds contracts made in violation of law void and unenforceable, will in the long run bring better results to the public than would a construction which enables the wrongdoer to escape the consequences of his unlawful omission because strong equities are at stake..

The judgment of the trial court is affirmed, with costs of this court to defendant. -

Ostrander, C. J., and Steere, Fellows, and Stone, JJ., concurred with Bird, J.

Kuhn, J.

(dissenting). I have become convinced, upon the rehearing of this case, that we arrived at a wrong conclusion in the opinion written by Mr. Justice Bird. If we are to give to this statute (Act No. 164, Pub. Acts 1913) the interpretation placed upon it in that opinion, to my mind it will open the door to fraud and serious damages to innocent parties who may have acted in the best of faith. Let us suppose a case where a person desires to have a building constructed. He examines the records and finds that certain contractors whose names are well known to him, have not complied with the statute. He contracts with them, and after the building is completed, calmly announces that he will not pay for the same because the men who have furnished the money, time and skill to complete the structure, have failed to comply with a statute which required the. contractors to give him information which he already possesses. Under the decision as made the contractors could not recover. No result leading to such palpable injustice should be arrived at if it can be avoided. That the statute in question need not be given such a construction is now quite clear to me. In Cashin v. Pliter, 168 Mich. 386, in construing Act No. 101, Pub. Acts 1907, Mr. Justice Steere said:

“The general rule is well settled that, where statutes enacted to protect the public against fraud or imposition, or to safeguard the public health or morals, contain a prohibition and impose a penalty, all contracts in violation thereof are void.”

Let us examine the statute before us. Its title is:

“An act to require the filing of certificates of copartnership, fixing the liability of copartners and providing a penalty for violation of the provisions of this act.”

Section 2 provides:

“In case there shall be at any time after the making and filing of said certificate, any change in the name or style of said firm, or in the time of its existence, then a new certificate, verified as before specified, shall in like manner be filed as required by section one of this act, before such change shall take effect; and until such new certificate shall have been made and filed, as above specified, the individual menubers of the firm, as set forth in the certificate on file, shall be held to be the actual members of the firm, and in all respects holden and liable for any obligation, debt or liability, incurred by the said copa/rtnership.”

This section plainly seems to contemplate that business will be transacted by persons who have not complied with it. A careful examination of the act leads to the irresistible conclusion that it was not passed for the purpose of making null and void contracts entered into by partnerships which have not filed the certificate required by this act, but only to inform the public of the true membership of a firm so as to enable one dealing with said firm to be absolutely advised of the individual responsibility of the members of such firm and under the second section to sue those whose names have been registered and who have not signified their withdrawal by an amended certificate. A study of the case of Cashin v. Pliter, supra, shows that the court bases its conclusion therein upon the ground that the statute therein under discussion was of that class of statutes which are passed to protect the public against fraud or imposition, or to safeguard the public health or morals, and that when such statutes contain a prohibition and impose a penalty, all contracts in violation thereof are void. Before the right of private contract, which is no small part of the liberty of the citizen, is taken away, we should, in’the language of the opinion of Cashin v. Pliter, supra,—

“carefully scrutinize the particular statute under advisement, for the purpose of ascertaining, from the subject-matter and language used, the object for which it was enacted and the intent of its makers, to the end that such intent may be rendered effectual and the indicated purpose accomplished.”

Clearly the legislature did not intend to hold contracts of the character here involved void, for if they had, in view of the decision in Cashin v. Pliter, which was before them, they could easily have said so. The Michigan cases up to the passage of this act have held a contract prohibited by law as void, in which the thing prohibited was bad in itself. Niagara Fulls Brewing Co. v. Wall, 98 Mich. 158; In re Reidy’s Estate, 164 Mich. 167; and Cashin v. Pliter, supra. The act here prohibited is not malum in se, and I think that counsel were right when they said that this statute—

“is a mere regulation designed to have record evidence of the membership of partnerships; it is nothing more than a convenience, to enable those who are not aware of the names of partners composing a firm, to readily ascertain them.”

I am aware that in Sloman v. Bender, 189 Mich. 258, we had this statute under consideration, but an examination of the record and briefs in that case discloses that the point now under discussion with reference thereto was not especially considered. While the court did say in reference to the two acts (Act No. 101, Pub. Acts 1907, and Act No. 164, Pub. Acts 1913), “The two acts are along the same lines,” the point which was argued in the briefs of counsel and on which the case turned, was that attorneys, when associated as partners, occupied no different position with reference to these statutes than other persons. Counsel for plaintiffs and appellants in that case say in their brief:

“Concisely stated, the only proposition involved in the appeal is: Is the practice of the law a profession or a business?”

The decision in that case is, therefore, not controlling of the question now before us.

The judgment should be reversed and a new trial ordered.

Moore and Brooke, JJ., concurred with Kuhn, J.


text:
    ANDERSON v. BONEMAN.
    1. Replevin — Possession of Property — Change of Possession.
    Although, the general rule is that replevin is a possessory action, and, in order to recover, the writ must run against the party in possession at the time of its issuance, where property is taken wrongfully and the plaintiff does not know that it has been transferred to a third person by the defendant at the time of the issuance of the writ, recovery of damages may be had against such defendant.
    2. Same.
    A constable who, acting for a deputy sheriff, levies a circuit court execution, which he has no authority to do, will be liable to the owner in replevin for damages, notwithstanding the fact that he has delivered possession of the property seized to the deputy sheriff, if, at the time of the issuance of the writ, such fact was unknown to the owner.
    •3. Same.
    The affidavit on which the writ of replevin issued, which was in evidence, would furnish some evidence that plaintiff was ignorant of the fact that the property involved had been turned over to a third person, since the statute requires the affidavit to show by whom the property is detained.
    Error to Gratiot; Searl, J.
    Submitted April 13, 1917.
    (Docket No. 90.)
    Decided December 28, 1917.
    Replevin by Alzina Anderson against Henry Bone-man for the possession of certain horses. Judgment for plaintiff on a directed verdict. Defendant brings error.
    Affirmed.

      George P. Stone, for appellant.

      John T. Mathews, for appellee.
   Bird, J.

Adelbert Giles, a deputy sheriff of Gratiot county, had a circuit court execution issued on a judgment rendered against plaintiff’s husband and one Fletcher. Having information that plaintiff and her husband, who resided in Midland county, were to be in Gratiot county the following day, December 18, 1915, and he being obliged to be away on that day gave the execution to Henry Boneman, a constable at Breckenridge, and directed him in the event plaintiff and her husband came into Gratiot cpunty the following day, to levy on the horses, wagon, and harness. Boneman took the execution, and on the following day, while plaintiff and her husband were in Gratiot county, seized the property as directed and followed it with an inventory and appraisal and placed the property in the hands of a liveryman for care and safekeeping. When Giles returned on the evening of the 18th Boneman claims he turned the property over to him, and so notified the liveryman. Giles corroborates him in this, and claims that he' subsequently gave the horses some care and attention, but admits that he made no levy on them. Plaintiff, claiming title to the property, sued out a writ of replevin in which Bone-man was made defendant, and the property was replevied. Upon the trial Boneman made the defense that at the time of the issuance and service of the writ he was not in possession' of the property, and therefore was entitled to a directed verdict. This defense was overruled, and judgment directed for plaintiff for the amount of her damages, the same having been agreed upon by counsel.

It appears to be conceded that plaintiff established her title to the property, and that the levy made by Boneman was a nullity on account of his lack of official authority to execute a circuit court execution. The questions narrow down to one, namely, whether defendant was entitled to a verdict on the ground that he was not in actual possession of the property when the writ issued. Both counsel recognize the general rule that replevin is a possessory action, and that in order to recover the writ must run against the party in possession of the property at the time' of the issuance of the writ, but plaintiffs counsel assert and claim the benefit of an exception to this rule. The exception is that where property is taken wrongfully, as in this case, and the plaintiff does not know that the property has been transferred to another at the time of the issuance of the writ, a recovery may be had against a defendant not in actual possession. In considering this question in McBrian v. Morrison, 55 Mich. 351 (21 N. W. 368), Mr. Justice Campbell observed that:

“Upon the question whether recovery could be had for staves which may not then have been in defendant’s hands, resort must be had to the character of the action itself under our statute. There is no doubt of its being chiefly valuable as a possessory action, although, as already seen, the plaintiff is not bound to make it so in all cases. There is nothing in the language of the statute itself which confines recovery to property actually held by defendant at the date of the writ. If such is the rule, it must come from inference, and belong to the nature of the action.
“By section 1 of the chapter of the Compiled Laws on Replevin, it is declared:
“ ‘Whenever any goods or chattels shall have been unlawfully taken or unlawfully detained, an action of replevin may be brought for the recovery of the damages sustained by such unlawful taking or detention, except in the cases hereinafter excepted.’ 2 How. Stat. § 8315.
“This language, taken alone, is very broad, and would cover any possession once obtained by tortious taking or by tortious detention. The question is whether a defendant is exonerated from liability for such wrongful possession by turning it over to some one else. In most cases a cause of action cannot be destroyed by the act of the wrongdoer alone. And if a right to bring replevin can be destroyed by the defendant, without the fault or even the knowledge of the plaintiff, the case would certainly be exceptional. It would not be.a difficult matter, by a series of concealed transfers, to cut him off entirely from this action."

See, also, Coomer v. Gale Manfg. Co., 40 Mich. 692; Reid, Murdoch & Co. v. Ferris, 112 Mich. 693 (71 N. W. 484, 67 Am. St. Rep. 437); 1 Stevens’ Mich. Prac. § 132; Nichols v. Michael, 23 N. Y. 264 (80 Am. Dec. 259); Andrews v. Hoeslich, 47 Wash. 220 (91 Pac. 772, 18 L. R. A. [N. S.] 1265, 125 Am. St. Rep. 896, 14 Am. & Eng. Ann. Cas. 1118).

In the last-named case the court, in considering a state of facts where a pawnbroker had wrongfully disposed of a diamond ring upon which he had a lien without the knowledge of the owner, it was said:

“Where, as in this case, property has actually been in appellant’s possession and has been wrongfully transferred by him without respondent’s knowledge, before the commencement of an action for the recovery of its possession, the rule that replevin will not lie against one not in possession at the time of the commencement of the action will not obtain. The evidence and findings show that the appellant’s disposition or sale of the ring was wrongful. In an action for the recovery of the possession of personal property, when it appears for the first time during the progress of the trial that the defendant theretofore in possession had, prior to the commencement of the action, without the knowledge or consent of the plaintiff, wrongfully disposed of the property, it would be a rank injustice for any court to hold that the plaintiff cannot for that reason recover.”

For valuable note, see 18 L. R. A. (N. S.) 1269.

This exception to the general rule seems to have been recognized and followed in several cases, and we think with much reason. Where the taking is wrongful, or where the taking is lawful, but is disposed of wrongfully, and the plaintiff has no knowledge of its disposition at the time of the issuance of the writ, we can see good reason for holding that plaintiff should be permitted to recover his damages against the wrongdoer, even though he has not actual possession when the writ was issued. We think the exception should be applied in the present case. The property belonged to plaintiff, and it was taken from her wrongfully. She had no knowledge that defendant had attempted to turn it over to Giles; therefore she did the natural thing in making the one defendant who had deprived her of her property. The possession of Giles was no more lawful than defendant’s, neither had actual possession, but we think it would be fair to conclude, if it were necessary, that defendant still had constructive possession. Defendant was the wrongdoer, and we think he is properly held for plaintiff’s damages.

The point is made in this connection that there is no proof that plaintiff was ignorant of the fact that the property had been turned over to Giles at the time the writ issued. The affidavit for the writ which was in evidence would furnish some evidence of that fact, inasmuch as the statute requires the affidavit to show by whom the property is. detained.

We think the judgment of the trial court should be affirmed.

Kuhn, C. J., and Stone, Moore, Steere, Brooke, and Fellows, JJ., concurred with Bird, J. Ostrander, J., concurred in the result.