text:
    FULLER & RICE LUMBER & MANUFACTURING CO. v. HOUSEMAN.
    1. Contracts — Construction—Evidence.
    Plaintiff, a dealer in lumber, having agreed to furnish to one S. material for houses to be erected upon lots purchased from defendant, wrote the latter as follows: “We have taken an order from S. for two house bills, * * * upon the understanding that he is to give us an order on you for the amount of our bill. * * * H. [a son of defendant] told us you would treat these two houses in the same way you have D.’s, and protect our interest in the same way. If same is not correct, kindly advise us.” Defendant made no reply to this letter. It appeared that buildings had been erected for D. on lots purchased from defendant a short time before, and that defendant had cashed the orders drawn by D. in favor of plaintiff; but it did not appear that the payments were in pursuance of any arrangement made by the parties before the lumber was purchased by D., or that they were not made out of D.’s money. Held, that, even if defendant’s failure to respond to the letter should be construed as an assent to its terms, he could only be held liable thereunder “in the same way” as he had been liable in D.’s transaction, which was not shown to have been a liability to pay out of his own funds.

      2. Same — Promise to Pay Debt of Another — Statute of Frauds.
    "WTiere goods are furnished and credit given to one person under the understanding that he shall pay for the same in orders upon another x>erson, the latter cannot be held for the purchase price because of his verbal promise, made when the orders are presented, that he will pay them in a few days, since a contract to answer for another’s debt is one required by 2 How. Stat. § 6185, subd. 2, to be in writing.
    Error to Kent; Adsit, J.
    Submitted June 11, 1897.
    Decided September 14, 1897.

      Assumpsit by the Fuller & Rice Lumber & Manufacturing Company against Joseph Houseman and another for goods sold and delivered. From a judgment for plaintiff, defendants bring error.
    Reversed.

      L. G. Rutherford, for appellants.

      Sweet, Perkins & Judkins, for appellee.
   Long, C. J.

The defendants were the owners of several lots upon Houseman’s Fair Ground addition to Gránd Rapids. In February, 1895, they contracted with Schuiling & Kuipers to sell them two lots for $1,000 each, and agreed to furnish them $1,000 for each lot, to erect buildings thereon to cost about $1,800 each. In attempting to carry out this agreement on the part of Schuiling & Kuipers, Mr. Schuiling met one Mr. Torrey, agent of the plaintiff, and gave him figures for the bills of lumber for the two houses; and on February 28, 1895, the plaintiff made the following proposition:

“Messrs. Schuiling & Kuipers, City.
Gentlemen: • Confirming conversation with Mr. Schuiling at the Morton House yesterday, we agree to furnish you the following items, the list comprising rough lumber for one house. [Items omitted.] According to talk,.we furnish the two houses going on the Fair Ground addition, and when we have delivered the above material, and same is satisfactory to you, as being what you bought, you are to give us an order on Joseph. Houseman for the amount of our invoice, on the basis of $725, net cash, for three house bills like the one mentioned in the letter. You are then to advise us about the third house, to be built on Terrace avenue. Everything not included in this list is to be considered as an extra. Thanking you for the order, we remain,
“Yours respectfully,
“Fullee & Rice L. & Maneg. Co.”
This letter was received by Schuiling & ICuipers, and the lumber furnished. Plaintiff claims that on the same day Mr. Torrey, its agent, mailed the following letter:
“February 28, 1895.
“Joseph Houseman, Esq., City.
“Dear Sir: We have taken an order from Messrs. Schuiling & Iiuipers for two house bills to be erected on your Fair Ground addition, upon the understanding that they are to give us an order on you for the amount of our bill. Our invoice will amount to about $475. The extras may bring it up a little higher. Henry Houseman told us you would treat these two houses in the same way you have Durkee’s, and protect our interest in the same way. If same is not correct, kindly advise us.
“Yours respectfully,
“Fullee & Rice L. & Maneg. Co.,
“Torrey.”

Mr. Torrey testified that he wrote the letter for the plaintiff, took a letterpress copy of it, and then mailed the letter to the residence of Joseph Houseman, at No. 229 East Fulton street, Grand Rapids, postage prepaid. The court permitted the plaintiff to show by Mr. Torrey that, after these orders were taken, he presented them to Mr. Houseman; that, when he took the ordérs to him, Houseman took a memorandum of them on the fly leaf in the back of his book, and said: “I will have to go out and see;” when Mr. Torrey said: “I will come in in a few days, and get the money;” and Houseman replied: “All right; I will pay them in a few days.”

The witness was permitted to testify in regard to the Durkee matter. It appeared that Durkee had been building some houses for defendants, and getting lumber from the plaintiff; and the witness testified:

‘ ‘ He -[Durkee] would give me orders to the amount of the invoices of lumber delivered at different houses, and I would take these orders to Mr. Houseman. He would get the same book I have spoken of before, and enter the amount of the orders on the fly leaf. Then it was the custom for him to have 10 days, at which time he would give me a check for the amount.”

These buildings were being erected by Durkee about the same time that Schuiling & Kuipers were erecting theirs, or a little before that. Mr. Houseman testified that he never received this letter, and that the first he ever knew that this lumber was being furnished by the plaintiff was when the orders of Schuiling & Kuipers were presented to him; that, when presented, he looked at the books, and told Mr. Torrey there was nothing coming to Schuiling & Kuipers, and stated that he would not pay unless there was money coming to them, and that there never was any. He further testified that he had advanced to Schuiling & Kuipers some considerable money, when’ they failed, and -he was compelled to go on and finish the contract, which he did, paying out, including what he paid Schuiling & Kuipers, something over $1,000 on each house. Mr. Schuiling testified that when they failed there was nothing coming to them on the estimates. It also appeared, without contradiction, that the lumber was charged upon plaintiff’s books to Schuiling & Kuipers, and not to the defendants.

Defendants’ counsel asked the court to direct the verdict in favor of defendants. This was refused, and the court charged the jury, substantially, that, in order to entitle the plaintiff to recover, they must find that plaintiff sold and delivered the lumber on the credit and promise of the defendants to pay therefor prior to the delivery of such lumber, or of some part of it; that, if the sale and delivery were made to Schuiling & Kuipers without the knowledge or promise of the defendants, the plaintiff could not recover; that the mere belief on the part of the plaintiff that defendants would become responsible for it, when in fact they knew nothing about it until long after the sale and delivery, would not render the defendants liable, — that there would be no contract in such case; that there must have been what is known in law as an original agreement or undertaking between the parties in order to render the defendants- liable, which means, in short, that the plaintiff parted with the lumber relying on the promise of the defendants to pay therefor; that, if the sale was made direct to Schuiling & Kuipers on their promise to pay therefor in any manner, either in cash or in orders on defendants, then any promise thereafter made by the defendants not in writing was void, and did not make them liable in this case. Again the court charged:

“The fact, if you find it to be a fact, that said letter was written by plaintiff, inclosed in an envelope, with a return card thereon, and was addressed to Joseph Houseman at his residence in this city, and deposited in the post office, is prima facie evidence that he received said letter, and became acquainted with its contents; and if you find that Houseman did receive said letter, and did not respond thereto, as requested, and that, by an arrangement and agreement between plaintiff and defendants in reference to said Durkee matter, said defendants were to become responsible for and pay for the lumber furnished to said Durkee, then said defendants are liable to the plaintiff for the amount of lumber furnished to Schuiling & Kuipers for which this action is brought, if defendants knew the fact that the lumber was being furnished'under this alleged agreement. * * * Now, what is meant to be understood by these instructions * * * is that if you find, as a matter of fact, Mr. Houseman received that letter, and that he knew that the plaintiff was relying upon that proposition, assuming that his silence was an assent to it, he would be estopped now from denying it, and would be liable under an original promise, as an original promise. Mr. Houseman must have assented to the proposition in the letter in some manner which would bind him. * * * He must have done something by which the plaintiff had a right to rely-upon his assent to that proposition. Subsequent acts and conversations are material only as bearing upon the alleged knowledge and assent of the defendants to the proposition made in the letter before the lumber was delivered. That is why those subsequent conversations and acts of the parties have been admitted in evidence, not to prove an original agreement. * * * Subsequent promises to pay the plaintiff for the lumber may be considered by you as bearing upon the probability of the original agreement having been made.”

The jury returned a verdict in favor of plaintiff for the amount of the orders drawn on defendants, and the interest thereon.

We think the court should have directed the verdict in favor of defendants. There is no showing upon this record that in the Durkee case any correspondence ever passed between the plaintiff and defendants by which any agreement was made by defendants to pay for the lumber purchased by Durkee. All that can be said of that matter is that lumber was furnished by plaintiff to Durkee, for which Mr. Houseman afterwards paid; but there is no showing that he was legally liable for the lumber purchased by Durkee, or that any arrangement was ever made between the parties, before the lumber was furnished, that defendants should pay for it. All that is claimed is that, after the lumber was furnished to Durkee, the plaintiff would go to Mr. Houseman with orders drawn on him by Durkee, and Mr. Houseman would enter the amount on a fly leaf of his book, and afterwards make the payments. There is no showing but that, at the time these payments were made, defendants were indebted to Durkee, and were making payments out of Durkee’s money. In the case in suit it appears conclusively that defendants were not indebted to Schuiling & Kuipers in any sum whatever.

But counsel contend that, inasmuch as the Durkee matter was spoken of in the letter written by Mr. Torrey to Mr. Houseman under date of February 28, 1895, it was proper to show what the Durkee arrangement was. The statement in the letter is that “Henry Houseman told us you would treat these two houses in the same way you have Durkee’s, and protect our interest in the same way.” The way the Durkee matter was treated was, so far as shown here, that Houseman paid on the Durkee orders. It is not shown, however, but that these payments were made out of money then presently owing to Durkee. When the present orders were presented, no money was owing to Schuiling & Kuipers; so that the court was at least in error in permitting the plaintiff to put the Durkee matter into the case. It was all admitted under proper objection. Being in, the court, in its general charge, said to the jury that plaintiff claimed that there was an understanding and agreement between the plaintiff and defendants that defendants were to pay plaintiff for the lumber furnished to Durkee upon orders to be drawn by Durkee, and that defendants had promptly paid all such orders. Aside from the evidence already quoted bearing upon the subject, it also appears that, upon the cross-examination of Mr. Torrey, he was asked:

‘ ‘ Q. What did you furnish to Mr. Durkee ?
“A: The same building material for houses.
“ Q. And under the same conditions ?
“A. Yes, sir.”

The record states that “the above is all the testimony in the case bearing upon the question raised.”

With the Durkee matter eliminated, we may now inquire what there was in the case which warranted the charge of the court, and the verdict and judgment. The letter of February 28, 1895, and failure to answer it, must constitute the whole claim of plaintiff in the case. Admitting that the letter was received by Mr. Houseman, would his failure to answer it estop him and the other defendant from setting up the defense now made? The burden of proof is upon the plaintiff to establish its claim. The gist of the letter is that plaintiff was about to furnish Schuiling & Kuipers lumber to erect two buildings upon the defendants’ Fair Ground addition, and Schuiling & Kuipers were to give an order in plaintiff’s favor upon Mr. Houseman for the amount, and that one Henry Houseman had told plaintiff that the defendants would treat these two houses in the same way they had Durkee’s, and protect plaintiff’s interest in the same way. Mr. Houseman is asked in the letter if that is correct. The way the Durkee matter was treated we have already stated. When the orders were drawn by Schuiling & Kuipers upon Houseman, he, it appears without contradiction, had no money in his hands belonging to Schuiling & Kuipers, and refused to paythe orders. Under the circumstances, are the defendants bound to pay money out of their own funds ? There is no proof of any such agreement, even if we construe Houseman’s silence as an agreement to treat it as he did the Durkee matter. We are unable to find from the record any agreement which may be treated as an original undertaking by Mr. Houseman to pay for this lumber. Neither is there anything which would warrant our treating the case as one in which there is a promise to pay the debt of Schuiling & Kuipers, as there was no written agreement to that effect, as provided by subdivision 2, § 6185, 2 How. Stat. See, also, Studley v. Barth, 54 Mich. 6. The court should have directed a verdict in favor of defendants.

The judgment is reversed, and new.trial ordered.

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


source: Caselaw Access Project

author: Long, C. J.

license: Public Domain

text:
    A. P. COOK CO. v. BELL.

    1. Mortgages — Agreements Back — Trusts.
    B. executed a mortgage to C.i and at the same time deeded him certain lands located inV., under an agreement reciting that: “I, the said C., hereby agree to sell said lands in W. for the best prices that I can obtain, and, after deducting costs and expenses and reasonable charges for selling the same, to apply the proceeds upon said mortgage; said sales subject to the advice and consent of said B.” One year later, B. , at C.’s request, deeded other lands in W. to C:, who was to “account to B. for net proceeds after deducting expenses of all kinds, and apply balance upon his indebtedness.” Held, that the mortgage, deeds, and agreements back constituted C. a trustee of the lands in W. for the benefit of B.
    2. Same — Maturity oe Debt.
    Construing the instruments together, the mortgage was not to become due until the mortgagee had discharged the obligations cast upon him by the agreements.
    3. Same — Laches oe Trustee — Decree on Foreclosure.
    C. , by his laches, having permitted the lands in W. to be sold for taxes,¡and lost to the mortgagor, was charged in foreclosure proceedings with their value; and, it appearing that the amount equaled the mortgage debt, the foreclosure bill was dismissed by the circuit judge. Held, that the decree was proper.
    Appeal from Jackson; Peck, J.
    Submitted June 11, 1897.
    Decided September 14, 1897.
    Bill by the A. P. Cook Company, Limited, against Marietta A. Bell, Henry C. Bell, John O. Sharp, and others, to foreclose a mortgage. From a decree dismissing the bill, complainant appeals.
    Affirmed.

      Taggart, Knapp en & Denison and Parkinson & Campbell, for complainant.

      Charles A. Blair, for defendant Marietta A. Bell.

      Thomas A. Wilson, for defendant Sharp.

       Rehearing denied November 23, 1897.

   Long, C. J.

On November 19, 1873, Addison P. Cook filed the original bill in this case against Henry C. Bell and Marietta A. Bell for the foreclosure of a mortgage of $3,-590, given January 5,1866, by the defendants Bell to Mr. Cook upon 185 acres of land in Jackson county, this State. Defendants answered, admitting the execution and delivery of the bond and mortgage in question, and alleging in defense that they had conveyed to Mr. Cook a large amount of land in Wisconsin, the latter agreeing to sell the lands for the best prices he could obtain, and, after deducting the costs and expenses and reasonable charges for the selling of the same, to apply the proceeds on the mortgage, such sales to be subject to the advice and consent of Henry C. Bell; alleging that Mr. Cook had had numerous opportunities to sell such lands, and had refused to sell, and apply the proceeds on the mortgage; that defendants did not know how much Mr. Cook had sold, and what he had received; but alleging that he had in some manner converted to his own use the whole of said lands, and thereby become liable for the value thereof; and that defendants should have the same applied in payment of such bond and mortgage. Replication to defendants’ answer was duly filed. Defendants took certain proofs before a circuit court commissioner for Jackson county, as well as depositions of certain witnesses in Wisconsin under commission. On August 10, 1877, commission was issued for taking depositions of complainant’s witnesses in Wisconsin. July 1, 1878, an order closing proofs was entered by defendants’ solicitors. On September 23, 1878, a stipulation was made setting aside the order closing proofs, and providing for an extension of time for taking proofs until the 1st day of the following July.

No further effort seems to have been made for the purpose of obtaining a decree until June 9, 1891, when the A. P. Cook Company, Limited, filed a bill in the nature of a bill of revivor and supplement against the original parties, together with John W. Sharp and John C. Sharp, setting up the filing of the original bill, and the various proceedings thereunder; alleging the assignment by Mr. Cook to the complainant of the bond and mortgage under foreclosure; alleging that, since the filing of the original bill, defendant Marietta A. Bell had conveyed to John W. Sharp her interest in the mortgaged .premises, and that the title of John W. Sharp is subordinate to the mortgage rights of the complainant; that the defendant John C. Sharp is in privity with defendant John W. Sharp, and has, since the filing of the original bill of foreclosure, for the purpose of defeating complainant’s mortgage interest, purchased certain portions of the mortgaged premises upon tax-title sales; that the defendants Sharp are colluding together in holding the original title, and in the possession of the premises, and in permitting the lands to be sold for taxes, and in the purchase of the tax titles in the name of John C. Sharp, who was under the alleged duty of paying the taxes; and that defendants Sharp are estopped from asserting the tax purchase as an adverse and paramount title against the complainant’s mortgage interest. The bill prays that the complainant may have the benefit of the proceedings in the original suit, and the same relief Mr. Cook could have had but for the assignment, and that the rights of both defendants Sharp, including the tax titles, may be held subordinate to complainant’s mortgage. The bill contains the usual prayer for foreclosure and sale.

The bill was taken as confessed by Henry C. Bell. Defendant Marietta A. Bell answered, alleging payment of the bond and mortgage by reason of the alleged conversion of the Wisconsin lands by Mr. Cook, that she is still the owner of the mortgaged lands in Jackson county, and that defendant John W. Sharp holds a conveyance from her simply as mortgagee on account of certain advancements. Defendants Sharp answered, alleging:

1. That the proofs in the original suit were closed, and that that suit cannot be revived by this bill.
2. That the course taken to revive the suit is not proper.
3. That the mortgage is barred by the statute of limitations.
4. That the original suit had been abandoned by Mr. Cook.
5. That Mr. Cook had not a perfect title to the Jackson county lands conveyed to defendants Bell, but that one Stranahan claims title thereto, and is prosecuting a suit in ejectment therefor.
6. That Mr. Cook had permitted the Wisconsin lands, by connivance with parties in Wisconsin, or by his neglect and default, to be levied upon and sold by virtue of an execution issued upon a judgment rendered against him in the county of Wood, in the State of Wisconsin.
1. That by such proceedings the mortgage has been fully paid.
8. That the defendant John C. Sharp has purchased and is entitled to hold the tax titles referred to adversly to complainant’s interest.

Replications were filed to these answers, and a claim of right to examination of witnesses in open court entered. In September, 1894, a hearing in open court was had in part, when John W. Sharp died testate, and the suit was revived against his executor, John C. Sharp, and his widow and heirs at law. Thereafter the case was heard in open court, and the testimony closed in November, 1895. At the close of the testimony, the circuit judge filed a written decision, concluding:

1. That the complainant is entitled to maintain its present bill as an original bill in the nature of a bill of revivor and supplement,'and as assignee of Mr. Cook is entitled to the benefit of the original suit, and of the proceedings therein; that there has been no delay, laches, or other fact sufficient to defeat the complainant’s right to the foreclosure of the mortgage under the present bill.
2. That, as between defendants John W. Sharp and Marietta A. Bell, the deed given by the latter to the former was in fact a mortgage to secure Sharp for moneys advanced and to b.e advanced to her by him.
3. That defendant John C. Sharp cannot, in this suit, insist upon his tax deeds as against complainant’s mortgage rights.
4. That, as against the amount of the mortgage and interest, defendants are entitled to a deduction on account of the Wisconsin lands conveyed by defendants Bell to Mr. Cook, and that the value of the Wisconsin lands at the time of their sale upon execution was greater than the amount then due on the mortgage.

A decree was entered dismissing complainant’s bill, from which complainant appeals.

The agreement made between Mr. Bell and Mr. Cook in reference to the Wisconsin lands is as follows:

“Memorandum of agreement between Henry C. Bell and Addison P. Cook, viz.: That whereas, the said Bell has this day deeded to said Cook certain lands in the State of Wisconsin, and also received a deed of certain lands in Jackson county, Michigan, and executed a mortgage upon the same: Now, therefore, I, the said Cook, hereby agree to sell said lands in Wisconsin for the best prices that I can obtain, and, after deducting costs and expenses and reasonable charges for selling the same, to apply the proceeds upon said mortgage; said sales subject to the advice and consent of said Bell.”

This contract was dated January 5, 1866, and included over 1,000 acres of land. It is claimed by the defendants that, at the time of the conveyance, Cook was informed by Bell that there were taxes against these lands, and that Bell had never seen them; that, in the fall of the same year, Mr. Cook went to Wisconsin, made inquiries about the lands, found that they were valuable, paid the taxes upon a part of them, and employed attorneys to pay the balance of the taxes, which he thought would amount to about $1,400; that he then obtained an abstract of the lands; that upon Mr. Cook’s return from Wisconsin he stated these facts, and that he had employed attorneys in one or more actions then pending against him in Wood county, Wis., and to settle with parties holding titles upon some portions of these lands, and to look after and pay the taxes upon the lands generally in said county; that at that time he stated to Mr. Bell, “You have other lands out there which you did not deed to me,” and wanted Bell, some time when he came to Brooklyn, to make him a deed of the balance. On January 9, 1867, these other lands were deeded to Cook, being about 665 acres, and being termed “farming lands, intermingled with hard wood and pine.” They are described in a memorandum made by Mr. Cook at that time, which memorandum, after a description of the lands, reads:

“Deeded to A. P. Cook, 9th of January, 1867, to account to Henry C. Bell for net proceeds after deducting expenses of all kinds, and apply balance upon his indebtedness to me.”

The defendants’ proofs tended to show that, after this second deed had been made to Cook conveying these Wisconsin lands, the defendants Bell had further conversations with Cook about the lands, and wrote to him to make sales, and that Cook would answer that he must attend to it, that he had been busy, and that his business had been such that he had neglected it; that at one time Cook was offered $600 for 80 acres of these lands; that he refused to sell, and stated he could get more for it by waiting; that his attorneys at Grand Rapids, Wis., wrote him in January and February, 1867, concerning the suits commenced against the lands; that he neglected to answer either of the letters until June 1st thereafter, when he wrote, giving instructions to pay all taxes on the Bell lands; that his attorneys, on June 10th, replied that they would give the matter immediate attention, and would draw on him for the amount necessary to settle; that they did draw for $1,000; that Cook did not answer these letters, letting the draft go back unpaid; that suit was then commenced against Cook by attachment in Wisconsin for the amount expended, and process was personally served upon Cook in this State; that Cook paid no attention to the suit, and plaintiffs obtained judgment August 10, 1868, for $2,351, upon which execution was -levied upon the lands deeded by Bell to Cook, and they were sold to one Kingston for $2,400 on December 5, 1868; that the title to the lands under this sale became absolute on February 5, 1871; that Cook never asked Bell from first to last for any money to pay the taxes on these lands; that he never told Bell that a draft had been drawn on him on account of these taxes; that he never suggested to Bell to go to Wisconsin to look after the taxes or the lands; that he never explained to Bell what the nature of the suit was, but simply told him that the parties he had hired to look after these lands had sued him, or commenced suit; that Cook never gave Bell any notice of his intention to abandon the lands; and that by reason of Cook’s negligence the lands became lost to defendants Bell.

Several computations were made by counsel upon both sides, showing the value of the Wisconsin lands, and the amount of the mortgage and interest; and the complainant contends that the court was in error in finding that the lands were sufficient to pay the amount of the mortgage ; while, upon the other hand, counsel for defendants Bell contends that the value of the lands largely overpaid the mortgage in suit. We shall not discuss the testimony as to these values, as, from a careful examination, we are satisfied that they equaled, if they did not exceed, the amount of the mortgage.

The legal effect of taking the mortgage, the deeds to Cook, and the agreements back was to constitute Cook a trustee of the Wisconsin lands for the benefit of defendants Bell. Carter v. Gibson, 29 Neb. 324 (26 Am. St. Rep. 381). It is evident from the agreements between the parties that this mortgage was to be paid from the proceeds of the sale of these Wisconsin lands. It was not expected the defendants Bell would be called upon to pay the mortgage except in the manner provided in the contracts. The first contract was contemporaneous with the giving of the mortgage, and that contract was supple-merited by tbe one of January 9, 1867. The last contract was given for the very purpose of enabling Cook to dispose of the Wisconsin lands, and obtain his pay on the mortgage from the proceeds. Cook accepted this trust, and it became his duty to faithfully discharge it. The A. P. Cook Company, Limited, obtained no greater rights under the transfer of the mortgage to it than Mr. Cook had. That company does not stand in the position upon this record of a bona fide purchaser. By the terms of the mortgage and the agreements, taken together, the mortgage was not to become due until the mortgagee had discharged the obligations cast upon him by the agreements, which became a part of the mortgage. Keagle v. Pessell, 91 Mich. 618. It must have been contemplated between the parties that the Wisconsin lands should be sold, and the proceeds applied, before the maturity of the mortgage. It was held in Fink v. Chambers, 95 Mich. 508, that the nonperformance by the payee in a note of an agreement, in consideration of which the note was given, will prevent a recovery on the note by any one not a bona fide holder of the paper for value. It was also held in Sutton v. Beckwith, 68 Mich. 303 (13 Am. St. Rep. 344), that an agreement made at the time of the execution and delivery of a promissory note, to be performed before its maturity, and forming its real consideration, is a part of the transaction, and, as between the parties, its performance is a condition precedent to the enforcement of the note. We think the testimony preponderates greatly in favor of the defendants’ contention that Mr. Cook, as trustee, by his laches, and in the nonperformance of his duties as trustee, lost the lands to the defendants, where it was his duty, as such trustee, to have preserved them, and to have made sales for the benefit of defendants Bell. There are 80 acres of land the title to which stands in Mr. Cook’s name. It is the same 80 acres which at one time he could have sold for $600, and which he refused to sell, although urged to do so by Mr. Bell. He should therefore be charged with this 80 acres. Having assumed the trust, he could not throw it off or ignore it at his own volition.

In this proceeding the complainant has simply been called to an accounting — such as Mr. Cook should have made — for the purpose of showing whether the mortgage had or had not been paid. If Mr. Cook had diligently discharged his trust, there can be no doubt it would have been paid, and the complainant cannot have any greater rights than Mr. Cook could have claimed. We think the court below was not in error in determining that the mortgage had been paid and discharged, and that decree will be affirmed, with costs of this court.

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


text:
    HENDRICKS v. HASKINS.
    1. Evidence — Hearsay—Harmless Error.
    Error in receiving hearsay evidence that defendant did certain acts is rendered harmless by his testifying to the same effect.
    2. False Imprisonment — Confederation—Question for Jury.
    In an action for false imprisonment against a sheriff and one H., it appeared that plaintiff’s husband, father-in-law, and uncle were arrested at their home under a civil warrant issued on complaint of H. under the forcible entry and detainer act; that, having served the warrant upon the three men, the sheriff arrested the plaintiff without any warrant, and compelled all to accompany him to the office of the justice, 3J miles distant; that H., who had accompanied the sheriff when the arrest was made, taking advantage of the fact that no one was left to guard the premises, immediately broke into the house and took possession of the same, throwing out and damaging plaintiff’s furniture. Held, that the evidence raised a question for the jury as to whether the sheriff connived with H. with respect to the acts subsequent to the arrest.

      Error to Alpena; Kelley, J.
    Submitted June 16, 1897.
    Decided September 14, 1897.
    Case by Carrie Hendricks against William F. Haskins and William Mulvena’for false imprisonment. From a judgment for plaintiff, defendants bring error.
    Affirmed.

      Dafoe & Gustin, for appellants.

      J. D. Turnbull, for appellee.
   Long, C. J.

This action was commenced in the Alpena circuit court to recover damages for an unlawful arrest and imprisonment. On the trial the plaintiff had verdict and judgment for $337.50. The plea was the general issue, without notice of justification.

It appears that defendant Mulvena was the sheriff of Alpena county in 1895. Defendant Haskins, on June 29, 1895, made a complaint before Justice Patnode, on which a civil warrant was issued under the forcible entry and detainer act for the arrest of Charles Hendricks, plaintiff’s husband, Martin Hendricks, his father, and an uncle bj” the name of Austin Hendricks. On the evening of that day, the sheriff, accompanied by Haskins, went to the Hendricks house to serve the warrant. The plaintiff’s claim is that, when defendants arrived there, the sheriff took the three Hendricks into custody under his warrant, claiming that he held them for a criminal offense; that they asked him to read the warrant, which he refused to do; that some words passed between them, when the plaintiff said, “I am going to find out;” that the sheriff then said he would take all of them into custody, including the plaintiff, and stated to her that she would have to go before the justice too; that, when they left the house, they locked it up with a chain and padlock; that at that time she had a young child, about a year old, which she was obliged to carry with her; that they were all conveyed by the sheriff to Ossineke, 3£ miles distant; that it was after dark when they arrived at the justice’s office there; that the cause was then adjourned until the following Saturday; that the parties defendant were then asked to get bonds for their appearance. The record is not clear as to whether any bond was given or not, but the parties were released with the understanding that they appear at the adjourned day. They did appear on the adjourned day, but, the term of the justice having expired, no further proceedings were had. It appears that, during the time the Hendricks people were away from their home that night, defendant Haskins, with others, broke into the house, took the furniture out, and took possession. Plaintiff claims that a considerable amount of furniture was injured and destroyed in removing it from the house.

The contention of defendants on the trial was that, arriving at the house on that night, the plaintiff came to the door, and refused the sheriff admittance, flourished a knife, and threatened to do violence upon the sheriff with it if he attempted to remove the parties named in the warrant; that for this reason he arrested the plaintiff, and took her before the justice, and by direction of the justice he inserted her name in the warrant. There was no denial by the defendants but that the plaintiff was arrested that night and -taken before the justice.

The court charged the jury at the close of the testimony:

“There is but one question in this case for you to determine, and that is the amount of the recovery, — the amount of damages to be awarded to the plaintiff, — as the plaintiff is entitled to your verdict. There is no justification. There is no evidence in this case which warrants me in submitting to you the question of justification or excuse for the purpose of defeating this action. Under the pleadings in this case no justification has been permitted, and the question of the defendant Mr. Mulvena having in his possession a warrant at that time, or any other process, cuts no figure in this case, so far as justification is concerned. * * * The claim of defendant Mulvena is that when he went to that house the door was closed, or attempted to be closed, as he attempted to enter, and some very improper and abusive language was used by the woman, and he claims she had a knife in her hand. This testimony is permitted for the purpose of showing the manner in which he made this unlawful arrest; in other words, it is proper in this case for the purpose of mitigating damages, but not for justifying the act. * * * It makes no difference whether the sheriff and the other defendant who acted with him were mistaken or not about their legal rights; it makes no difference whether they supposed they had the right to do it or not; nor would it make any difference, any words nsed by this woman. There was no right in this officer to take her from her house on that occasion. He had no legal authority to do it, and it was a wrong when he attempted it. * * * If you find from the evidence in this case, and the circumstances and surroundings that have been disclosed by the evidence, that the sheriff in doing this act — in making this arrest — acted in connivance with or in concert with the other defendant for the purpose of cleaning out that house, so that some one else could obtain possession of it, — if you find that to be the fact from the evidence and surroundings and all the circumstances that have been detailed here, — it would be evidence of malice, and you have a right to impose what the law defines as exemplary damages. * * * If you find that the defendant Haskins aided and assisted and procured the acts of the sheriff, I charge you that he is equally guilty in this case.”

It is contended by counsel for defendants that there is no evidence in this record in any manner connecting defendant Mulvena with the other defendant in taking possession of the premises after the parties were arrested and taken from their home; that all the testimony upon that subject comes from the plaintiff, who did not return home that night, but stayed at the house of her uncle; that all she pretends to know about putting the furniture out is what her husband told her of what he found when he went back that night. It appears that defendant Mulvena did not go back to plaintiff’s house that night, but what was done there was done by defendant Haskins. The testimony of plaintiff as to what her husband told her about the furniture thrown out of the house by defendant Has-kins was incompetent; but defendants are in no position to complain of it now, as Haskins testified that, very soon after the parties left the premises, he broke into the house and threw the furniture out. The plaintiff’s testimony as to the destruction of the property was from an examination of it, and not from what her husband said of its condition, and was admissible. "We think it cannot be said that there is nothing in the case connecting defendant Mulvena with the breaking into the house; and the court very properly instructed the jury that this might be taken into consideration as bearing upon the question of malice. The sheriff knew that Haskins was attempting to get possession of the premises. The very purpose of the complaint and warrant was to determine the question of right of possession; and all the circumstances surrounding the case, and the conduct of the sheriff in making the arrest, taking all the parties from the house who could have defended possession as against Haskins, might properly be taken into consideration by the jury in determining the responsibility of Mulvena for Haskins’ breaking in after the arrest was made. In other words, we are unable to say upon this record, from the facts and circumstances and the testimony given, that there was nothing in the case which had a tendency to show that Mulvena was cognizant of the acts of Haskins after the arrest was made. Inferences to be drawn from the conduct of the parties and all that took place might tend to show that Mulvena and Haskins understood each other as to the manner in which possession of the premises was to be obtained. The arrest of the plaintiff was wholly unwarranted, and it is difficult to see why the sheriff should have taken her from her house that night, unless it was for the purpose of permitting Haskins to get possession. They were wrongdoers in making the arrest of .the plaintiff, and by that very act Haskins was enabled to get into the house without opposition, and put the furniture of plaintiff and her husband into the street. It is true that defendants attempted to» explain their actions that night, and both testified that Mulvena knew nothing about the goods béing thrown out of-the house; but, notwithstanding this, we think there was sufficient in the case to raise a question of fact for the determination of the jury.

It is said further by counsel for defendants that the court permitted the jury, in determining the amount of damages, to consider the damage done to the household furniture. In this counsel are in error. No estimate was attempted to be placed upon the loss of the property damaged; and the only attention which the jury were directed to give to that branch of the case was that they were to take it into consideration as evidence of malice and in fixing exemplary damages.

We think there are no other questions requiring discussion.

The judgment is affirmed.

The other Justices concurred.


text:
    UP RIVER ICE CO. v. DENLER.
    1. Contracts — Agreement Not to Engage in Business — Equity Jurisdiction.
    Evidence in support of a bill to enjoin defendant from carrying on an ice business in a particular locality, in violation of his agreement with complainant’s assignor, that complainant has eleven ice houses, containing 8,000 tons of ice, five wagons for delivery, and many customers, while defendant has four-wagons engaged in delivering ice to a large number of customers in direct competition with complainant, constitutes a sufficient showing that complainant is damaged by the continuance of defendant’s business to an extent that justifies the interference of a court of equity, if he is otherwise entitled to relief.
    2. Same — Consideration.
    The purchase by an individual of a stockholder’s interest in a corporation affords a sufficient consideration for a contemporaneous agreement by the seller not to engage in the business carried on by the corporation.

      3. Same — Construction—Prohibited Territory.
    An agreement by a seller of stock in a corporation doing an ice business in a city, not to engage in the ice business in such city, “or adjacent thereto,” sufficiently defines the prohibited territory, and means that he will not engage in such business within the city, or any territory which may reasonably be reached for delivery by the company with its teams and wagons. *

      4. Same — Restraint eor Unlimited Time — Validity.
    The fact that there is no limit as to the length of time [for which the seller must refrain from carrying on the business in the prohibited territory does not render the agreement invalid.
    5. Same — Assignability.
    The right to enforce such agreement may be passed by assignment to the corporation.
    6. .Same — Business in Wipe’s Name.
    A husband who has made a valid agreement to refrain from carrying on a particular business in a certain place, either as principal, agent, or employé, will not be permitted to build up and carry on such a business, in his own interest, under the guise of doing business for his wife.
    Appeal from St. Clair; Vance, J.
    Submitted June 18, 1897.
    Decided September 14, 1897.
    Bill by tbe Up River Ice Company to enjoin George Denler and Alice Denler from carrying on an ice business at Port Huron. Prom a decree dismissing the bill, complainant appeals.
    Reversed.

      Atkinson & Wolcott, for complainant.

      Avery Bros. & Walsh, for defendants.
   Long, C. J.

The complainant is a corporation doing an ice business at Port Huron. On June 26, 1889, defendant George Denler owned 140 shares of its capital stock, of the face value of $3,500. He was the general manager of the company. On that day he sold out all of his interest to Albert D. Bennett under the following contract :

“This agreement, made and entered into between George Denier, of the first part, and Albert D. Bennett, of the second part, Witnesseth:
“In consideration of the purchase made this day by the party of the second part of stock to the amount of $3,500 in the Up River Ice Company, the said party of the second part agrees to assume the payment of a note made by George Denier, and payable to the Up River Ice Company, for $300, and dated March 1, 1889, and due on demand, and also one-half of two notes made by John G. O’Neill and George Denier, payable to Jacob Denier, for $300 each, due and payable on August 1, 1889, and on December 1, 1889.
“In consideration of the purchase and sale aforesaid, the said George Denier agrees and binds himself in the penal sum of $1,000 that he will not engage in the ice business in Port Huron, or adjacent thereto, at any time, either as principal, agent, or employé.”

It is claimed by the bill that, at the time this agreement was made, Denier also agreed with the complainant orally that he would not engage in the ice business in Port Huron, or adjacent thereto, at any time, either as principal, agent, or employé. Thereafter Bennett assigned to John Hayes all his rights under that contract, as follows:

“I hereby assign to John Hayes all my rights under the within agreement, and any right of action accruing thereunder ; any action that he may commence thereunder to be in his name, and at his own cost and expense.”

On April 13, 1896, Hayes assigned in writing to the Up River Ice Company, the complainant, all his right of action against Denier, including the right to restrain his engaging in the ice business at Port Huron, and authorizing the complainant to enforce all rights that belonged to bim directly or indirectly against Denier growing out of his agreement with Bennett and with the company. On the same day Bennett assigned to the complainant as follows : *

“Whereas, the purchase by the undersigned of $3,500 of stock in the Up River Ice Company, a corporation, was largely induced by the agreement of George Denier not to engage in the ice business, which agreement was made in the office of the Up River Ice Company, and for its benefit, as well as for the benefit of the undersigned; and, further; in consideration of the premises, I hereby sell and assign to the Up River Ice Company all rights of action to enforce the agreement with Denier, or to restrain him from engaging in the ice business in violation thereof, authorizing the company to enforce it in its own name.”

It appears that, at the time Denier was a member of the company, John G. O’Neill owned 240 shares of the capital stock, Peter J. O’Neill 20 shares, and the balance of 140 shares was owned by Denier. John G. O’Neill was president of the company, and Denier was its superintendent. The complainant continued business after Denier went out, and, it is claimed, Denier thereafter bought out the Crystal Ice Company in that city, and again engaged in the ice business, contrary to his agreement; that, while the company was carried on in the name of the Crystal Ice Company, Denier’s name appeared as manager, and on the ice tickets which were sold appeared his name as proprietor; and, though he claimed the business was purchased by his wife, Alice Denier, the other defendant, yet in fact it was his business, and carried on for his interest and benefit. This bill was filed to perpetually restrain the defendants from carrying on the ice business in the city of Port Huron, and to restrain defendant George Denier from engaging in the ice business, either as principal, agent, or employe, in -accordance with the agreement heretofore set out. On the hearing below the court dismissed complainant’s bill. From that decree the complainant appeals.

It is contended on the part of the defendants:

1. That the contract on the part of Denier not to engage in the ice business is void, as being unlimited in time, and because given without consideration.
2. That the contract is a personal one in its nature, and enforceable only by the person in whose interest it was made.
3. That contracts of this character are enforceable only when connected with the good will of some business to which they attach; that in this case the subject-matter was the stock transferred, and the agreement at most could but attach to this stock, which is now owned by Mr. Hayes, and not by the complainant.
4. That a court of equity must have the actual parties in interest before it to determine rights; that Mr. Hayes is the only man who could maintain this action, if anybody can, he being the owner of the stock.
5. That the manner in which the parties treated this matter immediately after its execution constituted an abandonment, and, being once abandoned, it could not be reinstated except by the joint action of the covenantor and the covenantee; that in this the defendants mean the employment of Denier by the complainant company for nearly a year after the execution of the agreement in the prohibited business; and that, therefore, there was a license on the part of Bennett, while the owner of the stock, that Denier might engage in the ice business.
6. That there is no showing that the complainant has suffered damage to the extent of $100, and that is not sufficient to call for the interference of a court of equity.
7. That no relief can be granted against Alice Denier, as the proofs show that it is her property, and she was not a party to the agreement.

There is one other claim made, and that is that the public has some interest in the matter, as the evidence shows that the entire ice on hand in all the ice houses in Port Huron, when this evidence was taken, would be needed for the use of the people.

On the hearing John Gr. O’Neill was called as a witness, and testified to the arrangement made between Denier and Bennett; that he (the witness) was president of the company. He says:

“Mr. Bennett came into the store either the day or the second day before the 26th of June, and asked me how I would like him for a partner. He said he was talking of making a trade with Denier for some stock in the ice company. * * * I said, before he made any trade he wanted to get an agreement from Denier that he would not engage in the ice business again. A day or two afterwards Bennett came in with Denier, and the matter was then spoken of by both Bennett and myself, and I drew the agreement.”

The witness was asked:

“Independent of the writing, if anything, what was said in reference to that, — as to his not engaging in the ice business ?
“A. I, personally, as the representative of the ice company, asked Mr. Denier if he was willing not to engage in the ice business if he got the transfer of the stock, and he said he was; that he had had enough of it.”

The witness further testified that at that time Denier was indebted to the complainant; that the complainant had loaned him $200 in March, 1889, and that amount was still owing; that he was indebted on two other notes of $300 each, which were to be paid from the earnings of the ice company. It appeared that there was a company called the City Ice Company, prior to 1888, that was owned by George and Jake Denier. A consolidation was had between that company and the complainant. In the arrangement, O’Neill and George Denier bought out the interest of Jake Denier. O’Neill was asked on the witness stand to state whether the subject of Jake Denier’s not engaging in the ice business was discussed at the time he went out of the business, and the witness testified that it was discussed between himself and George and Jake Denier, and that an agreement was made by Jake Denier with them that he would not engage in the ice business.

It appears that the plant owned by the complainant at the time Denier sold his stock was worth about $8,000. Some additions were made to the business thereafter, so that, at the time of the filing of this bill, complainant had eleven ice houses, containing about 8,000 tons of ice, five wagons delivering ice, and many customers. At the time the proceedings were commenced, the Crystal Ice Company, operated by George Denier, had four wagons delivering ice, and a large number of customers; and it is claimed by the complainant, and, we think, sustained by the testimony, that the business conducted by Denier was in direct competition with complainant’s business.

The court below, so far as shown by this record, made no findings, and gave no reasons for dismissing complainant’s bill, except, as stated in the decree itself, that “the bill of complaint filed herein is on the part of the complainant entirely wanting in equity, and the same is therefore dismissed.”

The rule is that contracts of this nature will be enforced in equity where the restraint is only partial, being limited as to time and place, and where reasonable grounds exist for the restraint, and where it is founded on a good consideration. 2 High, Inj. § 1167. In Hubbard v. Miller, 27 Mich. 15 (15 Am. Rep. 153), a contract was entered into by which Hubbard purchased all the stock of Miller & Co., and a contract was entered into as follows:

“In consideration of the above sale, we agree not to keep well-drivers’ tools or fixtures, and not to engage in the business of well-driving, after this date.”

It was objected that there was no sufficient consideration for the contract, and that the restraint imposed upon Miller & Co. by the contract was void, because general and unlimited as to place. The contract was held valid, and a perpetual injunction issued. The court found that there was a sufficient consideration. As to the contract itself, it was said: “And there is no reason for holding that, without the restraint contracted for, complainant would have been willing to purchase for the price he gave; nor can we say that the vendors could have sold at that price without such stipulation. ” As to the place within which the restraint was to be held effective, it was held that it should include Grand Haven and such limits about that city as the business there located would naturally and reasonably embrace, and not to be construed as such a general and unlimited restraint of trade as to be void; that the contract was fair, reasonable, ánd valid.

In Beal v. Chase, 31 Mich. 490, the contract was for the purchase of Dr. Chase’s receipt books, with the good will of the business of printing and publishing, and also the right to the use of the name of Dr. Chase in connection with said books. It was there agreed as follows:

‘ ‘ The said party of the first part also agrees that, while said Beal remains in said business of printing and publishing in Ann Arbor, he will not, either directly or indirectly, engage in the business of printing and publishing in the State of Michigan.”

This contract was held valid, and the injunction issued.

The rule was stated by the vice chancellor in Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 353, with great clearness. It was said:

“All the cases, when they come to be examined, seem to establish this principle: That all restraints upon trade are bad, as being in violation of public policy, unless they are natural, and not unreasonable for the protection of the parties in dealing legally with some subject-matter of contract. The principle is this: Public policy requires that every man shall be at liberty to work for himself, and shall not be at liberty to deprive himself or the State of his labor, skill, or talent by any contract that he enters into. On the other hand, public policy requires that when a man has by skill, or by any other means, obtained something which he wants to sell, he should be at liberty to sell it in the most advantageous way in the market; and, in order to enable him to sell it advantageously in the market, it is necessary that he should be able to preclude himself from entering into competition with the purchaser. In such a case the same public policy that enables him to do that does not restrain him from alienating that which he wants to alienate, and therefore enables him to enter into any stipulation, however restrictive it is, provided that restriction, in the judgment of the court, is not unreasonable, having regard to the subject-matter of the contract.”

This case was cited with approval by this court in Beal v. Chase, supra.

We think there was a consideration for the contract in the present case. We are not to inquire into the adequacy of the consideration, but whether there was a legal consideration to support it. Denier received his price for the stock in the company, and upon the agreement not to enter into the ice business in Port Huron or adjacent thereto.

That the contract is not unreasonable in its terms we are also satisfied. The limit of territory is set out in the contract with sufficient clearness. It means within the city, and in any territory adjacent which might reasonably be reached for delivery of ice by the Up River Ice Company with its team§ and wagons. It is evident from the terms of the written contract and the testimony of O’Neill that there was a full and fair understanding between Denier, Bennett, and O’Neill that the contract did not have reference simply to Bennett’s individual interest in the ice company by reason of the stock held by him, but had reference to the business then being done and to be done by the company, and that Denier was not thereafter to do an ice business in Port Huron and vicinity which would coifte in competition with the company. The contract was brought about by O’Neill. He insisted that it should be made if Bennett purchased the Denier stock and Denier went out of that company, and he testifies that Denier agreed not to again engage in the ice business. The sale to Bennett carried the good will of the business, so far as Denier had an interest therein and could convey it. While there was no limit of time, the contract was not void for that reason. Jacoby v. Whitmore, 49 Law T. (N. S.) 335, and cases there cited. This case is reported in 28 Alb. Law J. 510. The contract in Hubbard v. Miller, supra, had no fixed limit of time, and yet was held valid.

But it is said that the complainant could take no interest in the contract as assignee. We have proceeded so far upon the assumption that the contract to which O’Neill testified was made in the interest of the company, and was supported by some consideration. But, even if this were not the fact, yet the written contract made With Bennett came to the company by assignment; and we think the complainant acquired all the rights of Bennett by these assignments. That very question was considered in Jacoby v. Whitmore, supra. The original contract was made between Whitmore and one Martin Cheek. Thereafter Cheek assigned to plaintiff all his beneficial interest and good will in the business, etc., and it was held that plaintiff took by this assignment all the rights and interests which Cheek had under the contract. In the present case the complainant company was directly interested in protecting itself • from the competition of Denler. The company was composed of the two O’Neills and Hayes. Hayes had taken an assignment of the Denler contract, and turned such rights over to the company by assignment, and we are of the opinion that the company had the right to the enforcement of the contract.

It is said that the business sought to be restrained is not that of Denler, but belongs to his wife. We think the proofs show that it was a business started and built up by Denler, and carried on in his interest. The question is ruled by Thompson v. Andrus, 73 Mich. 551.

The other questions raised are not, in our judgment, importance, and will not be discussed. The court below was in error in dismissing complainant’s bill. That decree will be reversed, and a decree entered here in favor of the complainant in accordance with the prayer of its bill, with costs of both courts.

The other Justices concurred.


text:
    PARKER v. LINCOLN..
    1. Drains — Commissioners to Determine Necessity — Disagreement — Second Combiission.
    A petition, to the probate court for the appointment of a second commission to determine the necessity for a drain may properly be granted immediately after the coming in of the report of the first commissioners to the effect that they are “unable to agree” as to the necessity for such drain.
    2. Same — Dismissal of Proceedings — Costs.
    Where the second commission, so appointed, decides against the necessity for the drain, the proceedings are properly dismissed by the drain commissioner at the cost of the applicants. 3 How. Stat. § 1740c6.
    Error to Macomb; Eldredge, J.
    Submitted June 18, 1897.
    Decided September 14, 1897.

      Assumpsit by William T. Parker, county drain commissioner, against George V. Lincoln and others, to recover the costs and expenses incurred in certain drain proceedings instituted on defendants’ application. From a judgment for defendants on verdict directed by the court, plaintiff brings error.
    Reversed.

      Byron B. Erskine, for appellant.

      T. M. Crocker and Crocker & Knight, for appellees.
   Long, C. J.

Plaintiff was drain commissioner of Ma-comb county, and had been for several years. On May 22, 1894, an application for the location and establishment of a drain in the townships of Lenox and Chesterfield, in said county, was made, and filed with him as such drain commissioner, signed by George V. Lincoln and 23 others, the defendants herein. The plaintiff caused a survey of the proposed drain to be made in June and July following, and on October 1st made his first order locating and establishing said drain in accordance with the survey. Being unable to obtain a release of the right of way from the parties whose lands were traversed by the drain, on March 11, 1895, he made written application to the probate court of that county for the appointment of three special commissioners to determine the necessity therefor, etc. Upon the filing of the application, the probate court appointed April 11, 1895, at the probate office, as the time and place for the hearing, and issued citations to all the parties interested. Commissioners were thereafter appointed, and they met with the drain commissioner and the parties interested, examined the route of the proposed drain, and thereafter, on April 24th, filed their report. That report, after setting out the proceedings up to that time, states:

“After hearing the proofs and allegations of each party in interest who was there to .present the same, and viewing the premises of all the parties in interest, and ascertaining all matters justly pertaining thereto, and after taking such matters and said allegations and proofs fully and fairly under consideration, we are unable to agree as to the necessity for the proposed drain, and of the taking of private property for the use and benefit of the public for the purpose thereof.”

On May 10th following, the plaintiff, as drain commissioner, filed a second application in the probate court, setting up the prior appointment by said court of special commissioners, and their proceedings in the premises, attached thereto a copy of their report, and prayed the appointment of a new commission to determine the necessity of said drain, etc. The probate court thereupon issued citations to all the parties in interest, reciting in substance the contents of said petition, and citing them to appear at the probate office on June 11, 1895, and show cause why the application should not be granted. Three commissioners were thereupon appointed by the probate court, and on June 18th they met with the drain commissioner and the parties interested, and, after being duly sworn, examined the route of the proposed drain, heard the proofs and allegations of the parties, and thereupon filed a report with the drain commissioner deciding against the necessity of the proposed drain.. On July 1st following, the plaintiff, as drain commissioner, made and filed an order dismissing the proceedings at the expense of the applicants, the defendants herein, and served a copy upon each. They refused to pay the costs and expenses of the proceedings. This suit was commenced to recover the same from them.

On the trial the court directed a verdict in favor of the defendants, giving as his reasons therefor that it was the duty of the special commissioners first appointed to report that it was or was not. necessary to establish the drain; that there could be no such thing as a disagreement of the commissioners, and a finding or conclusion of a majority on that point should have been reported to the drain commissioner, and his duty under the statute was to have required such report, and to have taken the steps necessary to enforce it; that the petition to the probate court for the appointment of a second commission on its face showed the situation as to the report of the first commission, and therefore showed that the probate court had no jurisdiction to appoint a new special commission, and that the appointment of commissioners and their subsequent action were without authority of law and void; that, therefore, there was no legal basis for the order of the drain commissioner dismissing the proceedings at the cost of the petitioners.

In this we think the court was in error. Section 174055, 3 How. Stat., provides:

“* * * Such applicants shall be jointly and severally liable for all costs and expenses in case the commissioner upon examination, or upon examination and survey, shall determine that the same is unnecessary or impracticable, or in case the proceedings shall be dismissed for other cause.”

Section 1740c6 of the same statute provides:

“In case the special commissioners or jury shall decide such drain to be unnecessary, they shall so state in their return, and the drain commissioner shall thereupon dismiss the proceedings at the cost of the applicants, and no further application for the same object shall be entertained within one year thereafter.”

It was held in Case v. Telling, 112 Mich. 689, that these proceedings under the statute make the applicants liable for the costs of the proceedings at any stage when dismissed or quashed for any cause not due to the negligence of the commissioner.

It is evident that the drain commissioner or his counsel followed the opinion of this court in Kress v. Hammond, 92 Mich. 372, in making application for the second commission. In that case it was said:

“There is no provision of the statute as to what the proceedings shall be upon a disagreement of the jury, but from the provisions of section 12, above quoted, we are satisfied that it was the intent of the legislature that, upon a disagreement of the commissioners or jury, proceedings might at once be had upon the application of the drain commissioner and parties interested in lands to be affected for the impaneling and striking of a new, jury.”

We think it cannot be said that these commissioners could not disagree. It is very evident they might disagree upon several questions they are called upon to determine, as is aptly illustrated by counsel for plaintiff in his brief : “A. and B. might be for and C. against the drain, and A. and B. disagree upon the award of damages; or A., B., and C. might be for the drain, and A. and B. agree on the award of damages for one parcel, and C. dissent, and B. and C. agree on the award for the second parcel, and A. dissent. A. might be for, B. against, and C. refuse to agree with either except upon an agreement with him as to the amount of some award.” Other illustrations might be given of the possibility of a disagreement by three commissioners, as they must determine not only the necessity for the taking of the land, but also the just compensation to be paid therefor. We think the only question in the case was as to the amount of costs and expenses which the defendants should be required to pay.

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

The other Justices concurred.


author: Moore, J.

text:
    WEGGNER v. GREENSTINE.
    1. Building Contracts — Arbitration Clause — Validity.
    A building contract provided that the contractor, under the direction and to the satisfaction of the architect, “acting, for the purposes of the contract, as agent of the owner,” should provide all materials, etc.; that, if alterations were made in the plans, the value of the work added or omitted should be computed by the architect, and the amount so ascertained added to or deducted from the contract price; that, in case of dissent from such award by either party, the valuation of such work should be referred to three disinterested arbitrators, whose decision should be final. Held, that the arbitration clause was valid, and binding upon the parties.
    3. Same — Architect as Agent of Owner — Appeal from His Decision.
    A dispute arose between the parties to such contract as to the damage caused by a failure to construct the cellar according to the specifications. The architect professed to be satisfied, and issued his final certificate as to the amount due. The owner demanded a reference to arbitrators, and named one who should act in his behalf. The contractor, contending that the architect was the agent of the owner under the terms of the contract, and that his decision was final, refused to appoint an arbitrator, and brought suit for the amount certified by the architect. Held, that the action was premature, and could not be maintained.
    3. Same — Premature Suit — Items Agreed Upon.
    It was not error for the court, in dismissing the suit as premature, to refuse to treat separately a claim for extras for work done under the terms of the contract, upon the value of which the parties were agreed.

      Error to Wayne; Frazer, J.
    Submitted June 18, 1897.
    Decided September 14, 1897.

      Assumpsit by Joseph Weggner against Jacob Greenstine to recover a balance due upon a building contract. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Affirmed.

      Floto ers, May & Moloney, for appellant.

      Henry B. Graves, for appellee.
   Moore, J.

January 30, 1896, plaintiff agreed in writing with defendant to construct for him three buildings, at an agreed price of $5,325. Differences arose between the parties, and this suit is brought to recover a balance due the plaintiff, which he claims amounts to $704, which includes $88 for extras.

The trial judge took the case from the jury on two grounds:

First. That the contract requires the plaintiff to submit his claim to arbitrators before he can bring suit, and he had failed to do so.
Second. That, under the provisions of section 4, Act No. 179, Pub. Acts 1891, the plaintiff was bound to furnish the defendant a statement under oath of the number and names of every.subcontractor and laborer in his employ, and of every person furnishing material, before he could bring this suit, and that, as he had not done so, his action is prematurely brought.

Plaintiff appeals.

The contract has these provisions:

“The contractor, under the direction and to the satisfaction of Harry J. Rill, architect, acting, for the purposes of this contract, as agent of the said owner, shall and will provide all the materials,”' etc. “No alterations shall be made in the work shown or described by the drawings and specifications, except upon a written order of the architect; and, when so made, the value of the work added or omitted shall be computed by the architect, and the amount so ascertained shall be added to or deducted from the contract price. In the case of dissent from such award by either party hereto, the valuation of the work added or omitted shall be referred to three disinterested arbitrators, one to be appointed by each of the parties to this contract, and the third by the two thus chosen, the decision of any two of whom shall be final and binding; and each of the parties hereto shall pay one-half of the expenses of such reference.”

Article 5 provides that in case of a failure on the part of the contractor to do the work, upon notice from the architect, the owner may go on and complete the buildings, and that,—

“ If the unpaid balance * * * shall exceed the cost of completing the buildings, such excess shall be paid by the owner to the contractor; but if such expense shall exceed such unpaid balance, the contractor shall pay the difference. The expense incurred by the owner, as herein provided, either for furnishing materials or for finishing the work, and any damage incurred through such default, shall be audited and certified by the architect, whose certificate thereof shall be conclusive upon the parties.”

The contract provided for the payments, and provided:

“The contractor is to show evidence before each payment is made-that there is no claim for material or labor against said buildings. The final payment shall be made within five days after this contract is fulfilled. All payments shall be made upon written certificates of the architect to the effect that such payments, and the amount of such payments, have become due. If at any time there shall be evidence of any lien or claim for which, if established, the owner or the said premises might become liable, and which is chargeable to the contractor, thé owner shall have the right to retain out of any payment then due, or thereafter to become due, an amount sufficient to completely indemnify him against such lien or claim. Should there prove to be any such claim after all payments are made, the contractor shall refund to the owner all moneys that the latter may be compelled to pay in discharging any lien on said premises made obligatory in consequence of the contractor’s default. It is further mutually agreed between the parties hereto that no certificate given or payment made under this contract, except the final certificate or the final payment, shall be conclusive evidence of. the performance of this contract, either wholly or in part, and that no payment shall be construed to be an acceptance of defective work or improper materials.”

The contract provided that the cellar should be six feet six inches high. It was built from three to five inches less than that height. It is claimed by the plaintiff that the reason it was not built as the contract provided was that the sewer was not low enough to allow the cellar to be built as provided in the contract, and that he was instructed by the defendant, after the defendant had been advised of the facts, to do the best he could. This claim of his is denied by the defendant, who claims the sewer was low enough to allow the cellar to he constructed as planned, and that, as soon as he knew it was not so constructed, he notified the plaintiff that he should not accept the building.

It was admitted on the trial by the plaintiff that more than $500 was due and unpaid to subcontractors and material men for work done and material furnished. The amount was claimed to be somewhat larger by the defendant. It was admitted that some changes were made in the stairway and partition walls, for which plaintiff should he paid $88 in addition to the contract price. The architect testified that the work was done to his. satisfaction, and that he issued his final certificate of the amount due. It is the claim of the plaintiff that the architect was acting, for the purposes of this contract, as the agent of the owner, and that, when the architect was satisfied, the contract was completed; that his conclusion would be conclusive upon Mr. Greenstine; citing Hanley v. Walker, 79 Mich. 607; Guthat v. Gow, 95 Mich. 527; Boots v. Steinberg, 100 Mich. 134; and other cases.

The circuit judge held, and so instructed the jury, that, by the terms of the contract, changes might be made, but, when made, that the amount caused by the change should be added to or deducted from the contract price, and that this amount must be first determined by the architect, and that, if either party was not satisfied with the amount found by the architect, the amount should be submitted to arbitrators. When the contract is read as an entirety, we think it difficult to reach any other conclusion than the one reached by the learned judge.

It is claimed by the counsel for the plaintiff that the provision for arbitration is a general one, not specifically designating the terms of the arbitration, or to whom the differences shall be submitted, and is therefore revocable by either of the parties; citing Home Fire Ins. Co. v. Kennedy, 47 Neb. 138; Donnell v. Lee, 58 Mo. App. 288; and Rison v. Moon, 91 Va. 384. The record discloses that, when the parties were unable to agree about the damages caused by the failure to construct the cellar according to the contract, the defendant proposed to arbitrate the matter, and named an arbitrator. The plaintiff failed to do so. The authorities cited by counsel undoubtedly hold as they contend, in relation to the effect of an agreement to arbitrate all differences between parties; but they hardly meet the situation shown by this record. The agreement, as shown by the record, is that, when alterations are made,—

“ The value of the work added or omitted shall be computed by the architect, and the amount so ascertained shall be added to or deducted from the contract price. In the case of dissent from such award by either party hereto, the valuation of the work added or omitted shall be referred to three disinterested arbitrators, one to be appointed by each of the parties to this contract, and the third by the two thus chosen, the decision of any two of whom shall be final and binding.”

In Chippewa Lumber Co. v. Phenix Ins. Co., 80 Mich. 120, it was said: “An agreement to submit all matters in controversy between parties to arbitration, and thus oust courts of .their jurisdiction, is void, and may be repudiated by either party at any time before award is made;” but the court held that an agreement to arbitrate the question of unliquidated damages involved in the contract which was the subject of controversy was reasonable and legal.

In Guthat v. Gow, 95 Mich. 527, it was held that a plaintiff conld not recover for a balance due upon a building contract, which contract contained a provision that the owner might at any time make any additions or alterations he deemed proper, the fair value of the same to he added to or deducted from the sum to be paid by the owner, “ and, should any dispute arise respecting the fair value of the same, such value shall be determined by the architect, and his decision shall be final and binding upon the parties hereto,” when the work was not done to the satisfaction of the architect, and testified by his certificate; citing Hanley v. Walker, 79 Mich. 607.

In the case of Boots v. Steinberg, 100 Mich. 134, the contract provided that the price for extras should be settled by arbitrators, unless the parties could agree upon their value. The value of the extras was not submitted to arbitrators before the suit was begun, and the Court held:

“The extras claimed cannot be called due, for they were to be submitted to arbitration, and no step has been taken to that end. The parties have seen fit to make their contract, and it is not for us to make one for them. They have provided their own forum to determine the value of extras, and it is not for us to deprive either of the right to such forum.”

See, also, Norton v. Hayden, 109 Mich. 682; Ball v. Doud, 26 Or. 14; Scammon v. Denio, 72 Cal. 393.

Plaintiff claims the court erred in refusing to submit to the jury the claim of $88 for extras. It is true the value of these extras was agreed upon by the parties, but they were for work done under the terms of the contract, and they cannot be treated as separate and apart from the contract.

We do not think the court erred in his disposition of the questions we have discussed. It is not necessary to discuss the questions raised in relation to the lien law, and we pass them without discussion.

Judgment is affirmed.

The other Justices concurred.


text:
    HOFFMAN v. FLINT & PERE MARQUETTE RAILROAD CO.
    1. Railroads — Occupancy op Street — Continuing Wrongs — Right op Action.
    The owner of a lot abutting upon a street in which a railroad company has laid its tracks under a mere license from the city, granted subject to the rights of adjacent owners, may recover from the company the damages accruing to him from year to year by reason of such occupancy of the street, although he did not own the lot when the road was constructed, and no rights of action have been assigned to him by the one who did then own it.
    2. Same — Measure op Damages.
    The measure of dámages in such case is the depreciation in the rental value of the premises by reason of the occupancy of the street by the company.
    3. Same — Statute op Limitations.
    The statute of limitations precludes a recovery in such case for damages accruing more than six years prior to the commencement of suit.
    Error to St. Clair; Eldredge, J., presiding.
    Submitted June 18, 1897.
    Decided September 14, 1897.
    Case by John M. Hoffman against the Flint & Pere Marquette Railroad Company to recover damages for the unauthorized use of the street in front of plaintiff’s premises. Prom a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Reversed.

      William T. Mitchell, for appellant.

      Stevens & Graham, for appellee.
   Moore, J.

January 7, 1884, plaintiff became the owner of lot 43 in the city of Port Huron, lying east of Merchant street, and between the said street and the St. Clair river, and claims to be the owner of the fee of said land to the center of Merchant street. In April, 1889, the defendant company purchased the Port Huron & Northwestern Railway. The last-named company built its road in front of the lot in question in 1880. Before doing so it obtained permission from the common council of the city of Port Huron to use the street for its railway, subject to the rights of the adjacent lot owners. The company also procured a release from Thomas S. Skinner. Mr. Skinner had no record title to the lot, but claimed an equitable interest in an undivided five-eighths of the lot. This suit was begun May 16, 1894. The declaration filed in the case claims damages for injuries done to said lot by reason of the unauthorized use of said street in front of said lot, which makes egress and ingress to said lot difficult, and which, it is alleged, continued from the 1st of May, 1888, from day to day, and continually, up to the time of bringing the suit. No release was ever obtained from the owners of the record title to said lot 43 by the railroad company. Testimony offered on the part of the plaintiff tended to show that, because of the use of the street by the railroad company, the lot has been depreciated in value $1,500. The testimony on the part of the defendant is to the effect that it has not been depreciated at all. The testimony also shows that the lot has been in the actual and undisputed possession of the plaintiff and his grantors and their tenants for over 20 years; that, prior to plaintiff’s obtaining title, it was rented to William Le Blanc, a boat builder, from year to year, and that he was still in possession, occupying for the plaintiff. The testimony also discloses that the defendant company is now occupying the tracks in front of said lot and upon the siding on Commercial street in substantially the same manner as did the Port Huron & Northwestern Railway Company.

When the testimony was all in, the judge charged the jury as follows:

“It being established by the uncontradicted testimony in the case that the legal title to lot 43, the premises in question, at the time the Port Huron & Northwestern Railway Company, the assignor of the defendant, entered upon and laid its main track and side tracks on the frontage of said lot on Merchant street, was in Calvin Ames, or his heirs at law, and that said title to lot 43 did not pass to the plaintiff at all until at least three years after the construction by" said company of its tracks on the frontage of said lot, and the plaintiff having made no proof of any assignment to him by said Ames, or his heirs at law, of his or their rights to have or collect the damages done to them by said action of said company, or their right to compensation for said appropriation of their land, and it appearing by competent and uncontradicted evidence that the said company was licensed and authorized by the city to construct and maintain its tracks in said street, the plaintiff in this action cannot recover for the diminution of the value of lot 43 caused by said appropriation of the frontage of said lot, nor can he recover any damages for any injurious effects of the mere maintenance and use of the main and side tracks of said company in said street in the usual and ordinary way in which such tracks are used; and, as no other damage is alleged or shown, it is your duty to render a verdict in favor of the defendant, and I so instruct you to do. ”

The plaintiff, appeals.

No copy of plaintiff’s deed to lot 43 is returned with the record, but it is not questioned by counsel that plaintiff is the owner in fee of the land to the center of Merchant street, subject to the rights of the public to use it as a street. It is the claim of counsel for the defendant that a railroad, when once constructed, is of such a permanent character that it is to be presumed that it will remain permanently; that when the railroad was constructed, in 1880, whatever damages were done to the premises occurred at that time, and the owner was entitled to recover not only the damages which had then accrued, but for all that might thereafter accrue; and, as plaintiff’s grantor had not assigned to him his cause of action, the plaintiff was not entitled to recover. Counsel cite in favor of this contention, Dunlap v. Railway Co., 50 Mich. 470; McFadden v. Johnson, 72 Pa. St. 335 (13 Am. Rep. 681); 6 Am. & Eng. Enc. Law, 588, note 3; New Jersey Central R. Co. v. Hetfield, 29 N. J. Law, 206. It does not seem to us, however, that these cases meet the issue here presented. The defendant has not taken exclusive possession of a portion of plaintiff’s property. Neither the defendant nor its grantor has taken any proceedings to condemn the right of way. The license granted by the common council was subject to the rights of the adjacent owners. The defendant has not acquired any right. of occupancy from the owners of the record title. In Grand Rapids, etc., R. Co. v. Heisel, 38 Mich. 62 (31 Am. Rep. 306), it was held that the city authorities could not authorize a railroad company to occupy a city street with its tracks and business without compensation to adjacent owners; and in the same case, when it was here the second time, reported in 47 Mich. 393, it was said:

“If the railroad company had undertaken in any legal way to obtain the right to occupy the street previous to 1873, and had obtained a condemnation of the line occupied, the question of any power to occupy a street except for crossing, and the question what rights could be reached and condemned under the statute, so as to give a title to lay and use the railway there, would both become material. It has been a matter of some 'difficulty to determine how far private interests may lawfully be interfered with when not actually granted or condemned. But there can be no doubt whatever that any entirely unauthorized interference -with any recognized right whatever is a good ground of action. In the present case there was no lawful occupancy or any claim of permission from the city shown prior to 1873, and no pretense of authority from plaintiff at any time. She has not been cut off by any supposed grant or condemnation, and the road was laid without her consent. She is, therefore, entitled to damages for such injury as she has suffered from the continued aggression. * * * It need hardly be said that nothing can be fairly termed compensation which does not put the party injured in as good a condition as he would have been if the injury had not occurred. Nothing short of this is adequate compensation. In the case of land actually taken, it includes its value, or the amount to which the value of the property from which it is taken is depreciated. * * * In cases where damage is by injury aside from actual taking of property, the rule has been to make the party whole as nearly as practicable; and where it affected the rental value or enjoyment, the same principle has been applied as in other cases. There is no reason, and, so far as we can discern, no law, which allows the wrongdoer to cast any portion of an actual and appreciable loss on the party whom he injures. In such a case as this it is in the power of the company, and always has been, to have the compensation settled once for all, and to get any benefit which the law attaches to such a method of ascertainment. Until this is done, the possession is a continuous wrong, from which, as intimated in our former decision, the amount accruing year by year is recoverable. The following are cases where the damage done was, as in this case, distinct from the actual taking of property from the party injured,” — citing a large number of cases. ,

In that case the reduction in the rental value during the years sued for was regarded as a reasonable test of the amount of damages, the court saying that the reduction of rental value is a recognized element of annual damage in all cases of injuries from misuse of highways, and that there can be no question that such an occupation of a highway without authority is actionable if any actual damage ensues to the adjacent owner. The plaintiff was allowed to recover her damages for the six years prior to the commencement of the suit. We think the principle announced by the court in the Heisel Case should control this case. It is doubtless true that so much delay has occurred before bringing suit that the statute of limitations has run so as to prevent a recovery for damages for more than six years prior to bringing suit. We think the plaintiff should have been allowed to recover for any diminished rental value of his premises for the six years prior to the commenc'ement of this suit.

Judgment is reversed, and new trial ordered.

The other Justices concurred.