text:
    THOMSON v. FLINT & PERE MARQUETTE RAILROAD CO.
    1. Lost Deed — Secondary Evidence.
    Whether the loss of a deed has been sufficiently proved to warrant the admission of secondary evidence of its contents is a question for the court, and not for the jury.
    3. Same.
    Testimony that a deed executed by witness as executor was in his possession in the custom house, where he was employed, that subsequently, both before and after leaving the custom house, he looked for it everywhere he thought it likely to be, but was unable to find it, and that he never took it into the office of testator’s estate, is sufficient proof of loss to justify the admission of secondary evidence, though it is not shown that search was made among the papers in the estate’s office.
    3. Same — Credibility of Witnesses — Instructions.
    Where, in ejectment against one claiming under a lost deed, a witness having no interest in the matter testifies to the execution of the deed and to its loss, and no purpose to withhold or destroy the paper, nor anything suspicious about its loss, is shown, it is not error to instruct the jury that the testimony of such witness, being undisputed, establishes the execution ’ of the deed.
    4. Same — Railroad Right of Way.
    In ejectment against a railroad company claiming under a lost deed, a contention that the substance of the deed was not sufficiently proved cannot be sustained where a witness testified positively that it was an absolute conveyance for a right of way across the lot in controversy.
    5. Deeds — Right of Way — Sufficiency of Description.
    Where the parties to a conveyance of a railroad right of way have gone upon the premises, and located and established the right conveyed, it ca.nnot afterwards be’contended that such right was a mere floating one.
    6. Same — Delivery—Several Grantors.
    Where a deed is executed by one of the grantors, and delivered to the grantee, without any qualification, or any intention to withdraw it, it is operative as to such grantor, notwithstanding a failure of delivery as to another grantor.

      Error to St. Clair; Vance, J.
    Submitted April 23, 1902.
    (Docket No. 127.)
    Decided June 17, 1902.
    Ejectment by John W. Thomson, Jr., and Kate V. Calder against the Flint & Pere Marquette Railroad Company, the McMorran Milling Company, and the Chicago & Grand Trunk Railway Company. From a judgment against the first-named defendant, and in favor of the other defendants, plaintiffs bring error.
    Affirmed.
    Lots 41, 42, and 43 of the village of Peru, now city of Port Huron, are water lots fronting on the St. Clair river, lying adjoining to, and south of, Court street. Lot 40 is also a water lot, lying north of Court street, and owned by the McMorran Milling Company. Daniel B. Harrington in his lifetime owned lot 41; the Sanborn and Sweetzer estates, of which John P. Sanborn was executor and trustee, owned lot 42; and James Beard owned lot 43. Henry McMorran and Charles F. and E. B. Harrington (the latter two being sons of Daniel B. Harrington) constituted a copartnership known as the McMorran Milling Company, and in 1875 commenced building a gristmill on lot 40, and the mill was completed and in operation in 1877. After the mill was in operation some time, the Mc-Morran Milling Company laid down tracks across lot 41 and the other two lots south, connecting their mill with the railroad tracks about 1,400 feet south. Daniel B. Harrington died in 1878. Charles F. and Edmund B. Harrington were made trustees of his estate, and, while in control of the estate, the Port Huron & Northwestern Railroad Company, in which they were interested, placed other tracks across said lot 41. The Port Huron & Northwestern subsequently sold to the Flint & Pere Marquette Railroad Company. In 1885 an elevator was built on lot 40 by the Port Huron & Northwestern Elevator Company, a corporation, in which Henry McMorran and Charles F. and Edmund B. Harrington were interested as stockholders and officers; and another railroad track was laid across the front of lot 41, connecting the elevator with the main •line of railroad tracks south. In the partition of the Har'rington estate, lot 41 was assigned to Ida A. Thomson and Kate V. Calder, daughters of Daniel B. Harrington, at an appraised value of $11,000. The interest of Ida A. Thomson was devised by her will to her husband, John Ws Thomson, Jr. In 1895, after the plaintiffs acquired title, and after due notice to the defendants to remove their tracks from lot 41, the plaintiffs brought this action of ejectment. A short time after the partition proceedings, Ida A. Thomson died, leaving her interest in lot 41 to her husband, John W. Thomson, Jr.; and he and Kate V. Calder, as plaintiffs, a year later instituted this suit against the Flint & Pere Marquette Railroad Company, the Chicago & Grand Trunk Railway Company, and the McMorran Milling Company.
    Lot 41 is located at the foot of Court street, and fronts on the St. Clair river, and runs west to First street. At the time of Daniel B. Harrington’s death there was a railroad track across lot 41, near the west end of the lot; the railroad being laid upon an embankment, and running from a mill located on the west part of lot 40 to connect with the Port Huron & Lake Michigan Railroad, on the south side of Griswold street. This so-called mill track had been constructed between one and two years prior to the death of Mr. Harrington, under the following circumstances: Mr. Harrington, being desirous that his sons, Charles F. and Edmund B., should engage in the milling business, induced Henry McMorran to form a partnership with them for the purpose of erecting a large flouring mill on lots 39 and 40, at the foot of Court street, lying immediately north of, and adjacent to, lot 41, and such partnership was formed under the name of McMorran & Co. Some years after the death of Daniel B. Harrington, the firm was incorporated as the McMorran Milling Company, and is one of the defendants in this suit. About 1876 the erection of the flouring mill was commenced, — located, as above stated, on the west part of lot 40, — and, when completed, cost upwards of $60,000. Mr. McMorran furnished one-third of the capital, and the Harringtons furnished their share of the funds required for constructing the mill.
    Mr. Harrington, from the time the work was started until the mill was built, and the embankment thrown up, and the track laid connecting the mill with the railroad, supervised and directed the enterprise both of constructing the mill and making the railroad connections. At the time the mill was erected, the only railroad in the city south of Black river was the Port Huron & Lake Michigan, which was in operation from Port Huron to Flint, and was known as the “Bancroft Road.” Its terminal in Port Huron was on the south side of Griswold street. Griswold street runs parallel with Court street, and the distance between the' termination of the railroad track south of such street and the location of the mill was about 1,500 feet. The land over which the mill track was required to be built was submerged, having from 2 to 3 feet of water upon it; and, in order to build the connection, it was necessary to dredge along the margin of the river across the marsh for 1,500 feet and upwards, throwing up an embankment above the level of the river sufficiently wide upon the top to carry a railroad track. Without a railroad connection the mill would have been of but little value, and therefore Mr. Daniel B. Harrington was anxious to have a railroad connection put in; and, at his suggestion, negotiations with Mr. Bancroft were entered into with such object in view. The evidence on the part of the defendants tended to show that, in order to secure the right of way for the railroad track, across the land of the individuals above named, to that controlled by the railroad company, Daniel B. Harrington drew up a deed between himself, James Beard, and John P. Sanborn, as executor of the Sweetzer and Sanborn estates, of the first part, and Henry McMorran, of the second part, conveying a right of way for a railroad with one or more tracks across lots 41, 42, 43, and the river front to the railroad land. After this deed had been drawn up and signed by-Mr. Harrington, it was given by him to Mr. McMorran, who took it to Sanborn to obtain his signature. Mr. San-born informed Mr. McMorran that he would prefer that he should secure the signature of Mr. Beard, and that then he would take the deed to Detroit and get the opinion of his counsel, Mr. Holbrook. After securing the signature of Mr. Beard, Mr. McMorran took the deed a second time to Mr. Sanborn, who carried it to Detroit and submitted it to his attorney, D. C. Holbrook; and, after getting his opinion, he signed it on behalf of the estates which he represented, and on his return put it away, so that Mr. McMorran could get it when he should call for it. Some time afterwards, when Mr. McMorran called for the deed, Mr. Sanborn was unable to find it; and up to the present time he has been unable to ascertain its whereabouts, although at different times he has made a search for the deed at the request of Mr. McMorran.
    On the trial a judgment was obtained by the plaintiffs against the Flint & Pere Marquette Railroad Company, but the court directed a verdict against the plaintiffs in favor of the McMorran Milling Company and the Chicago & Grand Trunk Railway Company.

      John B. Mcllwain, for appellants.

      Herman W. Stevens and John G. Graham, for appellee McMorran Milling Co.

      E. W. Meddaugh, for appellee Chicago & Grand Trunk Railway Co.
   Grant, J.

(after stating the facts). 1. It is insisted that the proof of loss of the instrument was insufficient to justify the admission of secondary evidence. The question whether the loss has been sufficiently proved must be decided by the court at the trial. It is not a question for the jury. Those relying upon a lost document must estabfish the execution of the document, its loss, and a diligent but unsuccessful search for it in places where it is most likely to be found. 1 Greenl. Ev. (15th Ed.) § 558. Mr. Sanborn testified to the execution of the paper by Mr. Harrington; that it was brought to him by Mr. McMorran; that he asked McMorran to secure the signature of Mr. Beard; that his signature was secured; that he took it to Detroit, consulted his attorney, and then executed it himself ; that the witness was then in the custom house, where he had the paper; that he looked everywhere he thought it was likely to be; that, after he left the custom house, he “went through all the papers where it was likely to be; that he did not take it into the estates’ office at all; that it never was in the estates’ office, dhat he knew of.” This testimony stood uncontradicted, and, we think, justified the court in holding that reasonable search had been made, and that its loss had been proved.

2. It is urged that the court erred in directing a verdict in favor of the defendants the McMorran Milling Company and the Chicago & Grand Trunk Railway Company, and in saying to the jury that “the testimony of John P. Sanborn was undisputed, and established the fact that Daniel B. Harrington executed a paper which gave to the McMorran Company the right of way for one or more tracks across lot 41.” Counsel for plaintiffs relies upon Hagan v. Railroad Co., 86 Mich. 615 (49 N. W. 509), and Michigan Pipe Co. v. Insurance Co., 92 Mich. 482 (52 N. W. 1070, 20 L. R. A. 277). In those cases there were facts and circumstances tending to throw discredit upon the statements of the witnesses, and held to be inconsistent with the testimony which was claimed to be undisputed. We find nothing in this case to bring it within the rule of those cases. Mr. Sanborn had no interest in the matter. No purpose or intention to withhold or destroy the paper, or anything suspicious about the circumstances of its loss, was shown. We find no error in thus instructing the jury.

3. It is next insisted that the substance of the writing was not sufficiently proved. This contention cannot be sustained. Mr. Sanborn testified positively that it was an absolute conveyance for the right of way across lot 41. Counsel seeks to bring the case within that of Taylor v. Adams, 58 Mich. 187 (24 N. W. 864), where a witness was not able to give either the description or number of the lot stated in a certain contract, and yet was permitted to testify that it was the same one in question in that suit. Here the lot is clearly identified, and a railroad right of way over it is a sufficient description after it has been located by the parties and used for a period of 20 years by the grantees.

Counsel also insists that this was a “mere floating right,” under the rule of Detroit, etc., R. Co. v. Forbes, 30 Mich. 165. The description in that case, which was held to be a “mere floating right,” was of “100 feet in width, being 50 feet on each side of the line which may be hereafter established by said company for the route of their railroad over and across the following described land,” being a 40-acre tract. Before the controversy arose the company had not located its route. Evidently, if the location had been made, the deed would have been held good; for the opinion says: “Until such actual location, therefore, the title of the whole 40 acres remained in the plaintiff below, and it was competent for him to do with or upon it all he could have done before the deed was executed.” The question involved in that case was whether the owner of the land could maintain an action of assumpsit against the company for failing to remove a certain barn located upon the land. In this case Mr. Harrington was present when the right of way was constructed, and superintended it. If the right conveyed was a floating one, it had become fixed when both the grantor and the grantee went upon the land and established the right of way.

4. We think there was sufficient evidence, so far as Mr. Harrington was concerned, of the delivery of the deed. He had executed it and delivered it without any qualification, or any intention to withdraw it. It was executed by other adjoining owners, over whose property the road must be constructed. It was constructed over submerged lands by throwing up a roadbed at great expense. It is apparent that all the parties understood that no title to a right of way could be obtained except by a written instrument. No other conclusion is possible than that such an instrument was executed, upon which all the parties thereto acted.

We think the case was rightly disposed of, and must be affirmed.

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


source: Caselaw Access Project

author: Hooker, C. J.

license: Public Domain

text:
    GROH v. GROH.
    Deeds — Reformation—Reservation.
    A decree reforming certain conveyances by inserting therein a reservation of a right of way over the premises conveyed was affirmed, under the evidence.
    Appeal from Wayne; Donovan, J.
    Submitted April 24, 1902.
    (Docket No. 47.)
    Decided June 17, 1902.
    Bill by Emeline, Elizabeth, Amber, Rebecca, and Mary Alice Groh against Albert and Lillian H. Groh and Emma Swan to enforce an easement in the nature of a right of way over defendants’ lands. From a decree for complainants, defendants Groh appeal.
    Affirmed.

      James H. Pound, for complainants.

      Ari E. Woodruff and Julius J. Thiede, for appellants.
   Hooker, C. J.

We agree with the learned circuit judge that this cause is an unseemly controversy, not creditable to defendants Albert and Lillian Groh, and we think the testimony warrants the finding of deliberate overreaching by Albert, whereby the legal right of the complainants to an easement through Frenchman’s Creek lane was not set forth in the conveyances made to give effect to their agreement. We are satisfied that it was the understanding that this right should not be disturbed by the partition, and that the deed from Amber to Albert Groh should have been made subject to it, which was the clear agreement of the parties.

The decree of the circuit court is affirmed, with costs.

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


author: Montgomery, J.

text:
    DASCHKE v. SCHELLENBERG.
    Equity Pleading — Demurrer to Amended Bill — Waiver oe Objections.
    Where a bill of complaint, which has been amended after a demurrer thereto has been sustained, is again demurred to for a defect which existed in the original bill, but which was not set up in the former demurrer, and complainant not only goes to a hearing on the second demurrer without objection, but admits that the defect assigned cannot be remedied, he will be deemed to have waived any irregularity in the practice.
    Appeal from Wayne; Donovan, J.
    Submitted April 24, 1902.
    (Docket No. 142.)
    Decided June 17, 1902.
    Bill by John Daschke and Charles Daschke, copartners as John Daschke & Co., against Harry L. Schellenberg, to enforce a mechanic’s lien. From a decree dismissing the bill on demurrer, complainants appeal.
    Affirmed.

      James D. May (Thomas J. Mahon, of counsel), for complainants.

      Harry L. Schellenberg, in pro. per.

   Montgomery, J.

Bill to enforce a mechanic’s lien. The decree entered in the circuit court is, in part, as follows:

'' The demurrer of the defendant to the bill of complaint having been duly brought for argument, and it appearing to the court that a former demurrer having been sustained, and the said complainants having had leave of the court to amend their said bill of .complaint, and that an amended bill of complaint has been filed therein, and that said amended bill of complaint does not contain any allegations that proof of service of statement of lien has been filed with the register of deeds, and it appearing by admission of counsel for complainants that no such proof was actually filed, and that therefore complainants are unable to further amend by adding such a statement, * * * it is ordered that the demurrer be, and the same is hereby, sustained, and that the said bill of complaint be dismissed,” etc.

The sole point raised on appeal is that the same defect having existed in the original bill, and the original demurrer having assigned but a single ground, — the omission to verify under oath, — the point cannot now be raised by a demurrer to the amended bill. Upon this point counsel cite Munch v. Shabel, 37 Mich., at page 168.

If we assume that correct practice required defendant to answer over the complainants’ amended bill, and that the second demurrer was irregular, the complainants should have met it by a motion to strike. Instead of doing this, the case is brought to a hearing on demurrer, without apparent objection. Not only this, but, as appears by the decree, complainants admit that the defect which the circuit judge found in the bill could not be remedied. The record does not disclose that at any stage the circuit judge was apprised of any objection to a determination of the questions- raised on demurrer. We think the complainants must, under these circumstances, be held to have waived any objection to the practice.

No argument is presented on the merits, and the decree will therefore be affirmed.

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


text:
    PEOPLE v. GILLINGHAM.
    Fish — Nets—Size of Meshes — Construction of Statute.
    2 Comp. Laws, § 5844, forbidding the use in the waters of this State of pound nets the meshes of which are of less than 4 inches extension “as manufactured,” and section 5846, providing that nets having 21-inch meshes may be used in certain localities, both have reference to the size of the meshes when the net is manufactured, and do not authorize a conviction for fishing with a net having meshes of the required size when purchased, but which have shrunk to less than that size when used.
    Exceptions before judgment from Iosco; Connine, J.
    Submitted May 8, 1902.
    (Docket No. 156.)
    Decided June 17, 1902.
    James H. Gillingham was convicted of unlawfully fishing on May 16,1901, with a pound net having meshes less than 2J inches in size.
    Reversed.

      Simonson, Gillett & Clark, for appellant.

      Charles A. Jahraus, Prosecuting Attorney, for the people.
   Hooker, C. J.

This defendant was convicted under section 5846, 2 Comp. Laws, of unlawfully fishing with a pound net the meshes of which were less than the size prescribed by law, viz., inches. It was shown beyond controversy that the meshes of the net as manufactured were of the required size, but that they had since shrunk until they were one-half or three-fourths of an inch smaller than inches. The only question in the case that requires consideration is whether the legislature intended to fix the size of the mesh as manufactured or as used. The learned circuit j udge was of the opinion that the act should be given the latter construction.

The section in question is a portion of an act to regulate the catching of fish, etc., passed in 1897, being Act No. 151 of the Public Acts of that year. Section 5846 has been amended since, but the amendment did not change its effect for the purposes of this case. The first section of the act (section 5844) provides that:

“ There shall not be used * * * any pound or trap net * *• * the meshes of which are less than permitted by this act, which are as follows: The mesh of every pound or trap net * * * shall be at least four inches extension measure, as manufactured, in the pot, pound, or crib.”

Section 5846 provides that:

‘ ‘ It shall be unlawful for any person to fish with any kind of net whatever in the waters of this State from the thirtieth day of October to the fifteenth day of December: * * * Provided, however, two and one-fourth inch mesh in pots for the purpose of catching herring and other rough fish in any vicinity where it will not interfere with or catch immature whitefish or lake trout may be used,” etc.

It is seen from the foregoing quotations that the policy of the State was to require all pound nets in general use to be of at least four inches of extension as manufactured, subject to a provision that in certain localities a smaller mesh might be used. We think that the proviso, by relation, implies that the 2i-inch mesh was intended to be as manufactured. The question is a close one, and it might possibly be said that the design of the legislature was that persons desiring to avail themselves of the privilege of fishing with a smaller net than that in general use must see to it that their net, when, used, should not measure less than 2J inches. But the act is a penal one, and, under established rules, should not receive a technical construction as against those claiming the benefit of the proviso. If this construction militates against the interests of the State, an amendment can easily be made.

The conviction is reversed, and a new trial ordered.

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


author: Grant, J.

text:
    PEOPLE v. SHOEMAKER.
    1. Trial — Appeal—Objections to Testimony.
    Where no reason is given for an objection to testimony, the ■ objection will not be considered on appeal.
    2. Criminal Law — Conduct oe Prosecutor.
    A conviction will not be reversed because the prosecuting attorney, in his closing address to the jury, called respondent a “monumental liar and bluffer,” where it cannot be said that there was no evidence in the case to justify the remark.
    3. Same — Credibility oe Witnesses — Instructions.
    In a criminal prosecution, where respondent’s counsel made a severe attack upon the police officers, it was not error to charge that: ‘ ‘ The police department is an important part of the machinery of our government, and it is well enough to bear in mind that your homes, your lives, and your property would not be safe but for the police department and officers.
    It does not follow that, because an officer testifies in the court-room, his testimony is to be discarded, or any suspicion cast upon it, unless there is something about it which calls your attention to it.”
    Error to Washtenaw; Kinne, J.
    Submitted June 5, 1902.
    (Docket No. 94.)
    Decided June 17, 1902.

      Frederick J. Shoemaker was convicted of horse stealing, and sentenced to imprisonment for 10 years in the State prison at Jackson.
    Affirmed.

      Cavanaugh & Wedemeyer, for appellant.

      John L. Duffy, Prosecuting Attorney, for the people.'
   Grant, J.

Respondent was convicted of horse stealing, under Act No. 102, Pub. Acts 1877 (3 Comp. Laws, § 11595).

1. Complaint is made of certain statements made by the prosecuting attorney in his opening to the jury. The extracts from the statement complained of are isolated from the rest of the statement, and were made, as expressly stated by the prosecuting attorney, not to influence the jury, but to explain the reason why certain witnesses would be produced. In his closing address to the jury the prosecuting attorney called the defendant a ‘ ‘ monumental liar and bluffer.” We are not prepared to say there was no evidence in the case to justify these remarks.

2. Several errors are assigned upon the admission of testimony. No reason was given for some of the objections, and such objections will not be considered. We, however, find no prejudicial error in any of the rulings upon the testimony. They are not of sufficient importance to discuss.

Evidently the attorneys for the defendant made a severe attack upon the police officers, and now complain of the following instruction:

“The police department is an important part of the machinery of our government, and it is well enough to bear in mind that your homes, your lives, and your property would not be safe but for the police department and officers. It does not follow that because an officer testifies in the court-room that his testimony is to be discarded, or any suspicion cast upon it, unless there is something about it which calls your attention to it.”

We see no objection to the instruction.

We find no error upon the record, and the conviction is affirmed.

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


text:
    STROH v. CITY OF DETROIT.
    X. Taxation — Stock in Foreign Corporations — Double Taxation-Constitutional Law.
    The taxation of shares of stock held by a resident of Michigan in a foreign corporation, all of whose property is located and taxed within this State, is double taxation, and as such is prohibited by the constitutional requirement that taxation shall be uniform.
    2. Same — Construction of Statute.
    Section 8, subd. 7, of Act No. 206, Pub. Acts 1898, provides for the taxation of shares of stock in a domestic corporation, except when its property is exempt or is taxable to itself; and subdivision 9 provides for the taxation of “all shares in foreign corporations, except national banks, owned by citizens ” of the State. Held, that as the policy of the State, as evidenced by pre-existing tax laws, had always been to tax ■ shares in a foreign corporation only when its property was not taxable in Michigan, and as to tax such shares and property both would be unconstitutional, the exception provided for by subdivision 7 should be construed to apply to foreign as well as domestic corporations, thus exempting from taxation shares in a foreign corporation when its property is located and taxable in this State.

      Certiorari to Wayne; Frazer, Carpenter, Donovan, Rohnert, Brooke, and Hosmer (dissenting), JJ.
    Submitted June 10, 1902.
    (Docket No. 103.)
    Decided June 17, 1902.

      Mandamus by Julius Stroh against the city of- Detroit and the common council of said city to compel the vacation of a tax assessment. From an order granting the writ, respondents bring certiorari.

    Affirmed.

      Henry M. Duffield and H. H. Hatch, for relator.

      Timothy E. Tarsney and P. J. M. Hally, for-.respondents.
   Hooker, C. J.

The Stroh Brewery Company is a corporation organized under the laws of the State of West Virginia. All but one of its stockholders reside in Detroit, where its principal place of business is located, and where all of its property is situated and assessed for taxes. The authorities having assessed the relator for the value of his shares of stock in said corporation for city taxes for the year 1902, the circuit court ordered this assessment vacated, and the city has removed the case to this court by certiorari.

The Constitution of this State requires that there be a uniform rule of taxation, and we have held that this forbids double taxation; and while double taxation may occur under any law, and that fact may, perhaps, not invalidate an act not intended nor calculated to impose it, and may not invalidate assessments made under it and according to its provisions, a law which in its terms necessarily requires it, under ordinary conditions, must be held invalid, or so construed as to avoid it. Comstock v. City of Grand Rapids, 54 Mich. 641 (20 N. W. 623); Attorney General v. Board of Supervisors of Sanilac Co., 71 Mich. 16 (38 N. W. 639); Standard Life & Accident Ins. Co. v. Board of Assessors of Detroit, 95 Mich. 468 (55 N. W. 112); Detroit Citizens’ St. Ry. Co. v. Common Council of Detroit, 125 Mich. 675 (85 N. W. 96, 86 N. W. 809).

In this instance, all of the property of the corporation being in Detroit, and substantially all of the stock being owned there, the effect of these assessments is to impose a double burden on the owners of the corporate shares, for it is undeniable that they bear the' burden of the tax imposed upon the corporation, inasmuch as the shareholders constitute the corporation and indirectly own its property. The severity of these assessments is the more apparent, though not more real, because they include all of the property and substantially all of the shareholders of the corporation. If a small portion of the property were situate, and a small proportion of the stockholders resided, here, or if the property and shareholders were scattered •over the State, the difficulty of making assessments which should reach all the shareholders and all of the property without making a double burden would be great. There is no method provided for doing this, and it is doubtful if a rule could be made by which assessors could in all cases accomplish it.

Did the law provide for the assessment of all shareholders upon their shares in domestic corporations, and of all corporate property to the corporation, we should hesitate to say that such law was not in violation of the constitutional provision requiring uniformity. We are aware that many courts have held that such laws do not require double taxation, upon the very technical reasoning that the tax is not levied upon the same property, and that it is not imposed upon the same person; both of which propositions are true in a sense, but are also untrue in another substantial sense, as stockholders are likely to learn if the action of the authorities in this case is sustained. So, several of the text-books assert that the weight of authority sustains the rule that the States may impose taxes upon both corporation and stockholder, though, without exception, they admit the severity and injustice of such measures, and say that the courts will never permit it where the law; is susceptible of another construction. This practice is so palpably unjust that Michigan does not tax shareholders in domestic corporations, where the property of the corporation is taxed. It does not even tax private persons upon property invested in business outside of the State, provided they do not invest in business conducted by foreign corporations; thereby making a most invidious discrimination against the latter, and in favor of the former, class, for they relentlessly tax a citizen who invests in a corporate business outside of the State, and the law goes so far, if technically construed, as to tax the resident stockholder in a foreign business corporation, although such corporation conducts all of its business in this State, and is here taxed upon all of its property; and this is what the authorities of Detroit seek to accomplish in this case. The policy of taxing property here which is not in this State, and which is taxed elsewhere, is an unjust and narrow one, and one well calculated to impede the progress of the State. While we were obliged to hold in Bacon v. Board of State Tax Com’rs, 126 Mich. 22 (85 N. W. 307), that the law might tax citizens whose property was invested in corporations in other States, the corporate property not being in Michigan, we were careful not to recognize the practice as either just or politic. The following quotation from a distinguished law writer indicates the policy of the more progressive States:

“It is undoubtedly within the constitutional power of the legislature of a State to enact a statute that persons residing in that State, who are stockholders in a corporation created by another State, shall be taxed on their shares of stock at their residence within the former State. This principle of law is based on the fact that shares of stock are personal property; that they are distinct from the corporate property, franchises, and capital stock; that they follow the domicile of their owner, like other personal property; and that consequently he may be taxed therefor wherever he may reside. It accordingly is a question of policy and expediency with a State whether or not it will tax its citizens who are stockholders in foreign corporations. A few of the States levy such taxes. But New York pursues the more broad and liberal policy that shares of stock should not be taxed where the corporation is already taxed; that the State which furnishes facilities to the corporation for the earning of dividends should have the sole benefit of taxes on such corporate interests; that a tax on resident stockholders in nonresident corporations would generally result in a double taxation of stockholders not residing in the State creating the corporation; and that interstate comity, interests, and financial investments are promoted best by taxing corporations directly, and not levying a tax on either resident stockholders in nonresident corporations or resident stockholders in resident corporations where the corporation itself is subject to taxation. The injustice of a tax on resident stockholders in foreign corporations is at once apparent when it is considered that the State creating the corporation nearly always taxes the corporation itself or all its stockholders, resident and nonresident, and that, if stockholders residing elsewhere are taxed again where they reside, they are taxed both in the State of the corporation, directly or indirectly, and also directly in the State where they reside. No reduction need be allowed in the latter State for taxes levied upon the corporation in another State.” 2 Cook, Corp. § 565.

New York has long recognized this rule. Pennsylvania has adopted a similar rule. New Jersey imposes no tax upon shares except of banks. Texas does not tax shares where the corporate property is taxed. In California the legislature relieved domestic corporations by the following enactment:

“Shares of stock in corporations possess no intrinsic value over and above the actual value of the property of the corporation which they stand for and represent, and the assessment and taxation of such shares and also of the corporate property would be double taxation. Therefore all property belonging to corporations shall be assessed and taxed, but no assessment shall be made of shares of stock, nor shall any holder thereof be taxed therefor.” 1 Deer. Codes & Stat. § 3608.

This act was sustained and applied in the case of People v. Badlam, 57 Cal. 594, and Spring Valley Waterworks v. Schottler, 62 Cal. 69, 118. “But the temptation to tax stockholders in nonresident corporations was yielded to,” in the face of the solemn declaration that “shares of stock in corporations possess no intrinsic value over and above the actual value of the property of the corporation which they stand for and represent.”

There is reason to believe that the concensus of opinion in Michigan is in accord with the views expressed in the quotation, for the provision requiring shares of stock to be assessed was quite generally disregarded, if not practically obsolete, until brought into prominence through the recent agitation of the subject of “equal taxation,” and the efforts of the authorities to see that all property is listed in obedience to law. The effect is double taxation of such shareholders, as they are taxed at home and abroad. We have been compelled to sustain double taxation in some cases, because we felt constrained to hold that the constitutional inhibition against double taxation only applies to such taxatiqn by this State. See City and County of San Francisco v. Fry, 63 Cal. 470; Bacon v. Board of State Tax Com’rs, supra. It has not been held in this State that a case like the present does not involve double taxation, and we have never held that such a double taxation would be legal. We should hesitate to hold that it would not be double taxation, and therefore legal, in the case of an assessment of shares in a domestic corporation whose property was actually taxed in this State, and we see no justification for declaring a different rule where the corporation is( a foreign one.

The taxation of shares to the shareholder, and property to the corporation, is clearly double taxation, within the spirit of the constitutional provision, and while we appreciate the fact that the shareholders and the corporation are different entities in the law, and that shares of stock are recognized as property, and distinct from the corporate property, it is plain that the shareholders are the corporation, and that they are the owners of its property. The Constitution does not permit the taxation of both property and shares, and we must, if possible, give such a construction to the law as to make it reconcilable with the Constitution.

A reference to the tax law of 1885 shows that it was the policy of the State at that time to tax shares of foreign corporations only when the property was not taxable in Michigan. See Graham v. Township of St. Joseph, 67 Mich. 654 (35 N. W. 808). In this case it was held that the shares were properly assessed, for the reason that the property of the foreign corporation had no situs in this State. The same provision was continued in the tax law of 1889, i. e., “Shares in corporations, the property of which is taxable to itself, shall not be assessed to the shareholder.” Pub. Acts 1889, Act No. 195, § 2. The same provision is found in the law of 1891. Pub. Acts 1891, Act No. 200, § 2. In 1893 the law was changed so as to read: “All shares in corporations organized under the laws of this State, when the property of such corporations is not exempt, or is not taxable to itself; or when the personal property is not taxed.” Pub. Acts 1893, Act No. 206, § 8, subd. 7. And this has been since continued. Subdivision 9 provides: ‘ ‘All shares in foreign corporations, except national banks, owned by citizens of this State.” Thus by a different arrangement of the provisions, which were otherwise substantially unchanged, it is possible to claim that the legislature intended to tax foreign corporations on property, and shareholders on shares, contrary to the established policy of the .State, and contrary to the spirit of the Constitution. Under these circumstances, we feel justified in holding that this exception should apply to both foreign as well as domestic corporations, as it had before the passage of the act of 1893; and this is foreshadowed in Bacon v. Board of State Tax Com’rs, supra.

A discussion of this question should not ignore the authorities, of which there are many. It has been said by many law writers and judges that a State has authority to tax both corporation and shareholder. Mr. Justice Cooley says, in his work on Taxation, that “a tax on the shares of stockholders in a corporation is a different thing from a tax on the corporation itself or its stock, and may be laid irrespective of any taxation of the corporation, when no contract relations forbid.” Cooley, Tax’n (2d Ed.), p. 231. See, also, Burroughs, Tax’n, § 86; 2 Cook, Corp. § 565. These authors refer to substantially the same authorities, of which the following are the more important: President, etc., of Tremont Bank v. City of Boston, 1 Cush. 144; New Jersey R. & Transp. Co. v. Collectors of City of Newark, 25 N. J. Law, 315; Jersey City Gaslight Co. v. Mayor, etc., of Jersey City, 46 N. J. Law, 195; Conwell v. President, etc., of Town of Connersville, 15 Ind. 150; Whitesell v. County of Northampton, 49 Pa. St. 526; Van Allen v. Assessors, 3 Wall. 585; First Nat. Bank of Louisville v. Kentucky, 9 Wall. 360; City of Memphis v. Ensley, 65 Tenn. 558 (32 Am. Rep. 532); Nashville Gaslight Co. v. Mayor, etc., of Nashville, 76 Tenn. 410; Street-Railroad Co. v. Morrow, 87 Tenn. 406 (11 S. W. 348); Salt Lake City Nat. Bank v. Golding, 2 Utah, 8; City of New Orleans v. Canal & Banking Co., 32 La. Ann. 157; State Bank of Virginia v. City of Richmond, 79 Va. 113; C. N. Nelson Lumber Co. v. Town of Loraine, 22 Fed. 54; Cook v. City of Burlington, 59 Iowa, 252 (13 N. W. 113, 44 Am. Rep. 679); Henkle v. Town of Keota, 68 Iowa, 338 (27 N. W. 250); Frazer v. Siebern, 16 Ohio St. 614. Of these, nearly all were cases which did not involve the question of the authority of the State to provide for double taxation under a constitution forbidding it, and while this power, i. e., that of double taxation, is denied by the Iowa supreme court in Cook v. City of Burlington, supra, although there be no constitutional inhibition, many of the cases cited state the true rule to be that, unless restricted by the constitution, a State may impose a double tax. It is true that many of them assert that this is not double taxation, upon the theory herein-before stated, and they are authority to that extent, and therefore pertinent to this question.

On the other hand, we find that this doctrine is denied in Ang. & Ames, Corp. § 461; and in Burroughs, Tax’n, p. 171, § 86, it is said that “in the work of Messrs. Angelí and Ames a contrary doctrine is asserted,” etc., though the author questions the authorities cited. In 2 Spell. Priv. Corp. § 1114, it is said that taxation pf property and shares is duplicate taxation. A large number of cases hold that it is double taxation, while they admit that shares are not corporate property. Smith v. Burley, 9 N. H. 423; Tax Cases, 12 Gill & J. 117; Gordon v. Mayor, etc., of Baltimore, 5 Gill, 231; Mayor, etc., of Baltimore v. Railroad Co., 6 Gill, 288 (48 Am. Dec. 531); State v. Railroad Co., 40 Md. 50; County Com’rs of Frederick Co. v. Bank, 48 Md. 117; State v. Branin, 23 N. J. Law, 484; American Bank v. Mumford, 4 R. I. 478; Hannibal, etc., R. Co. v. Shacklett, 30 Mo. 550; State v. Railroad Co., 37 Mo. 265; State v. Railway Co., 77 Mo. 209; Valle v. Ziegler, 84 Mo. 219; People v. Badlam, 57 Cal. 594; City and County of San Francisco v. Fry, 63 Cal. 470; Same v. Flood, 64 Cal. 505 (2 Pac. 264); Pennsylvania Co. for Ins. v. Com., 22 Week. Notes Cas. 340, 15 Atl. 456; Gillespie v. Gaston, 67 Tex. 599 (4 S. W. 248); Cheshire County Tel. Co. v. State, 63 N. H. 167; Board of Com’rs of Rice Co. v. Bank, 23 Minn. 280. Many of the above cases expressly hold that such double taxation is prohibited by statutes and constitutions requiring uniformity. See, also, Lenawee Co. Sav. Bank v. City of Adrian, 66 Mich. 273 (33 N. W. 304).

It is never to be presumed that a legislature intended a double tax if such conclusion can be reasonably avoided. Pennsylvania Co. for Ins. v. Com., 22 Week. Notes Cas. 340, 15 Atl. 456; Board of Revenue of Montgomery Co. v. Gaslight Co., 64 Ala. 269; Salem Iron Factory Co. v. Inhabitants of Danvers, 10 Mass. 514; Tennessee v. Whitworth, 117 U. S. 137 (6 Sup. Ct. 645); Hannibal, etc., R. Co. v. Shacklett, 30 Mo. 560; State v. Railroad. Co., 37 Mo. 265; New York, etc., R. Co. v. Sabin, 26 Pa. St. 245.

It follows that, when the assessors and board of review were advised of the assessment of all of the corporate property to the corporation, they should have removed the assessment against the shareholders.

We do not feel called upon to ignore the plain meaning of our Constitution by carrying the principles that the corporation and its shareholders are different persons, and the corporate property and the shares different property, so far as to say that the taxing of both is not double taxation in the common acceptation of the term or in the sense of the Constitution.

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


author: Moore, J.

text:
      In re OSBORN.
    Contempt — Enforcement of Civil Remedy — Punishment.
    A contempt proceeding for the violation of an injunction issued at the suit of the attorney general to enforce a judgment of ouster against a foreign corporation is a proceeding to enforce a civil remedy, within chapter 301, 3 Comp. Laws, justifying the imposition of the punishment in said chapter provided. 1 Comp. Laws, § 1103.

      Habeas corpus proceedings by H. S. Osborn to obtain his release from the Berrien county jail.
    Submitted June 10, 1902.
    (Calendar No. 19,405.)
    Writ dismissed June 17, 1902.

      Laivrence C. Fyfe, for petitioner.

      Horace M. Oren, Attorney General ( Charles W. McGill, of counsel), for the people.
   Moore, J.

The petition and the return of the sheriff' show that in August, 1901, the attorney general, suing for the people of the State of Michigan, filed an information in the nature of quo warranto against the League of Eligibles, a foreign corporation acting under the name of League of Educators, for the purpose of securing a judgment of ouster to prevent it from doing business in this State. Such proceedings were had therein that a judgment of ouster was entered in January, 1902. In April, .1902, for the purpose of enforcing this judgment, the attorney general filed an injunction bill against the League of Eligibles and others, including the petitioner. An injunction was issued therein, and served upon Mr. Osborn. It was claimed Mr. Osborn did not heed the injunction, and he was cited into court to show cause why he should not be punished for a contempt of court. After a full hearing the circuit judge found him guilty of contempt of court, and adjudged and decreed that he pay a fine of $225 and costs, amounting to $50.94, and, in default of the payment thereof, that he be committed to the county jail until such fine and costs be paid, not exceeding 80 days, and, in case of payment of the fine and costs, that he be discharged. Mr. Osborn did not pay the fine and costs, and an order of commitment was issued by the circuit judge, by virtue of which the sheriff now holds him.

A great many questions are raised by counsel. The only one which has given us any trouble is, Was the sentence excessive ? It is claimed by the petitioner that the proceedings for contempt must be governed by the provisions of chapter 38,1 Comp. Laws, and, as the punishment exceeds what the court is allowed to impose by the provisions of section 1099, the sentence is excessive and void. It is the claim of the attorney general that the proceeding is governed by chapter 301, 3 Comp. Laws, and the sentence is not excessive.

Section 1102 (chap. 38), 1 Comp. Laws, provides that nothing contained in the preceding sections shall be construed to extend to any proceeding as for a contempt for the purpose of enforcing any civil right or remedy. The attorney general filed the injunction bill for the purpose of enforcing the judgment of ouster. It is for a violation of the injunction issued in that proceeding the petitioner is adjudged to be in contempt. We think the proceeding is one to enforce a civil remedy, and the sentence was authorized by section 10915, 3 Comp. Laws.

The writ of habeas corpus is dismissed, and the petitioner remanded.

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


text:
    MURPHY v. NORTHERN STEAMSHIP CO.

    1. Contracts — Recovery of Wreck —Salvage — Expenses— Instructions to Jury.
    Plaintiff contracted to recover a sunken vessel and cargo belonging to defendant for 70 per cent, of the salvage; defendant stipulating that it should not assume any risk or bear any share of the expense in connection with the recovery. The vessel was sunk in Canadian waters, and both parties knew that a person, under authority from the Canadian government, had undertaken to recover the wreck, as a menace to navigators, and was claiming rights therein. In order to prosecute plaintiff’s work, it was necessary for him to institute injunction proceedings against such person; and defendant was made a party complainant therein, with the acquiescence of its general manager. Held, that there was no warranty of title by defendant as against the claim of such person, and hence it was not error to charge that, before the jury could impose the entire burden of this litigation on defendant, they must find an express agreement by it to assume the same.
    2. Same — Accounting.
    The jury having found an implied contract on the part of defendant to pay its proportionate share of the expense of such litigation, it was entitled to an accounting, in which the amounts already paid by it should be considered.
    3. Same.
    On such accounting, plaintiff was not entitled to charge for his own services; nor could any part of the loss resulting from a levy on defendant’s boat to collect a judgment rendered in such litigation be charged against plaintiff.
    Error to Wayne; Waite, J.
    Submitted October 24, 1901.
    (Docket No. 78.)
    Decided June 24, 1902.

      Assumpsit by Thomas Murphy against the Northern Steamship Company for moneys expended and services rendered. From a judgment for defendant, plaintiff brings error.
    Modified.

      Moore & Moore (Chester M. Culver and Henry B. Shaw, of counsel), for appellant.

      Shaw, Waite, Cady & Oakes, for appellee.

      Rehearing denied January 5, 1903.

   Hooker, C. J.

Defendant, being tbe owner of a vessel and cargo sunk in the Canadian waters of Lake Erie, had some negotiations with the plaintiff in relation to saving the same in 1892. Either before or soon after, the plaintiff became aware that one Hackett had done some work upon the wreck under a contract with the Canadian government, which treated the wreck as a menace to navigators. He thereupon had negotiations with Hackett, who claimed to have a lien upon or an interest in the wreck of $7,500 or upwards, and offered*to sell his right to the plaintiff for that sum.. The plaintiff thereupon employed a lawyer named Kidd to obtain a revocation of Hackett’s authority, and both Hackett and the government were notified by the defendant that it owned the wreck, and would have it removed.

On April 18, 1893, the plaintiff sent a proposition to the defendant as follows:

“Detroit, Mich., May 16th, 1892.
“John Gordon, Esq.,
“Manager Northern Steamship Co.,
‘-‘Buffalo, N. Y.
Dear Sir: I propose to take the cargo of stone out of ■the sunken schooner Fayette Brown, and to raise the vessel, if the same proves, upon examination, to be worth raising, for seventy per centum (701°) of the net value, when sold, of the cargo and vessel, or whatever portion of the wreck is saved. This is, as' I understand, the agreement we arrived at when I saw’ you in Buffalo on the 13th inst. If it is as you understand it, please sign and return same to me, and oblige,
“Very truly yours,
“Thos. Murphy.
“The above is accepted by
“(Duplicate.)”

It was accompanied by the following letter:

“Detroit, Mich., April 18th, 1893.
“John Gordon, Esq.,
“Manager Northern Steamship Co.,
“Buffalo, N. Y.
Dear Sir: Inclosed I hand you proposals in duplicate for raising the schooner Eayette Brown, as per our agreement of May 13, 1892, and have dated them at that time, and also inclose a certificate of contract for your signature, which I want, so I can show my authority for working on the wreck, without producing the agreement, in the event of Hackett or others disputing my rights to recover the property. I have been delayed on this job, owing to the fact of the Canadian government having instructed Mr. Hackett to remove the wreck, but now have, through the efforts of our attorney (Geo. E. Kidd, of Ottawa), obtained an order prohibiting Hackett from doing any further work on the wreck; but that order was obtained last season, too late for us to do.any work. The amount we paid Mr. Kidd for his services in this direction was $225. Have you paid him anything for the same services? We have been in hopes that the bill before the two governments relating to reciprocal wrecking privileges would have been proclaimed a law before this time, but as yet they have not; but we have made arrangements by which, if the bill is not proclaimed, we will begin work with Canadian apparatus as soon as the weather will permit.
“Very truly yours,
“Thomas Murphy,
“Per E. E. Krell.”

The proposition was returned with the following indorsement:

“May 16th, 1892.
“ To Whom It May Concern:
“This is to certify that we have entered into a contract with Thomas Murphy, of Detroit, Mich., to raise the schooner Eayette Brown, sunk about 9|- miles east of Pt. Au Pelee, Lake Erie.
[Signed] “John Gordon,
“General Manager Northern Steamship Co.”

A letter went with the acceptance, i. e.: .

“Buffalo, N. Y., April 21, 1893. '
“Thomas Murphy, Esq.,
“ Detroit, Mich.
“Dear Sir: Yours of the 18th. inst. at hand and noted. I return you herewith, signed, the understanding of May 16th, Í892; it being, of course, distinctly understood that Northern Steamship Co. assumes no risk, nor bears any share of the expense, in connection with your recovery of the wreck and cargo of Fayette Brown, but that it (N. S. S. Co.) shall be entitled to 30 per cent, of the salvage, and shall also have a voice in the sale of hull and cargo which may be recovered.
“Ihave paid Mr. Kidd nothing in connection with the matter, as he has performed no service for this company.
“I also inclose you herewith authority for rescuing Fayette Brown and cargo.
“Yours truly,
“ John Gordon,
“Gen’l Manager.”

Also:

“Buffalo, N. Y., April 22d, 1893.
“Thos. Murphy, Esq.,
“Detroit, Mich.
“Dear Sir: Herewith I inclose you authority for raising schooner Fayette Brown and cargo, same having been omitted from my letter of yesterday to you.
“Yours truly,
“John Gordon, Gen’l Manager.
“F. P. G.
“Ans. Apl. 24, ’93.”

Thereupon the plaintiff proceeded to raise the cargo, and in a short time had it up. He abandoned the vessel as not worth raising. Defendant’s share of the cargo amounted to about $2,000, and this has not been paid.

At the time plaintiff sought to commence operations under his contract, .he met with some opposition from Hackett, and filed a bill in chancery in a Canadian court to enjoin Hackett and one Heminger from interfering with the wreck or its cargo. At the time said suit was begun, the plaintiff wrote to tbe defendant, stating that he had found it necessary to enjoin Hackett, and to make defendant a party complainant, and hoped that it would be agreeable to defendant. The following is a copy of the letter:

“Detroit, Mich., July 19,1893.
“The Northern Steamship Co.,
“John Gordon, Mgr.,
“Buffalo, N. Y.
“Dear Sir: I have been obliged to get out an injunction in the Windsor courts restraining Hackett & Hetninger against taking stuff out of ■ the Fayette Brown. They found I was ready to go to work with a Canadian outfit, and went there with a Canadian tug and two American vessels to work at her; and I immediately got out an injunction and served it upon them, and they quit work and went back to Amherstberg. I inclose you herewith an affidavit to be signed by you and sworn to before a notary public; and, if you should be away, I hope some one next to you in authority will sign and return the same. I will telegraph you tomorrow whether to send the affidavit back to Fleming & Wigle, of Windsor, or McCarthy, Osier & Co., of Toronto. The injunction case is to be argued in Toronto on Friday next, unless the defendants will consent to have it tried here in Windsor. I have been ready for some time to wreck the Brown with a Canadian outfit, and have been hindered by this interference of Hackett. I, however, have started the outfit this morning, and they will be at work by tomorrow. I wrote to Ottawa to know if Hackett had been given any permission to wreck the vessel, and I have word from there this morning that he had no permission whatever, and would not get any. Through spite, he may serve an injunction on me when I get to work, and interfere to the extent of a day or two’s time; but I feel it is all bluff on his part, and that we will go on now and recover the vessel and cargo. As I wrote you some weeks ago, I made an examination, and found the vessel in fair shape, and worth raising. This season, so far, has not been a good one outside, as it has been windy, and only about one day in three could we have worked at the wreck; and this is partly the reason why I did not begin on the wreck sooner, but I hope to have both vessel and cargo in about one month. It was necessary for me to make the Northern Steamship Company a party to this suit, which I hope is agreeable to you, as it is for our mutual interests, and I have given security for costs and all that. Forward this document at once, as the case is to be heard either in Toronto or Windsor on Friday.
“Yours very truly,
“Thos. Murphy.”

Defendant’s manager returned the affidavit, which is as follows:

“In the High Court of Justice, Common Pleas Division.
“Between The Northern Steamship Company and Thomas Murphy, Plaintiffs, and F. B. HACKETT and A. Heminger, Defendants.
“I, John Gordon, of the city of Buffalo, in the State of New York, one of the United States of America, general manager, make oath and say:
“1. That I am general manager for the Northern Steamship Company, one of the above-named plaintiffs, and have a knowledge of the facts hereinafter stated.
“2. The Northern Steamship Company are the owners of the schooner Fayette Brown and her cargo.
“3. The said schooner Fayette Brown was wrecked in the summer of 1891 about ten miles east of Point Pelee, in Lake Erie, in the province of Ontario.
“1. The said company have been continually since the said date endeavoring to arrange matters so that they could make a contract to raise the said schooner and cargo.
“5. The said schooner is worth about the sum of $16,-000, and the value of the cargo is in the neighborhood of $10,000, and the said company have not in any manner abandoned the said schooner or cargo.
“6. I believe the said schooner is not lying as an obstruction or impediment to navigation, being in 51 fathoms of water, without her masts or rigging.
“7. The said plaintiff company did on or about the 16th day of May, 1893, enter into a contract with their coplaintiff, Thomas Murphy, to save the schooner and cargo on the said schooner, and have not given any other person or persons any contract or right to interfere with the said cargo or vessel.
“ 8. That I am informed and verily believe that the defendant Hackett has stripped the said schooner of her anchors, chains, masts, sails, rigging and tackle, apparel and furniture, and committed other depredations on the said schooner, and refuses to deliver up possession of the same to the plaintiffs.
“9. That, through the interference of the said Hackett with the said schooner, the plaintiffs have suffered loss and damage to the amount of $3,000, and are apprehensive of further serious loss and damage if the defendants are not restrained by this honorable court from in any way •interfering with the said schooner or her cargo.
“ 10. That the plaintiff Thomas Murphy is agent for his said coplaintiff, the said company, in this action.
“Northern Steamship Company,
“By John Gordon,
“Gen. Mgr. Northern Steamship Company.”

The commencement of this suit enabled plaintiff to prosecute the work, which was soon finished; but the litigation continued much longer. The defendants in that cause filed a cross-bill alleging a lien upon the cargo, and a decree was rendered for $8,000 in their favor. From this the complainants appealed, and subsequently this decree was reduced to $3,000, which the defendant in the present cause paid. Afterwards Murphy and this defendant were sued by the lawyers who conducted the chancery case for them, and a judgment was rendered against them for solicitors’ fees. This was also paid by the defendant. At the commencement of the present case the plaintiff had in his possession all of the proceeds of the wreck. The defendant had not only received nothing, but had paid out several thousand dollars upon the litigation referred to, and in addition to this the plaintiff now asks that defendant not only reimburse him for moneys expended by him in the conduct of the litigation, but also pay him for time spent in looking after it. A verdict was rendered in favor of defendant, and the plaintiff has appealed.

The contract in this case is in writing, and it was executed in 1893, though dated in 1892. From the letter which accompanied the acceptance of plaintiff’s proposal, which constitutes a part of the agreement, it is plain that the defendant did not undertake to warrant a title against Hackett. The parties understood that there was a claim made by him, and the terms of the agreement preclude the construction contended for by plaintiff; i. e., that the defendant undertook to protect the property against such claim. The plaintiff, with full knowledge of the situation, undertook to raise this wreck for a share of the proceeds, taking all of the risk; and he was notified, with the acceptance, that the defendant repudiated any suggestion of liability for expenses that plaintiff had already incurred in an attempt to prevent Hackett from interfering further. There was not only no representation of title, but plaintiff knew of Hackett’s claim, and had been negotiating for it. Unless there was something that occurred after the making of the contract to create a liability upon the defendant, the plaintiff has no claim. It is true that he testified that in 1892 Gordon authorized him to take any steps he saw fit to recover the property from Hackett, but this was nearly a year before the contract was executed. It constituted no authority to commence the injunction proceedings. ^ "We find nothing in the record that justifies an inference that the defendant undertook to defend the plaintiff against the claims of Hackett, and the plaintiff was not injured by the charge that the jury must find an express agreement to do so before it could impose the entire burden of this litigation upon the defendant. In permitting the jury to find an implied contract to pay its proportionate share of the cost of defending the property against a lien, the court went as far as the plaintiff had a right to ask, and upon that theory the defendant was entitled to an accounting, in which the expenses of litigation paid by itself should be taken into consideration. The theory upon which this verdict was found seems to be that the amount realized from the wreck was increased by the reduction and payment of the lien, and that, as this increase was shared by the parties, the expense attendant upon such reduction and payment was mutual, as was also the expense of litigating with the attorneys, and payment of their judgment. We have already said that the contract between the parties imposed upon the plaintiff a share of the risk of this lien, and that he cannot claim that defendant guaranteed the title against it. If this is so, he could not require the defendant to do more than to join him in protecting their mutual interests, and the law would imply nothing more in the absence of an express undertaking by the defendant to do more.

We think the court did not err in refusing to permit plaintiff to charge against the defendant an item of $2(10 which was apparently within his own control; and it was not error to deny him compensation for his services rendered in litigation relating to the mutual interest of the parties, unless the testimony justified the inference of an understanding that he should be' paid. The question was left to the jury.

The item of $525 was properly excluded, for both parties had the benefit of it in the litigation with Hackett.

We are of the opinion that there was not sufficient proof to warrant the submission of the items of disbursements by the defendant to the jury. They came to the defendant through the usual course of business, duly certified, and were paid, and seem not to have been disputed; but there was an absence of affirmative proof that the services for which such payments were made were in fact rendered.

Again, it was error to charge against the plaintiff any share of loss resulting from a levy upon defendant’s boat to collect the Canadian judgment.

We are constrained to reverse the judgment, and order a new trial, unless the defendant shall file a consent to remit 70 per cent, of the said items (i. e., $606.53), which amounts to $424.57. If such consent shall be filed in this court within 30 days, the judgment will be affirmed, but the plaintiff will recover costs of this court.

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

       Consent to remit was duly filed.


text:
    WAGNER v. GLADWIN CIRCUIT JUDGE.
    Mandamus — Replication—Hearing—Court Rules.
    Cir. Ct. Rule 46 c provides that “all material allegations of the petition in mandamus proceedings, not specifically answered by the respondent, may be taken as admitted.” Subdivision d provides that the proceeding “shall stand for hearing upon the return day of the writ, without notice of trial or hearing, unless the court, for cause shown, shall order a postponement of such hearing.” Held, not to contemplate that the relator in a mandamus case may, on his own motion, and without any suggestion of the necessity of framing an issue, or any order of the court, file a replication, and proceed to a hearing on petition, answer, and replication.

      Mandamus by Julius G. Wagner to compel Nelson Sharpe, circuit judge of Gladwin county, to vacate an order striking a replication from the files in a mandamus proceeding.
    Submitted October 29, 1901.
    (Calendar No. 18,885.)
    Writ denied June 24, 1902.

      O. E. M’Cutcheon (William G. Gage, of counsel), for relator.

      Campbell & Foster, for respondent.
   Montgomery, J.

The sole question presented on this application is whether the relator in a mandamus case •may on his „ own motion, and without any suggestion o£ the necessity of framing an issue, or any order of the court in that respect, file a replication, and proceed to a hearing of the case on petition, answer, and replication. We think this question should be answered in the negative. Cir. Ct. Rule 46 c provides that “all m.aterial allegations of the petition in mandamus proceedings, not specifically answered by the respondent, may be taken as admitted by the respondent to be true as alleged.” Subdivision d provides that the proceeding “ shall stand for hearing upon the .return day of the writ, without notice of trial or hearing, unless the court; for cause shown, shall order a postponement of such hearing.” This rule does not contemplate the filing of a replication as matter of right. No provision is made for it. And while the court may frame an issue upon the application of the relator, and when an issue is framed a replication is a very proper pleading, we do not think that a replication is to be regarded as one of the regular pleadings in the case. The return in this case shows that no application for the framing of an issue was made to the court, and the ruling striking the replication from the files is sustained.

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


text:
    THOMAS IRON CO. v. JACKSON IRON CO.
    1. Sale — Breach of Contract — Excuse.
    Where defendant sold iron ore by a contract stipulating that it should not be liable in damages if delivery should be prevented or obstructed by combinations, strikes, “hindrances,” turnouts, or accidents, it was not excused by mere difficulty in procuring labor, if it could have been obtained by a reasonable effort at prices not prohibitive.

      2. Same — Measure of Damages — Instructions.
    In an action for the breach of a contract for the sale and delivery of iron ore, it was not error to instruct the jury that, if the ore was not obtainable on the market, plaintiff might recover the increased expense to it by reason of being compelled to use, as a substitute, ore of another grade; the contract disclosing that the ore was sold for use in plaintiff’s furnaces.
    3. Same — Construction of Testimony.
    In an action for damages for the nondelivery of iron ore sold, the court instructed the jury that, if such ore was not obtainable on the market at the time specified for deli very, then the measure of damages was the actual loss sustained by the failure to deliver, and that the case, in that respect, rested on the proof adduced by plaintiff, as defendant’s testimony did not tend to show that any of this ore was on the market. Held, not error; the only testimony for defendant being that of a single witness, from memory, that such ore commenced to advance about July or August, and in September “would at least command the difference in freight, possibly about §3 per ton,” but not showing that he had any knowledge of the value at the place in question, nor fixing the time as of the time the contract was broken.
    Error to Marquette; Stone, J.
    Submitted November 14, 1901.
    (Docket No. 115.)
    Decided June 24, 1902.

      Assumpsit by the Thomas Iron Company against the Jackson Iron Company for the breach of a contract to sell and deliver iron ore. Prom a judgment for plaintiff, defendant brings error.
    Affirmed.

      Clark & Pearl, for appellant.

      George Hayden (William Fackenthall, of counsel), for appellee.
   Montgomery, J.

Plaintiff instituted this action to recover damages for the breach of a contract to sell and deliver at the docks of the Lehigh Valley Railroad at Buffalo 20,000 gross tons of iron ore, of a grade designated as ■“Jackson Pit No. 7,” and to average 53.20 per cent, of metallic iron in its natural condition. Among' other conditions of the contract were the following:

“It is expressly agreed that said first party shall not be held liable for damages resulting from failure to deliver all of said ore hereunder, if prevented or obstructed by combinations, strikes, hindrances, turnouts, accidents, or delays at the mines, on the railroads or docks, or in transit, or by disaster of navigation, or other causes beyond its control, or by failure of said mines to produce sufficient ore to fulfill this and all other sales contracts: Provided, that all its sales contracts for such ore shall not at any time exceed in the aggregate the quantity which its officers estimate can reasonably be expected to be produced and delivered thereunder: Provided, when any such shortage is ascertained, first party shall so apportion further deliveries on this and all other sales contracts then unfulfilled so that all purchasers shall receive as nearly as may be their pro rata share of the aggregate shipments of said ore of the season 1899. Any undelivered balances resulting from such shortage shall be canceled.”

On the trial it appeared that the defendant had delivered but a part of the ore contracted; that there was a shortage of something more than 8,893 tons. The plaintiff offered testimony tending to show that it was impossible to obtain ore of the grade in question at any price, and that it was only possible to keep its works in operation by supplying itself with other ore, which was used as a substitute, at an increased cost in reducing it to iron. Plaintiff recovered damages in the sum of $31,891.40, which sum included an overpayment on the ore shipped of about $1,300, and about $1,100 rebate on account of the ore actually received not coming up to the standard agreed upon. The defendant brings error.

On the trial the defendant sought to excuse the failure to deliver the ore contracted by showing that it was hindered by the scarcity of labor. The circuit judge held that the testimony offered by defendant was not sufficient to excuse its default. Defendant contends that the circuit judge erred in thus holding, and this presents the first question in the case. The defendant, by the terms of its contract, was to be relieved from performance “if prevented or obstructed by combinations, strikes, hindrances, turnouts, accidents, or delays at the mines, on the railroads or docks, or in transit, or by disaster of navigation, or other causes beyond its control.” It appears to be the theory of defendant that difficulty in securing labor is to be considered as a hindrance, within the meaning of this clause. The circuit judge, on the other hand, was of the opinion that a mere showing of inconvenience or difficulty in securing men at going wages was not sufficient, and that the defendant’s evidence did not show that it had taken the means which a prudent man should have taken to obtain the necessary labor at an increased price. The defendant insists that this question should have been submitted to the jury.

The term “hindrance,” as used in this clause, is to be construed in connection with the other terms with which it is connected. Defendant was to be excused only if “prevented or obstructed.” These words, “prevented or obstructed,” imply some obstacle which it is not within the power of defendant to overcome by reasonable effort on its own part. The conditions with which this word “hindrance” is connected — “combinations, strikes, turnouts,” etc. — import the same thing. When this contract was made, the parties expected increased activity in the ore industry, and must have anticipated increasing difficulty in securing labor, and must have expected that increased wages would be paid, if necessary to secure the performance of the contract. To set out the testimony at length would extend this opinion beyond reasonable limits. A careful examination of the evidence, however, convinces us that defendant failed to show impossibility of securing labor to load this ore. That, if an increase of price had been offered and maintained, the labor could have been secured, and this at prices that were not prohibitive, is fairly inferable from the testimony of defendant’s witnesses.

The circuit judge instructed the jury that the general rule of damages, where there is a market or a market price, is the difference between the market price and the agreed price; but that; if there was no market for this ore, — that is, if the ore was out of the market, and unobtainable, — the plaintiff would have a right to recover the increased expense to it by reason of being compelled to use, as a substitute, ore of another grade. This was based upon the fact that the contract showed that the business of the plaintiff was understood by the defendant at the time the contract was made, and that the ore was sold for use in plaintiff’s furnaces. The rule thus laid down is supported by the holding of this court in Den Bleyker v. Gaston, 97 Mich. 354 (56 N. W. 763). See, also, McHose v. Fulmer, 73 Pa. St. 365, and Hinde v. Liddell, L. R. 10 Q. B. 265.

The circuit judge, after instructing the jury that the general rule was that the difference between the market price and the price at which the ore was contracted should be the measure of damages, added: “If you shall say that there was no market for such ore; that the ore was-out of the market, so to speak; that there was no such ore in the market to be obtained at the time of the breach of this contract, in the fall of 1899, — then the plaintiff could not and should not be held to this rule;” and, in effect, instructed the jury that in such case the measure of damages is the actual loss sustained by reason of the nondelivery. The circuit judge further instructed the jury that the case, in this respect, must rest upon the proof as adduced by the plaintiff, for the reason that the testimony on the part of the defendant did not tend to show that any of this ore was on the market in the fall of 1899. Complaint is made of this holding, but we think it entirely justified. The only testimony on the part of the defendant which might tend to show that ore of this quality was obtainable was the testimony of Capt.. Mitchell, who was asked, “What was the ore in question worth in Cleveland, or on these Lehigh docks mentioned in the contract, in the year 1899, — this pit No. 7 ore?” and answered; “ There was an advance in the fall over the spring prices,, of course. It commenced to advance about July or August. I should say — from my memory I would say— that pit No. 7 ore, in the month of September, would at least command the difference in freight; possibly about $3 per ton.” This testimony does not show that the witness had any knowledge of the value of ore in such place. Nor dobs it fix the time as the time at which the breach occurred. We think there was no error on the part of the circuit judge in instructing the jury that the testimony of the plaintiff’s witnesses was the only testimony bearing upon this question.

We find no error in the record, and the judgment will be affirmed, with costs.

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


text:
    REHBERG v. TONTINE SURETY CO.
    1. Corporations — Transfer of Assets — Liability on Existing Contracts.
    A transfer of all the business and assets of one corporation to another, in consideration, among other things, that the latter assume the former’s contracts, renders the purchasing corporation liable on such contracts.
    2. Same — Ultra Vires — Estoppel.
    A corporation receiving money under a contract entered into by it is estopped to assert that it is ultra vires.

    3. Gambling Contracts — Validity.
    A contract requiring one party to pay §80 in weekly installments of §1.25 each, the contract to be forfeited for any default in such payment, and requiring the other party, three months after the last payment, to deliver a diamond to the first party, and to buy the same back from him at §120, if he so desires, is not, on its face, a gambling contract.

      Error to Wayne; Rohnert, J.
    Submitted November 15, 1901.
    (Docket No. 121.)
    Decided June 24, 1902.

      Assumpsit by Ernest Rehberg against the Tontine Surety Company of New Jersey on certain tontine diamond contracts. From a judgment for plaintiff, defendant, brings error.
    Affirmed.
    Plaintiff sued defendant upon four contracts, — two made with the plaintiff direct, and two with other parties, and assigned to plaintiff. The contracts had been fully performed by him and his assignors, and were due when suit was brought. The contracts were made with the Tontine Surety Company of Detroit, a Michigan corporation, organized and existing under the laws of this State. Each contract provided that, upon payment of $80 in 63 consecutive weekly payments-of $1.25 each, the defendant would sell and deliver to him a commercial white, clear, and perfect diamond, of the weight of 1£ carats, within three months after the sixty-third payment. The contract further provided that, in case the holder should not desire the diamond after the same was delivered to him, the company would buy it back at the time of delivery for $120 in cash. It further provided that, if any holder of such contract should fail to pay his weekly installments as provided, and continue in default more than a week, the contract was to become null and void, and all payments made thereon forfeited.
    The declaration sets out these contracts; their fulfillment by plaintiff and his assignors; that defendant, a New Jersey corporation, assumed all the obligations of the former company, including the obligation to perform its contracts; that it notified plaintiff that it had assumed such obligations; and that the defendant had refused and neglected so to deliver said diamonds, or to pay the value thereof. The plea was the general issue. The court instructed the jury that the defendant had failed to perform its contract, and was liable for damages, and that the amount of damages was #3 20 upon each contract. The only question left to the jury was whether the defendant assumed the payment of these contracts upon which suit" was brought. The jury were instructed that if they found that there was an understanding between the former company and the defendant, and on the part of the holders of the tontracts, that the defendant should accept the liability on those contracts, and pay them, and that the former company was released by the holders of the certificates, and the liability of the latter company accepted, it was liable. The jury were further instructed that if they found that a part of the consideration for the purchase by the defendant was the assumption of the liabilities of the former company, and for that it received all the assets of the old company, the defendant was liable; but, if they should find that there was no such mutual agreement or assumption on the part of the defendant, they should find no cause of action.
    Counsel for defendant requested the court to instruct the jury that there was no evidence to authorize them in finding a verdict on the assigned contracts. The court thereupon instructed the jury as follows:
    “If you find that the new company took all of the assets of the old company, and as a part of the consideration for those assets agreed to pay all the liabilities of the old company, it covers those two contracts also. If you find that there was simply a dissolution of the business of the old company and an absorption of it by the new company, — and you must consider the fact that the officers of the old company and the new are the same persons, — if you find that there was simply an incorporation of the new company and the old company, the new company taking possession of the business of the old company, so as to substantially absorb it, even if there was no sale, then the new company will be liable upon all the contracts.”
    Verdict and judgment went for the plaintiff.

      John J. Speed, for appellant.

      Graves & Hatch, for appellee.
   Grant, J.

(after stating the facts). 1. We do not deem it essential to enter into a detailed statement of the testimony in regard to the negotiations between these two-corporations which culminated in the latter’s becoming possessed of all the business and assets of the former. "It is sufficient to say that there was evidence to sustain the charge of the court, and to show that defendant had swallowed up all the business and assets of the former-company, had notified the holders of contracts in the former company that it (the latter) had assumed them and would pay them, and that one consideration for such transfer was the assumption by the defendant of the contracts made with the former company, and that plaintiff and other contract holders in the former company acted in accordance therewith. The instruction was in direct accord with the former holdings of this court. Shadford v. Detroit, etc., Railway, 130 Mich. 300 (89 N. W. 960), and authorities there cited. Counsel for the defendant characterizes the transaction as one solely of purchase, in which the purchaser is not liable for the debts of the vendor. As shown in the above cases, that principle does not apply to cases of this character.

2. The defendant is not in position to assert that these contracts are ultra vires. There is nothing to indicate that they were not entered into in good faith. The defendant has received the plaintiff’s money. The law estops it to now assert, “You cannot have what I promised to give, because I had no authority to make the contract.”

3. It is next asserted that this is a gambling contract, and void, as against public policy. We cannot so hold. The contract provides for the payment of $80 in cash, and the agreement to deliver, in consideration therefor, a diamond, which the party (the vendee) may keep or sell back, as he chooses. It was contemplated that many forfeitures would occur from failure to make weekly payments, and that the corporation would make large gains from this source. They are not gambling contracts upon their face, nor does the testimony taken in this case show them to be such. There is no mutuality in a gambling contract; no opportunity for both sides to make gains; no consideration to be paid by one and received by the other. One must gain, and the other must lose. This contract is not within the definition of gambling contracts. 14 Am. & Eng. Enc. Law (2d Ed.), 581, 582.

"We have not before us the question of whether the State should permit corporations to be organized for such purposes, or permit foreign corporations to carry on such business within the State. That question may arise in a direct proceeding by the State against the corporation.

The judgment is affirmed.

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


text:
    CLARK, MASON & CO. v. PARKER, WEBB & CO.
    Corporations — Ultra Vires — Gambling Transactions.
    Plaintiff and defendant were both corporations organized to deal in meats and provisions. A member of plaintiff corporation arranged with defendant’s manager to buy lard through the latter’s commission dealers; defendant advancing money to make the deals, for which it was subsequently reimbursed; the account being carried on its books in the name of the member of plaintiff who originally made the arrangement. Defendant’s directors never authorized its manager to transact such business, a majority of them did not know of it, and defendant received no benefit therefrom. Held, that the transaction was ultra vires as to defendant, so that plaintiff could not recover back the money which had passed through defendant’s hands, either on the ground that the dealings were the personal transactions of the acting member, in which the money of plaintiff was used under such circumstances as to charge defendant with notice of the fact, or on the ground that they were gambling transactions.

      Error to Wayne; Brooke, J.
    Submitted January 29, 1902.
    (Docket No. 93.)
    Decided June 24, 1902.

      Assumpsit by Clark, Mason & Company against Parker, Webb & Company for money had and received. Prom a judgment for defendant, plaintiff brings error.
    Affirmed.

      Bowen, Douglas & Whiting (Herbert JR. Clark, of counsel), for appellant.

      Chamberlain & Guise (Alfred Lucking, of counsel), for appellee.
   Montgomery, J.

The plaintiff is a Michigan corporation, with headquarters at Adrian, incorporated for the purpose of “the buying, selling, and merchandising of cheese, all kinds of meats, fruits, vegetables, canned goods, groceries, oysters, and all kinds of fish and provisions.” The defendant is likewise a Michigan corporation, incorporated for “ the buying and selling of live stock, the slaughtering, packing, and selling the same, both at wholesale and retail, the rendering of fats, and dealing in all kinds of meats, both salt and fresh, and pork and beef .products, and transacting all business incidental thereto.”

Beginning in 189?, an account appeared upon the books of defendant company headed “Da Z. Mason,” and was opened under the following circumstances, as testified to by Mr. Craig, defendant’s manager:

“In 189? Mason was at our office at one time, and he wanted to buy some lard in Chicago, and said that he wasn’t acquainted with any commission firm over there, and wanted to know if we could accommodate him by buying some goods for them; and I explained to him how the commissions were. I told him that they would buy and sell for 6.25; that they usually charged 6.25 for buying, and 6.25 for selling. I told him I could save him a little that way, and that we would be glad to accommodate him. Nothing was said at that time about the name in which the account should be carried. I told him my brokers over in Chicago were Hately Bros. * * * We sent money for Clark, Mason & Co. before they gave it to us, because we had guaranteed to Hately Bros, the account of A. Hayward, our traveling salesman, in whose name these deals were made; and therefore we were responsible, in a way, for that money, and we had to send it as soon as called for. I talked with Mason about it. I had told him previously that when we were called on for money he must send it as soon as it was called for, and he didn’t always do it. * * * When the $200 came in, I" didn’t know exactly what to do. I had to make some entry to keep a record of it. I didn’t want to put it into Clark, Mason & Co.’s 30-day business, and so, as a memorandum, I put it right under their account, and opened it, ‘Account of Ira Z. Mason,’ so as not to get it mixed up with the regular 30-day business; and I gave them credit for the $200 there, and charged them with the $500 sent to Chicago. There was no credit business in Chicago; it was all cash. I remitted to Chicago all the moneys that were sent from Adrian, — to Hately Bros. * * * Mr. Hayward was one of our traveling salesmen, and we had guaranteed his account with Hately; and we didn’t want to guarantee Clark, Mason & Co.’s account, and we didn’t want to have it mixed up with our own business. . We were dealing ¡with Hately, and we put it that way so as to keep it separate and distinct, so that it could be traced,— not mixed up with our business. Mr. Mason was informed of that. He knew it was in the name of Hayward when he came in the next time.”

This commission business continued during the years 1897 and 1898, and until November, 1899. During a considerable portion of this period remittances were made by the checks of Clark, Mason & Co. There was testimony tending to show that the transaction was a transaction on behalf of Mason, although the defendant’s testimony controverted this; and the plaintiff sued to recover upon the grounds: First, that the dealings were the personal transactions of Mason; that, without authority to do so, he used the plaintiff’s money; and that the fact that checks were drawn on the bank account of Clark, Mason & Co. was sufficient notice to put the defendant upon inquiry; and, second, that, if the transactions were not the personal transactions of Mason, they were gambling transactions, in which Clark, Mason & Co. did not, nor did Parker, Webb & Co., intend any actual sale or purchase, nor any actual receiving or delivery, of the lard, but both intended that accounts should be settled by the payment of differences, according as the market price of lard might rise or fall. The court below left it to the jury to determine whether or not these transactions were those of Mason individually, or of Clark, Mason & Co.; but complaint is made of the instructions given to the jury as to the plaintiff’s rights in case the jury should find that the deals were the personal deals of Mason.

The defendant, in this court, contends that in no view of the case was the plaintiff entitled to recover against the defendant. A careful examination of the record leads us to the conclusion that this contention is sound. The testimony of the directors is that no such business as that attempted to be transacted was authorized by the board of directors of Parker, Webb & Co. It is also in evidence, and, so far as we discover, undisputed, that a majority of the directors remained in ignorance of these transactions until after they were closed. It is to be noted that the plaintiff was not misled in any way 'by an appearance of authority on the part of those connected with the business. We think it is manifest that no authority in fact existed. The defendant company was not organized to act as a gratuitous agent. It appears that the attempted services which Mr. Craig undertook to render for Mason, or for the plaintiff, were entirely gratuitous, and rendered as an accommodation. Neither the articles of incorporation nor any authority of the board of directors conferred upon him this power. The company was the mere conduit through which these funds were transmitted. No benefit whatever inured to the defendant company. While, if the money had remained in the hands of defendant, it might be recoverable, the mere fact that it passed through its hands does not entitle the plaintiff, to an action for money had and received. See Wixson v. Haywood, 33 Mich. 68.

The case presents a very different aspect than it would had the dealings been for the ostensible benefit of the defendant corporation. But the party representing the plaintiff, or acting on its behalf, was in no way misled by any apparent authority of Craig. He knew that the transaction was not engaged in in the interest or on behalf -of the defendant company, or, at most, with any idea of profit to the company, but that it was solely for the benefit of either himself or the corporation which he represented. Under such circumstances, the same - considerations which would deny to defendant the right to assert that the plaintiff’s agent, Mason, was acting within the line of his authority, entitled the defendant to assert that Craig was acting without authority from his board of directors. See Shavalier v. Lumber Co., 128 Mich. 230 (87 N. W. 212); Merchants’ Nat. Bank v. Detroit Knitting & Corset Works, 68 Mich. 620 (36 N. W. 696); Rice v. Peninsular Club, 52 Mich. 87 (17 N. W. 708); 7 Am. & Eng. Enc. Law (2d Ed.), 790, and cases cited. We think the case should have been determined upon the ground that the contract was wholly ultra vires, so far as the defendant corporation was concerned, and that, as no benefit accrued to that company, no recovery should be had.

Judgment affirmed.

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