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    GUSTIN v. MERRILL.
    1. Corporations — Transfer of Stock — Purpose — Misrepresentation-Accounting.
    On a bill by a minority stockholder of a newspaper corporation against the principal stockholder for an accounting of the business and the proceeds of a sale thereof, evidence examined, and held, to show by a clear preponderance that a transfer of complainant’s stock to defendant was not intended to transfer the title absolutely, and that a subsequent transfer to defendant was procured by fraudulent misrepresentations as to the terms of a proposed sale of the corporation’s newspaper.
    3. Same — Purchase of Stock with Company Funds — Accounting.
    Where stock of a corporation is purchased from a stockholder with company funds it becomes treasury stock, and an accounting between the remaining stockholders should proceed on the basis of their respective holdings of the stock yet outstanding.
    Appeal from Bay; Connine, J., presiding.
    Submitted April 5, 1906.
    (Docket No. 5.)
    Decided July 3, 1906.

      Bill by Wilbert H. Gustin against Frank C. Merrill and others for an accounting. From the decree rendered, both parties appeal.
    Reversed, and remanded.

      Pierce & Kinnane (John L. Stoddard and Frederick K. Gustin, of counsel), for complainant.

      T. A. E. & J. C. Weadock (O. L. Collins, of counsel), for defendants.
   Blair, J.

Complainant filed his bill in this suit for an accounting between himself and the defendant Merrill of the business of the Bay City Times Company and of the proceeds of the sale thereof to defendant Booth.

Complainant alleges that on the 20th day of February, 1903, he was the owner of 400 shares of the capital stock of the company, which he was induced to transfer to defendant Merrill, to enable him to sell to Booth, by fraudulent representations that the largest price obtainable for the property was $32,000, for which amount he had given an option to Booth, whereas Booth then had an option for $65,000; that after the sale Merrill represented that he only obtained $30,000, whereas he had received $50,000; that in reliance upon these representations complainant agreed to and did accept $8,000 for his interest. Complainant also alleged by amendment to his bill of complaint that 300 shares of stock, claimed by defendant Merrill to have been purchased by him of one Bennett, were purchased with the funds of the corporation, and therefore became treasury stock, reducing the active stock to 1,500 shares, of which complainant held 400 shares and defendant Merrill 1,100. Complainant also averred that defendant had unlawfully converted to his own use funds of the company, for which he should account.

The defendant Merrill avers that he purchased complainant’s stock on the 29th of October, 1901, and from that date until the sale to Booth was the sole owner of the entire stock of the corporation. This contention presents the principal issue of fact between the parties. The testimony was taken before a commissioner, and the case heard by the judge of another and somewhat distant circuit. The circuit judge found that Gustin did sell his stock to Merrill in October, 1901, and was therefore not interested in the selling price; that Merrill purchased the Bennett stock with the moneys of the corporation and “must account to Mr. Gustin for such a proportion of the amount so used, viz., $2,000, as Mr. Gustin’s stock then bore to the total amount of outstanding stock, with interest;” that “the accounts in evidence are not so stated that the court is able to determine what company moneys, if any, Mr. Merrill used prior to October 29, 1901, the date on which he became the owner of all the stock. Both parties will be permitted to offer proof upon this point if they wish to do so.” After hearing the supplemental proofs of the parties, the court found, as follows:

“Balance due Times Company from Frank C. Merrill -.-$7,480 63

Complainant Gustin’s share of this balance, or four-eighteenths...........................-................$1,662 36

Interest at 5 per cent, due complainant from October 29, 1901, 3 years, 5 months, 11 days-------------------- 286 54

Total amount due complainant from defendant Frank C. Merrill-_________________________________-........-$1,948 90"

Decree was rendered for this amount, and both parties appealed to this court. It is agreed that prior to October 29, 1901, the complainant was the owner of 400 shares of' stock. On the back of his certificate there appeared at the hearing the following indorsements:

“ For value received I hereby sell, transfer, and assign to F. C. Merrill all the shares of stock within mentioned and authorize him to make the necessary transfer on the books of the company.

“Witness my hand and seal 2?th Nov., 1900.

“W. EL Gustin.

“Witness: Olive Smith Merrill.”

And below the assignment, in writing: “Frank O. Merrill.” It is also agreed that complainant signed the transfer of his certificate and delivered it to defendant Merrill for a temporary purpose, and that the certificate was never returned.

Merrill testified that he purchased this stock of Gustin, October 29, 1901, giving him therefor his note, payable on demand, for $4,000, with the understanding that, whenever Gustin wanted the money, Merrill’s mother would get it for him.

“ Where at this time was the certificate of stock which had originally been issued to Mr. Gustin for the $4,000 ?

“A. It was in my private drawer in the safe, where it had been after it was given to me at the time of the Bennett incident. * * * Mrs. Merrill, my wife, and my mother knew that I had purchased the McMillan stock, and I asked my wife to come to the Times Company office, which she did in the afternoon. Mrs. Merrill came to the office of the Times Company on October 29th, and I went to the safe and got that certificate and went into the editorial room. * * * She sat down at a desk, at Mr. Gustin’s desk, I believe. She asked Mr. Gustin if that was his signature on the stock. He said it was. She signed her name, and I signed my name, and we went out of the editorial room; and a short time later I turned over this stock to my mother, which she held as collateral. * * * I think it was at the same time that Archie gave me his stock, that I bought of him, along in December.

‘ ‘ Q. Then you turned over to your mother his certificate and the McMillan certificate at the same time ?

“A. Yes, sir.”

The testimony of defendant Merrill is corroborated by Ms wife, who testified:

“And we went into the editorial room, and I met Mr. Gustin there — sat down at the desk there. I saw his signature on this paper. I asked Mr. Gustin if that was his signature, and he said it was, and I was a witness of it.

Q. Did you sign your name then ?

"A. I did. * * *

‘ Q. Do you remember about what time this occurred or what year ? •

A. The only way I can remember it, it was the fall before the baby was born, and that was in 1902, and it was the fall before that, some time in the fall. I cannot fix the date. * * * I cannot remember anything else at all that occurred there that day.”

Mr. Hamilton, the bookkeeper, also testified to a statement by Gustin, some time prior to 1903, that “he was going to dispose of his stock, or was in the course of disposing of his stock,” and to a further incident—

“ Of Mr. Gustin showing me a piece of paper. He was in the act then of putting the paper in his pocket as he was passing my desk, and seemed at the time to be very much pleased over something, and he said he had got — I think the expression was that he had got — $4,000 out of it. * * *

Q. Can you give the year ?

“A. No; I cannot.

Q. You cannot tell whether it was 1901, 1902, or 1903, can you ?

“A. I can tell it was not 1903.

Q. How can you tell that ?

“A. Because it was about the end of the year some time. * * * Mr. Kinnane asked me if I knew that Mr. Gustin was a stockholder — if I understood he was a, stockholder.

“ Q. What did you tell him ? v

“A. I told him I understood that he was. * * *

Q. The fact is that you did not at that time recall that you had had the conversation with Mr. Gustin that you have testified to here this afternoon ?

“A. Possibly I did not. * * *

Q. Can you tell the year ?

“A. No, sir; I have no idea of the time.

“ Q. You would not be certain that $4,000 is the amount he mentioned either ?

“A. No, I would not be positive. „

Q. Whether it was $4,000 or $8,000, you don’t remember ?

“A. No; I do not.

Q. It might have been $8,000 as well as $4,000 ?

“A. I have no recollection of $8,000 being mentioned.

Q. You have no definite recollection of any other amount ?

“A. No, sir; I would not say either.”

Archibald McMillan testified that on October 27, 1901, at a meeting with Gustin and Merrill, or prior thereto, and after the time he agreed to sell his stock to Merrill and Gustin, Gustin said—

“That he would like to get out of there, or words to that effect.

Q. That is, in effect that he could not buy the stock, and he didn’t know as he wanted to buy it, and he didn’t like the way the business was running, and he wanted to get out of there himself. Is that the substance of it ?

“A. I think that was the substance of it.”

Complainant testified that he never sold his stock to defendant Merrill, never received any $4,000 note from him, and that Mrs. Merrill never witnessed his signature to the transfer of the certificate in his presence. He denied the statements attributed to him by Hamilton, but testified that—

“The Monday morning following the closing of the deal I went through there, and told, I guess, Gerry Laing and the rest of them, and Mr. Hamilton, that I guessed I would go up now and get my money. That is the only talk I ever had with him about it. At that time I had the check in my pocket, the $8,000 check. When I say closing of the deal, I mean the sale to Booth. I was going to the Commercial Bank to get the check cashed.”

His solicitors contend that the truth of his statement is established by the circumstances attending the sale to Booth, the papers executed by Merrill and Gustin for that purpose, the reports of the corporation to the secretary of State, the fact that the note for $4; 000 was written upon a blank which was not in use till after the sale to Booth, and the admissions of Merrill that Gustin owned the stock at the time of that sale. Frederick Hebinger testified to a conversation with Mr. Merrill after the sale to Booth :

“Mr. Merrill told me that he received $32,000; and from that I told him I supposed Mr. Gustin must have gotten a nice little share of it, and he said, ‘ Yes, he said, he got a good price, and told me that his share was $8,000.’ From that, then, I thought of Mr. McMillan, he being associated at the time of his death, and I asked him if the McMillan estate got about that proportion out of it, and lie said, ‘ No, that interest had been purchased some time before.’ That is all the conversation, and that is all I know about the case.”

Herbert H. Gustin, a brother of complainant, testified:

“I had a conversation with Mr. Merrill relative to the transaction. I think it was within a week after the announcement of the sale. * * * Cap and I were going down together, and I says, ‘ Cap, I hear you have sold out the Times Press.’ He says, ‘Yes.’ I says, ‘How much did Bert get out of it ?’ He says, ‘ He got $8,000— just double what his stock was. I done the fair thing with Bert and gave him what he wanted.’ He says, ‘ I had an option on Bert’s stock for this last two or three years, and I could have bought it at par, but I done the square thing by Bert. I gave him two for one.’ ”

The annual report of the corporation, showing its condition on the 1st day of April, 1902, and sworn to by Merrill, Gustin, and Clarke, April 28, 1902, stated the ownership of stock as follows:

Stockholders’ Names. Shares of Stock Held.

F. C. Merrill..... ___________1,398

W. H. Gustin.... ___________ 400

W. A. Clarke — . ........... 1

J. D. Jones______ ____________ 1

The annual report showing the condition of the corporation January 2, 1903, sworn to by the same directors, January 20th, 1903, states the ownership of stock to be:

Stockholders’ Names. Shares of Stock Held.

' F. C. Merrill..... ...........1,398

W. H. Gustin — ........... 400

W. A. Clarke— ........... 1

J. D. Jones______ ........... 1

Treasury stock .. ........... 800

2,600

Filed January 22, 1903.

With reference to the sale to Booth, Gustin testified that he called Merrill’s attention to a report that the Evening News Association contemplated coming into the newspaper field in Bay City, and suggested that Merrill call upon them, as he was going to Detroit, and take the matter up with them; that Merrill did not see Booth upon this -occasion, but later on met him by appointment on February 19, 1903. On the 20th of February, 1903, upon his return from the interview with Booth, he said:

“He had sized up the situation and they were going to come in here. Cap said they could buy their paper in large quantities and buy their ink a good deal cheaper ■than we could, and they were in a position to give us a hot competition, and it was a question whether we could put up a fight against them — a question how long we could stand against such a corporation as the Detroit News Association. * * * He said Mr. Booth wanted to know what our indebtedness was, and Mr. Merrill said he enumerated the indebtedness, which was $3,000 on the building, and $1,500 on the machinery, and $1,500 in minor accounts around town, and little outstanding bills that $1,500 would clear up, making $6,000 altogether of debts. He says Mr. Booth was willing to pay par and pay those debts. In other words, he would pay $32,000 for the paper, and we were to pay the debts out of the $32,000. * * * Merrill said he had done his best to get a better price. He had talked the value of the field and plant all over with Mr. Booth, and Mr. Booth was in a position where he could judge, and he didn’t care much about it. Of course, he wanted to get the entire field, and that is what he figured he was buying. The machinery and plant didn’t amount to anything, but he was willing to pay $26,000 to get the paper out of the field and have a clear field here. That was the best price he could get. Finally, after the matter was gone over in that way, we both concluded it would be better for us to sell under the circumstances. * "* * Now, he says, he took out his pencil and commenced to figure. He says: ‘ You have got four-eighteenths now. When I bought that stock of Bennett’s I agreed to do the square thing by you. Now I will give you 100 shares of that stock. That will make you five-eighteenths.’ He figured out five-eighteenths of 26,000, and handed it back to me on a little scrap of paper about six inches long.

Q. Did you see the figures that he put down on the paper ?

A. Yes, sir.

‘ ‘ Q. What were they ?

“A. He divided 26,000 by 18 and multiplied by 5.

Q. You saw him put down the 26,000 ?

A. Yes, sir.

Q. You saw him put down the 5-18 in figures ?

“A. Yes, sir; he figured up and says, ‘Well,, that comes to a little over $8,000.’ I says, ‘Cap, I have not figured it, but I have figured it in my mind, and I thought my share was about $7,000.’ Then I said, ‘ There is that note of mine in the safe now, that $666 note, the company note I hold against the company.’ He says, ‘ How much does that amount to ?’ I says, ‘ I have not figured it up, but I think it amounts to over $800, the note and interest.’ He says, ‘ We will call it $8,000, lump it at $8,000, for my share of the sale and the amount due on the note.’ He wanted to know if that was all right. I says, ‘ Yes, that is fair enough.’ Now, he says, ‘ Write me,out a bill of sale of your stock. ’ I says: ‘You have got. my stock in your drawer. You can use that. My name is on the back of it.’ ‘No,’ he says, ‘ I don’t want to use that. I want something to show Booth that you are perfectly satisfied that this deal go through.’ He says, ‘ I will use that in connection with the certificate, showing it is the same one.’ I says, ‘ You dictate something to suit you, and I will write it out. ’ I took a pen or pencil, and I wrote out the bill of sale. He dictated it, and I wrote down what he dictated. This bill of sale referred to the old certificate of stock, the original 400 shares. We wanted to identify that certificate, and I says to Cap, ‘ When did I transfer that to you ? ’ And he didn’t seem to know, and I didn’t seem to remember the year exactly, and he says, ‘ Put in there, “transferred in 1901.” It will be all right.’ That is the time that we supposed that we fired Bennett. I signed the bill of sale and delivered it to him at that time. He then wrote his check out on the Commercial Bank for $8,000, and told me to hold that check until he would let me know when the check was good. I suggested the advisability of our signing an agreement between ourselves, in case the deal did not go through, that I would get my stock back and he would get his check back. He says, ‘ Bert, I will trust you, if you will trust me.’ Isays: ‘No, Cap; that isn’t business. We ought; to have something to show how we stand in this matter.’ And I sat down and wrote the business out and called him to sign it. * * * I wrote it with a carbon paper underneath, so that it made a carbon duplicate copy, and I took one and he took the other. We both signed both copies. * * * He went to Detroit to close the deal on. the 4th of March, 1903. About 4 o’clock in the afternoon,, in the business office of the Times Press, he said he had been up to Mr. Weadock’s office, and they had talked the matter all over, and it was decided that we would have to sell, and he was going down to sell in some way or other, and close the deal up. He was going to be there the next day. I says, ‘ Well, now, Cap, if you make the deal, send me a cipher dispatch saying that the horse is sold, and I will understand it,’ and he said he would. I shook hands with him, and we were standing at the telephone desk, and wished him success, and I went home. * * * On the evening of March 5th I received a telegram from Mr. Merrill.”

The bill of sale, the agreement, and the telegram read as follows:

“Bay City, Mich., Feb. 20, 1903.

“To Whom It May Concern; This is to certify that I have tranferred to Frank C. Merrill all my right, title, and interest in the 400 shares of stock in the Bay City Times Company, transferred to said Merrill in 1901, for a consideration of eight thousand dollars, and am perfectly satisfied in case deal with Booth of Detroit is consummated.

“ W. H. Gustin.”

“Bay City, Mich., Feb. 20, 1903.

“We, the undersigned, give this note to each other, and both agreeing that, in the event of deal with Booth of Detroit not being consummated within three weeks, Gustin agrees to return to Merrill his check for eight thousand dollars this day issued and Merrill agrees to return to Gustin the bill of sale of his stock dated this day.

“Our signatures: W. H. Gustin.

“F. C. Merrill.”

" Received at

“811 North Water St., Bay City, Mich.

“46.DE AC ON 10 Paid.

“Detroit, Mich., Mar. 5, ’03.

“W. H. Gustin,

“ Bay City, Mich.

“ Sold horse, lower price but think will be satisfactory you.

“ F. C. Merrill.

“7:46 P. M.”

“I told him that the paper— I knew the paper was worth more money; that we ought to have got more for it. I says, ‘ How did you come to cut,’ and he said that Mr. Booth absolutely refused to pay one cent more, and just then he pulled out a new bank book out of his pocket and held it up to me and showed an account in the Commercial Bank of $30,000, and he said, That is what I got.’ ”

Mr. Merrill’s version of the transactions is as follows:

“ That option, or a copy of it, has been offered in evidence in this case. The amount of it was $65,000. I did not say anything to Mr. Gustin in relation to my having given an option; as to the facts that I had given an option prior to the time it was given. I said nothing to him about the fact I was negotiating a sale of the paper to Mr. Booth until I had given the option and come home, the 20th of February. I first had a talk with Mr. Gustin in relation to the matter on February 20th, the day after the giving of the option. I think it was the next morning, in the editorial room. I went in the editorial room and I said to Mr. Gustin: I haye given an option on the paper to Mr. Booth of the Detroit News, and if the deal goes through I want to take your note up, or my note up. He expressed surprise. The conversation occupied, I think, about five or ten minutes, because I know I went out, and then I went in the editorial room in the afternoon and saw him. I don’t recollect that I told him anything about an examination of the books.

‘ ‘ Q. Yo.u heard this testimony in relation to your showing him a check, answering that if the deal did not go through you would have that much to blow in ?

"A. Yes, sir.

Q. Did you have such a conversation ?

“A. I never said to him that w& would have that much to blow in. I showed him the check, bearing out the statement that I had made that I’ had given Mr. Booth an option. He complained about selling his stock. In the next conversation I had with Mr. Gustin he said he thought he had made a mistake; that if he had held on he could have gotten more money. I said to him that it was a very peculiar thing; that he did not want to take any chances, he had had an opportunity to buy the McMillan stock; that he had had an opportunity to buy treasury stock before that, but that he would not take any chances. As long as I had taken the chances that I had taken, that I didn’t see what kick he had coming. I told him that Mr. Booth said that he was coming into Bay City, whether he bought the Times Company, or whether he started a paper; that undoubtedly there would be a fight. I then said to him: ‘ I will tell you what I will do. I will give you my check for $8,000. You return to me my note. If the Booth deal goes through, you can cásh the check, and if it does not go through, you áre to take'up your certificate of stock and help me make the fight.’ I said, ‘I had every reason to believe that Mr. Booth is in earnest, and that he is coming in here, and that he wants the Times ’property.’ Mr. Gustin agreed to the proposition, gave me back the note, and I gave him a check. Then I said to him, ‘ Are you satisfied now ?’ He said he was perfectly. I says, ‘ Then I would like to have you give me something, an agreement that you are agreeable to this transaction,’ and he then sat down at his desk and wrote the paper which has been offered in evidence. * * *

‘ ‘ Q. Did you have any part in dictating that agreement ?

“A. Absolutely none. * * * After some talk, I started to go out of the editorial room, and it occurred to me that Mr. Gustin had my check for $8,000, and I thought it well to. get a paper from him, and I asked him to give an agreement whereby, in case the Booth deal was not consummated, that I should receive my check back, and that he should take his stock. * * *

“Q. What obligations were then outstanding?

“A. I owed $3,000 on the building; three notes, of $500 each, on the Mergenthaler linotype machines, with interest; $4,000 to A. H. McMillan; $4,000 to W. H. Gustin; $666 to Mr. Gustin for the Times Company note; the McMillan note of $666.66, although there had been asmall payment made on it at that time; about $1,000 in bills; for one or two carloads of paper — the paper bills were not included in the $1,000 — aggregating about $15,000. * * * Mr. Gustin seemed to be very anxious, and was very anxious, that the sale should be made, and when I went to Detroit I told him if I sold the paper I would telegraph him.

“Q. At the time of the conversation, and up to that time, had you ever discussed with Mr. Gustin directly or indirectly the amount of the option ?

“A. That question had never , been discussed in any Way.

“Q. Had he ever asked you ?

“A. No, sir.

“Q. Did you send Mr. Gustin a message in relation to • the sale of the paper ?

“A. I did.

“Q. This message that has been offered in evidence here ?

“A. I believe it is. * * *

“Q. Why did you give him a check for $8,000 ?

“A. I wanted the man satisfied in the first place. I wanted the man satisfied, and I wanted, as I have stated here, that in case Mr. Booth came into the field, to have Mr. Gustin there. Mr. Gustin was a valuable man in the editorial room. He had always been a valuable man as a reporter in Bay City. I had a great deal of indebtedness, and after my conversation with Mr. Booth, saying he was coming into the field, and plans had been made for coming here, if he did not buy the plant, I was confident he would come in, and I thought that if Mr. Booth came and bought the Bay City Times property, and paid me what my option called for, $65,000, that by paying Bert Gustin $8,000 I was treating him all right, and it would be perfectly satisfactory, and everything would be perfectly satisfactory in every way.

Q. Did you pay him this additional $4,000 because you wanted an agreement from him to stay by and make the fight with you if the paper was not sold?

“A. I made the'proposition to him which was accepted.

Q. (question read).

“A. That reason and the reason that I wanted the man satisfied.”

The oral testimony as to the ownership of the stock is so irreconcilable that great importance must attach to the written evidence in determining where the truth lies. The possession of the stock by Merrill regularly assigned to him by Gustin on November 27, 1900, would be quite conclusive, if it were not for Merrill’s admission that such assignment was merely to enable him to vote the stock and that Gustin was the owner of the stock till October 29, 1901. The circumstances of the sale of the stock on that day as narrated by Merrill, are somewhat unusual. The only change made in the certificate was by Mrs. Merril attaching her signature as a witness. The transfer ■still purported to have been made on November 27, 1900, •and it would naturally be presumed from the face of the paper that the signature of the witness was made upon that day. There is nothing upon the face of the paper to indicate a sale on October 29, 1901. The signature of a witness added nothing to the validity of the oral agreement or the written transfer, and- nothing whatever was said at the time to indicate that this was a new transaction. Neither would it be usual for a business man to request his wife to come to his place of business to witness such a •signature when there were others at hand, and if he desired evidence of a change of the bailment to a transfer of title he would naturally have required a memorandum to ■that effect. On April 28,1902, six months after Merrill claims to have become the. owner of Gustin’s stock, he made affidavit to the annual report, stating that Gustin was the owner. Again, in January, 1903, he made oath "that .Gustin was the owner of 400 shares. Prior to March, 1901, the undisputed ownership of stock in the company was as follows: Archibald McMillan, 400 shares; "Wilhert H. Gustin, 400 shares; Edwin and Maria C. Bennett, 100 shares; Edwin and Maria O. Bennett, contract •for stock held as treasury stock, 200 shares; Prank O. Merrill, 700 shares; treasury stock, 800 shares. On March .15, 1901, Merrill bought the Bennett stock, and on October 28, 1901, he bought the McMillan stock. On March 11, 1901, Merrill had transferred of his stock 1 share each to Jones and Clarke; but the certificates, therefor were not removed from the stock hook, and it is conceded that the two shares really belonged to Merrill. The Bennett stock -and the McMillan stock, added to the shares then owned "by Merrill, made 1,400 shares, and, deducting the shares ■transferred to Clarke and Jones, 1,398, the precise number he swore in the reports that he owned. These reports were made out by Mr. Merrill himself, are consistent with •complainant’s claim of ownership, and are inconsistent with defendant’s claim. In order to sustain his claim of purchase, we must find that he deliberately made oath to a false statement. The circumstances should be very convincing to induce such a result. The bill of sale, except as to the date of the previous transfer, stated as 1901,is also consistent with complainant’s claim, and at least unfavorable to defendant’s contention. Gustin says that this paper was dictated by Merrill, who said that he wanted it “to show to Booth that you are perfectly satisfied that this deal go through,” and that the year was intended to be the year of the original transfer, but through faulty recollection was written 1901, instead of 1900. Merrill denies that he dictated the- bill of sale, but says it was written wholly by Gustin at his request.

“ I says, ‘ Then I would like to have you give me something, an agreement that you are agreeable to this transaction,’ and he then sat down at his desk and wrote the paper.”

Disregarding the conflicting testimony of the parties* and looking to the paper itself, it is apparently a transfer of stock, previously transferred in 1901, for a consideration of $8,000. The only actual transfer of the certificate of stock that was ever made, however, so far as the paper itself shows, was in 1900, and it is agreed that that transfer was not intended to change the ownership. Moreover, the consideration for the alleged transfer of title in 1901 was $4,000. If Merrill was merely a bailee of that stock for Gustin, it was reasonable that he and Gustin should agree upon the actual transfer of ownership for $8,000. If Merrill was actually the owner of the stock, the agreement was useless and the consideration extraordinary. If he did not desire the bill of sale as an evidence of title, but merely to show that Gustin was agreeable to the transaction, it is singular that the writing was not confined to that purpose. A mistake in the recollection of the year in which a transaction took place is not so uncommon as to make the statement of the year of controlling influence. The mutual agreement signed by both, parties must also be considered in construing the bill of sale. Whoever suggested the making of this agreement, it was, confessedly, deliberately made by very intelligent men to protect their interests. In the bill of sale Gustin states that he is “ perfectly satisfied in case deal with Booth of Detroit is consummated.” The mutual agreement was evidently made to provide for “ the event of deal with Booth of Detroit not being consummated within three weeks.” In that event “ Gustin agrees to return to Merrill his check for $8,000 this day issued and Merrill agrees to return to Gustin the bill of sale of his stock dated this day.”

This agreement is plain and unambiguous, and clearly shows that the writing signed by Gustin just before was not intended primarily as a statement of Gustin’s satisfaction with the transaction as between himself and Merrill, but was intended to be (what its terms indicate) a bill of sale of a present interest in stock for $8,000 and an expression of satisfaction with the deal with Booth. In case the satisfactory deal with Booth did not go through, the parties where to be placed in statu quo by Gustin returning the check and Merrill returning the stock. That the satisfaction expressed by Gustin was with the deal with Booth as it had been represented to him by Merrill is made manifest by Merrill’s telegram of March 5, 1903: “ Sold horse, lower price, but think will be satisfactory you.”

Upon Merrill’s theory, this telegram should have contained only the first two words, since the fact of a sale was all that concerned Gustin. Why, then, should he have further informed Gustin that he had sold at a lower price, but one which he thought would be satisfactory to him ? The only reasonable answer to this question is that given in Mr. Gustin’s testimony — that the deal had been fully discussed by him and Merrill, who represented not only himself but Gustin as well in making the sale, and that the price had been agreed upon on the representations of Merrill that it was the highest price obtainable. The telegram recognizes Gustin’s interest, not only in the sale, but in the result of the sale, which is entirely consistent with Gustin’s claim that he had parted with his interest in his stock for a consideration based upon the price to be obtained for the property of the corporation, and is inconsistent with Merrill’s theory that Gustin had no interest whatever in the amount to be paid.

The only remaining written evidence, if it may be so designated, is the promissory note. This note is entirely in the handwriting of Merrill, and there is nothing to connect Gustin with it, except the oral testimony of Merrill. Merrill introduced the note in evidence as the very note he gave to Gustin in payment for his stock, and which Gustin returned to him when the arrangement of February 20, 1903, was made. He stated on cross-examination that there was one chance in a thousand that it might be a copy, and explained how he might have retained a copy and destroyed the original, but maintained that, to the best of his knowledge and belief, it was the original. It is apparent that if the original bill of sale, mutual agreement, and note were left, in the first instance at his counsel’s office, as claimed, obtained there for the purpose of making copies, taken away and the copies left, returned and the copies obtained for destruction, some one in the office must have known about the entire transaction. In view of the fact that complainant proved conclusively, as Merrill afterwards admitted, that the note was written upon a blank which was not in existence till after the sale of March 6, 1903, it is worthy of note that no one took the stand from his counsel’s office to corroborate his explanation of the possible destruction of the original. Certainly the circumstances surrounding this piece of evidence, as disclosed by the record, do not tend to strengthen defendant’s claim, but rather to cast doubt upon it. The testimony of Hamilton as to Gustin’s admission that he had disposed of or was about to dispose of his stock, and his statement üpon another occasion, showing a piece of paper, that he had got $4,000 out of it, is not very convincing, and is more than overcome by the testimony of Hebinger and Herbert Gustin as to Merrill’s admissions after the sale and by the documentary evidence above referred to. On the whole, we are satisfied that complainant proved by a clear preponderance of the evidence that he was the owner of 400 shares of stock on February 20, 1903, and that defendant Merrill obtained the same by fraudulent representations as to his agreement with Booth.

We agree with the circuit judge in the conclusion that the 300 shares of Bennett stock were purchased by Merrill with the money of the corporation; but we think this stock should be treated as treasury stock, and that the accounting should, therefore, be upon the basis of eleven-fifteenths of the stock being owned by Merrill and four-fifteenths by Gustin. In 1895, a resolution was adopted by the board of directors that until certain notes were paid the salaries of the editor, business manager, and others should not be increased, and an agreement to the same effect was signed by Merrill, Gustin, and the other directors. This resolution and agreement were never changed by any corporate action, and Mr. Merrill had no legal authority to increase his salary against Mr. Gustin’s protest. As the accounting was limited by the circuit judge to the period prior to October 29, 1901, we do not think it desirable to determine the respective shares of the parties in advance of a full accounting.

The decree of the circuit court is reversed, and the case remanded for further proceedings in accordance with this decree. The complainant will recover costs of both courts.

Grant, Montgomery, CÍstrander, and Hooker, ,JJ., concurred.


source: Caselaw Access Project

author: Ostrander, J.

license: Public Domain

text:
    DETROIT SHIPBUILDING CO. v. COMSTOCK

    1. Sales — Warranty—Representations by Seller — Effect.
    In an action for the price of a steam boiler sold by a written contract to take the place of one in use, evidence that the sellers represented that the new boiler would give defendants much greater capacity, steam pressure, power, and economy than the old boiler ever did, amounts at most to evidence of a parol warranty.
    2. Same — Warranty—Written Contract — Implied Warranty.
    Where a steam boiler is sold by a written contract in which no warranty is made, the only warranty that can be asserted is an implied one.
    3. Same — Parol Evidence.
    Parol evidence is not admissible to add to an unambiguous writing facts which may aid the implication of a warranty.
    4. Same — Warranty—Suitableness for Purpose Intended.
    A contract to build and install in a steamship a boiler of a particular size and type is fulfilled by the installation of one of correct workmanship and materials that does the work reasonably to be expected of a boiler of that size and type, though it fails to accomplish all that the parties hoped it would.
    Error to Wayne; Brooke, J.
    Submitted April 4, 1906.
    (Docket No. 9.)
    Decided July 3, 1906.
    Assumpsit by the Detroit Shipbuilding Company against Andrew W. Comstock and another upon a promissory note. There was judgment for plaintiff, and defendants bring error.
    Affirmed.

      Moore & Moore, for appellants.

      Miller, Smith, Alexander & Paddock, for appellee.

       Rehearing denied November 7, 1906.

   Ostrander, J.

The declaration of the plaintiff contained the common counts in assumpsit, with notice, and copy, of a promissory note. Plaintiff’s case was made by introducing the note in evidence and testimony of the amount due thereon. With the plea, defendants gave notice of special matters of defense and filed a bill of the particulars of their set-off and recoupment. There was a jury trial, and a verdict for plaintiff. Motion for a new trial was denied.

■ The note sued upon represented a part of the purchase price of a steam boiler, manufactured and sold by plaintiff to defendants under a written contract therefor. Negotiations for the manufacture and purchase of the boiler were begun in January, 1902. A written proposition was submitted by the plaintiff for two types of boiler and for removing and replacing the cylinder of the engine of the boat. February 25, 1902, one of the defendants wrote plaintiff that he was expecting to give it an order, hiaving arrived at that conclusion, for one of the types mentioned in the proposal. At about the same time, the other defendant wrote: “We have decided to build a Scotch type boiler ” — being the same type mentioned in letter of February 25th. Another letter of February 27th is to the effect that Mr. Comstock will be in Detroit March 4th and 5th and take up the boiler matter. The result was the agreement here set out:

“ This agreement made this 6th day of March, 1902, by ■and between the Detroit Shipbuilding Co., party of the first part, and A. W. Comstock and Alex. É. Sinclair, of the second part,

Witnesseth: The party of the first part agrees to “build for said parties of the second part for the steamer Simon Langell, one fire-box boiler 11' 6" diameter, 14' long, with double fire-box, to be allowed 125 lbs. steam, furnish new stack, breeching, set of grate bars and bridge walls, place it in the ship, fit rolling braces, and pipe it up ready for service, new mountings and stop valves, and cover boiler and main steam pipes, for the sum of ninety-four hundred dollars ($9,400) and the old boiler.

“The parties of the second part agree to place said steamer at the Shipbuilding Co.’s dock on or before the close of navigation season 1902, and do all necessary cutting away and putting back of boiler-house.

“The parties of the second part agree to make payments-as follows: On August 1, 1902, $700; September 1, 1902, $1,000; October 1, 1902, $1,000; November 1, 1902, $1,000; December 1, 1902, $1,000, and note for balance ($4,700), payable 6 months after the work is finished ready for steam, said note to draw interest at 5 per cent, per annum, beginning three months from date of same.”

The boiler was placed in the vessel during the winter of 1902, was used during the season of 1903, payments were made on the purchase price, the last one May 28, 1903. Defendants finally disposed of the boiler and refused to pay the remainder of the purchase price. They are in the position of affirming the contract and suing for damages for breach thereof.

They claimed the right to show that they were induced, to purchase the boiler by false and fraudulent representations of plaintiff that it would have a greater capacity, furnish more steam, and be more economical than the old boiler, say the testimony offered for this purpose was improperly excluded, and rely in this behalf upon Peck v. Jenison, 99 Mich. 326; Kranich v. Sherwood, 92 Mich. 397; Match v. Hunt, 38 Mich. 1; Picard v. McCormick,. 11 Mich. 68; Kost v. Bender, 25 Mich. 515; Maxted v. Fowler, 94 Mich. 106; Perkins Windmill Co. v. Kelly, 141 Mich. 459.

No testimony was offered which had a tendency to establish the proposition that plaintiff made any representations, at any time, which were known or supposed to be-false. On the contrary, it is evident that plaintiff desired to give satisfaction and believed the boiler furnished would do the work such a type was rated and expected to do. Without setting out the testimony in question, it was claimed for it that it tended to show that plaintiff, a boilermaker, assured defendants that it knew just what they wanted, and, if defendants would sign the contract in question and leave it to plaintiff, the plaintiff would make them a boiler which would give them greater capacity,, steam pressure, power, and economy than the old boiler ever did, and be more satisfactory than the old boiler ever was -, that defendants relied upon the representations and, believing them true, signed the contract. At most, this amounted to evidence, of a parol warranty. No warranty is found in the written contract. The court was not in error in ruling, as it did, that the only warranty which could be asserted was an implied warranty. Nichols, Shepard & Co. v. Crandall, 77 Mich. 401 (6 L. R. A. 412).

According to the contentions of defendants, the implied warranty was that, the purpose being to furnish steam for a certain steamboat, equipped with a certain engine, and expected to perform certain work, the boiler was warranted to perform as defendants hoped it would perform; in other words, the same alleged parol representations, made prior to the execution of the written contract and not contained in it, are sought to be added to the contract to support an implied warranty. That parol evidence is not admissible to add to an unambiguous writing facts which may aid the implication of a warranty, see McCray Refrigerator, etc., Co. v. Woods & Zent, 99 Mich. 269, 275.

. Upon the question of the suitableness and quality of the boiler, both parties offered testimony at length. The court, as requested by counsel for defendants, charged the jury in the following language:

“ 1. If you find that a steam boiler of the fire-box pattern, 11 feet and a half in diameter by 14 feet in length, could have been constructed so as to have been reasonably suitable for the purpose for which it was purchased, then it was the duty of the plaintiff to construct and place in said steamship, Simon Langell, a boiler reasonably suitable for the purpose for which it was constructed, to wit, for the purpose of supplying a suitable quantity of steam to the engine of said steamship, when said steamship was navigating the Grreat Lakes.

“2. It was the duty of the plaintiff to furnish a steam boiler reasonably suitable for the purpose for which it was to be used, as already explained, 11 feet 6 by 14 feet, and if you find that such a boiler was not furnished, then the plaintiff was guilty of a breach of the contract on its part.

“3. If you find under the instructions already given that the plaintiff was guilty of a breach of contract, then the defendants will be entitled to recoup in this action the difference between the value of the boiler furnished and its value as it would have been if the boiler had been reasonably suitable for the purpose for which it was purchased, and also the loss the defendants necessarily sustained in the operation of their steamship, and which was caused solely by reason of the boiler being unsuitable for the purpose for which it was purchased, provided the defendants acted with reasonable prudencé, care, and discretion, and discontinued the us^of the boiler at a reasonable and suitable time, so as to make the loss as small as practicable.”

This was fair to defendants, and submitted to them the issues of fact which the testimony properly presented.

A further contention is that both parties agreed after trial of the boiler that it was not reasonably suitable. The testimony referred to establishes no such fact, unless the definitions and theory of defendants as to suitableness be used. The boiler did not, it seems, furnish the horse power expected by defendants in connection with the engine they had. It is not important to go over the questions of specific unsuitableness which are discussed in the briefs. What has been said disposes of all debated questions.

The judgment is affirmed.

Grant, Blair, Montgomery, and Hooker, JJ., concurred.


author: Blair, 3.

text:
    FELL v. GORMAN.
    1. Garnishment — Venue—Place oe Service.
    Where an affidavit in garnishment shows that plaintiff is a resident of the county in which the venue is laid, and that the principal and garnishee defendants are residents of another county, service on the garnishee in the county of his residence, no service of any kind being made in the county of the venue, will not confer jurisdiction over the garnishee.
    S. Pleading — Pleas to the Jurisdiction — Abatement—Manner oe Pleading — Appearance.
    The common-law distinction between pleas to the jurisdiction and pleas in abatement not being recognized in this State, the filing of a plea to the jurisdiction by attorney instead of in person does not amount to an appearance and an admission of jurisdiction of the persbn.
    Error to Calhoun; Hopkins, J.
    Submitted April 5, 1906.
    (Docket No. 14.)
    Decided July 3, 1906.
    Garnishment proceedings by William I. Fell against John J. Gorman as garnishee defendant of James N. Riley. There was judgment for plaintiff, and defendant brings error.
    Reversed, and writ quashed as to garnishee defendant.

      Tarsney & Fitzpatrick and Bernard J. Onen, for appellant.

      Williams & Beck, for appellee.
   Blair, 3.

Appellant prosecutes his writ of error to review a judgment rendered against him as garnishee defendant. Plaintiff brought suit against one Riley upon a promissory note, and on the same day instituted proceedings in garnishment against appellant. The affidavit in garnishment set up that plaintiff was a resident of Calhoun county and that Riley and Gorman were residents of Wayne county. The writ was served upon Gorman in Wayne county, and copies of the writ, etc., were served upon Riley at Chicago, Ill., together with the usual notice to appear within 30 days. No service of any kind was made in Calhoun county. The other proceedings in the case will be found sufficiently set forth in Gorman v. Calhoun Circuit Judge, 140 Mich. 230.

The record presents two questions for our determination:

(1) Did the service of the writ of garnishment confer jurisdiction ?

(2) Did the filing of the plea to the jurisdiction by attorney, instead of in propria persona admit jurisdiction ?

1. No service of any kind having been made in Calhoun county, the service of the writ upon Gorman in Wayne county was insufficient to confer jurisdiction over him. People, ex rel. McCloskey, v. Wayne Circuit Judge, 26 Mich. 100; Moore v. Wayne Circuit Judge, 55 Mich. 84; Stern v. Wayne Circuit Judge, 105 Mich. 685.

2. Treating of pleas to the jurisdiction, Mr. Chitty says:

“Pleas of this description, though in effect they abate the writ, yet differ from pleas in abatement principally in three points, viz., that they must be pleaded in person. * * *

“Pleas to the jurisdiction must be pleaded in person because the appointment of an attorney of the court admits its jurisdiction; but 'pleas in abatement in general may be pleaded by attorney, because the jurisdiction of the court in the latter case is not disputed.” 1 Chitty on Pleadings (16th Ed.), pp. 569, 588.

The distinction between pleas to the jurisdiction and pleas in abatement which prevailed at the common law has not been recognized by this court. National Fraternity v. Wayne Circuit Judge. 127 Mich. 186. It follows, therefore, that pleas to the jurisdiction, like ordinary pleas in abatement, may be put in by attorney without admitting jurisdiction of the person. The same result. follows from the provisions of Circuit Court Rule 6. Having provided that a plea of the general issue may be filed with the plea in abatement which could certainly be signed by attorney without waiving the plea in abatement, it would seem' illogical to hold that the dilatory plea must be signed by the party in person.

The judgment is reversed, and the writ quashed as to the defendant Gorman.

Grant, Montgomery, Ostrander, and Hooker, JJ., concurred.


author: Blair, J.

text:
    CADY v. BURGESS.
    1. "Witnesses —- Competency — Transactions with Person Since Deceased.
    Where, on a bill by the administrator of the estate of a deceased wife against her surviving husband for an accounting, and to have a deed from her to him declared a mortgage, and the amount due thereon ascertained, the only evidence tending to support the allegation of the bill that the deed was , given as security is certain admissions of the husband made while testifying in another case, his whole testimony in that case is admissible, and he is a competent witness as to the entire of his transactions with decedent.
    2. Mortgages — Consideration—Deed Absolute in Form — Presumption — Amount Due.
    Though, in the absence of evidence to the contrary, a presumption of fact obtains that the sum mentioned in a mortgage as . the consideration therefor is correctly stated, where the defendant in a bill to have a deed declared a mortgage, and the sum due thereon ascertained, admits that the deed was not given to secure an ascertained indebtedness, but to secure the payment of such sum as should afterwards be found due upon an accounting, the burden is upon him, the grantor being dead, to show what that sum is.

      3. Same — Evidence — Confidential Relations — Burden of Proof.
    Where, on a bill by the administrator of the estate of a deceased wife against her surviving husband to have a deed from her to him declared a mortgage and the amount due thereon ascertained, defendant claims that the consideration for the deed was in part a certain bill of sale given her by him, and it appears that at the time of executing the deed she was in a helpless physical condition, and mentally weak, and could communicate with others only through the medium of defendant who pretended to understand her, the relation of trust and confidence established imposes on defendant the burden of showing, not only the true consideration of the bill of sale and deed, but that his transactions with decedent were fair and honest, and that there was no abuse of her confidence.
    4. Same — Evidence—Sufficiency.
    On a bill 'to have a deed absolute in form declared a mortgage, and the amount due thereon ascertained, evidence examined, and held, to show that the deed was a mortgage, and that nothing was due thereon.
    Appeal from Chippewa; Steere, J.
    Submitted April 6, 1906.
    (Docket No. 20.)
    Decided July 3, 1906.
    Bill by George A. Cady, special administrator of the estate of Augusta Brown Burgess, against John W. Burgess, Charles O. Stratton, and Cora J. Stratton for an accounting. From the decree rendered, complainant appeals.
    Modified.

      Warner & Sullivan, for complainant.

      Oren, Webster & Carleton, for defendant Burgess.
   Blair, J.

Complainant filed the bill of complaint in this suit, as special administrator of the estate of Augusta W. Brown-Burgess, for an accounting between said estate and the defendant Burgess, and to have a certain deed from decedent to said Burgess determined to be a mortgage and the amount due thereon, if anything, ascertained. Burgess became acquainted with Mrs. Augusta W. Brown about the year 1891, and soon thereafter began to maintain illicit relations with her, and they lived in lewd and lascivious cohabitation up to the time of their marriage, October 20, 1898. Mrs. Brown was a woman of considerable property; her net income for 1899 being about $2,000. She was a woman of good business qualifications and made prudent investments. The defendant Burgess came to the Soo in 1887 with $1,632.51. in money, which, in 1889, he invested in the livery business. He was a man of dissolute habits, given to excessive drink, and not the kind of man who would be likely to accumulate property. He executed a bill of sale of the livery business March 20, 1896^ to Mrs. Brown, and from July, 1896, to the death of his wife in May, 1900, he was engaged in no business on his own account. Some time in 1897 Mrs. Brown was taken seriously ill and went to Mt. Clemens for treatment. In July or August, 1898, Burgess took her to Chicago, and from that time they were out of the State of Michigan the.greater portion of the time till her death. After July, 1898, and probably before that time, Mrs. Brown was in a critical condition, and had to have some one to transact her business for her. On December 20, 1899, Mrs. Brown, then defendant’s wife, was declared by the probate court of Chippewa county to be mentally incompetent to have charge of her property, and a guardian was appointed. It was, however, determined in this decree that she was competent at the time of her marriage to contract the marriage, and the decree has been held conclusive of that fact. Burgess v. Stribling, 134 Mich. 33. During the greater portion of the time from 1897 until her death, she was unable to walk, unable to talk plainly, and unable to use her hands, and defendant had practically the entire care of her. She died May 7, 1900, of softening of the brain due to syphilis. Her method of transacting business after her marriage is shown by the testimony of defendants’ witness, Metzger, who took charge of her property after she left for California in January, 1899.

“ Her method of conveying what she wanted to say to me was to first make Burgess understand, and then Burgess would give me to understand what he understood from her, and the only way she could communicate to me any idea originating with herself was through Burgess, and, when she wanted to open a conversation or communicate any original thought, she would look at Burgess and attempt to say something. He would watch her mumble, and then repeat his understanding of what she said. She would mumble or attempt to say something, and in these attempts would not articulate any word that I would understand, but sometimes I could understand a letter, not altogether. Independently of Mr. Burgess, she could not make me understand sufficiently so that I would be able to guess what she meant had I been alone with her.”

Mrs. Brown began loaning money to Burgess, March 12, 1891, when she loaned $1,500 on chattel mortgage security to the firm of Lennox & Burgess. From this time on there were numerous transactions between them, and it is conceded by his counsel that on March 20, 1896, Burgess was indebted to Mrs. Brown in the sum of $300 or $400. It is also agreed by counsel that the accounting should begin with the last-mentioned date. The evidence presented in the record as the basis for the accounting consists, in the main, of bank books, checks, check stub books, notes, bills of sale, deeds, and memoranda, which are quite vague, incomplete, and unsatisfactory. Counsel for complainant also read in evidence, as admissions, extracts from the testimony of Burgess given at the hearing of the case of Burgess v. Stribling, supra. Upon complainant’s resting, defendants’ counsel called Burgess as a witness, and, against complainant’s objection, examined him upon the whole case. Defendants’ counsel also offered in evidence the complete testimony of defendant Burgess on the former trial, from which complainant’s counsel read extracts. This last testimony is not printed in the present record, but we are referred by counsel to the record in Burgess v. Stribling, supra.

It is contended by counsel for complainant that the testimony of Burgess is incompetent, under section 10212, 3 Comp. Laws. Defendants’ counsel contend that his testimony was admissible under the rule laid down in Fox v. Barrett’s Estate, 117 Mich. 162; Lange v. Klatt, 135 Mich. 262. We think the contention of defendants’ counsel must be sustained. The instrument which complainant seeks to have declared a mortgage was in form a warranty deed, conveying 40 acres of land, purporting to have been executed July 23, 1897, for an expressed consideration of $2,000, and recorded January 4, 1899. The only evidence presented by complainant to sustain his claim that the deed was given as a security was the admission of defendant in his testimony in the Stribling Case, as follows:

“ I got the deed to this farm in July, 1897. I did not at that time and never had a settlement with Mrs. Brown. The deed was given to secure me until such time as we had a settlemen.t. I do not know exactly how much Mrs. Brown owed me at that time. I think she would owe me $1,500. I never had reason to find out how much she owed me. It was not my suggestion that she give me the deed to this property. She gave it to me without my knowing she had it made out. I was not present when it was made out, and never talked over the transaction with her before the deed was made. I had talked to her about wanting security before that time for what she owed me, but not about this particular piece of property. I didn’t have a great deal of money at that time.”

Complainant also read in evidence from the former case the following as an admission:

‘ ‘ Q. Do you know how much she owed you at the time she died?

“A. Not exactly.

“ Q. Know anywhere in the neighborhood ?

“A. No.”

These admissions and others, read in evidence by the complainant, went to the merits of the entire case made by the bill, and without them complainant could not have sustained his bill at all as to the mortgage -character of the deed. The case is not distinguishable in principle from the cases above cited.

The learned circuit judge made a decree finding that the above-mentioned deed was given as a security for the payment of an indebtedness of $2,000, upon which there was due $1,300. Complainant has appealed to this court. Counsel for defendant Burgess state that:

“The circuit court took the view that the consideration expressed in the deed, viz., $2,000, was a virtual acknowledgment by Mrs. Brown that her debt was at least the amount she had voluntarily expressed in the instrument as its consideration, and to that extent the amount of decedent’s debt to Mr. Burgess was established by competent testimony.”

We are unable to concur in this conclusion. Undoubtedly, a presumption of fact obtains, in the absence of evidence to the contrary, that the sum mentioned in a mortgage as the consideration therefor is correctly stated. Wiswall v. Ayres, 51 Mich. 324. But in this case the defendant himself overthrows the presumption. In his previous testimony, he admitted that Mrs. Brown did not owe him $2,000 at the date of the deed, and that he did not know anywhere in the neighborhood” of how much she owed him at the time of her death. He further testified in the Stribling Case:

“That 40 acres deeded me is worth $1,300. It was given me to secure an indebtedness, but I couldn’t tell how much the indebtedness was.”

He does not pretend in this record to state what the indebtedness was, but claims that he repeatedly asked for a settlement to determine the amount, which he was unable to obtain. According to his testimony, the mortgage was not given to secure an ascertained indebtedness, but to secure the payment of sucli sum as should afterwards be found due upon an accounting, and, under such circumstances, the burden was upon him to show what that sum was.

The only plausible basis for an inference that she owed him anything - at the time of making the deed or at the time of her death must be found in his unsupported statement that she owed him the value of the livery stable property transferred by him to her by bill of sale March 20, 1896, to secure the payment by him of one-half of the purchase price, advanced by her, of certain real estate known as the “Mission property,” and deeded to them jointly on April 16, 1896; that, being unable to pay his part of the purchase price, he conveyed his interest in the lands to her on May 15, 1896, and thereupon the consideration for the bill of sale failed, and she agreed to account to him for the property. In the Stribling Case, Burgess testified as to this bill of sale, as follows:'

“About this time I had borrowed some money from her —several hundred dollars — and I got in ill health, and I gave her a bill of sale of what I had. Just gave her a bill of sale of it. It was not my property after that. That bill of sale was given to secure the debt I owed her. 1 am sure about that. We bought the Mission property together. She and I bought that property together, but she furnished the money. I had something like $2,500 standing out at that time, and I expected to be able to collect it, and I bought the property on the strength of that, and when I could not do it — yes, sir; I bought the property on the strength of my outstanding accounts and paid for it in that way. Mrs. Brown furnished the money. I don’t remember whether I transferred the outstanding accounts to her or how that was fixed. It was bought in our joint names and I afterwards transferred my interest to'her when I found I couldn’t collect what I expected to.”

There was no distinct claim in that case, as in this, that the bill of sale of March 20, 1896, was given to secure the payment by Burgess of his portion of the purchase price, but the natural inference is that he “ paid for it ” with the accounts, which were not covered by the bill of sale at all but retained by him, and that the bill of sale was given to secure an existing indebtedness independent of the purchase of the Mission property, which was not purchased till April 16, 1896, nearly a month afterwards. After the bill of sale of the livery stable property, Burgess worked for Mrs. Brown for wages, and on March 10, 1897, she sold the major portion of the property for $1,700 for her own use. The livery stable property represented substantially all of Burgess’ property. It is quite singular, to say the least, that he should not have insisted upon a return of his property, if his testimony is true, after the failure of the consideration, or of some evidence of his interest in it.

Mrs. Brown, when Burgess went to live with her in 1894, was a comparatively well to do woman, a money loaner, while he was a man of slender means, of dissolute habits, and a borrower. His relations to her naturally gave him a great influence over her, and after 1897, and until the appointment of a guardian, I am satisfied that he practically had charge of her affairs. Mrs. Brown paid the household expenses, Burgess paying nothing in any way, and she bore the expenses of both outside the State. He admitted upon the witness stand that, since July or August, 1898, she “had to have somebody to do her business for her,” and that he had verbal authority to sign her name to checks. He had access to all of her private papers and books of account, and they were under his control for two or three weeks after her death. Among these books was one book which contained his account with her, and this book he claimed he could not find after her death, and did not know what had become of it. The basis of the indebtedness claimed to be secured by the deed rests upon his unsupported testimony as to the consideration for the bill of sale of the livery property, .and every act of his with reference to that property disputes his claim that that bill of sale was a security. His claim that he was unable to get a settlement with Mrs. Brown is not consistent with his relations to her as disclosed by the record, and there is no good reason why, if she was indebted to him, he should not be able to state with reasonable accuracy what that indebtedness was. He states repeatedly that he does not know what the amount of the indebtedness was which was secured by the deed, and there is room for doubt upon the record whether the deed had ever been delivered to Burgess, and whether Mrs. Burgess ever ordered it to be recorded or had sufficient mental competency so to do in January, 1899. Burgess admits that the deed was made without his knowledge, and it was not recorded till January 4, 1899, and then was recorded by Metzger, as he claims, by Mrs. Burgess’ directions. The fair inference from his testimony is that he found this deed among her papers and asked her what should be done with it, although Burgess was present. He says she told him to record it, that it belonged to Burgess. The extract from his testimony hereinbefore given will explain how she told him.

The influence which Burgess possessed over this woman, her helpless physical condition, and her feeble mental condition, the trust and confidence necessarily reposed in Burgess, cast upon him the burden of showing not only the true consideration of the bill of sale and deed, but that his transactions with her were fair and honest, and that there has been no abuse of her confidence. Ten Eyck v. Whitbeck, 156 N. Y. 341.

I think he has failed to discharge the burden of proof, and that it must be held that no sum has been shown to be due upon the security, and that the same should be canceled. The defendant, having failed to show that there was anything due upon the alleged mortgage indebtedness, must account for the income derived by him from the mortgaged premises, shown by the record to be $125 per year, from the date of his wife’s death, with interest at 5 per cent. He must also account for the avails of the $400 mortgage on the Stratton farm, with interest at 7 per cent, from the date thereof, and for the amount of the $300 check of March 8, 1898, with interest at 5 per cent, from that date.

A decree may be entered in accordance with this opinion, with costs of this court to complainant and appellant against the defendant John W. Burgess.

Grant, Montgomery, Ostrander, and Hooker, JJ., concurred.


author: Grant, J.

text:
    BURGESS v. STRIBLING.
    Judgment — Res Judicata — Guardianship Proceedings — Matters Concluded.
    Where, in a proceeding for the appointment of a guardian for a female incompetent, the question of her marriage, and her competency to contract marriage, are litigated, the judgment is conclusive of those questions in subsequent proceedings between the same parties after her death to appoint an administrator of her estate, and to determine who are her heirs.
    Error to Chippewa; Steere, J.
    Submitted April 6, 1906.
    (Docket No. 19.)
    Decided July 3, 1906.
    Petition by John W. Burgess to determine the heirship and for a partial distribution of the estate of Augusta W. Brown-Burgess, deceased. There was judgment confirming the order of the probate court, and Hannah Stribling, Minnie Reidy, and Emilie Metzger bring error.
    Affirmed.
    Appellants have appealed from a judgment of the circuit court confirming the judgment of the probate court, in determining who were the heirs of Augusta "W. Brown-Burgess, deceased, and in ordering a partial distribution of the estate among said heirs. Appellants again seek to contest the question of the marriage between John W. Burgess, the petitioner in this cause, and the deceased, Augusta W. Brown-Burgess. That question was contested in an application for the appointment of a guardian over Mrs. Burgess upon the ground of incompetency, and the court determined that there was a legal marriage. Subsequently Mrs. Burgess died, and after her death Mr. Burgess, as her husband, petitioned for the appointment of an administrator. The two questions to be determined by that suit were whether there was a marriage ceremony, and, if there was, whether the decedent was competent to contract the relation. The issues were determined in favor of Mr. Burgess. The administration of the estate ■proceeded, and there were funds on hand ready for distribution. Mrs. Burgess left no children, and, under the statute, her husband is entitled to one-half the estate. The probate court determined that Mr. Burgess was her Busband, and allotted one-half of the estate to him. The circuit court upon appeal affirmed the judgment, and the case is now before this court for determination.

      Warner & Sullivan and JEJ. S. B. Sutton, for appellants.

      Oren, Webster & Carleton, for appellee.
   Grant, J.

(after stating the facts). In Burgess v. Stribling, 134 Mich. 33, we held that the judgment rendered by the probate court, in the proceeding for the appointment, of a guardian, that Mr. Burgess was the husband,- was res judicata in a petition for the appointment of an administrator. This proceeding is between the same parties. We held in that case that the issue of the marriage was distinctly involved in the case, and as distinctly decided. The same issue between the same parties is again sought to be raised in this proceeding. To hold that it can now be raised and determined would be to overrule Burgess v. Stribling. We refer to that case for a discussion of the question and the authorities. It is not important to discuss the other questions raised. It is sufficient to say that the ruling of the court below thereon is correct.

Judgment affirmed.

Blair, Montgomery, Ostrander, and Hooker, JJ., concurred.


author: Carpenter, C. J.

text:
    GREENMAN v. O’RILEY.
    1. Seduction — Declaration—Sufficiency—Averment of Plaintiff’s Chastity.
    In an action by a woman for her own seduction, an averment, in the declaration that defendant seduced her sufficiently alleges her chastity.
    2. Same — Evidence—Promises—Sufficiency.
    In an action by a woman for her own seduction, evidence examined, and held, sufficient to warrant the jury in finding that defendant made such promises, deceits, artifices, or influence as would overcome the scruples of a chaste woman, though no promise to marry is shown.
    3. Same — Pleading—Unohastity of Plaintiff — Affirmative-Defense.
    Though the presumption of plaintiff’s chastity relieves her from offering evidence to prove it until it is attacked, it is still a part of plaintiff’s case and defendant is not required by Circuit Court Rule 76 to give notice of intention to show her unchastity in his defense.
    4. Same — Cause of Action — Chastity of Plaintiff.
    Section 10418, 3 Comp. Laws, gives a woman a right of action for her own seduction only in case she was chaste at the time of her seduction, though chastity once lost may be regained by repentance and reformation.
    5. Same — Evidence—Hearsay.
    Testimony by plaintiff that she had been told by third persons that defendant had made certain remarks about her condition and denied responsibility therefor is properly rejected as hearsay.
    6. Same — Definition.
    Seduction is the act of persuading or inducing a woman of previous chaste character to depart from the'path of virtue by the use of any species of arts, persuasions, or wiles which are calculated to have, and do have, that effect, and resulting in her ultimately submitting her person to the sexual embraces of the person accused.
    7. Appeal and Error — Briefs—Argument—Necessity.
    Complaints in the appellant’s brief which contain no argument will not be noticed.

      Error to Calhoun; Hopkins, J.
    Submitted April 11, 1906.
    (Docket No. 50.)
    Decided July 3, 1906.
    Case by Grace Greenman, by next friend, against Miles O’Riley for seduction. There was judgment for plaintiff, and defendant brings error.
    Reversed.

      F. A. Kulp and Stewart & Jacobs for appellant.

      Walter S. Powers, for appellee.
   Carpenter, C. J.

-Plaintiff brought this suit to obtain damages for seduction. She secured a verdict and judgment in the lower court. Defendant seeks a reversal of that judgment upon several grounds.

1. He contends that the court erred in denying his motion, made at the conclusion of - plaintiff’s case, to strike out all the testimony upon the ground that the declaration did not aver the plaintiff’s chastity. The declaration did aver that defendant seduced the plaintiff. This, as will hereafter appear in this opinion, 'was an averment that she was thereby drawn from the path of virtue. The declaration then- did in effect aver chastity and sufficiently averred it. The trial court did not therefore err in overruling this motion.

2. Defendant contends that the trial court erred in overruling his motion to strike out plaintiff’s testimony on the ground that she failed to show such “ promises, deceits, artifices, or influence that would overcome the scruples of a chaste woman.” Plaintiff, who was a girl only 17 years of age, testified:

“ He told me * * * he liked me the best of any girl he ever knew. He told me he was worth between $20,000 and $30,000. He did not say it right out — say that he would marry me, or anything like that. He always. said I never would be sorry, and would never regret it, and he said I always could live with him and be happy. That is the way he worded it.”

This testimony was sufficient to warrant the jury in deciding that defendant made such promises, deceits, artifices, or influence as would overcome the scruples of a chaste woman. See Hallook v. Kinney, 91 Mich. 57.

3. The trial court prevented defendant from proving by the cross-examination of plaintiff, and by the introduction of other testimony, that plaintiff lacked chastity at the time of the alleged seduction, upon the ground that with his plea he had given no notice of his intention to offer such testimony. This testimony was admissible under the plea of the general issue, unless made inadmissible thereunder by subdivision b of Circuit Court Rule 7. That subdivision reads:

“An affirmative defense, such as payment, release, satisfaction, discharge, license, fraud or failure of consideration in whole or in part, and any defense which by other affirmative matter seeks to avoid the legal effect of or defeat the cause of action set forth in plaintiff’s declaration, must be plainly set forth in a notice added to the defendant’s plea.”

Plaintiff’s lack of chastity is not an affirmative defense, tinder the foregoing rule, unless it was “affirmative matter [which] seeks to avoid the legal effect of or defeat the cause of action set forth in plaintiff’s declaration. ”

It is contended by plaintiff that testimony tending to prove plaintiff’s lack of chastity was “affirmative matter,” under the language above quoted, because the presumption of chastity made it the duty of defendant to introduce such testimony. It is true there is a presumption of plaintiff’s chastity. People v. Brewer, 27 Mich. 134. This presumption transferred from plaintiff to defendant the duty of first introducing testimony touching the issue of chastity, but it by no means follows that in introducing that testimony the latter was making an affirmative defense, within the meaning of Circuit Court Rule 7. If it is true that plaintiff’s declaration avers by implication that she was chaste at the time of the alleged seduction, and that she cannot recover if she was not — and I shall hereafter endeavor to prove that this is true — her suit necessarily puts her chastity in issue. The presumption of chastity "under consideration merely takes the place of evidence of chastity. It does not remove the issue of chastity from the case. Defendant, when offering testimony to disprove chastity, is merely denying an essential fact asserted "by plaintiff, and is not making an affirmative defense. Though the presumption of chastity compels the defendant, instead of the plaintiff, to first introduce testimony on the issue of chastity, the latter, when introducing it, is not bringing into the case “affirmative matter to avoid the legal effect of or defeat the cause of action set forth in plaintiff’s declaration,” within the meaning of Circuit Court Rule 7. He is merely offering testimony which tends to prove that plaintiff did not have, and never had, “ the cause of action set forth in her declaration.”

The foregoing contention that, in introducing testimony tending to prove that plaintiff lacked chastity at the time of the alleged seduction, defendant is not making an affirmative defense, rests upon the assumption that plaintiff had no cause of action, unless she was chaste at the time of the alleged seduction. It is therefore essential that I prove that this assumption is well founded. At common law the seduction of a female gave her no right of action. Her right of action is statutory. It is given in this State by section 10418, 3 Comp. Laws, which reads:

“ It shall not be necessary in any action on the case for •seduction hereafter to be brought, to allege in the declaration, or to prove on the trial, any loss of service in consequence of such seduction; but if the female seduced be a minor at the time of the seduction, the action may be brought by her father, mother, or guardian; and if such female be of full age, the action may be brought by her father, or any other relative who shall be authorized by her to bring the same.” . .

We have held that this statute gives to the woman seduced a right of action which she may enforce in her own name. Watson v. Watson, 49 Mich. 540; Ryan v. Fralick, 50 Mich. 483. This right of action is described in the statute asan “action on the case for seduction.” The question arises What is meant by seduction for which the female has a right of action ? This court has been called upon several times to define seduction in enforcing section 11694, 3 Comp. Laws, which makes it a crime “to seduce and debauch any unmarried woman,” and we have uniformly held that the offense was not committed unless the woman seduced was chaste at the time of her seduction (see People v. Clark, 33 Mich. 116; People v. De Fore, 64 Mich. 699; People v. Gibbs, 70 Mich. 430; People v. Smith, 132 Mich. 58), saying at the same time that, “although the female may have previously left the path of virtue, * * * yet, if she has repented of that act and reformed, she may again be seduced.” People v. Clark, supra. On the other hand, in a suit brought by a parent for the seduction of his child, this court said, that the child’s lack of chasity ‘ ‘ would have weight in mitigation of damages, but would not be a complete answer to the action.” Stoudt v. Shepherd, 73 Mich. 589. It should be borne in mind, however, that in this latter case we were not called upon to define seduction. When a parent brings suit to recover compensation from one who has debauched his child, proof of seduction is not essential to the right of recovery. In those cases the plaintiff is entitled to recover if the illicit intercourse has resulted in legal injury. See Akerley v. Haines, 2 Caines (N. Y.), 292; McAulay v. Birkhead, 35 N. C. 28; Bigelow on Torts (4th Ed.), p. 167.

Can we say that the word “seduction” has two distinct legal definitions in this State ? Can we say it has one meaning when a woman brings suit for damages under the statute last above quoted, and another and different meaning when her seducer is prosecuted under the criminal statute ? To answer this question in the affirmative would, in my judgment, be illogical and productive of unnecessary confusion. Seduction as a statutory cause of action is to be defined precisely as it has been defined in construing the criminal statute. Plaintiff was not seduced. therefore, if she was not chaste — remembering (see People v. Clark, supra) that her chastity; though once lost, may be regained by repentance and reformation — at the time of her seduction. The trial court, as will hereafter appear, defined seduction in accordance with these views, but he erred in excluding the testimony under consideration which tended to prove that plaintiff was not chaste at the time of her seduction.

4. Plaintiff testified that she had been told by third persons that defendant stated in his store “that I was a mother. He said that he could prove that he was not the cause though.” This testimony was admitted against the objection of defendant that the same was incompetent, irrelevant, and immaterial and hearsay. It was clearly hearsay, and should not have been admitted.

5. The trial court defined seduction to be:

“The act of persuading or inducing a woman of previous chaste character to depart from the path of virtue by the use of any species of arts, persuasions, or wiles, which are calculated to have, and do have, that effect, and resulting in her ultimately submitting her person to the sexual embraces of the person accused. ”

Defendant complains of this definition. It was correct. See People v. Gibbs, 70 Mich. 425; People v. Smith, 132 Mich. 58.

Other complaints are made in defendant’s brief. Some of these complaints are answered by elementary principles of law, and they need no discussion. Some of these complaints relate to discretionary rulings of the trial judge, and there was no abuse of that discretion. Some of these complaints are based upon no exception, and they relate to rulings which we cannot review without exceptions. In support of other complaints the brief contains no argument. We illustrate these last complaints by quoting from defendant’s brief: ■ . ■

“Exceptions 52 to 61, inclusive, relate to the refusal of the court to give defendant’s request to charge, and we call the court’s attention to such requests. Record, pp.. 108-112. Exception 63 relates to such portions of the court’s charge as are found in defendant’s bill of exceptions. Record, pp. 138, 139.”

We assume that it was not expected that we should consider such complaints.

For the errors pointed out, the judgment is reversed, and a new trial granted.

McAlvay, Grant, Blair, and Moore, JJ., concurred.


text:
    POWELL v. CHAMPION IRON CO.
    Sales — Contract—Construction—Time of Delivery.
    Under a contract to furnish elevator fronts for a building in process of erection, the seller to execute the contract with all diligence and have the fronts ready to be put in when the ■ stairs are being put in, the seller is not required to have the fronts on the ground before the stairs are ready to be put in, the provision requiring diligence being limited by the stipulation as to time.
    Error to Wayne; Frazer, J.
    Submitted April 12, 1906.
    (Docket No. 67.)
    Decided July 3, 1906.
    Assumpsit by Frank Powell against the Champion Iron Company for goods sold and delivered. There was judgement for plaintiff, and defendant brings error.
    Affirmed.

      Orla B. Taylor (George E. Grane, of counsel), for appellant.

      Lehmann & Biggs and Ben W. Johnson, for appellee.
   Carpenter, C. J.

On the 8th of September, 1902, the parties to this controversy entered' into a written contract of which the following are the material parts:

“Said party of the second part [plaintiff] agrees to furnish and deliver free on board cars, Atlanta, Ga., thirteen stories of elevator fronts (not facia or globes) to take in four elevators for the Century Building located at Atlanta, Ga., all to be made according to plans and specifications of architects Bruce and Morgan of Atlanta, Ga., and subject to the approval of the architects and owner. * * * Said second party further agrees to execute this contract with all diligence and to have all the fronts ready to put in place when the stairs are being put in — they do not furnish the stairs. In consideration of the above work being furnished and delivered at Atlanta in a condition acceptable to the architects and owner, said party of the first part [defendant] agrees to pay,” etc.

Plaintiff delivered said elevator fronts and brought this suit to recover the contract price. Defendant sought to recoup damages. The case was tried in the court below before a jury, who rendered a verdict for plaintiff for the full contract price.

Defendant asks us to reverse the judgment entered upon said verdict, upon the ground that the trial court placed a wrong construction upon the following provision of the contract, viz.:

‘ ‘ Said second party further agrees to execute this contract with all diligence and to have all the fronts ready to put in place when the stairs are being put in — they do not furnish the stairs.”

The trial court charged the jury:

“The time limit in the contract for the execution of this work was not later than when these stairs were ready to be put in, and, if they got them there in that time, they got them there in sufficient time to comply with the terms of this contract.”

Defendant’s counsel insist that this construction was erroneous; that, properly construed, the provision in question obligated plaintiff “to deliver the inclosures when the stairs were ready to be put in at all events, and to deliver them at an earlier date if by the exercise of all diligence he could do so.” We cannot agree with this contention. We think the trial court properly construed the contract. We agree with plaintiff “that the clause ‘ to have the fronts ready to put in place when the stairs were being put in ’ limited and defined the meaning of the expression ‘all diligence,’ used in connection with it.” Thus construed, the contract obligated plaintiff to execute it with the diligence necessary to have all fronts ready to put in place when the stairs are being put in. We think this construction is sustained by Grand Rapids, etc., R. Co. v. Van Deusen, 39 Mich. 441. The contract in question in that case contained the following provision, viz.:

“ Said parties of the second part [the contractors] agree to proceed with such diligence and with such force of laborers as the executive committee of said company may direct, to perform the work herein specified, and to complete the same according to the specifications as furnished by the engineer of said railroad company, and to the full satisfaction and acceptance of said engineer, and the executive committee, on or before 'the 1st day of August, 1873.”

The officers of the railroad company compelled the contractors to reduce their force of employes, and thereby prevented their performing the contract on or before the date specified. The trial court held that this conduct was not justified by the above-quoted provision. This court approved that decision, saying:

“ The time for completion seems tobe fixed, certain, and imperative, with nothing in the language, and we find nothing in the subject-matter indicating that this time could be prolonged by the company at their option, by the right of direction reserved. One of these provisions must, to avoid repugnancy, be subordinate to the other in its operation; and the order in which they are stated, the form of the language, the subject-matter and situation, and (so far as we can discover) the apparent objects of the company, all indicate that the discretion or right of direc'tion was intended to be the subordinate or auxiliary provision, inserted for the purpose of securing beyond contingency the completion of the work within the prescribed time; the provision for which was to be primary and absolute.”

We think it follows from this reasoning that the provision in the contract in the case at bar that the plaintiff should “ execute the contract with all diligence” was subordinate to the provision that he should have “ the fronts ready to put in place when the stairs are being put in.”

Defendant contends that the construction we place on this contract is precisely the construction that would be placed on it had the expression “execute this contract with all diligence” been omitted, and that it therefore ■violates the rule which requires effect to be given to every provision in the contract. We answer this contention by saying that the rule which requires effect to be given to every provision of the contract is not inflexible. It must be made to harmonize with the rule which governs the construction of this contract, viz., that parties may by definite and particular language limit and define the meaning of more general language used by them. See Bock v. Perkins, 139 U. S. 628, and authorities there cited.

As no other error is claimed, the judgment is affirmed.

McAlvay, Grant, Blair, and Moore, JJ., concurred.


author: Montgomery, J.

text:
    DAHROOGE v. PERE MARQUETTE RAILROAD CO.
    1. Carriers — Baggage — Loss—Liability—Merchandise—Notice.
    Though, in the absence of notice of the character of the property shipped, a carrier is not liable for the loss of merchandise shipped as baggage by a passenger, the notice need not be express, and it is sufficient if the carrier or its agent have notice or knowledge of facts sufficient to put it upon inquiry as to the character of the baggage.
    2. Trial — Argument—Failure to Produce Testimony — Prejudice.
    In the trial of an action 'against a railroad company for the loss of goods shipped as baggage, it is not prejudicial for counsel to state, in commenting on the failure of defendant to produce testimony contradicting plaintiff’s evidence as to the value of the goods, that defendant has plenty of money to do business with, and could produce witnesses on the point if any were to be had, though reference to defendant’s ability should be omitted.
    Error to superior court of Grand Bapids; Stuart, J.
    Submitted April 18, 1906.
    (Docket No. 90.)
    Decided July 3, 1906.
    Case by George Dahrooge against the Pere Merquette Bailroad Company to recover the value of goods lost in transit. There was judgment for plaintiff, and defendant brings error. .
    Affirmed.

      F. W. Stevens (Charles McPherson, of counsel), for appellant.

      G. A. Wolf (S. Wesselius, of counsel), for appellee.
   Montgomery, J.

_ne plaintiff is a merchant, who» travels from place to place by rail, taking with him his stock, consisting, in large part, of fine silk apparel for ladies. On October 25, 1904, he was at Ludington, and, desiring to go to Traverse City, purchased a ticket over defendant’s line and had his goods checked as baggage. He had four parcels with him — one zinc trunk, two large telescopes, and a hand satchel. The last he did not check, but the first three were checked and marked on the agent’s memorandum, “ Z. T., Tel. and S. C.,” meaning zinc trunk, telescope, and sample case. Plaintiff testified that he told the agent that he was a sample merchant. The agent testified that plaintiff said nothing to him as to the contents of the baggage and that he did not have any knowledge of its contents. One of the telescopes was never delivered to plaintiff, and this action was brought to recover the value of its contents. Judgment passed for plaintiff in the sum of $1,825. Defendant brings error.

The trial judge charged the jury as follows:

“ If a passenger ships merchandise in his trunk, without notice to the railroad company or knowledge on its part of the contents of the trunk, the company is not responsible for its loss. It is the duty of the passenger to give the carrier notice that his trunk contains merchandise, or things which cannot be included as baggage, unless the carrier has knowledge that the contents of a trunk are not baggage but merchandise. * * *

“For the purpose of showing that the defendant had notice, you have heard the testimony of the plaintiff as to his conversation with the baggageman Smith, at Ludington, when he checked the baggage. You have also heard the testimony of baggageman Smith in regard to what took place, and it is for you to say whether the baggage-man, Mr. Smith, was notified or had sufficient knowledge from the facts surrounding the case that the contents of this telescope was merchandise or not.

“ The notice to the railroad or its agent need not be an express notice. If the agent or the company had sufficient notice or knowledge of the facts to put a person on inquiry it is equivalent to notice.

“If you find, by a fair preponderance of the evidence, that the plaintiff was a passenger as claimed, and that he informed the defendant’s agent, the baggageman at Ludington, when he checked the baggage and telescopes, that they contained samples or merchandise, and that they had notice in any way, and that the goods in question while in transit were lost by the defendant’s negligence, such information is sufficient notice to render the defendant liable for such negligent loss; but if, on the other hand, you do not find, by a fair preponderance of the evidence, that the plaintiff informed the baggageman, the agent at Ludington, when he checked the baggage, or that he and the company did not know the character of the baggage, that the telescope in question contained samples or merchandise, I say, if you do not find that to be the fact, that would be the end of the case, and your verdict-would have to be no cause of action. * * *

“ But the passenger cannot require the railroad company to carry as baggage to be checked on his ticket articles of merchandise which the passenger carries to sell or exhibit as samples. The articles of women’s wearing apparel which the plaintiff claims to have lost were not such articles as he was entitled to have checked as his personal baggage; but unless, as I have said, you find that the agent of the defendant who received such articles at Ludington as plaintiff’s baggage was notified, or the company had knowledge, that the satchel or telescope which the plaintiff claims to have lost contained articles of merchandise not intended for the personal use of the plaintiff on his journey, your verdict must be for the defendant.”

Error is assigned upon that portion of the instruction which states that notice to the agent need not be express notice, but that, if the agent or the company has sufficient notice or knowledge to put a person on inquiry, it is equivalent to notice. In view of the issue presented, it must be inferred that the jury would understand from this instruction that the agent must, before liability could be affirmed, be found to have had knowledge that the parcels contained something other than the plaintiff’s personal luggage. In Amory v. Railroad Co., 130 Mich. 407, it was said:

“It is the duty of the passenger to give the carrier notice that his trunk contains merchandise or things which cannot be included as baggage, unless the carrier has knowledge that the contents of the trunk are not baggage, but merchandise.” .

It was also held that knowledge was equivalent to notice. .And in that case it was permitted the jury to find knowledge without proof of' direct notice. It would seem to follow that notice of such facts as show that the agent had direct knowledge that the plaintiff was sending something other than his personal luggage was sufficient to call upon the agent to make inquiry. Wade on Notice, § 11. A charge in the language of the one under consideration was distinctly approved in Ft. Worth, etc., R. Co. v. Millinery Co. (Tex. Civ. App.), 29 S. W. 196. See, also, Sloman v. Railway Co., 67 N. Y. 208. In Kansas City, etc., R. Co. v. McGahey, 63 Ark. 344 (36 L. R. A. 781), it was said:

“ When a passenger presents to the carrier for transportation his goods and chattels, and makes known what they are or exposes them to view or packs them in a way to give to any one concerned good reason to understand and know that they are not usually carried as baggage, ■and demands transportation of them as his luggage, and the carrier receives and carries them accordingly, he will be responsible for them as baggage, notwithstanding he was not bound to accept and transport them as such.”

See note to this case in 36 L. R. A. 781, where the cases are collated.

In the course of the argument of plaintiff’s counsel, he used the following language:

“ They brought a man over here from Friedman’s to do what ? To swear that these goods had a certain value. If they had a good defense in this case, they would have come here with witnesses to swear that there were no goods of this value made to sell. That would have been a good defense. This town is full of silk houses and dry goods clerks. Have you heard from a single witness in this case who comes here to testify that garments of this rustle silk and Chinese silk, worth #35 to #60, are not made and are not sold to these women ? No; • not a word about that. This railway company has behind it .all the money it needs to do business.

‘ ‘ Mr. McPherson: I take an exception to that statement.

“ Mr. Wesselius: Is there any harm in saying that the railway company has money sufficient to do business with? It is Within their province and it was within their power to take the deposition of the one man who brought these goods to the city of Grand Rapids.”

No request was preferred to the court covering the subject; but on a motion for a new trial it was urged that this was prejudicial to defendant, and error. The case of Cavanagh v. Township of Riverside, 136 Mich. 660, is cited in support of this claim. In that case the comment on defendant’s failure to call a witness went further. Plaintiff’s counsel undertook to tell the jury what the witness would have been compelled to testify to if placed on the stand. In the present case the comment called attention to the absence of testimony only. While the reference to the defendant’s ability to procure witnesses should have been omitted, we agree with the trial judge that it was not calculated to prejudice the jury. No appeal was made to the jury, except one based on the absence of testimony to meet the case made by the plaintiff.

No error appears. Judgment affirmed.

Carpenter, C. J., and Ostrander, Hooker, and Moore, JJ., concurred.