author: Bied, J.

text:
    PEOPLE, for use of YOUNG, v. NEDERLANDER.
    Principal and Surety — Notary Public — Fraud—Bond of Notary — Extent of Liability — Acknowledgment.
    For such damages only as are the proximate result of a notary’s false or fraudulent certificate his surety is liable. One who parts with money upon false statements of a notary, afterwards receiving a forged deed with his fraudulent certificate, cannot recover on the bond. The misrepresentations, not the bond of the notary, .constitute the proximate cause.
    Error to Wayne; Van Zile, J.
    Submitted October 10, 1912.
    (Docket No. 29.)
    Decided November 3, 1913.
    Assumpsit by Edward Young and wife in the name of the people of the State of Michigan against George H. Reissman, principal, and Joseph Nederlander, surety, on the bond of Reissman as a notary public. Judgment for plaintiff. Defendant Nederlander brings érror.
    Reversed as to appealing defendant.

      Bernard Goldman (Bumps & Bishop, of counsél), for appellant.

      Hearn, Sherman & Chapman, for appellee.
   Bied, J.

This action was instituted to recover for a breach of'the notarial bond of defendant Reissman. The plaintiffs had judgment against both Reissman and his surety, Nederlander, in the trial court, and defendant Nederlander, who alone defended, assigns error thereon.

It appears that on September 12, 1910, defendant Reissman sold to plaintiffs, upon contract, two lots in the city of Detroit, for a consideration of $1,000, $500 of which was paid down, leaving a deferred payment of $500. Less than 30 days thereafter, Reiss-' man sought out the plaintiffs, and represented to them that his client was desirous of having her money, and that she was willing to discount the remaining payment $50, if paid at once. Plaintiffs took advantage of this offer and made the payment to Reissman, and received from him a warranty deed of the lots, purporting to be executed by the owner. The deed bore the names of two witnesses and the notarial certificate of defendant Reissman. It turned out and appeared to be conceded on the trial that Reissman had no authority to act for Elizabeth Auberey, the owner of the lots, and that the deed was a forgery.

At the close of plaintiffs’ case, the defendant requested a directed verdict. This was refused, and a verdict for $950 was directed for the plaintiffs. This action of the trial court is assigned as error. The contention of the defendant is that no recovery could be had for the reason that, under the plaintiffs’ own proof, it was shown that they did not part with their money in reliance upon the genuineness of the certificate to the deed. The general rule governing actions like the present one against notaries and their sureties is stated as follows:

“If the officer who takes an acknowledgment makes a false certificate, an action on his official bond for the damages sustained by reason thereof will lie against him or his sureties, though it seems that such recovery may be had only where the damages sustained are the proximate result of the false certificate.” 1 Cyc. p. 628.

See, also, Wyllis v. Haun, 47 Iowa, 614; Oakland Bank of Savings v. Murfey, 68 Cal. 455 (9 Pac. 843); Nolan v. Labatut, 117 La. 431 (41 South. 713); People v. Butler, 74 Mich. 643 (42 N. W. 273),

Mrs. Young testified that she paid the $450, the balance on the contract, on September 28th, and that when she did so, Reissman gave her a receipt therefor and advised her that he would have the deed recorded and bring it to her. The next day, on September 29th, he delivered the deed as promised, and that was the first time she had seen it. Under her own testimony, it is obvious that she did not pay the money in reliance upon any official act of Reissman; but that she did pay it upon his unofficial statements and promises. When she parted with her money, she had not yet seen the notarial certificate, and it does not appear that she knew Reissman was a notary public. In fact it does not appear from the record that the deed was actually prepared at the time she made the payment. Had Reissman absconded immediately after receiving the payment, and not delivered the forged deed, the position of plaintiff with reference to her money would have been the same. That plaintiffs were grossly defrauded by Reissman does not admit of doubt, but defendant Nederlander, as surety, must not be made to suffer therefor unless some act of Reissman as notary has deceived and defrauded them. The surety would not be liable to the plaintiffs for the fraud of Reissman as an individual. The undertaking of the surety was one “for the faithful discharge by said George H. Reissman of the duties of his office without fraud as a notary public.” The failure of the plaintiffs to show that the loss sustained by them was the proximate result of Reissman’s official misconduct or fraud renders their case against the surety without merit.

For this reason the judgment against the surety must be reversed, with no new trial granted.

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


source: Caselaw Access Project

author: Bird, J. Ostrander, J.

license: Public Domain

text:
    SLACK v. CURRY.
    1. Evidence — Negligence—Customs and Usages — Machinery— Children — Duty to Guard Machinery.
    On the trial of a personal injury action, wherein plaintiff claimed that defendant neglected to guard or protect one of his pulleys, used in moving a building, and that a child of two years caught his hand in it as a result of defendant’s negligence, testimony that defendant employed the usual appliances of persons moving buildings, was not incompetent or inadmissible in evidence.
    2. Same — Personal Injuries — Infancy.
    The custom of defendant’s employees -in protecting children was not a proper subject of testimony: the error committed in receiving such, evidence was not, however, prejudicial, where the witnesses testified in detail what they did on the day of the accident to protect children.
    3. Same — Appeal and Error.
    And any error that the court may have committed in receiving testimony that the infant was in the charge of a ten-year old boy, who said he lived with the family to care for the children, was cured by the charge of the court that plaintiff was not chargeable with contributory negligence on account of his extreme youth, and that the negligence of his parents could not be imputed to him.
    Error to Kalamazoo; Knappen, J.
    Submitted October 17, 1912.
    (Docket No. 125.)
    Decided November 3, 1913.
    Case by Harold Ray Slack, an infant, by next friend, against Samuel E. Curry for personal injuries. Judgment for defendant. Plaintiff brings error.
    Affirmed.

      Jackson & Fitzgerald, for appellant.

      Harry C. Howard, for appellee.
   Bird, J.

While defendant was engaged in moving a house on Forbes street in the city of Kalamazoo, the plaintiff, a boy of two years of age, took hold of a wire cable which was passing through a pulley and his hand was drawn into it and a portion of his thumb amputated. The pulley was fastened to a telephone pole in front of plaintiff’s home, near where he was accustomed to play. The negligence with which the defendant was charged was his failure to protect the pulley with a mechanical guard and also for his failure to keep plaintiff away from the cable and pulley. A trial resulted in a verdict for defendant, and plaintiff complains of several errors committed by the trial court during the course of the trial.

The defendant was permitted to show that the agencies employed in moving the building were the usual and customary ones in moving buildings, and that it would destroy the usefulness of the pulley to place a mechanical guard over or around it. This testimony was taken subject to the plaintiff’s objection that it was incompetent to show what the custom was of other movers in that vicinity, and he argues that, because other movers were negligent, it would not excuse the negligence of the defendant. This testimony was admitted by the court, and the jury instructed that they had a right to consider it in determining whether the defendant was guilty of the negligence charged. We are of the opinion that this testimony was admissible. No complaint is made that the defendant was committing an unlawful act in moving the building upon the highway. The complaint in the declaration is aimed at the manner of doing the act. Ordinarily, when the question arises as to whether the doing of a lawful thing is done in a negligent manner, such testimony is admissible. Larson v. Ring, 43 Minn. 88 (44 N. W. 1078); Kelly v. Railway Co., 28 Minn. 98 (9 N. W. 588); Kolsti, An Infant, v. Railway Co., 32 Minn. 133 (19 N. W. 655); Missouri, etc., R. Co. v. Holley, 30 Kan. 474 (1 Pac. 554); Boick v. Bissell, 80 Mich. 260 (45 N. W. 55).

Complaint is also made because several witnesses were permitted to testify as to what the custom of defendant’s employees was in watching and protecting the children who might gather around the apparatus. This testimony appears to be objectionable on the ground of incompetency (Blanchette v. Railway Co., 175 Mass. 51 [55 N. E. 481]), but we do not think that the. case should be reversed on this ground, as nearly all of the witnesses, after testifying upon the subject of custom, went into detail and related what was done by them on this particular day in protecting the children. Of course it was not important as to what they were • accustomed to do; it was what they actually did in watching and protecting the children that was important in determining the care which was exercised.

It appeared in the testimony that the plaintiff was left by the mother shortly before the accident in the care of Ray Hartkee, a boy 10 years of age, who was living in plaintiff’s family. Hartkee testified upon cross-examination, over plaintiff’s objection, that the reason the Slacks had him in the family was to take care of the children. It is said that this testimony was incompetent and harmful because it carried with it the inference that the mother was careless in caring for him and therefore contributed to his injuries. If this view were taken by the jury, it must have been dissipated by the charge of the court wherein he made it very plain that the plaintiff could not be charged with contributory negligence on account of his extreme youth, and further that he could not be charged with the negligence of his parents. By reason of this instruction, we think no harm resulted to plaintiff’s case.

Several exceptions are taken to the charge of the court. Most of them involve the same questions as are raised by the objections to the admissibility of the testimony.

The charge in its entirety was a fair one, and we think the judgment of the trial court should be affirmed.

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

Ostrander, J.

(concurring). The brief for plaintiff and appellant is confined to discussion of certain alleged errors relating to the admission of testimony and to the charge of the court. The testimony objected to is substantive testimony offered by the defendant after plaintiff had rested as to the custom of others in moving houses along the street and the custom of the defendant’s own men. Error is also assigned upon a ruling refusing to strike out a single bit of evidence elicited on cross-examination from one of the witnesses for plaintiff. All of the rulings complained about are unimportant in view of the declaration of the plaintiff and the testimony offered in behalf of the plaintiff. The duty of the defendant “to provide a guard or protéction so as to prevent this plaintiff from going near or coming in contact with said rope, wire, chain or cable, or the said wheel or pulley, and that it was the duty of the said defendant to so guard the said rope, chain, wire or cable, and the said wheel or pulley so that this plaintiff would not be injured as hereinafter described,” is variously alleged in the declaration, but the proof that any such duty existed seems to me to be wholly lacking. It appears, it is true, that plaintiff, a two-year-old child, took hold of the wire cable running through a block and his hand was injured. It seems to be apparent that, if any person had in like manner taken hold of the wire cable when it was moving toward the block, he might have been injured. But it is not made to appear by allegations in the declaration or by plaintiff’s testimony that the defendant owed any duty to use any other or different apparatus than the one in use; that the apparatus was in any way strange or the manner of using it not the common and proper way. Although the case does not seem to be relied upon by counsel for the plaintiff, O’Leary v. Telephone Co., 146 Mich. 243 (109 N. W. 434), is the one which upon the facts comes nearest the case at bar of any decided by this court. In that case the justices were divided in their opinions, and in the opinions considerable reference is made to other decisions; the ¿majority opinion sustaining the proposition that defendant’s liability was a question for the jury is based entirely upon the fact that children were meddling with the apparatus to the knowledge of the defendant’s agents, a fact not present in the case at bar. See, also, Iamurri v. Gas Co., 148 Mich. 27 (111 N. W. 884). Therefore, whether the testimony introduced by the defendant showing the custom of other house movers or the custom of his own men was rightly or wrongly admitted is wholly immaterial; and, inasmuch as the trial judge might very properly have directed a verdict at the close of plaintiff’s case, there is no occasion to discuss the assignments of error based upon the charge. The jury returned a verdict for the defendant, and any other verdict should have been set aside by the court. The judgment ought to be affirmed.


author: Steere, C. J. Bird, J.

text:
    DAHROOGE v. ROCHESTER GERMAN INSURANCE CO.
    1. Insurance — Limitation of Actions — Conditions of Policy.
    An action upon a Michigan standard policy of fire insurance must be brought within a year from the date of the fire. Act No. 277, Pub. Acts 1905 (3 How. Stat. [2d Ed.] § 8328).
    2. Same — Estoppel—Promise to Pay Loss.
    And the period is not extended by mere assurances that the loss would be paid, offered by defendant’s adjuster during negotiations of settlement. Waiver must arise by express agreement, from a new promise to pay or out of part payment or failure to plead.
    3. Waiver — Words and Phrases.
    A waiver is a voluntary relinquishment of a known right.
    4. Insurance — Estoppel.
    Where plaintiff, acting under legal advice, entered into negotiations with defendant’s adjuster, and was put off from time to time with assurances that the parties would get together, or that defendant would pay the loss, or not to sue, that the adjuster was busy and would take up the matter later, so that the insured delayed starting legal proceedings until two or three months before the expiration of the year, and where two actions failed or were abated, and service was not secured until four months in excess of the year had elapsed, defendant was not' liable on any theory of estoppel or waiver.
    5. Limitation of Actions — Eire Insurance — Statutes.
    3 Comp. Laws, § 9738 (5 How, Stat. [2d Ed.] §14145), extending the time for commencement of suit one year after failure, abatement, or dismissal of any action instituted within the period of limitations, has no application to a fire insurance policy of standard statutory form.
    Bird, J., dissenting.
    Error to Kent; Perkins, J.
    Submitted October 17, 1912.
    (Docket No. 124.)
    Decided November 3, 1913.
    Assumpsit by George Dahrooge and Maggie Dahrooge against the Rochester-German Fire Insurance Company upon a policy of insurance. Judgment for defendant on a verdict directed by the court. Plaintiffs bring error.
    Affirmed.

      Powers & EarcLley, for appellants,.

      Norris, McPherson & Harrington, for appellee.
   Steere, C. J.

A judgment was rendered against plaintiffs and appellants in this case on a directed verdict, for the reason that the action was not begun until several months had elapsed after the expiration of one year from the time of the fire which it was claimed destroyed property of plaintiffs covered by the policy of insurance upon which suit was brought. Plaintiffs are husband and wife and resided on Wealthy avenue in the city of Grand Rapids, Mich., where they also conducted, in a portion of their residence, the business of manufacturing silk garments. They had resided there and been so engaged for nine years previous to the time in question, and had carried insurance with defendant on their property for six or seven years.

On May 19, 1910, a policy for $1,500 was issued to them, through W. H. Van Leeuwen, the agent of defendant, on their building, and its contents while occupied as a dwelling, on Wealthy avenue. This policy bore a mortgage clause making the loss, if any, payable to a named mortgagee, as her interest might appear. In the summer of 1910 plaintiffs desired to make a change in this policy, and the husbancl, George Dahrooge, visited Mr. Van Leeuwen, the agent, with the policy, requesting him to change it over so as to cover the stock and machinery in the building, informing him fully of the location and value of the property and the condition of the title. The agent made the change, on August 13, 1910, by canceling two riders on the policy, containing a description of building and contents and the mortgage clause, and attaching another rider providing an indemnity, in case of loss, of $200 on sewing machines and fixtures, and $1,300 upon stock and materials connected with their manufacturing business. There was other concurrent insurance on the property, in relation to which no question is raised. A fire occurred on the premises October 14, 1910, about 6 o’clock in the morning, partially consuming the building and totally destroying the stock on hand, also seriously damaging the machinery.

Notice was given at once to the local agent, who visited the property and informed plaintiffs that an adjuster would be sent. Two or three days later a Mr. Bartells, acting as adjuster for defendant, came and looked over the premises, being furnished by plaintiffs with all the information he desired and given access to books and bills then on hand and which had survived the fire. At his suggestion duplicates of bills lost or destroyed were procured from where the goods were purchased, and produced later when Dahrooge was examined under oath at the instance of defendant in January following. The assured transmitted, with schedule of property claimed to have been destroyed, to defendant, proofs of loss on November 30, 1910. These proofs were made out on a blank defendant had furnished. Assured appears to have been represented by counsel at that time, who, on December 17, 1910, wrote defendant, stating that the proofs of loss and inventory had been mailed to it on November 30th, but receipt had not been acknowledged, asking for a reply; again writing on December 24, 1910, advising of the two previous communications, and noting that they had not yet been favored with the courtesy of a reply, asking acknowledgment of previous communications and information as to what defendant proposed to do. To this, on December 28, 1910, defendant, through its manager, replied:

“The matter to which you refer is in the hands of our Mr. H. A. Bartells, Home Bank Building, Detroit, Michigan.”

Another letter of March 6, 1911, acknowledging a letter from said attorneys, of the 2d inst., stated:

“Have passed the matter on to our Mr. H. A. Bar-tells,” etc.

The, testimony shows without controversy that the assured, as often as requested, exhibited to the person or persons .designated by the defendant the place and remains of any property from the fire, submitted to examination under oath and produced for examination the books and accounts, bills, invoices, and other vouchers, or certified copies thereof, allowing the same to be examined, and any copies or extracts desired to be made by defendant’s representatives. Plaintiffs’ testimony was that the cash value of the machinery in the building amounted to $956.90, and the loss thereon $428; the cash value of the stock being $3,268.76, and the loss thereon total, the same being entirely destroyed by fire; making total loss as the result of the fire $3,691.76, the value of the property being given as $4,520.66. This action was begun January 27, 1912, one year three months and thirteen days subsequent to the fire, which occurred October 14, 1910.

Plaintiffs’ declaration was upon their policy, in proper form under Circuit Court Rule 3 (c). Defendant pleaded the general issue, adding to such plea a special notice, under Circuit Court Rule 7 (d), of various breaches of conditions, stipulations, etc., contained in the policy, and that action was not commenced within the.statutory period after date of the fire alleged in plaintiffs’ declaration. As the case is presented only the last feature of said notice demands attention.

On the trial defendant introduced no testimony, and, after plaintiffs rested their case, moved the court to direct a verdict in its favor, for the reason that it appeared from the undisputed evidence that the action was not commenced within 12 months next after the fire. This motion was granted.

A subsequent motion of plaintiffs for a new trial was denied, for reasons already stated by the judge to the jury in his charge when directing a verdict for defendant, the pertinent parts of said charge being as follows:

“The statute expressly provides that suit shall be brought within 12 months from the time of the fire. The only way in which that statute can be abrogated would be by showing that the company had done something, or was responsible for some act, which led the plaintiffs into the belief that their claims would ultimately be paid — some act upon which the plaintiffs had a right to rely, and upon which they did rely, thereby creating an estoppel against the defendant company on account of the delay. I fail to see from the evidence anything which prevented the plaintiffs from bringing their action within the 12 months, so far as the defendant company is concerned. In fact they did bring their action within the 12 months; they brought two suits, both of which failed on account of defects which are unnecessary to be mentioned at this time. * * * Those cases failed, and some months after the expiration of the year they brought this suit, and now claim that the company is estopped from raising this defense or from making this defense under the statute by reason of its conduct; that they were led to believe * *' * that their claim would be paid, by the action of the company or its agents, and that they relied upon the promises and statement of the agent of the company, and waited until the year had expired before they commenced their suit; that position is inconsistent with the admitted facts in the case. * * * I think the statute is a salutary one, and that the court is bound to obey it. * * * The equities of the case are not for the court at this time. It is a legal proposition, pure and simple, as to whether or not their action was commenced within the statutory period. Clearly it was not.”

Plaintiffs contend that the court erred in its conclusions for two reasons, summarized as follows:

“That the 12 months in which suit must be started had not expired at time present suit was started; and, even though it had expired, the time was extended by defendant’s conduct and dealings with plaintiffs.”

The policy involved in this case is a Michigan standard fire insurance policy of the form prescribed by Act No. 277, Pub. Acts 1905 (3 How. Stat. [2d Ed.] §8328). The use of this form was compulsory upon the parties in effecting the insurance. It requires that immediate notice of the fire shall be given, and proof of loss furnished within 60 days; that insured, as often as required, shall submit to examination under oath by any person named by the company, and shall produce all books of account, bills, invoices, etc., and that “the loss shall not become payable until 60 days after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by this company,” etc., and that “no suit or action on this policy, for the recovery of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within 12 months next after the fire.”

It is contended by plaintiffs that the period of 12 months in which the action must be brought only begins to run from the time in which the cause of action accrues, which would be, at the earliest, 60 days from the time of full compliance with the requirements mentioned; that though they acted promptly in all particulars and complied with all requests and demands of defendant, they had no right of action until 60 days after January, 1911, being the time when, at the request of defendant, Dahrooge submitted to examination under oath. Numerous authorities are cited from various jurisdictions in support of this contention. Many of them involve policies purely contractual, containing similar provisions to those in our standard policy, but voluntarily prepared and adopted by the insurance companies for their own protection. Even in that class of cases there is conflict, though it may be conceded the majority of decisions tend to sustain plaintiffs’ contention. Where there are Michigan decisions on the subject we need look no further.

In Barry & Finan Lumber Co. v. Insurance Co., 136 Mich. 42 (98 N. W. 761), it is said of a policy containing a similar limitation to the present one:

“It is settled that, under a provision like the one in this policy, a plaintiff cannot ordinarily recover, unless his action is begun within 12 months” (citing nine Michigan cases, amongst which are Law v. Accident Ass’n, 94 Mich. 266 [53 N. W. 1104], which contained identically the same provision relative to time of bringing suit found in our standard policy).

In that case negotiations and attempts to settle were conducted for between six and seven months, leaving but a little over five months within which suit could have been brought before the 12 months expired. The action, however, was not brought until upwards of 14 months had expired. The question of waiver was raised, but the court held that nothing was done by defendant which could be construed as a waiver of this substantial right expressed in the policy; that the suit should have been brought within the year specified, and, not having done so, plaintiff lost his right of action. Also, Lentz v. Insurance Co., 96 Mich. 445 (55 N. W. 993), involving a policy limiting the time when suit could be brought to six months. A fire occurred on October 23, 1889. Action was begun May 5, 1890 — six months and twelve days after the fire. The court held that this delay operated to bar recovery unless excused by act of the company. It is stated that on the 22d of December, 1889, defendant’s agent informed plaintiff that the company denied any liability. The court, speaking through Justice Montgomery, said:

“He now treats the repudiation of liability as excusing him from furnishing any proofs of loss, and justifying an action on the policy. Assuming that he is right in this contention, it unfortunately demonstrates that he was not delayed in bringing suit by the negotiations. Had he furnished proofs of loss the day the fire occurred, the company would have been entitled to 60 days within which to make payment, by the terms of the policy. He could not, therefore, have brought suit earlier than December 22d. He now brings suit without furnishing proofs of loss, on the claim that the company’s refusal to pay waived such proofs. This he was entitled to do on December 22, the earliest day at which he could have brought suit had he furnished proofs.”

One of the strongest cases cited and relied upon by plaintiffs is Steen v. Insurance Co., 89 N. Y. 315 (42 Am. Rep. 297), which was decided before adoption of a standard policy in the State of New York. That case is fully in harmony with plaintiffs’ contention here, holding that the limitation should be construed as running from the time when the loss becomes due and payable, and not from the time of the fire, and refers with disapproval to Massachusetts and Illinois decisions holding that the time begins to run when the fire occurs. Subsequent to the adoption of a standard policy in the State of New York the same court, in the case of Hamilton v. Insurance Co., 156 N. Y. 327 (50 N. E. 863, 42 L. R. A. 485), passing upon a similar clause in a standard policy, said:

“The policy in this case was a standard fire insurance policy, * * * and was issued under and in pursuance of a statute, * * * . The only policy the defendant had a right to issue was that authorized by that statute, and the policy in suit contained only such provisions, agreements, and conditions as were specially authorized and required by it. The provision limiting the time within which an action thereon should be commenced to the period of one year, was inserted in obedience to the statute. * * * Therefore, it is manifest that the statute specially prescribes the limitation of time within which an action upon a fire insurance policy upon property in this State shall be commenced. * * * It was not, however, made a part of the policy by virtue of any agreement of the parties, but by the command of the statute. * * * The law establishes the period of limitation, and forbids the parties from disregarding it.”

In that case the fire occurred January 16, 1892. Summons was issued and put in the sheriff’s hands January 14, 1893, but he failed to serve it until the 17th, which was held to be too late. Our present standard policy is copied from that of New York. The policy there under consideration contained exactly the same provisions and requirements, that loss shall not be payable until 60 days after notice, ascertainment, estimate, proof of loss, etc., upon which plaintiffs rely here to extend the time for bringing action beyond the 12 months. Standard policies similar to that before us have been adopted, and their use made compulsory by statute in many States. It has been repeatedly held, in passing on their various provisions, that they should be construed according to the plain meaning of the language used, and that the trend of authority is towards enforcing the legislative command when clearly expressed, rather than to nullify and modify by strained constructions. The provision that an action cannot be sustained “unless commenced within twelve months next after the fire” is very plain, clear, and simple language. If it was the legislative intent that this should have other than the natural meaning, it would have been a simple matter to have so provided. In Richards on Insurance Law (3d Ed.), §327, it is said:

“By the better authority the period of limitation begins to run, under the standard policy, from the date of the fire, as specifically stated” (citing many cases).

It is further contended in plaintiffs’ behalf that the time for bringing action was extended by waiver, or estoppel, arising from negotiations for settlement, extending from the date of the fire in October until the following July, during which time defendant’s adjuster gave repeated assurances that the loss would be paid. It has been said that a waiver must arise either by express agreement, a new promise to pay, a part payment, or a failure to plead. A waiver is a voluntary relinquishment of a known right. Estoppel is based on some misleading conduct or language of one person which, being relied on, operates to the prejudice of another, and is applied to the wrongdoer by the court in denial of some right, which otherwise might exist, to prevent a fraud. The claim of plaintiffs in this case seems rather to suggest an estoppel, though in insurance cases the terms are freely used interchangeably, and it is sometimes expressed as waiver by estoppel.

So far as the record discloses in this case defendant required no further proof of loss, production of papers, arbitration, or other proceedings under the policy which might operate to delay, after the examination of Dahrooge under oath in January, 1911. From that time plaintiffs were legally at liberty to begin an action whenever they saw fit. They had, however, been advised that the matter was in the hands of Mr. Bartells, the adjuster, and were negotiating with him for a settlement. Though the details are not given, it seems evident that there was some matter in difference between them, for Dahrooge testifies: That the next time he saw Bartells after the examination under oath, in January, was in February, and he then talked of a compromise; “said we would get together soon, that he was busy just at that time.” That he thought he saw him again in March or April, when Dahrooge with his attorney met Bartells on the street, and they walked and talked together. That he then said:

“We will get together, Mr. Dahrooge; I am busy now, and I will be back in a few days.”

That in reply to the statement that they would wait no longer, but would sue, he said:

“Don't sue, we will get together and settle it up.”

That he again saw Bartells in June or July, and said:

“You are delaying so long; I am going to sue you” —to which Bartells replied: “I will tell you, Mr. Dahrooge, my friend is sick in Detroit, and I cannot bother; you better go in and see the attorneys, Mr. McPherson and Mr. Norris, and they will fix you up. •]>*]>•]«
“Q. What, if anything, did he say about whether it was necessary to sue the company or not?
“A. He did not say; he said: ‘You go over there and they will fix you up, Mr. Dahrooge.’ He said: ‘Don’t sue; I am busy, and I will be back again. You go and see Mr. Norris; he has it now, and I think he will fix it up with you.’ That was some time in July, but I cannot remember the exact date in July.”

Witness, further testified, that he later, in July, visited one of the attorneys to whom Bartells referred him, and told him he was going to sue the company if they did not settle; that the attorney asked what kind of a proposition witness wanted to make to the company, to which he replied, “The full amount;” that the attorney offered him “something,” which was not accepted; that in reply to the threat to start suit the attorney said, “That is up to you if you want to wait until Bartells comes back,” and witness then said, “I waited long enough. * * * I ain’t going to wait,” after which he started suit. Plaintiffs’ testimony on that subject, taken as a whole, can be said to show that up to this time they delayed action through hope and expectation of a settlement, encouraged by assurances of defendant’s adjuster, but who, at the last interview with him, when approached with a demand for settlement, said he could not bother, and referred them to the defendant’s attorneys ; that an interview with one of said attorneys resulted in an offer of “something,” which was refused, with the declaration that suit would be brought. That was some time in July. The year did not expire until the following October. The first suit was brought in August; a second was started before the year had expired, and this suit was begun 16 months after the fire. The first and second failed, when or why is not disclosed in the record, beyond the statement of counsel for defendant in open court that service in the second was defective, and “that suit was quashed” and this third action was begun January 27, 1912.

Irrespective of the question of whether the adjuster of defendant could orally waive the statute of limitations provided in a standard policy, or by estoppel in pais bar defendant from pleading and relying on such statute, we are unable to find that the negotiations with the adjuster and attorney, taking any assurances or promises testified to have been made by them in their strongest light, amount, under the undisputed facts in this case, to a waiver or estoppel. No promises or assurances in writing were ever made by defendant. To plaintiffs’ urgent demands, made through their attorneys, they were informed that the matter was in the hands of the adjuster. Negotiations with him began with a demand of payment and a proposal from him to “compromise,” and ended by referring plaintiffs to attorneys, one of whom made an offer which was refused. Then all negotiations ended, over two months before the 12-month limitation had expired. During all this time plaintiffs had legal counsel and cannot plead ignorance of their rights. It has been frequently held that mere negotiations for an adjustment are not a waiver of limitations, especially where they do not cause delay beyond the period in which action may be brought. McFarland & Steele v. Insurance Co., 6 W. Va. 425; Vincent v. Life Ass’n, 74 Conn. 684 (51 Atl. 1066); Carlson v. Insurance Co., 172 Mass. 142 (51 N. E. 525); Allen v. Insurance Co., 95 App. Div. (N. Y.) 86 (88 N. Y. Supp. 580); Morrill & Co. v. Insurance Co., 71 Vt. 281 (44 Atl. 358); Blanks v. Insurance Co., 36 La. Ann. 599.

In the last-mentioned case the policy contained a stipulation limiting the time in which claims could be prosecuted to one year following the loss. Negotiations were had in which promises to make payment on certain conditions were claimed to have been made. It was claimed that these conditions were fulfilled, after which defendants neglected or refused to pay. Several months were consumed in these negotiations. The court said:

“But here, even conceding that the negotiations were entitled to any effect whatever, they ceased, as conclusively proved, about two months before the expiration of the limitation. The mere pendency of the negotiations between the parties on subject of settlement will not of themselves operate as a waiver' of the limitation, unless they are of a character to induce the insured to abstain from suit within the time.”

Though it may be conceded that some of our decisions appear to view this question from a somewhat different angle, we think that the above rule of law is borne out by reason and abundant authority, and is in harmony with the principles laid down in Shackett v. Benefit Society, 107 Mich. 65 (64 N. W. 875); Law v. Accident Ass’n, supra, and Lentz v. Insurance Co., supra.

It has been suggested in consultation that section 9738, 3 Comp. Laws (5 How. Stat.’ [2d Ed.] § 14145), may have some application here. The section provides, in cases where an action has been begun within the time limited in the same chapter and failed for specified reasons, that the time for commencing an action is extended for one year from abatement of the original suit. The saving provisions of that section relate to the limitations specified in the chapter of which the sections form a part, and have no application to cases barred under Act No. 277, Pub. Acts 1905 (3 How. Stat. [2d Ed.] § 8328). Wilton v. City of Detroit, 138 Mich. 67 (100 N. W. 1020). It is to be inferred that such was the view of counsel in this case. While the question of the statute' of limitations, on the one side, and waiver, on the other side, are raised, urged, and exhaustively argued pro and con by counsel in their respective briefs, no reference is made to said section 9738, nor has there been any suggestion by counsel on either side that they consider it pertinent, or desire the court to pass upon it. This court has so often said that questions not raised by the record, and argued in the briefs, cannot be considered that to cite authority would be superfluous. Furthermore, if we were of opinion that it was a proposition material to a decision here, the case could not be decided upon such point until both counsel have been notified and given an opportunity to argue the same before this court. Section 193, 1 Comp. Laws (4 How. Stat. [2d Ed.] §11690).

Since the foregoing opinion was written counsel of record were invited to furnish briefs, if they so desired, relative to the applicability of the statute last referred to. Carefully prepared briefs from both sides have recently been received. We are still of the opinion that the bill of exceptions upon which the case was heard does not properly present that question, and also that said section 9738, which was enacted prior to 1857, does not apply to this special statute of limitations relative to fire insurance policies, enacted in 1905.

For the foregoing reasons we are constrained to hold that the conclusions reached by the trial court are well founded, and its judgment is affirmed.

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

Bird, J.

(dissenting). I am unable to agree with the conclusion of Mr. Justice Steere that this case should be affirmed. I think it is saved from forfeiture by the statute. The first suit on this cause of action was begun on August 25, 1911. For some reason which is not disclosed, it was dismissed. The second suit was begun within the year limited in the policy, and was subsequently and after the year had expired dismissed on account of defective service of process. The present suit was begun January 27, 1912, within one year after the second suit had failed for want of proper service. This state of facts brings the case, in my opinion, within the saving statute, section 9738, 3 Comp. Laws (5 How. Stat. [2d Ed.] § 14135), which reads as follows:

“If, in any action, duly commenced within the time limited in this chapter, and allowed therefor, the writ or declaration shall fail of a sufficient service or return, by any unavoidable.accident, or by any default or neglect of the officer to whom it is committed * * * the .plaintiff may commence a new action for the same cause, at any time within one year after the abatement or other determination of the original suit, or after the reversal of the judgment therein.”

Section 9728 of the chapter to which the foregoing section refers, provides that “all actions of assumpsit, or upon the case, founded upon any contract or liability, express or implied,” shall be commenced within six years after the cause of action shall accrue, and not afterwards. Had not the standard policy been enacted by Act No. 277 of the Public Acts of 1905, the plaintiffs would now clearly have the right to commence their action any time within six years from the date when the policy was payable. The act amended, by implication, section 9728, and reduced the time in which suit might be commenced on standard fire insurance policies from six years to one year. The foregoing statute should now be read in connection with Act No. 277, and construed together as one law. 36 Cyc. p. 1164; Conrad v. Nall, 24 Mich. 275; People, ex rel. Attorney General, v. Railroad Co., 145 Mich. 140 (108 N. W. 772); Dennison v. Allen, 106 Mich. 295 (64 N. W. 38). If we follow this rule of construction and read section 9728 in connection with the amendment, that section would then read:

“All actions of assumpsit, or upon the case, founded upon any contract or liability, express or implied, Shall be commenced within six years after the cause of action shall accrue, and not afterwards, provided that all actions upon the standard fire insurance policy shall be commenced within twelve months next after the fire.”

While Act No. 277 of the Public Acts of 1905 clearly indicates an intention to shorten the period within which actions on the standard policy may be commenced, it nowhere indicates an intention to withdraw such actions from the protection of the saving statute. The case of Wilton v. City of Detroit, cited, does not apply because that case dealt with a local law, while Act No. 277, Pub. Acts 1905, involved in this case, is a general law.

The suit having been commenced within the year of grace allowed by the statute, I am of the opinion that it is thereby saved from forfeiture, and that the judgment should be reversed and a new trial granted.


author: Stone, J.

text:
    PEOPLE, ex rel. ATTORNEY GENERAL, v. QUINCY MINING CO.
    Corporations — Taxation — Inheritance Tax — Transfer of Stock — Assessment of Stockholders.
    Under the inheritance tax law, a corporation is not liable to the State for the tax upon its stock that was transferred by the will of a decedent who resided in Massachusetts, where the defendant made the transfer on its books without retaining sufficient to pay the tax or notifying the county treasurer; Act No. 188, Pub. Acts 1899, as amended by Act No. .195, Pub. Acts 1903 (1 How. Stat. [2d Ed.] §§ 2022, 2030). It could not be said that the defendant had control over or held the stock within the meaning of the statute, since it enumerates the persons liable to pay the tax, and does not include such corporation; and its stock being absolutely owned by the holder who may dispose of his shares as he sees fit.

    Error to Wayne; Hosmer, J.'-
    Submitted January 29, 1913.
    (Docket No. 49.)
    Decided November 3, 1913.
    Assumpsit by the People of the State of Michigan on relation of Roger I. Wykes, attorney general, against the Quincy Mining 'Company for certain taxes. Judgment for plaintiff. Defendant brings . error.
    Reversed.

      Otto Kirchner, for appellant:

      Roger I. Wykes, Attorney' General, and L. D. Averill, Assistant Attorney General, for the people.

       As to Inheritance tax, on stock in a domestic corporation belonging to the estate of a nonresident, see notes in 19 L. R. A. (N. S.) 887 and 25 L. R. A. (N. S.) 384.

   Stone, J.

In this case the question is as to the liability, under our inheritance tax law, of a domestic corporation which has transferred upon its books the stock of a nonresident decedent, and issued a new certificate therefor, before payment of the inheritance tax, and without giving notice, either of such transfer or the issuing of such new certificate, to the proper county treasurer. The question is raised by demurrer to the declaration, by which it appears that one John Blackie, domiciled, at the time of his death, at Brookline, in the State of Massachusetts, was the owner in his own right of 25 shares of the capital stock of the defendant, a Michigan corporation, formed and existing under the Michigan statute that provides for the formation of mining companies, being Act No. 118 of the Public Acts of 1877, and the acts amendatory thereof.

Decedent made a will that was duly probated by the surrogate court for Suffolk county, in the State of Massachusetts. Under that will thus probated, his executrix transferred said 25 shares of stock to a legatee named in the will. The legatee surrendered his stock certificate to the defendant company, which made a transfer of the stock upon its books, and issued to him, said legatee, in his own name, a certificate for said stock, without giving notice, either of such transfer upon its books, or of the issue of the new certificate to the legatee, to the proper county treasurer. The facts are fully set out in the declaration. Defendant demurred. The demurrer was overruled. Defendant elected to stand by its demurrer. Thereupon the court rendered a final judgment for the plaintiff, and against the defendant, for the amount of the tax. This being an amicable action, the court, agreeably to the stipulation of the parties, ordered that no costs be allowed the prevailing party. The defendant has brought the case here upon writ of error, and contends that it is not liable to pay said inheritance tax, because: (1) No such liability is imposed by the common law. (2) It is not imposed by statute.

The Michigan inheritance tax law was adopted in 1899, being Act No. 188, and was amended in every section but one by Act No. 195 of the Public Acts of 1903 (1 How. Stat. [2d Ed.] §§ 2022, 2030). This action is brought under section 14 of the act of 1903, which, among other things, provides:

“As a cumulative remedy for the collection of the tax, the State may proceed by an action of assumpsit in any court of competent jurisdiction.”

It will be noted that by this provision no new liability was imposed; but an additional or cumulative remedy was given.

It will be well for us to notice next the provisions of our statute; sections 3 and 5 of the act of 1903 enumerate the persons chargeable with the payment of this tax thus:

“Sec. 3. Every such tax shall be and remain a lien upon the , property transferred until paid, and the person to whom the property is so transferred and the administrator, executor, and trustee of every estate so transferred,' shall be personally liable for such tax until its payment. * * * ”
“Sec. 5. * * -* Any such administrator, executor, trustee or other person having in charge or in trust any legacy or property for distribution subject to such tax, shall deduct the tax- therefrom; and within thirty days thereafter shall pay over the same to the county treasurer, as herein provided. * * * He shall not deliver or be compelled to deliver any specific legacy or property subject to tax under this act to any person until- the tax assessed thereon has been paid to him or to the county treasurer.”

Obviously, these two sections apply only to domestic executors, administrators, and trustees. Special provision is made by section 9 of the act of 1903 for the payment of the tax by foreign executors, administrators, and trustees, as follows:

“If a foreign executor, administrator or trustee shall assign or convey any stock or obligation in this State standing in the name of a decedent, or in trust for a decedent, liable to any such tax, the tax shall be paid to the treasurer of the proper county on the transfer thereof; and any corporation, person or persons having control over any such assets, shall not deliver or transfer the same to any person or corporation other' than an executor, administrator, trustee or guardian duly qualified under the laws of this State, until the tax to which the same is liable has been paid as provided in this act. No. safe deposit company, trust company, bank or other institution, person or persons holding securities or assets.of a decedent shall deliver or transfer the same to the executors, administrators, or legal representatives of said decedent or their assignees unless notice of the time and place of such intended delivery or transfer be served upon the county treasurer by said company, bank, institution, person or persons, at least five days prior to the said delivery or transfer. And it shall be lawful for the said county treasurer and is hereby made his duty personally or by representative, to examine said securities or assets at the time of or prior to such, delivery or transfer. Failure to serve such notice or to allow such examination on the delivery or transfer herein prohibited, shall render such safe deposit company, bank, or other institution, person or persons liable to the payment of the tax due or to become due upon said securities or assets in pursuance of the provisions of this act.”

The part printed in italics was no part of the section as originally enacted; it was inserted by amendment in 1903.

1. It will not be necessary for us to discuss the question raised by appellant, that no liability is imposed upon the defendant at common law to pay this tax, because the entire contention of the attorney general is that the liability is one imposed by statute.

2. This brings us to the consideration of the main question in the case. The appellant does not question the right of the State to inhibit a corporation organized under its laws from registering a transfer of its stock upon its books under the pain of liability to pay the inheritance tax, if any is due thereon. The question is, Has the State done so? It is the claim of the appellant that neither the statute under which the defendant was organized nor its by-laws, nor both combined, give the corporation control of the stock of its stockholders. It is urged that the title to stock may be transferred by an assignment and delivery of the stock certificate, and that the transfer of such stock upon the books of the company is not necessary to effect such transfer of title, and the following cases are cited in support of this position: Mandelbaum v. Mining Co., 4 Mich. 465; Newberry v. Manufacturing Co., 17 Mich. 141; McLean v. Medicine Co., 96 Mich. 479 (56 N. W. 68), and cases cited; May v. Cleland, 117 Mich. 45 (75 N. W. 129, 44 L. R. A. 163); Rough v. Breitung, 117 Mich. 48 (75 N. W. 147); Foster v. Row, 120 Mich. 1 (79 N. W. 696, 77 Am. St. Rep. 565); Michigan Trust Co. v. Comstock, 123 Mich. 689 (82 N. W. 527); May v. McQuillan, 129 Mich. 392 (89 N. W. 45); Lufkin Rule Co. v. Secretary of State, 163 Mich. 30 (127 N. W. 784).

The attorney general does not question the authorities above cited by appellant, but claims that there are intervening superior rights or equities of the State here which render them inapplicable. If there are any such superior rights or equities, it is conceded that the same are based upon or grow out of the very terms of the statutes that we are here considering. In other words, the right to maintain this action, if it exists, is because of the statutory liability of the defendant in this case. If no such statutory liability exists, then the State has no intervening superior rights or equities.

We are of the opinion that the provisions of section 9, above quoted, are not applicable to this defendant, because it is not a safe deposit company, trust company, bank, or other institution or person holding securities or assets of the decedent, or controlling the same. In no just sense can it be said that the defendant holds or controls the stock upon which the inheritance tax, sought to be imposed here, is chargeable.

We are of opinion that the defendant is not liable to pay this tax, because no such liability is imposed by the statute. It cannot be said that the defendant either “had control over” the stock in question, or “held” it. Stock in a corporation, absolutely owned by an individual, is his own property, which he may sell or dispose of as he sees fit, and the corporation has no “control over” it, nor does the corporation “hold” it, within the meaning of the statute. The statute enumerates the persons liable to pay the tax, and does not include the defendant. We think that this conclusion is in harmony with the history of the legislation imposing the so-called inheritance tax. We said in Re Stanton’s Estate, 142 Mich. 491, 495 (105 N. W. 1122), in speaking of the statute imposing the tax:

“The statute is adopted, together with a judicial interpretation of the language above quoted, from the State of New York.”

The New York legislation upon this subject has been as follows: By section 11 of chapter 483 of 1885, being the 108th session of the legislature of that State, it was provided:

“Whenever any foreign executor or administrator shall assign or transfer any stocks or loans in this State, standing in the name of a decedent, or in trust for a decedent, which shall be liable to the said tax, such tax shall be paid to the treasurer or comptroller of the proper county on the transfer thereof, otherwise the corporation permitting such transfer shall become liable to pay such tax, provided that such corporation has knowledge before such transfer that said stocks or loans are liable to said tax.”

By this early New York statute, liability to pay the tax was thus, in express terms, imposed upon the corporation that made the transfer of the stock upon its books. But this law was again amended in 1892, as appears by section 9 of chapter 399 of the 115th session of the legislature of New York. That section reads as follows:

“If a foreign executor, administrator or trustee shall assign or transfer any stock or obligations in this State standing in the name of a decedent, or in trust for a decedent, liable to any such tax, the tax shall be paid to the treasurer of the proper county or the comptroller of the city of New York on the transfer thereof. No safe deposit company, bank or other institution, person or persons holding securities or assets of a decedent, 'shall deliver or transfer the same to the executors, administrators or legal representatives of said decedent unless notice of the time an'd place of such intended transfer be served upon the county treasurer or comptroller at least five days prior to the said transfer. And it shall be lawful for the said county treasurer or comptroller, personally or by representative, to examine said securities or assets at the time of such delivery or transfer. Failure to serve such notice or to allow such examination shall render said safe deposit company, trust company, bank or other institution, person or persons liable to the payment of the tax due upon said securities or assets in pursüance of the provisions of this act.”

The provisions of the section of the Michigan inheritance tax law of 1903 are substantially the same as the last above-quoted statute of New York; but the legislature of New York, in 1902, again amended the law. See Laws of New York, 125th Session, vol. 1, p. 352. We quote that statute even at the risk of •prolixity. It is as follows:

“Sec. 228. Liability of Certain Corporations to Tax. If a foreign executor, administrator or trustee shall assign or transfer any stock or obligations in this State standing in the name of a decedent, or in trust for a decedent, liable to- any such tax, the tax shall be paid to the treasurer of the proper county or the State comptroller on the transfer thereof. No safe deposit company, trust companyj corporation, bank or other institution, person or persons having in possession or under control securities, deposits or other assets of a decedent, including the shares of the capital stock of, or other interests in, the safe deposit company, trust company, corporation, hank or other institution making the delivery or transfer herein provided, shall deliver or transfer the same to the executors, administrators or legal representatives of said decedent, or upon their order or request, unless notice of the time and place of such intended delivery or transfer be served upon the State comptroller at least ten days prior to said delivery or transfer; nor shall any such safe deposit company, trust company, corporation, bank or other institution, person or persons deliver or transfer any securities, deposits or other assets of the estate of a nonresident decedent including the shares of the capital stock of, op other interests in, the safe deposit company, trust company, corporation, bank or other institution, making the delivery or transfer, without retaining a sufficient portion or amount thereof to pay any tax and penalty which may thereafter be assessed on account of the delivery or transfer of such securities, deposits or other assets including the shares of the capital stock of or other interests in, the safe deposit company, trust company, corporation, hank or other institution making the delivery or transfer, under the provisions of this article, unless the State comptroller consents thereto in writing. And it shall be lawful for the said State comptroller, personally, or by representative, to examine said securities, deposits, or assets at the time of such delivery or transfer. Failure to serve such notice and to allow such examination, and to retain a sufficient portion or amount to pay such tax and penalty as herein provided, shall render said safe deposit company, trust company, corporation, bank or other institution, person or persons liable to the payment of three times the amount of the tax and penalty due or thereafter to become due upon said securities, deposits or other assets, including the shares of the capital stock of, or other interests in, the safe deposit company, trust. company, corporation, bank or other institution, making the delivery or transfer; and the payments as herein provided shall be enforced in an action brought in accordance with the provisions of section two hundred and thirty-five of this chapter.”

It therefore appears that section 9 of the Michigan .law was substantially the law of New York as passed in 1892. Were our statute like the section last above quoted, there would be no question as to the liability of the defendant, because that statute imposed upon a corporation, making a transfer of its own stock upon its books, a liability for the payment of the tax; but the legislature of this State has not seen fit to adopt the last legislation of New York in that behalf.

It therefore appears to us that the liability here sought to be enforced is purely statutory; that the statute enumerates the persons liable to pay the tax, and by implication excludes the defendant; that it does not own, hold, or control the stock upon which the inheritance tax is sought to be collected; that such stock was the absolute property of the testator, by virtue of whose will it was transferred to his legatee, and the transfer registered upon defendant’s books; that defendant had no option, discretion, or control in the matter; that the defendant is not within the purview of the statute, and therefore that the judgment of the circuit court was erroneous, and will be reversed, and no new trial granted, but without costs.

Steere, C. J., and Moore, Brooke, Ostrander, and Bird, JJ., concurred. McAlvay and Kuhn, JJ., did not sit.


author: MOOEE, J.

text:
    QUIGLEY v. WOLF.
    Mortgages — Foreclosure—Trusts — Inconsistent Positions — Public Policy — Injunction' Against Foreclosure.
    In a suit to restrain defendant from foreclosing a mortgage by advertisement, upon the alleged ground that defendant, as trustee, had entered into a contract of guaranty that was void as against public policy, by reason of defendant’s occupying illegal and inconsistent positions, held, that if any barm bad been done by tbe alleged improper conduct of defendant, tbe court could not remedy tbe illegality of tbe transaction by declaring tbe mortgage invalid.
    Appeal from Kent; Brown, J.
    Submitted April 14, 1913.
    (Docket No. 60.)
    Decided November 3, 1913.
    Bill by John F. Quigley and wife against Gustave A. Wolf for an injunction to restrain the defendant from foreclosing a mortgage by advertisement. From a decree for defendant, complainants appeal.
    Affirmed.

      Charles E. Ward, for complainants.

      Gustave A. Wolf and Myron H. Walker, for defendant.
   MOOEE, J.

On April 11, 1908, the complainants made a mortgage on certain real estate, running to the defendant. During the summer of 1911, the defendant commenced to foreclose said mortgage by newspaper advertisement. The bill of complaint in this case was filed July 6, 1911. It is a sworn bill of complaint. In it is averred that defendant was, on and before January 31, 1908, the legal adviser of complainants, and represented to them that it was important for them to acquire certain stock in the J. F. Quigley Lumber & Land Company, and that defendant undertook to procure said stock, if complainants would execute to David Wolf, a brother of the defendant, the mortgage hereinafter described.

The bill of complaint proceeds as follows:

“That in order to carry out said arrangement and comply with the said advice so given them by said defendant, they, at some time in the early part of the year 1908, the exact date of which they are unable to give, at the request and instance of said defendant, signed a mortgage for the sum of $3,000, covering the land hereinbefore described, and executed a note for the said sum of $3,000, which note represented the said indebtedness which said mortgage was given to secure, and that the said mortgage, after being so executed, was left with the said defendant.
“That at the time said mortgage was made and so left with said defendant, the agreement and arrangement therefor was, by the said defendant, reduced to writing and signed by him, and said writing was delivered to your orators and the same is now in their possession ready to, be produced and proved as this honorable court shall direct. The said writing truly and correctly recites the agreement then made between your orators and the said defendant in regard to said mortgage, and is in words and figures as follows:
“ ‘Grand Rapids, Michigan, January 31, 1908.
“ ‘Received of John F. Quigley and Flora E. Quigley, a certain note and mortgage bearing' even date herewith, made by them to David Wolf on lots seven (7) and eight (8) of block (11) Oakdale Park addition to the city of Grand Rapids, to be held by me in escrow and delivered to said David Wolf by me on receipt by me of thirty (30) shares of preferred stock in the J. F. Quigley Lumber & Land Company, issued to C. R. Hills, represented by certificate No. 26; ten (10) shares of preferred stock in said J. F. Quigley Lumber & Land Company, issued to Elmer E. Dennis, represented by certificate No. 28; nine (9) shares of preferred stock in said J. F. Quigley Lumber & Land Co., issued to Alvin E. Dennis, represented by certificate No. 29; and one (1) share of preferred stock in said J. F. Quigley Lumber & Land Company, represented by certificate No. 22 issued to Horace L. Foote, all of said shares of stock to be indorsed in blank by the owner thereof and delivered by me to said Flora E. Quigley on the delivery of said mortgage to said David Wolf.
/ “ ‘On failure by me to receive said stock within ninety days from the date hereof said mortgage is to be returned by me to said John F. Quigley and Flora E. Quigley or either of them.
“‘G. A. Wolp.’
“That said defendant never procured the certificates of stock mentioned and described in the receipt so delivered by him to your orators. * * *
“That the said defendant, contrary to the rights of your orators, and without their consent, on, to wit, the 11th day of April, 1908, recorded said mortgage in the office of the register of deeds for the county of Kent; that by an examination of the record of said mortgage it appears to bear date April 11, 1908, and to run to the said defendant, but your orators show that the said mortgage is the same and none other than the one described in said receipt so executed and delivered to your orators by the said defendant. *
“That notwithstanding the agreement and arrangement hereinbefore set forth between your orators and said defendant, and contrary to the rights and equities of your orators, the said defendant has advertised and given out that default has been made in the conditions of said mortgage; that on March 30, 1911, there was due from your orators to him upon said mortgage the sum of $3,574, and has caused to be published in the Grand Rapids Chronicle, a newspaper published at Grand Rapids, Mich., and circulating in the county of Kent and elsewhere, a notice of mortgage foreclosure sale. * * * ”

The prayer of the bill of complaint is:

“(a) That a temporary injunction be issued out of this honorable court, restraining the said defendant from selling or attempting to sell the land mentioned in this bill of complaint at the time stated in said notice of sale, or at any other time.
“(b) That at the final hearing of this cause said injunction be made permanent.
“(c) That the said defendant may be required, by the decree of this court, to discharge said mortgage of record and deliver the same, together with said note, to your orators.
“(d) That your orators have such other and further relief in the premises as shall be agreeable to equity and good conscience.
“(e) That appropriate process issue herein.
“John F. Quigley,
“Flora E. Quigley,
“Complainants.”

The defendant filed an answer in the nature of a cross-bill, in which he avers that in the negotiation for the stock mentioned in the bill of complaint, the agreement to procure the same was made with David Wolf, and not defendant; that defendant was acting as' the legal adviser of David Wolf, and not for the complainants; that the mortgage to which the paper dated January 31, 1908, set out in the bill of complaint, refers, was a mortgage for $1,500, running to David Wolf, and was not the mortgage defendant was foreclosing. We how quote from the answer and cross-bill:

“Defendant denies the allegations of paragraph 5 of said bill. The consideration for the $3,000 mortgage dated April 11/ 1908, was the payment by defendant at complainants’ request of the $1,500 note and mortgage of January 31, 1908, held by David Wolf, and the further advance and credit at their request by defendant to complainants- of money and money’s worth to the additional amount of $1,500. And that the $3,000 consideration for the mortgage of April 11, 1908, was derived from and charged up to trust funds in the hands of defendant not his own, as complainants well knew at the time.
“Defendant denies 'the allegations of paragraph 6 of said bill. The stock agreed to be procured was procured for them by David Wolf at the time of the execution of the $1,500 mortgage to him.
“Defendant denies the allegations of paragraph 7 of said bill. That complainants well knew that theP mortgages of January 31, 1908, and of April 11, 1908, represent different transactions, and that the latter mortgage represents the full-consideration of $3,000 to the parties thereto. * * *
“And this defendant, further answering and claiming the benefit of a cross-bill, says: That on or about April 11, 1908, said John F. Quigley and Flora E. Quigley did make, and execute under their hands and deliver to defendant their one certain promissory note dated the 11th day of April, 1908, and-thereby, for value received as hereinbefore set forth, promised to pay to him the sum of $3,000 on or before five years after date thereof 'with interest at 7 per cent., payable semi-annually. * ■* *
“That said mortgage contains a covenant and agreement that, should default be made in the payment of the interest, or any part thereof, when pay- . able, and should the same remain unpaid for 30 days, then the principal sum with all arrearages of interest should, at the option of the mortgagee, become payable immediately, although the period limited for payment thereof should not then have expired.
“That the execution of said mortgage was, on April 11, 1908, duly acknowledged by the said John F. and Flora E. Quigley before a notary public duly authorized to take such acknowledgment; the certificate of such acknowledgment being duly indorsed on said mortgage. * * *
“Defendant further shows that, as he believes and charges, this bill herein is not filed by complainants in good faith, but is without merit, and without any legal or equitable basis therefor in fact, as they well know. That the injunction herein was sued out recklessly, and with the malicious intent to cause defendant unnecessary delay and expense in the collection of said $3,000 mortgage, and to injure him personally. That defendant has been promised time and again payment of the interest, and also has been promised payment of the principal, of said $3,000 mortgage. That no question'whatever has ever been raised about the validity of the mortgage to the full amount until defendant gave notice of his intent to foreclose, and then the present defense stated in the bill was, as defendant verily believes and charges, trumped up.”

The prayer is for affirmative relief.

The case was put at issue and tried in open court at such length that the, printed record contains nearly 500 pages. The trial judge made a decree, in which appears the following:

“(1) That the $3,000 note and mortgage mentioned in the original bill, which are dated April 11, 1908, running to the defendant, G. A. Wolf, were given in consideration of the payment by the defendant, G. A. Wolf, of $3,000 in money and money’s worth to and for the use and benefit of the complainants as hereinafter stated, and were not given for the consideration and upon the conditions alleged in said bill.
“(2) That the receipt and agreement signed by the defendant, G. A. Wolf, set forth in paragraph 5 of said original bill, refers to a prior mortgage of $1,500, dated January 31, 1908, running to David Wolf, and does not refer- in any manner to the $3,000 note and mortgage.
“The said agreement was superseded by other agreements subsequently executed between the parties, being Exhibits Nos. 18 and 22, inclusive, of all of which complainants had full knowledge.
“Said $1,500 mortgage to said David Wolf was recorded on April 3, 1908, at which date, at the latest, it became and was an absolute and unconditional obligation from said complainants to said David Wolf.
“(3) That on April 11, 1908, the defendant, G. A. Wolf; at the request of complainants, took up and paid to said David Wolf said $1,500 note and mortgage, and said David Wolf discharged the sums of record on the same date; and the said G. A. Wolf, at the complainants’ request and on the same date, also took up and paid another note and mortgage given by the complainants on lot 22, Nagele’s addition, on which there was due $467, and at the same time gave them money and credit for the balance of $3,000, a full statement of the amount of which said $3,000 mortgage and the consideration is as follows:
David Wolf note and mortgage paid by defendant at complainants’ request......... $1,500 00
Interest, etc............................... 20 00
Quigley mortgage on lot 22, Nagele’s addition, paid by defendant at complainants’ request ................■.................. 467 00
Certificate of deposit .............. $650 00
Certificate of deposit .............. 153 37
Delivered to complainants by defendant..... 803 37
Credit as agreed on account of complainants,
owing to defendant ..................... 137 22
Check of G. A. Wolf to complainant J. F.
Quigley for balance ...................... 73 45
$3,001 04
“The money for the above amounts, aggregating $3,000, for which said mortgage was given, was a loan to complainants from trust funds held by G. A. Wolf, as trustee, for and belonging to the estate of his mother, who was deceased, and the income of which belonged to his father, and who is still living, of which the complainants had notice and knowledge; and the same was at the time charged by. defendant in his account with said trust as a loan to complainants.
“That the securities were marked by defendant as belonging to his mother’s estate, and were kept by him in a separate drawer in his safe, used only for the securities of her estate, and defendant kept an account on his books with his mother’s estate in which this transaction appears, and he made an annual report to his father, showing the securities belonging to the estate and the income therefrom, which report included this $3,000 mortgage and accrued interest.
“(5) That the defendant practiced no deception upon complainants, and that they were fully cognizant of the facts in connection with said $3,000 mortgage and the consideration thereof, and voluntarily executed the same to secure the moneys advanced and used for their benefit as above stated.”

Then followed the usual decree of foreclosure. The complainants bring the case here by appeal.

The record shows that in making certain statements in this sworn bill of complaint the complainant John F. Quigley is certainly very reckless. His own proofs show beyond any question that the paper set out in his bill of complaint did not refer, as he states, to the $3,000 mortgage which was in process of foreclosure, but did refer to a $1,500 mortgage, which at the time the $3,000 mortgage was given was discharged of record, and was delivered to Mr. Quigley and produced by him upon the trial. It is said in his behalf that he was ill when the transactions referred to in his complaint occurred, and that he had forgotten what happened. The situation disclosed by the record hardly justifies this claim, and certainly if before filing this bill of complaint the records in the office of the register of deeds had been examined, they would have shown the falsity of the averments. There did, however, arise upon the trial of the case grave questions growing out of certain documentary evidence in the case, to some of which documents reference is made in the decree rendered in the court below.

It is claimed on the part of defendant that David Wolf procured 20 shares of stock under the agreement made in January, 1908, but that it was found in February that he could not get the balance of it because of litigation which had arisen between one Hills and the Dennis brothers, who were the holders of the stock, and that to take care of any possible trouble arising out of the failure to procure the balance of the stock other papers, reading as follows, were executed, dated as of the same date as the prior paper, and that they were to stand in the place of it.

“Grand Rapids, Mich., Jan. 31, 1908.
“Received of John F. and Flora E. Quigley one note and mortgage for $1,500, being payment in full for the 20 shares of preferred stock of the John F. Quigley Lumber & Land Co., issued to Dennis Bros, and Foote.
“And we also guarantee that Flora E. Quigley shall recover a decree in her chancery suit against said company and G. A. Wolf, Trustee, for the discharge of the two mortgages held by said trustee; and we also guarantee that if liability is established and collection made on account of the 30 shares of preferred stock in said company issued to C. R. Hills, either against said company or John F. and Flora E. Quigley, that we will save them harmless from such payment up to the amount of $1,000.
“And if David Wolf is not held liable on account of any other indemnity he has signed on account of said Hills stock, then we will save said parties harmless from such payment up to the amount of $1,500.
“David Wolf,
“G. A. Wolf."
“Grand Rapids, Mich., Jan. 31, 1908.
“I hereby agree in consideration of the contract this day made with David and G. A. Wolf that if any liability arises thereunder against them in excess of fifteen hundred dollars, that I will make the same good to them to an amount not exceeding five hundred dollars, additional.
“John F. Quigley.”

Counsel for complainant argue with great earnestness that these papers disclose a situation that should not only avoid the $1,500 mortgage, but the $3,000 mortgage as well. This claim is based upon the fact that when the guaranty agreement, so called, was made, Mr. G. A. Wolf, as trustee, was a party to the suit mentioned therein, and that the agreement was void because against public policy. It is the claim of defendant that the agreement was not illegal because he did not represent the stockholders in the litigation; that his answer disclosed that he was a mere stakeholder; that the stockholders were represented by the receiver, who had put in an answer, and was represented by a solicitor, and that defendant was a mere stakeholder, and his conduct would in no way influence the decree that would be rendered. He claims, further, that as trustee he had no interest in the litigation because the trust had been completed. We quote from his brief:

“We desire to emphasize the fact that defendant was not in law or fact any longer a trustee at the time the agreements in question were made in February, 1908, but was in the position of a mere stakeholder. His appointment was for a special purpose only, to secure certain indorsers or guarantors. The trust instrument states the specific purpose:
“ ‘To secure the following directors * * * for their indorsement or guaranty of a certain note * * * which may be made within one year.’
“And this agreement provided that when the notes were paid, the securities ‘shall be reassigned by said trustee to said company.’ When defendant on June 25, 1907, paid the bank the $2,350, the balance due it, and thereby completely executed the purpose of the trust, he became a mere stakeholder for Mr. Miller, the receiver, who was the company’s sole legal representative. As Judge Hatch testified:
“‘I certainly understood that the order by which Fred C. Miller was appointed receiver carried with it the right to all of the assets of the company. * * * As a matter of fact I knew that an assignment of those mortgages had been made to the trustee prior to the appointment of the receiver. I suppose whatever equity or rights the company had in the reassignment of those mortgages back to the company was conveyed to Mr. Miller by the order appointing him receiver.’
“In addition to the authorities we have cited, showing that on the performance of the defendant’s trust the title to the securities at once passed by operation of law, we cite further: Selden v. Vermilya, 3 N. Y. 525, where it is held:
“ ‘A trust to sell real estate for the payment of debts ceases when the debts are in any mode paid or discharged.’
“And in Salomon v. Sternfeld [102 N. Y. 665], 7 N. E. 47, it is held:
“ ‘The purpose for which a trust was created having ceased, the trust itself ceases, and the property reverts to the creator of the trust.’
“In Brillhart v. Mish, 99 Md. 447 [58 Atl. 28], it is held:
“ ‘The legal estate of a trustee under a voluntary deed of trust does not last longer than is necessary to effect the objects of the trust, and when these objects have been accomplished the trust is at an end.’
In 1 Perry on Trusts, § 312, it is said:
“ ‘Although a legal estate may be limited to a. trustee to the fullest extent, as to him and his heirs, yet it shall not be carried farther than the execution of the trust necessarily requires.’
“And in Doe v. Considine, 6 Wall. [U. S.] 458, it is stated:
“ ‘It is equally well settled that where no intention to the contrary appears, the language used in creating the estate will be limited and restrained to the purposes of its creation. And when they are satisfied, the estate of the trustee ceases to exist, and his title becomes extinct. The extent and duration of the estate are measured by the objects of its creation.’

“It is clear that the receiver was the only person who could claim title to the mortgages if they belonged to the company, and at this time he was asserting this claim by his answer and cross-bill in Mrs. Quigley’s suit. It is an elementary principle that the receiver of an insolvent corporation represents the stockholders as well as the creditors. The syllabus in Franklin Nat. Bank v. Whitehead, 149 Ind. 562 [49 N. E. 592, 39 L. R. A. 725, 63 Am. St. Rep. 302], states:

“ ‘A receiver of an insolvent corporation represents the creditors as well as the stockholders, and holds the property for the benefit of both, and, as trustee for creditors, can maintain and defend actions which the corporation could not.’
“And in Hays v. Pierson [N. J.], 58 Atl. 728, it is held:
“ ‘While a receiver of' a corporation is the representative of creditors, he is also the representative of the corporation and of its stockholders, and may inquire into actions of the directors to the same extent that stockholders might do.’
“See, also, First Nat. Bank v. Iron Works, 60 Mich. 487, 499 [27 N. W. 657]. It is evident, from the trust agreement with defendant and the circumstances surrounding it, that it was intended solely for the benefit of the indorsers thereby secured. The defendant, therefore, as trustee did not represent stockholders; and clearly after the trust was executed he owed them no duty, and he could not then act for them. The title to the trust securities had immediately passed to the legal owners thereof. Still no act was committed, or even dreamed of, tending to a breach of trust. Defendant merely stood indifferent between the claimants awaiting the determination of the court. And as shown, his trust was ended, and his signing the agreement in question could not be, and was not, a breach of trust.”

A reading of the record satisfies us that all the parties in interest supposed they had a right to do just what was done, and that it was to the advantage of the complainants in the present proceeding to have it done. Under the facts disclosed by the record we do not need to decide this feature of the controversy. Mr. David Wolf is not made a party to this proceeding. A decree later was entered in the case then pending as had been guaranteed. It still stands. After it was entered at the request of Mr. Quigley, Gustave A. Wolf paid David Wolf the $1,500 mortgage. It was paid out of funds in the hands of Mr. Wolf belonging to the estate of his mother, the income of which belonged to his father, and those facts were known to Mr. Quigley. An accounting was also had between Mr. Gustave A. Wolf and the Quigleys, and the state of the account was agreed upon, and with full knowledge of the situation the $3,000 mortgage was given. In this connection language used by Judge Severens, in Buchanan v. Drovers’ Nat Bank, 55 Fed. 223, 5 C. C. A. 83, is pertinent:

“It is very doubtful whether, assuming that the business was malum prohibitum, the mere knowledge that the proceeds of the note were intended to be used therein would render the note discounted void, if the bank did not co-operate in the use of the money. Sortwell v. Hughes, 1 Curt. 244 [Fed. Cas. No. 13,177]; Webster v. Munger, 8 Gray [Mass.], 587. But here the business connected with the giving of the first note and the use of the money realized thereon had transpired. The giving of the new note to raise money to pay off the earlier one did not promote the illegal business, assuming it to have been such, but was a transaction quite distinct from it. The new note, therefore, was not void by reason of any illegality in the first note. Armstrong v. Toler, 11 Wheat. [U. S.] 258; McBlair v. Gibbes, 17 How. [U. S.] 236; Brooks v. Martin, 2 Wall. [U. S.] 70; Planters’ Bank v. Union Bank, 16 Wall. [U. S.] 483.
“In Brooks v. Martin the parties had been engaged as partners in buying and dealing in bounty land warrants, in violation of a statute prohibiting such dealings, the policy of which was to prevent soldiers to whom the warrants were issued from becoming the victims of speculators. The defendant, who had become possessed of a large sum of money in the prosecution of the forbidden business, resisted the action of his partner for an accounting on the ground of illegality in the cause of action; but the court refused to sustain the defense, and held that as the illegal object had been already accomplished, and the recovery of his share by the plaintiff would not aid in accomplishing any object in violation of law, the defendant should be compelled to account to the plaintiff.
“In Planters’ Bank v. Union Bank the defendant had sold Confederate bonds, which had been sent to it by the plaintiff for that purpose, and in accounts rendered had charged itself with the proceeds. In a suit brought to recover therefor the defendant set up the illegality of selling the bonds as a defense. The court held that the defense did not avail; that while it would have been a good defense to a purchaser of the bond in a suit for the price thereof, or perhaps to the defendants in a suit by the plaintiff to recover damages for a failure to sell as directed, yet that whatever mischief there was in the transaction had already been done, and there was nothing in public policy to be affected by the action of the court in granting or withholding redress on other grounds.”

See, also, Portsmouth Brewing Co. v. Mudge, 68 N. H. 462 (44 Atl. 600); Boggess v. Lilly, 18 Tex. 200.

We have not overlooked the item of $450 upon which counsel place much stress, though it is not mentioned in the bill of complaint. We accept defendant’s version of this item, and hold it was intelligently passed upon by the parties when the mortgage was given.

The decree is affirmed, with costs.

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