text:
    PROCTOR v. PLUMER.
    1. Land Contract—Foreclosure—Parties.
    A railroad company which takes possession of a distinct portion of land sold under contract, and maintains it up to the time of the filing of a bill to foreclose, refusing to state whether it claims as principal, as assignee of the original purchaser, or otherwise, may be made a co-defendant in the bill.
    2. Same—Equity—Right to Disclosure.
    The bill in such case may properly allege the evident facts in regard to the company’s possession, and pray an answer under oath disclosing its position with respect to the property, and that the court ascertain its true relation to the contract.
    3. Same—Option—Election—Evidence.
    The conduct of a prospective purchaser of land in going into possession under an instrument claimed by him to be an option merely, in making payments in accordance with its terms, and in permitting a railroad company to enter upon and construct an elevated road across the property, amounts to an irrevocable election to purchase.
    4. Same—Uncertainty—Construction.
    An agreement to sell land for a given price per acre, a part of the consideration to be paid at once, a part in 30 days, and the balance within five years, is not rendered uncertain by the fact that a further provision that the vendor should give a deed and accept a mortgage for one-half the purchase price, if desired by the purchaser, after the payment of the other half, did not specify the terms of the mortgage, since the time such mortgage might run would be limited by the general clause prescribing the terms of payment.
    5. Equity Pleading — Appeal — Demurrer — Objection not Raised Below.
    An objection that a bill is improperly framed cannot be considered upon an appeal from an order dismissing it on demurrer for multifariousness and want of equity.
    6. Same—Disclaimer.
    Defendant in a bill to foreclose cannot properly disclaim in a demurrer to the bill.
    Appeal from Wayne; Donovan, J.
    Submitted January 6, 1897.
    Decided April 27, 1897.
    Bill by Mary A. P. Proctor against Addie L. Plumer, the Flint & Pere Marquette Railroad Company, and others, to foreclose a land contract. From a decree dismissing the bill on demurrer, complainant appeals.
    Reversed.

      Alfred Lucking, for complainant.

      Charles K. Latham, for defendants Plumer.

      Henry M. Campbell, for defendant railroad company.
   Montgomery, J.

On the 13th of April, 1891, complainant entered into a contract with Samuel A. Plumer, which reads as follows:

“For and in consideration of the sum of |1,000, to me in hand paid, I hereby agree to sell to Samuel A. Plumer, or his assigns, all that certain piece or parcel of land situate and being in the township of Springwells, county of Wayne, Michigan, on section 17, being about 30 acres of land on the southeast corner of the Chicago road and the Miller road, and being the piece of land marked ‘ Mary Proctor, 27.50,’ on the Springwells map in Wayne County Atlas of 1876; I hereby agree to make the easterly line or side of said land a straight line; for the sum of, or rather at the rate of, $1,000 per acre for said land, according to actual survey; said $1,000 this day received to apply on purchase price, $4,000 within 30 days from the date hereof, at the option of the purchaser, and the balance at any time within five years from the date hereof, at the option of the purchaser, in sums not less than $1,000, with interest on all sums remaining due or unpaid at the rate of 6 per cent, per annum until paid. And I hereby agree to give for said land, on receipt of said purchase price, a good and sufficient warranty deed, and a Burton abstract of title and taxes to date, showing a perfect title. And I also agree, if desired by said purchaser, to give said deed and abstract when one-half of said total purchase price is paid, and to accept a purchase-money mortgage, drawing interest at the rate of 6 per cent, per annum, for the other one-half of said purchase price; said purchaser or his assigns to have immediate possession of said property.
[Signed] “ Mart A. Proctor.” [Seal.]

This contract was duly witnessed and acknowledged. Samuel A. Plumer died in July, 1894, and the defendants Addie L., John H., and Leonette T. are his widow and two children. The will of Samuel A. Plumer was probated in July, 1894, and commissioners on claims were appointed. No claims were proven against the estate, and in February, 1895, the final account of the executor was allowed, and he was discharged. Subsequently, complainant appeared in the probate court, and asked to have an order setting aside the discharge of the executor, and that she be permitted to prove her claim against the estate. This application was denied, and an appeal taken to the circuit court, which appeal is now pending.

Subsequently the complainant filed the bill of complaint in this cause, setting forth that she is the owner of the land described in the contract above quoted; that on the 13th of April, 1891, she made a verbal agreement with Samuel A. Plumer, by which she agreed to sell him the land described, substantially on the terms set forth in the written instrument; that Plumer undertook to reduce the agreement to writing, and that the instrument above quoted was the result; that the first two payments of $1,000 and $4,000 were made upon the contract, and that thereupon Samuel A. Plumer went into possession of the land, and kept and retained possession, collecting the rents and profits thereof, until the time of his decease, and that his representatives, heirs, grantees, and assigns have ever since kept and retained possession of the land, and that they are still in possession of the same; that some time after the making of the contract, and after the payment of the $4,000, the defendant railroad company took possession, and has ever since maintained possession, of a way 100 feet in width across said land, and is now in possession of the same; that said way runs through said parcel from the Michigan-avenue front to the opposite side thereof, in a somewhat diagonal, course; and that said railroad company has constructed an elevated railway, the same being about 4 feet in height above the level of the ground at the Michigan-avenue front, and about 10 feet above the level of the ground at the rear portion of the parcel; that said road was originally constructed upon trestlework, but that, in the last year or thereabouts, the railroad company had filled up with dirt underneath the railway bed and around the trestle-work. Complainant further avers in her bill that whether said Plumer did contract to convey the right of way to the railway company, or whether he assigned the entire contract to the railway company, or what terms he made with the railway company, or just what his and the railway company’s relations to each other in such matters were, she does not know, and has never definitely learned, or been able to learn, either from Plumer, his representatives, or the railway company. She further avers that on the 14th of May, 1896, the claim was put forth by the Plumers that Samuel A. Plumer, in taking the contract for said land in Ms own name, acted simply and solely as the agent of the defendant railroad company; that he leased the same, and collected the rents and paid the taxes thereon, only as the agent of the railroad company, and that, since the decease of Samuel A. Plumer, defendant John H. Plumer has done the same in the capacity of agent of the said railroad company; that it was not stated whether said contract had been assigned, or whether some other agreement had been entered into between them. Complainant avers that she has never been able to get any expression of the company’s position from its agents, and does not know what its relations to the land are. It is further averred that the railroad company has insisted that, if she would not sell a right of way, the company would proceed to condemn it. It is further averred in the bill that the defendants Plumer have contended that the written instrument above recited was a mere option, and did not bind Plumer or his representatives, and that they have not elected to take the land under the option. The bill avers, as to this, that, if the instrument is to be construed to be an option, it was imposed upon her by Plumer in lieu of a specific contract for the sale of the land, and, furthermore, that the act of Plumer in permitting the construction of a railroad across the land is such as to amount to an election to take the property, even though the instrument be construed as an option.

The bill prays an answer under oath by the defendant railroad company, which will disclose its true relations to the property, as to whether it was the principal in the contract originally, or whether it has since become owner by assignment, and that the court may ascertain the true relations of the Flint & Pere Marquette Railroad Company to the contract, and if it shall be developed that the Flint & Pere Marquette Railroad Company was in fact the principal in the transaction, and that Plumer was the lawfully authorized agent only of such company, that said contract be enforced in all respects against the defendant railroad company, and that a vendor’s lien may be established on said land in favor of complainant, and duly enforced in the usual manner, according to the course of practice of this court, and that any deficiency may be paid by defendants, or such of them as may be found liable therefor, and if, in the enforcement of the relief granted by this court, the premises shall be sold, then that the court place the purchaser in possession of the lands, and remove the defendants therefrom.

To this bill of complaint the defendants Plumer demurred, on the grounds—

First, that the bill is exhibited against the named defendants and the defendant railroad company for separate and distinct causes of” action, and that the bill is multifarious.

Second, that the bill states no cause for equitable relief against the defendants.

Third, that any remedy against the defendants, except as against the land, to which they make no claim, is barred by the statutes of this State.

The railroad company demurred, on the ground that the bill is multifarious, and that no case is made entitling the complainant to equitable relief against the defendant. Both demurrers were sustained, and complainant appeals. We are not advised as to the view adopted by the circuit judge, as no written opinion was filed.

Was the bill multifarious ? It appears by the bill that the defendants Plumer and the railroad company were respectively in the occupancy of distinct portions of this land. It is clear that all the parties are necessary parties to a proceeding to foreclose this land contract. We think it was also competent for the complainant to set out all the facts, as she did, and to have the respective rights of the defendants determined, in order that it might be ascertained to whom the conveyance should be made, and on what terms. Hanchett v. McQueen, 32 Mich. 22.

The parties, then, having been properly joined, the question- remains whether the bill states a cause for equitable relief. We think it very clear that it does state a cause entitling the complainant to a foreclosure of this contract, and that, whether it be treated as a contract or an option, the acts of the purchaser have been such, as set out in the bill, as to amount to an irrevocable election. Curran v. Rogers, 35 Mich. 221; Cilley v. Burkholder, 41 Mich. 749; Dickinson v. Wright, 56 Mich. 46.

It is argued in the brief of counsel for defendant railroad company that the writing is incomplete, as it does not provide the length of time which the mortgage to be given shall run. Counsel relies upon the following provision: “I also agree, if desired by said purchaser, to give said deed and abstract when one-half of said total purchase price is paid, and to accept a purchase-money mortgage, drawing interest at the rate of 6 per cent, per annum, for the other one-half of said purchase price.” It is said by counsel that, so far as anything contained in the contract is concerned, Plumer could satisfy this contract by paying one-half the purchase price in cash, and demanding that the complainant accept a mortgage for any length of time which he might choose, for the balance. The rule is fully recognized that, under the statute of frauds, a contract for the sale of lands must be complete in itself. Gault v. Stormont, 51 Mich. 636. But such a construction will be placed on a written instrument as will, if possible, give it effect; and we think that the provision last quoted should be construed in connection with the preceding provisions of the contract, and, so construed, the contract entitled Plumer to an election to accept a deed and give back a mortgage, and, as no provision is made as to the time which the mortgage should run, such mortgage would necessarily be payable according to the terms previously fixed by the contract.

It is further urged that, if the agreement be construed as an option, the mere entry upon the land and making improvements do not make a contract of sale, or give any interest in the land. But we think that, in view of the cases cited above, the character of the change in the land was such as to amount to an election.

It is next urged that no distinct charge is made against the defendant railroad company, and that the prayer that the relations between Plumer and the railroad company may be determined, and relief granted accordingly; cannot be granted, for the reason that a bill of discovery will not lie, under our practice; citing Riopelle v. Doellner, 26 Mich. 102, and Shelden v. Walbridge, 44 Mich. 251. It is true that a bill of discovery in aid of a suit at law will not lie under our practice, but in this case the court has undoubted jurisdiction to foreclose this contract in the nature of a mortgage, and has jurisdiction over persons in possession of the land, and, having such jurisdiction, has the right to determine their respective interests. It is urged, it is true, that the bill is not properly framed as a bill to foreclose the contract. We think this is a mistake; that the prayer of the bill is broad enough for this purpose; and that all the facts are set out. And, as the only two objections stated in the demurrer are the general objection for want of equity and the objection of multifariousness, we think the criticisms upon the frame of the bill are not to be considered.

It is urged on behalf of the defendants Plumer that no personal decree can be granted against them, and that no actual occupancy of the premises by defendants Plumer is shown, and that they have disclaimed any interest, or intention to obtain or claim any interest, in the land. It is perhaps sufficient answer to say that the bill does aver possession by defendants Plumer, and that the only disclaimer is contained in the demurrer, which is not good practice.

The other questions considered need not be discussed.

The decree will be reversed, the cause remanded, and defendants allowed 20 days in which to answer.

The other Justices concurred.


source: Caselaw Access Project

author: Moore, J.

license: Public Domain

text:
    PREFERRED MASONIC MUTUAL LIFE INSURANCE CO. v. GIDDINGS.
    Insurance — Mutual Companies — Articles op Association — Form of Policy.
    A mutual life insurance company, organized under Act No. 187, Pub. Acts 1887, as amended by Act No. 58, Pub. Acts 1895, requiring such companies, in their articles of association, to state definitely the object of the incorporation, the classification of members, and the purpose of the classification, cannot, where its articles of association provide for the payment of policies only in the event of the death of the insured,issue a policy payable upon the occurrence of total disability.

      Mandamus by the Preferred Masonic Mutual Life Insurance Company to compel Theron F. Giddings, state commissioner of insurance, to approve a certain form of policy.
    Submitted January 12, 1897.
    Writ denied April 27, 1897.

      Moore & Moore, for relator.

      Theron F. Giddings, in pro. per., and Fred A. Maynard, Attorney General, for respondent.
   Moore, J.

This is a proceeding commenced by the relator to compel the respondent to approve of the form of a policy containing, among others, upon certain conditions, provisions to—

First, issue a paid-up policy for such sum as the reserve will buy.

Second, pay one-half the reserve applicable for a surrender of the policy.

Third, pay one-half the face of the policy in case of total permanent disability.

Fourth, loan to the policy holder one-half of the reserve, to enable him to pay his premium. It is the contention of the respondent that these provisions should not be allowed in the policy, for two reasons: First, because not authorized by the law of its incorporation; second, because not authorized by its articles of association.

The relator company was organized under the provisions of Act No. 187, Pub. Acts 1887, as amended by Act No. 58, Pub. Acts 1895. The third subdivision of section 3 of said Act No. 187 requires the articles of association to state “the object of the incorporation, the number of classes or divisions of members therein, and the object or purpose of such classification or division, all of which shall be definitely and correctly stated.” The articles of association provide:

“Art. 3. The object of this incorporation is to insure the lives of its members, and thereby to secure to their beneficiaries a certain sum of money, payable at death; but only persons having insurable interest in the life insured shall be beneficiaries. There shall be only one class or division of members in this corporation, and each member shall be insured for a fixed sum, payable at death. Every applicant shall make and sign a written application for insurance, and shall undergo a careful physical examination by a physician of good repute, who shall make a detailed certificate thereof, and attach the same to such application, showing’ that the applicant is in good health, and recommending the issuing of the certificate or policy applied for.”

Article 4 reads as follows:

“A regular fixed premium shall be required of each member, the amount of which shall be the estimated cost of the insurance, and shall be proportionate to the age of the member at the time the insurance is effected. No other premiums, payments, or assessments shall be required of any member unless the same is necessary to meet the obligations of the company, in which case assessments shall be made on the members in proportion to their regular premiums per thousand, for a sufficient sum to pay such obligations. The purposes and objects for which the moneys realized from the members are to be appropriated are to the payment of death losses and the expenses of the corporation. There shall be two kinds of funds into which the money received by the corporation shall fee paid. One fund shall be known, together with its accumulations, as the ‘Reserve,’ and shall be used for the payment of death losses. The other fund shall be known as the ‘General Fund,’ into which all other moneys of the company shall be put, and from which may be used moneys for the payment of death losses in cases of excessive mortality, and for the payment of all other disbursements and expenses of the company.”

It will be noticed that there is no provision for the payment of the policies except upon the death of the insured. We do not think the articles of association authorize the issuance of policies payable upon the occurrence of total disability. It is not necessary to discuss the other question raised by the respondent.

The application is denied.

The other Justices concurred.


author: Long, C. J.

text:
    WHITE v. RICE.
    1. Deeds—Consideration—Parol Evidence.
    It may be shown by parol that the consideration for a deed of property to a religious corporation for church purposes, which expressed a consideration of “one dollar and other consideration hereinafter stated,” was a trust declared therein in favor of certain other denominations.
    2. Same—Trusts—Use of Church Property.
    A deed of a site for a church building, which provides, as a part of the consideration, that the church shall, when not in use by the grantee, be open for use to certain other denominations, creates a valid trust in favor of the latter, which is enforceable in equity.
    3. Corporations—Power to Hold as Trustee.
    A corporation with legal capacity to hold property may take and hold it in trust in the same manner and to the same extent as a private individual.

      4. Trusts—Religious Societies—Construction oe Statute.
    Section 4640, 1 How. Stat., providing that no grant of land for religious purposes shall vest any title or interest in any person to whom such grant may be made unless the same shall be made to a corporation organized under some statute of this State, refers to the legal title or interest in the grantee or trustee, and not to the beneficiary; it being expressly provided by section 4637 that land conveyed in trust for the use of any congregation or religious society organized within this State shall be so held in trust for its use.
    5. Same—Charitable Trusts.
    Charitable trusts are enforceable in this State the same as they were at the common law, subject to the provision of our statute that all trusts must be fully expressed and clearly defined upon the face of the instrument creating them.
    6. Same—Unincorporated Societies.
    An unincorporated society or a voluntary association is, at common law, capable of taking as a beneficiary in a trust.
    7. Same—Enforcement of Trust—Parties.
    The trustees and agents of an unincorporated religious society may, in behalf of all the members of the society, maintain a suit for the enforcement of a trust for the benefit of the society.
    Appeal from Cass; Coolidge, J.
    Submitted January 13, 1897.
    Decided April 27, 1897.
    Bill by Nathaniel White and others, as trustees and agents of the Methodist Episcopal Church, to restrain Samuel Rice, the Pleasant Valley Congregation of the Brethren Church, and others, from interfering with the use by complainants of a certain church building for religious services. Defendant the Pleasant Valley Congregation appeals from an order overruling its demurrer to the bill.
    Affirmed.

      Harsen D. Smith, for complainants.

      Howell & Carr and L. A. Tabor, for appellant.
   Long, C. J.

This bill is filed for the purpose of obtaining an injunction restraining the defendants from interfering in any way with the Methodist Episcopal Church Society and the complainants in using a certain church edifice in which to hold religious services, and to prevent the defendants from interfering with the complainants in opening and entering said church for religious services. Upon the filing of the bill an injunction was issued and served upon the defendants in accordance with the prayer of the bill. The defendant the Pleasant Valley Congregation of the Brethren Church filed a general demurrer to the bill, setting out that the bill did not state a cause which entitled the complainants to any relief whatever. The other defendants answered the bill. The cause came on to be heard on the demurrer. The court overruled the demurrer, without costs, and gave the defendant 30 days to answer. The appeal to this court is from the order overruling the demurrer.

It appears by the bill that the Pleasant Valley Congregation of the Brethren Church is a corporation organized and existing under chapter 170, 1 How. Stat.; that in 1890 it owned a church building, which burned during that year; that subsequently negotiations were entered into between the members of that corporation and the members of the Methodist Episcopal Church Society, called the “Bethel Class, Vandalia Circuit,” and other persons in the neighborhood, to raise a common fund with which to rebuild such church edifice, and which it was agreed should be used, not only by the Pleasant Valley Congregation, but by other denominations in common with them,—that is, the Baptist, Disciple, Methodist, Congregational, and Presbyterian denominations. The Pleasant Valley Congregation then claimed to have $930, which had been obtained from insurance on the old building, and that, if $400 would be raised by the other parties who were interested in the erection of the church edifice, and not belonging to the Pleasant Valley Congregation, but belonging to the other denominations, the Pleasant Valley Congregation would build such church upon what was called “White’s Four Corners,” and that such church should be open to worship by the other denomi-' nations above enumerated. The bill further charges that Walter Clark, the minister in charge of the Pleasant Valley Congregation, represented to the complainant White and his wife, Ella White, that it would locate such church upon White’s Four Corners, on the land of said White, if the site could be obtained therefor, and that the complainant White stated that he would furnish the site and donate $100 for erecting the building on the express condition that it should be used only for church purposes, and that when erected, and when not in use by the Pleasant Valley denomination, it should be open for use by the Methodist, as well as the Baptist, Congregational, Presbyterian, and Disciple churches; that in that neighborhood there were people connected with said different denominations, either as members or in belief, and that they wanted a church in which they would be at liberty to worship; and that upon this condition, and no other, would he give said site and contribute the $100; that his proposition was accepted by said Walter Clark in behalf of said church; and that a deed was made and delivered on May 30, 1891. The deed expressed the consideration of “one dollar and other consideration hereinafter stated.” After the description in the deed, it recited : ‘ ‘ For and during the period or term that said land shall be used for church purposes, and no longer. Said church, when on said site, shall, when not in use by the party of the second part hereto, be open for use to the following orthodox denominations, to wit, the Baptist, Disciple, Methodist, Congregational, and Presbyterian, —together with all and singular the hereditaments,” etc. This deed was executed by Nathaniel White and wife to the Pleasant Valley Congregation of the Brethren Church, a body corporate under the laws of Michigan. The bill further alleges that in 1894 the quarterly conference of the Niles district authorized the pastor of the Vandalia circuit to hold meetings in this building, and then made it a part of the Vandalia charge, and called it the “Bethel Class;” that the trustees of the Pleasant Valley Congregation, then denying that the complainants and the Methodist society had any right to occupy the church, excluded them therefrom.

The bill contains the usual prayer for injunction, as above set forth, and further prays that the verbal agreement by which the contributions were made may be- decreed to be specifically performed, and that the deed be decreed to create a trust, and that such trust may be enforced. The injunction which was issued in the case contains the command to the .defendants that—

“ You do absolutely desist and refrain from interfering in any way with the said Methodist Episcopal church and society, and using said church to hold religious services therein, and preventing the said complainants from opening and entering said church in order that meetings may be held by the said church and society under the deed of conveyance of said church premises; and also restrained and strictly forbidden from preventing the Rev. H. H. Miller, or any other minister of said society, from entering-said edifice as the minister and said pastor of the same, and in any manner interfering with him in holding religious services therein, and in his discharge of his duties as such pastor and minister in charge of such society, and to refrain from interfering in any manner with the rights of the said Methodist Episcopal church and society, or with the complainants, to open said church; that the same may be opened, used, and occupied for religious services; that the said church should be opened; and that you and each of you shall refrain and absolutely desist against locking the doors of said church, from locking said church against said complainants and the Methodist Episcopal church and society, until the further order of this court.”

It is contended by counsel for the defendants:

(1) That, under the statute, a trust cannot be created or exist in real estate by parol; that the same must be evidenced by some writing.

(2) That the deed in controversy is not a trust deed.

(3) That the complainants cannot maintain this bill.

(4) That the injunction is too broad, as it, by its terms, takes the possession of the church property from the defendants, and turns it over to the complainants.

1. As to the first proposition, it may be said that the recitations in the bill simply show the surroundings and situation of the parties at the time of the execution of the deed, as well as the consideration for which the deed was given. Such consideration may always be shown by parol testimony.

2. We think the deed itself creates a trust in favor of the denominations named therein, which may be enforced in equity. Section 5573, subd. 5, 2 How. Stat., provides for the creation of a trust for the beneficial interest of any person, when such trust is fully expressed and clearly defined upon the face of the instrument creating it. No particular words are necessary to create a trust. Chadwick v. Chadwick, 59 Mich. 92. In the deed the trust is fully stated. Four hundred dollars was raised by the other denominations, and used in the building of the church edifice. The title to the property was taken in the Pleasant Valley society, but the deed expressly declares that “said church, when on said site, shall, when not in use by the party of the second part hereto, be open for use to the following orthodox denominations, to wit,” etc. No other interpretation could be given to this language than that it was the intent of the parties to the deed that these other societies should have the use of this church edifice when not in use by-the Pleasant Valley society; and the breach set out is that these other societies were denied absolutely the use of the church edifice at any and all times.

But it is said that a corporation has no powers except those conferred upon it by statute, and that the statute does not authorize it to act as a trustee in a trust, and that such power is ultra vires. We think it is now well settled that a corporation with legal capacity to hold property may take and hold it in trust, when authorized by law, in the same manner, and to the same extent, as private individuals may do. Congregational Society v. Atwater, 23 Conn. 34; Mason's Executors v. Trustees of M. E. Church, 27 N. J. Eq. 47; Maynard v. Woodard, 36 Mich. 423; 4 Am. & Eng. Enc. Law, 218.

The claim that is made that the beneficiary in .a trust for religious purposes must be a corporation organized under the laws of this State has no force. Section 4640, 1 How. Stat., refers to the legal title or interest in the grantee or trustee, and not to the beneficiary in the trust, as, under section 4637, the lands conveyed to any person as trustee may be held in trust for the use of any congregation or religious society organized within this State.

It is further contended that the beneficiaries named in the deed are indefinite, and that the trust, if sustainable at all, can only be sustained on the doctrine of charitable trusts, which is claimed to be founded on the English statute of charitable uses, and that this statute has never been adopted in this State. However this may be, trusts are enforceable in this State the same as they were at the common law, subject to the provision of our statute that they must be fully expressed and clearly defined upon the face of the instrument creating them. The beneficiaries here named are the members of the several specified denominations residing in the vicinity of the church. An unincorporated society or a voluntary association, like a religious society or denomination, is capable of taking as a beneficiary in a trust. Universalist Society v. Fitch, 8 Gray, 421; Smith v. Bonhoof, 2 Mich. 115. See, also, Tomlin v. Blunt, 31 Ill. App. 234.

3. The claim that the complainants are not proper parties to bring this bill has no force. They showed by their bill that they were the trustees and agents of the Methodist Episcopal Church, and were acting in behalf of- themselves and all other members of said church, and all having a like interest. That question was settled in Fuchs v. Meisel, 102 Mich. 367.

4. We think the injunction does not turn the Pleasant "Valley society out of the church building, but simply goes to the extent of preventing that society or its members from locking the doors of the church against the other societies, and their members, named in the deed.

The order of the court below overruling the demurrer will be affirmed, with costs against the defendant.

The other Justices concurred.


author: Montgomery, J.

text:
    BANK OF SAGINAW v. PIERSON.
    1. Corporations—Failure to File Annual Reports—Liability oe Directors.
    Under section 12 of Act No. 232, Pub. Acts 1885 (3 How. Stat. § 4161b1), providing that the directors of corporations organized under said act shall, in case of their willful neglect to file an annual report, be individually liable for “all the debts” of the corporation, and subject to a prescribed penalty for each day during the pendency of the default, the directors are liable for corporate debts incurred after a default in filing a report, and before a second default.
    2. Same—Statutes—Amendment—Repeal,
    The liability of the directors for failure to make the reports required by said act was not repealed by the amendatory act of 1895 (Act No. 164), extending the period within which reports might be made, and providing that the public penalty should be for the use of the State, instead of the county, as under the former law.
    Error to Bay; Kelley, J., presiding.
    Submitted January 14, 1897.
    Decided April 27, 1897.

      Assumpsit by the Bank of Saginaw against Frank D. Pierson, as director of the Williams Milling Company, upon a promissory note. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Reversed.

      J. L. Stoddard, for appellant.

      T. F. Shepard, for appellee.
   Montgomery, J.

-The plaintiff in this action seeks to recover from the defendant, a director of the Williams Milling Company, the amount due upon a promissory note given by said company on July 20, 1895, payable on the 30th day of October thereafter to the order of Alfred Mosher & Son, which note was indorsed to the plaintiff, and discounted in the usual course of business.

The evidence of the plaintiff tended to show that the Williams Milling Company was organized on May 12, 1892, under Act No. 232 of the Public Acts of 1885; that the defendant had been director and secretary of the company from the date of its organization to the date of trial; that no annual report was filed, either in the office of the secretary of state or the county clerk, as required by section 12 of the act above referred to, until November 8, 1895. Upon this evidence the plaintiff contended below that the defendant was liable for the amount of the note, under the provisions of section 12 of the act above referred to, which, prior to the amendment of 1895, hereinafter referred to, required that an annual report should be made in the month of January by each corporation organized under the act in question, stating.the amount of capital stock, the amount actually paid in, the amount invested in real estate and personal property, the amount of debts of the corporation, the amount of credits, and the name of each stockholder and the number of shares held by him, which report was required to be signed by a majority of the directors, and verified by the oath of the secretary of the corporation, and filed in the office of the secretary of state. A duplicate was required to be filed in the office of the clerk of the county where the business of the corporation should be carried on; and the statute further provided that—

“If any of said directors of any such corporation shall willfully neglect or refuse to make the report required by this section, they shall each be liable for all the debts of such corporation, and subject to a penalty of twenty-five dollars, and, in addition thereto, the sum of five dollars for each and every secular day after the first day of March in each year during the pendency of such neglect or refusal, which penalty shall be for the use and benefit of the general fund of the county in which such corporation is required to file its report.”

It has been held by us that proof of the failure to file the report required by this section raises a presumption that the neglect was intentional, and therefore willful. Gennert v. Ives, 102 Mich. 547. See, also, Van Etten v. Eaton, 19 Mich. 187. This view was not controverted in the court below; but the defendant contended, first, that he was not liable for the default in filing a report covering the fiscal year of 1894, for the reason that the indebtedness was not incurred during that period, and that the statute was not intended to create a liability as to indebtedness incurred after the date of the default, and before a second default in failing to file the report for the ensuing or succeeding year. It was further contended that the statute of 1895, to which reference will be made, operates as a repeal of the law of 1885, and that, as the statute is penal in its nature, this repeal cuts off the right of plaintiff to enforce its provisions.

1. The circuit judge was of the opinion that the plaintiff could not recover, for the reason that it was not a creditor of the corporation during the fiscal year of 1894; that is, during the period covered by the default or negligence in making and depositing the report. This precise question has never been passed upon by this court, nor have we been cited to any case in which it was presented. The statutes in the different States differ materially in their provisions fixing the liability of directors for defaults in making reports. The New York statute creates a liability for “all debts of the company then existing, and for all that shall be contracted before such report shall be made.” The Colorado statute creates a liability for “all debts that shall be contracted during the year next preceding the time when such report should have been made and filed, and until such report shall be made.” The Wisconsin statute, on the other hand, limits the liability to one “for all debts of such corporation contracted during the period of any such neglect and refusal.” In this State, a former statute (section 1821, Comp. Laws 1857) declared that directors should be liable in an action founded on the statute “for all the debts of such corporation contracted during the period of such neglect or refusal.”

It will be seen that the statute in question differs from any of those referred to, and for this reason none of the cases which we have examined from any of these States throw much light upon the question here involved. The reasoning of defendant, as we interpret it, is that this statute is penal in its nature, and should be strictly construed, and that the language should be construed to refer to existing debts, and not to future debts incurred by the corporation. It is undoubtedly the established rule that these statutes are regarded as penal in their nature, and therefore to be strictly construed, although these holdings have not escaped criticism. 3 Thomp. Corp. § 4164. But no such strictness is required as to exclude from the operation of the statute conditions clearly within the evil aimed at by the legislature. The entire statute should be construed together. The language is that the director shall be liable for all debts of the corporation. The provisions relating to the report are such as to indicate a purpose of affording information to those who are expected to enter into contract relations with the corporation, and we agree with the view of the learned counsel for the plaintiff that it is more in accord with good reason to hold the directors liable for debts contracted after the default than for those contracted before the default occurs, for, as to prior contracted debts, the injury to the creditor is not as apparent. A case in its reasoning quite analogous to the present is Felker v. Standard Yarn Co., 148 Mass. 226, where the converse of the proposition contended for by the defendant was urged. The court say:

“The ground of defense principally relied on is that the statute does not make the officers liable for debts incurred before the filing of the false certificate. And no doubt one important reason—perhaps the principal reason—for the statutory provision is to enable persons who may have occasion to deal with corporations to ascertain their condition, and their title to credit; so that a person whose debt already exists at the time of the filing of the certificate certainly has not, by any false statement contained therein, been misled into giving credit to the corporation, and may not in any way be injured thereby.”

The statute in that State provided that the officers who knowingly make the false certificate “shall be jointly and severally liable for its debts and contracts.” It will be seen that, if the reasoning of the court be adopted, it rules this case; and we think that reasoning entirely sound.

2. The statute of 1895 (Act No. 164, Pub. Acts 1895) amended section 12 of the law of 1885 by providing that the corporation should make duplicate reports, to the secretary of state, and omitting the requirement of a report to the county clerk. The secretary of state was required, however, to forward one of these duplicates, to the county clerk. These duplicate reports were required to be deposited in the month of January or in the month of February each year, instead of being required to be filed during the month of January, as under the former law. The language, as it relates to the liability of the directors for neglect to make and deposit the report required, is unchanged. The, amount of penalty remains the same, except that the public penalty is for the use and benefit of the general fund of the State, instead of the county, as under the former law. We do not think these provisions amount to a repeal of the former law, so as to cut off the right of action. The case of Breitung v. Lindauer, 37 Mich. 217, cited in support of defendant’s contention, is one where the amendment consisted in striking out the personal liability clause, and changing the fine and imprisonment, and adding the per diem penalty during the period of neglect. The court held that, as the statute was essentially penal, the amendment, which, in terms, repealed the clause creating a personal liability, abrogated such liability. Such is not the case here. The rule is stated in Suth. Stat. Const. § 133:

“The amendment operates to repeal all of the section amended not embraced in the amended form. The portions of the amended sections which are merely copied without change are not to be considered as repealed and again enacted, but to have been the law all along; and the new parts, or the changed portions, are not to be taken to have been the law at any time prior to the passage of the amended act. The change takes effect prospectively, according to the general rule.” .

See, also, Moore v. Mausert, 49 N. Y. 332; End. Interp. Stat. §§ 195, 240, and at section 483, where it is said: “Even in the case of statutes falling, strictly or in a general sense, under the head of penal laws, the intention of the legislature has been permitted to prevail over the rigid application of the rule.” It is beyond belief that the legislature intended, by simply changing the period within which the reports were to be made, to repeal the provision imposing the liability upon the directors for failure to comply with the prior law. The provision creating the liability was not repealed, and we think that no repeal by implication arises. See, also, Knoup v. Piqua Bank, 1 Ohio St. 603; Nash v. Bank of Buffalo, 37 Hun, 57.

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

The other Justices concurred.


author: Hooker, J.

text:
    SWAN v. THURMAN.
    1. Chattel Mortgages —Accounts—Right oe Mortgagor to Sue.
    A chattel mortgagor may maintain an action on an account covered by the mortgage if he is not in default, where the mortgage provides that until default he may keep and use the mortgaged property in the regular course of his business.

    2. Evidence—Books oe Account—When Admissible.
    A merchant’s books of account are inadmissible in an action for goods sold and delivered, where the only testimony to support them is that of the bookkeeper, who merely transcribed the entries from slips handed him by salesmen, and who had no personal knowledge of the sale and delivery of the articles charged.
    Error to Wayne; Donovan, J.
    Submitted January 14, 1897.
    Decided April 27, 1897.

      Assumpsit by Thomas Swan against Charles Thurman for goods sold and delivered. From a judgment for plaintiff, defendant brings error.
    Reversed.

      William B. Jackson, for appellant.

      Charles T. Alexander, for appellee.

       The mortgage or assignment of future accounts is considered, with a review of the decisions, in a note to Sandwich Manfg. Co. v. Robinson, (Iowa) 14 L. R. A. 126.

   Hooker, J.

The defendant appeals from a judgment against him in an action of assumpsit, alleging two errors:

1. That plaintiff’s books of account were- improperly admitted in evidence.

2. That the plaintiff had assigned his claim to another as security, and has no authority to sue for and collect it upon his own account and in his own name.

The latter contention is based upon a chattel mortgage which covered the plaintiff’s stock and included his accounts. In addition to the usual provisions of chattel mortgages, this mortgage contained the following, viz.:

“It is agreed that until default be made by the mortgagor in one or more of the conditions above recited, or proceedings are taken to foreclose this mortgage, the mortgagor may possess, sell, and use said mortgaged property in the regular course of retail business, but not for any other purpose.”

We discover no evidence that the conditions of the mortgage have not been complied with, so far as said mortgage fixes the time for such compliance. It would seem, therefore, that the plaintiff has the right to continue his business, and collect his accounts for use in his business. This seems to have been the understanding of the mortgagees, one of whom was a witness. We cannot accede to the argument that this was an absolute assignment. That accounts may be the subject of mortgage is supported by innumerable authorities. Davis v. Pitcher, 97 Iowa, 13; Sykes v. Hannawalt, 5 N. Dak. 335; Sandwich Manfg. Co. v. Robinson, 83 Iowa, 567; Lawrence v. McKenzie, 88 Iowa, 440; Preston Nat. Bank v. George T. Smith Middlings Purifier Co., 84 Mich. 364; Kirkland v. Brune, 31 Grat. 126; Tingle v. Fisher, 20 W. Va. 497; Bacon v. Bonham, 27 N. J. Eq. 209; Williamson v. Railroad Co., 26 N. J. Eq. 398.

The evidence in support of the plaintiff’s account consisted of the testimony of the bookkeeper, who stated that he kept the books of the plaintiff which contained the accounts. It appeared conclusively that the bookkeeper had no personal knowledge of the sale and delivery of any goods; all that he knew about their delivery being obtained from slips handed to him daily by the waiters, who took the orders and delivered the articles. It is sometimes proper to admit books of account as evidence of the acts of those who keep them, where the entries are' contemporane ous with the acts recorded; but where the book is as in this case, the record of the acts of others, not within the personal knowledge of the bookkeeper, but made up from the statements of others, such book is hearsay. From the earliest cases, the admission of entries by third persons has proceeded upon the theory that such persons had personal knowledge of the fact stated in the entry. Such was the case in the leading case of Price v. Earl of Torrington, 1 Salk. 285, where, though the entry was made by one who did not deliver the goods, it was made in the presence of and was signed by the drayman who did, and it was treated as the entry of the drayman, and admitted after his death. In Smith v. Blakey, L. R. 2 Q. B. 326, Blackburn, J., says of the English authorities:

“The rule to be collected from all the cases is that it is an essential fact, to render such an entry admissible, that not only it should be made in the due discharge of the business about which the person is employed, but the duty must be to do the very thing to which the entry relates, and then to make a record of it.”

In Welsh v. Barrett, 15 Mass. 380, Parker, C. J., said:

“ But what a man has actually done, and committed to writing, when under obligation to do the act, it being in the course of the business he has undertaken, and he being dead, there seems to be no danger in submitting to the consideration of the jury.”

See, also, Nicholls v. Webb, 8 Wheat. 326; Livingston v. Tyler, 14 Conn. 493.

The general subject is exhaustively discussed in a note to Price v. Earl of Torrington, 1 Smith, Lead. Cas. 344, but we find nothing consistent with the proposition that entries made by a third person, living or dead, may be introduced to prove facts regarding which it is shown that he had no personal knowledge at the time the entries were made. It was necessary in this case to make further proof, before it could be said that these books made a prima facie case.

In Jackson v. Evans, 8 Mich. 476, the defendant was charged with brick which were delivered by plaintiff’s teamsters. One witness counted the brick when loaded, and kept account of them in a tally book or slate, until evening or the next day, when he reported the number to the plaintiff] but made no entries nor charges in plaintiff’s books. It was held that these were not original entries. But the court held that, before the books could be introduced, it was necessary to call the teamsters, and, while they might not be able to remember how many brick they delivered to the defendant, they might remember that all loaded for him were delivered, which “would be a very important link in the chain of circumstances to prove a sale and delivery of the articles charged.” The court said: “The teamsters can prove the delivery. Evans proves the number loaded and hauled away, and that he reported them to the defendant [in error], who entered them in his books. This makes up the res gestœ.”

We are of the opinion that the books were not admissible without further proof, and that the defendant was entitled to a directed verdict.

The judgment is reversed, and a new trial ordered.

The other Justices concurred.


text:
    PALMER v. SHARP.
    1. Mortgages—Subrogation—Estoppel.
    One H., as agent for B., advanced money to discharge a real-estate mortgage, and took as security a mortgage upon the same property. H. had acted in the same capacity for the mortgagee whose lien was discharged, and had at that time been assured by the assignee of the only mortgage which was then of record that such mortgage was paid, and would be promptly discharged; and he believed that he was acquiring for his principal, B., a first lien upon the land, none having been created since the prior transaction. Held, that B. was entitled to be subrogated to the rights of the mortgagee whose lien he had satisfied, and therefore to take precedence over the assignee of the original mortgage, whose misrepresentation estopped him from claiming priority as to such mortgagee.
    3. Same—Foreclosure.
    The fact that B. had foreclosed his mortgage did not affect his right to subrogation, where such action was taken in the belief that the first mortgage had been paid.
    Cross appeals from Jackson; Peck, J.
    Submitted January 15, 1897.
    Decided April 27, 1897.
    Bill by Don E. Palmer, trustee, against William C. Sharp and John C. Sharp, executor of the estate of John W. Sharp, deceased, to set aside a mortgage as a cloud on complainant’s title. From the decree rendered, all parties appeal.
    Modified.

      A. F. & F. M. Freeman and James A. Parkinson, for complainant.

      Wilson & Cobb, for defendants.
   Montgomery, J.

This is an appeal from the circuit court for the county of Jackson, in chancery. The bill was originally filed against William C. Sharp and John W. Sharp, and, without stating at length the pleadings, it will suffice to say that they appropriately set out all the facts, which appear to be as follows: It appears that in 1871 William C. Sharp was the owner of the 40-acre tract of land involved in this controversy. On the 28th of January of that year he executed to one Louisa A. Crossman a mortgage to secure the payment of $900 in three equal annual payments, beginning two years from the date thereof. The first two payments upon this mortgage were made, and, after the maturity of the third payment, the deceased, John W. Sharp, father of the defendant William C. Sharp, advanced the money to pay the balance remaining unpaid upon the Crossman mortgage, and took an assignment thereof. On the 4th of September, 1884, William C. Sharp secured another loan upon the premises from one Amy F. Howland, and executed to her a mortgage of $1,000, which was duly recorded. At the time that this mortgage was taken, one Timothy B. Halliday acted as agent of Miss Howland in making the loan, and, before making the loan, conferred with John W. Sharp with reference to the Crossman mortgage, and was assured by him that the Crossman mortgage had been paid, and that he “would, on his next visit to Jackson, discharge the same of record- Belying upon this assurance and promise, Halliday made the loan in behalf of Miss Howland. The Howland mortgage matured, and $800 thereof remained unpaid. On the 5th of January, 1889, defendant William C. Sharp sought and obtained a loan from Mary J. Blanchard, deceased, executing as security a mortgage upon the same property: Mrs. Blanchard intrusted the business to the same agent who had represented Miss Howland, and directed that he receive the mortgage, and pay the money, if everything was all right. Halliday caused an examination of the records to be made, sufficient' to assure himself that no conveyance or incumbrance had been placed upon the property subsequent to the time of the execution of the Howland mortgage, and concluded the business, and received the mortgage of $800 in favor of Mrs. Blanchard. Mrs. Blanchard died in April, 1890, and Dnncan Hyndman, as her executor, foreclosed the mortgage executed to her. On the 29th of April, 1891, William C. Sharp deeded the premises to John C. Sharp. Complainant has derived title under the Blanchard foreclosure. Subsequently the Crossman mortgage was also foreclosed by advertisement, and title is claimed by defendants under said foreclosure. The question as to whether the representation claimed to have been made to Halliday at the time he received the Howland mortgage was in fact made was a matter in dispute between the parties. The circuit judge found as a fact that such representation was made, but also found that the mortgage had not in fact at that time been fully paid to John W. Sharp by his son. This finding of fact is challenged. It would not be profitable to go at length into the testimony in this opinion. We have carefully examined the record, and think the conclusion of the circuit judge upon this question of fact fully warranted by the testimony.

The complainant contended below:

First. That John W. Sharp, and those succeeding to his estate, were estopped from asserting the Crossman mortgage as against complainant’s mortgage.

Second. That if the court should not adopt this view, complainant having furnished the money with which to pay off the Howland mortgage, and as there could be no doubt upon this finding that there was an estoppel arising in favor of Miss Howland, complainant should, in equity, be subrogated to her rights.

The learned circuit judge rested his conclusion upon the first contention, and found that there was an estoppel. We find difficulty in accepting this view, as, at the time the representation was made, John W. Sharp could not have known that Halliday would ever be called upon to act upon behalf of this complainant, or any other than Miss Howland. The general rule is that, to constitute an estoppel, the statement which is alleged to work the estoppel must have been made to the party who was expected to act upon it, or to his agent, or other person in privity with him. We prefer, therefore, to rest our conclusions upon the doctrine of subrogation. Clearly, the case falls within this equitable doctrine. Mrs. Blanchard, through her agent, Halliday, advanced money with which to pay off the Howland mortgage, and which was devoted to that purpose, understanding and believing that she was receiving a valid first lien upon the property. Every consideration of equity would preclude the defendants, or either of them, from receiving the benefit of this payment by asserting a lien which was not known by Mrs. Blanchard to exist, particularly as we are unable to say that she was guilty of any negligence in accepting her security in this mistaken belief.

The defendants contend that, before subrogation can take place, by which a party advancing money to discharge a lien can be substituted in place of the lienor, it must appear that the party so advancing the money is under some legal obligation to make the payment; that such substitution does not take place in favor of a mere volunteer. This is undoubtedly the general rule. The case of Desot v. Ross, 95 Mich. 81, to which counsel refer as sustaining their contention, illustrates the rule. In that case this court, having determined that the paper relied on by defendant gave no right to a lien upon the property, had before it the simple question of whether one who, with his eyes open, and in the absence of any fraud or mistake, advances money for the discharge of a lien, is entitled to be substituted in place of the lienor, and held, in accordance with the rule prevalent everywhere, as we think, that no subrogation takes place in such case. But the question of who is or who is not a mere volunteer is not entirely free from difficulty. In numerous cases in this State parties who have accepted security in good faith, upon a loan made for the purpose of discharging existing incumbrances upon the same real estate, have, upon its appearing that the security was ineffectual or invalid, been allowed to be subrogated to the rights of prior lienors, there being no person intervening entitled to superior equities. Such was the holding in Detroit Fire & Marine Ins. Co. v. Aspinall, 48 Mich. 238, and in Lockwood v. Bassett, 49 Mich. 550, and the same doctrine was recognized in Kelly v. Kelly, 54 Mich. 48. In Sheld. Subr. § 8, the rule is stated to be general that, where money has been loaned upon a defective mortgage for the purpose of discharging a prior valid incumbrance, and has actually been so applied, the mortgagee may be subrogated to the rights of the prior incumbrancer whom he has thus satisfied, there being no intervening incumbrances. The principle upon which these holdings rest is clear, and applies with equal force to a case where the security is partly invalid, and does not cover all the property intended, or in the full right intended, as to a case where the security is so imperfect as to cover no part of the- property; and the doctrine has been so applied in Emmert v. Thompson, 49 Minn. 386 (32 Am. St. Rep. 566). There are cases which extend this doctrine still further, but, for the purposes of this case, it is unnecessary to determine their soundness.

It is contended that by the foreclosure of the Blanchard mortgage the mortgage right, as well as the right to subrogation, was merged in the title of complainant, and that he is now without remedy. But it appears that the executor, who was acting for complainant, was assured by William C. Sharp that the Crossman mortgage had been paid, and was acting in this belief. We think, therefore, that the complainant is not precluded from now claiming subrogation.

Decree will be entered in this court subrogating the complainant to the rights which Miss Howland had under her mortgage at the time of its payment, and he will be entitled to foreclose the same to the amount of 1800, with interest at 6 per cent. Complainant will also recover costs of the court below, and no costs will be awarded in this court.

The other Justices concurred.


text:
    TURNER v. FIDELITY & CASUALTY COMPANY OF NEW YORK.
    1. Insurance — Commencement of Suit—Limitations—Waiver.
    A letter from an insurer to a claimant, asking that the matter be allowed to rest until the adjuster of the company can see the claimant or his attorney, constitutes a waiver of a provision in the policy limiting the time for furnishing proofs of loss and beginning an action on the policy.
    3. Same.
    Claimant in such case does not lose his right of action by delaying suit for 19 months after the receipt of the letter, although nearly a year is thus' allowed to elapse after the expiration of the time limited in the policy itself.
    3. Same—Total Disability—What Constitutes.
    The disability of a real-estate broker resulting from the dislocation of his shoulder in an accident is not, as matter of law, partial only, so as to deprive him of the right to recover the indemnity provided by an accident policy insuring against loss resulting from injuries which “immediately and wholly disable and prevent him from prosecuting any and every kind of business pertaining to his occupation,” where, although he goes to his office every day, he is practically unable to do any kind of work.

    Error to Saginaw; Wilber, J.,
    Submitted January 15, 1897.
    Decided April 27, 1897.

      Assumpsit by Henry Turner against the Fidelity & Casualty Company of New York on a policy of accident insurance. From a judgment for plaintiff, defendant brings error.
    Affirmed.

      Hanchett & Hanchett, for appellant.

      Beach & Gavit, for appellee.

       With this case as reported in 38 L. R. A. 529, is an extensive note on the question what constitutes total disability of the insured.

   Long, C. J.

This is an action to recover a weekly indemnity under an accident policy issued by the defendant to the plaintiff on the 8th day of January, 1888, and subsequently renewed from year to year, the last renewal certificate covering a period from January 8, 1894, to January 8, 1895. On February 10, 1894, while the plaintiff was carrying wood on a wheelbarrow, he slipped and fell, dislocating his right shoulder. He claims an indemnity under the policy for a total disability for a period of 10 weeks. At the time the policy was issued, and at the time of the accident, the plaintiff was engaged in the business of loaning money on personal security and real estate. He was insured as a banker and real-estate dealer. He made two claims under this policy, the first one being made on March 12, 1894. Nothing was done in respect to this claim. Afterwards, and on June 21, 1894, the plaintiff made a second statement of claim, which was forwarded to the company by Camp & Brooks, his attorneys. In regard to this letter, the defendant wrote the following letter, dated July 2, 1894:

“Your favor of June 23d, inclosing claim blank regarding the above for an alleged injury stated to have been received February 10th, duly to hand. I beg to say that we have already received a claim blank from Mr. Turner for an alleged injury stated to have been received February 10th. We have already notified you that we fail to recognize any liability in that matter, and return the claim blank herewith. "One of our adjusters will be in Saginaw shortly, and we will have him call upon you, and discuss this matter with you. We think he will be able to show you that there is a breach of warranty in Mr. Turner’s application, and therefore no liability on the part of the company under the policy Mr. Turner holds. Kindly allow the matter to rest until our adjuster can see you, and oblige.”

Nothing more was done by either party until this suit was commenced, February 4, 1896.

The first assignment of error relates to the refusal of the court to direct a verdict for the defendant, on the ground that the suit was not commenced within one year from the date of the injury. The policy provides that “unless affirmative proof of death or duration of disability is so furnished within seven months, and any legal proceedings for recovery hereunder is begun within one year, from the time of such accident, all claims based thereon shall be forfeited to the company.” The claim of plaintiff is that the letter above quoted, written to Camp & Brooks, constitutes a waiver of this clause of the policy. On the other hand, it is contended that inasmuch as, during the time from the receipt of the. letter to the commencement of suit, no adjuster of the company called upon plaintiff or his attorneys, and there was no communication of any kind between them on the subject of the adjustment of the claim, the plaintiff was not justified in waiting a year and a hálf before bringing suit; and, again, that the statement in the letter requesting him to let the matter rest would not warrant or justify the plaintiff in permitting'the year to go by without bringing his suit if he desired to protect his rights; that the plaintiff might have been justified in waiting a reasonable time after receiving the letter before taking action, but not in waiting the time he did, as the letter held out no hope or promise of an adjustment, but merely asked that an opportunity might be given the company to explain why liability was denied. .

This clause in the policy, however, was one which could be waived by the company. It cannot be construed as a limitation fixed by law. While the plaintiff was not bound to wait before bringing suit, yet it is apparent that he did wait at the request of the company. He testified that the reason he did not begin his action within the 12 months was because of the receipt of the letter of July 2d. Such clauses in policies of insurance, while held valid as contracts, may be waived by the company. The law does not favor clauses of limitation in policies of insurance, and they are strictly construed, and it does not require the positive act of the company inducing postponement; but, where the evidence is conflicting, the question of waiver is one for the jury. We think, however, in this case, that there is no conflict in the evidence, and that the letter was positive in its terms, asking that the matter be allowed to rest until the adjuster of the company could see the plaintiff or his attorneys. As was said in Bonenfant v. Insurance Co., 76 Mich. 657: “Forfeiture is not favored either in law or equity, and a provision for it in a contract will be strictly construed; and courts will find a waiver of it upon slight evidence when the equity of the claim is, under the contract, in favor of the assured.” See, also, Lyon v. Insurance Co., 55 Mich. 146 (54 Am. Rep. 354), and cases there cited; Peoria, etc., Ins. Co. v. Hall, 12 Mich. 202; 2 May, Ins. § 488; German Fire Ins. Co. v. Carrow, 21 Ill. App. 631; Thompson v. Insurance Co., 136 U. S. 287.

It is next contended that the plaintiff’s own evidence .and the evidence of his attending physician do not support the finding that he was totally disabled in the sense intended by the policy, and that the court should so have instructed the jury. The policy provides an indemnity of the sum of $50 per week “against loss of time, not exceeding 26 consecutive weeks, resulting from bodily injuries effected during the term of this insurance through external, violent, and accidental means, which shall, independently of all other causes, immediately and wholly disable and prevent him from prosecuting any and every kind of business pertaining to his occupation above stated.” Upon this point the plaintiff testified substantially that the fall entirely disabled his arm to the shoulder, and that it remained in that condition 10 weeks; that his business consisted generally in personal-security loans, and that during that time he did no business at all; that he could not dress himself without help, and that he had help during the whole time; that he did not do any work or business during that time, but had a man to do it for him; that he went to his office every day for a short time, but was unable to do any kind of work. We find nothing in the record which shows, or tends to show, from the testimony of the plaintiff or his attending physician, that the plaintiff was not totally disabled from attending to and prosecuting any and every kind of business pertaining to his occupation. At least, it was a question for the jury to determine, and the court submitted it in these words:

“I think that a fair interpretation of that clause is, not that he must be so disabled as to prevent him from doing anything pertaining to the business, but that he must be wholly disabled, so as to prevent him from doing any and every kind of business pertaining to his occupation; not that he might do some one thing in regard to it, but that he must be wholly disabled, so as to prevent him from doing any and every kind of business pertaining to that occupation. I submit that to you as a question of fact to find whether he was so disabled, and for what length of time, under this policy.”

In the case of Young v. Insurance Co., 80 Me. 244, a policy in the exact language of this policy was considered. The court used this illustration:

“Suppose a barber, who can use his razor and shears in his right hand only, but can use his left to wipe his customer’s face, comb and dress his hair, and receive pay and make change, by an accident is wholly deprived of the use of his right hand, so that he can neither shave his customer nor cut his hair, can it be said that he is not wholly disabled from the prosecution of his business as a barber ?”

It' was held by that court that there is a difference between being able to perform any part of one’s business and any and every kind of business pertaining to one’s occupation.

If this language in the policy is ambiguous and suceptible of two constructions, then the question must be solved in favor of the insured; for it is well settled in this State that where a stipulation or exception to a policy, emanating from the insurer, is capable of two meanings, the one is to be adopted which is the most favorable to the insured; that it ought to be framed with such deliberate care that no form of expression by which, on the one hand, the party insured can be caught, or by which, on the other, the company can be cheated, should be found on the face of it. Utter v. Insurance Co., 65 Mich. 545 (8 Am. St. Rep. 913); Grand Rapids Electric Light & Power Co. v. Fidelity & Casualty Co., 111 Mich. 148.

It is further contended that the attending physician having testified that, in treating, this dislocation, he discovered that the plaintiff had sustained “an injury at some time to that shoulder, which produced, as he called it, “traumatic rheumatism,” and that a part of the pain was due to that, therefore the company should not be called upon to pay for an injury the inconvenience of which resulted partly and indirectly from disease or bodily infirmity previously existing. We think that question was fully and fairly submitted to the jury, and need not be discussed.

The judgment will be affirmed.

The other Justices concurred.


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    HATCH v. REID.

    1. Public Officers—Treasurer—Roan of Private Funds.
    Public policy does not forbid a county treasurer from advancing from his private funds the amount of a liquor dealer’s tax, and from taking the latter’s note for the loan. Doran v. Phillips, 47 Mich. 228, distinguished.
    2. Partnership—Bills and Notes—Evidence.
    H., a partner in the saloon business of R. & H., carried on a separate business in his own name, leaving the sole management of the firm business to his partner, R. The latter gave to H. $300 in money, and a note for $200, with which to pay the tax of §500 upon the business of the firm. H. visited the county treasurer, and borrowed §600 from him upon the firm’s note, thereupon paying the tax on his own private business, as well as that of R. & H. In an action on the note, H. testified that his partner did not know that he was going to give the note, and R. testified that he never authorized it. and first learned of it at maturity. Held, that the evidence did not justify a finding that the note was given by the authority of R.
    3. Appeal—Complete Record—Certificate of Trial Judge.
    The trial court’s certificate that, “forasmuch as the matters set forth do not fully appear of record, [appellant] tenders this, his bill of exceptions, and prays the same may be signed and sealed by the judge of this court, and that said testimony be set forth in full, questions and answers, for a necessary and full understanding of the same, which said bill of exceptions is accordingly signed,” etc., indicates that all of the evidence is set out in the record.
    Error to Kent; Grove, J.
    Submitted February 2, 1897.
    Decided April 27, 1897.

      Assumpsit by Reuben Hatch and another against Peter Reid and John B. Hughes upon a promissory note. From a judgment for plaintiffs, defendant Reid brings error.
    Reversed.

      L. E. Carroll (Kingsley & Kleinhans, of counsel), for appellant.

      A. W. Johnston (John E. More, of counsel), for appellees.

       Rehearing denied June 18, 1897.

   Long, C. J.

This action is brought to recover on a note made by Reid & Hughes and one Henry B. Grady, to Sherman T. Colson. At the time of the execution and delivery of the note, Reid & Hughes were doing business as retail liquor dealers at No. 28 Pearl street, and John B. Hughes, of that firm, was doing a liquor business at No. 31 North Ionia street, both in the city of Grand Rapids. Mr. Reid had sole charge of the business of Reid & Hughes, the latter spending no time nor exercising any control over said business, but devoting his time to his separate business on Ionia street. Sherman T. Colson was treasurer of Kent county at the time. On June 23, 1890, Reid & Hughes were desirous of paying the liquor tax for that year, and obtaining the receipt provided by law; and defendant Reid executed a note for $200, which, with $300 in money, he delivered to John B. Hughes, instructing him to go to the treasurer’s office, and pay the tax and procure the receipt for the firm of Reid & Hughes. Hughes went to the office of the .treasurer, but, instead of delivering the $200 note and paying the $300 in cash, he made the note in suit of'$600, due 60 days after date, payable to Sherman T. Colson, with interest at 7 per cent., signed Reid & Hughes, and delivered that note to Colson, and paid him $400 in cash, thereby paying the tax on his own private business, as well as that of Reid & Hughes, and received the two receipts. Mr. Colson would not accept the note of $600 without an indorser, and Hughes procured the signature of Henry B. Grady to it. This note was dated June 23, 1890. Five years after it was due, it was transferred by Colson to Anna A. Grady, the wife of Henry B. Grady, and afterwards transferred to the plaintiffs.

It is contended by the defendant Reid:

1. That the note was made and delivered without the knowledge or authority of defendant Reid, and was for the benefit of Hughes, which was well known to Col-son; that Hughes was acting outside of his partnership authority, and therefore the note was void as against defendant Reid.

2. That the court erred in finding, under all the testimony, that the note was given by the authority of defendant Reid.

3. That the note is void, for the reason that the whole transaction in giving and receiving it was against public policy, as the county treasurer had no authority to take the note in payment of the tax.

We think the last contention cannot be sustained. The testimony of Mr. Colson shows that Hughes came to his office, bringing $400 with him, and negotiated a loan from him of $600 more, with which to pay the liquor taxes for himself and the firm of Reid & Hughes, each being $500; that, for this loan of $600, Hughes gave the note in question; that the money Colson loaned was his own money, and kept in his private drawer in the office; that, when the note was delivered to him, he took $600 of his own money, and put it with the $400 furnished by Hughes, and paid the whole amount into the county funds; and that it remained there until it was accounted for to the proper authorities. The case is entirely different in principle from the case of Doran v. Phillips, 47 Mich. 228. There the note was given directly in payment of the tax. It is true that all agreements having the violation of public duty as their object, the neglect of official duties, or the seduction of those intrusted with the enforcement of the law from the performance of their duty, are disregarded by the courts; yet we find nothing in the conduct of Mr. Colson which may be characterized as unlawful, or in any sense a violation of public trust. He had a right to make a loan of his private funds, and apply the loan in payment of the taxes.

In reference to the first and second points, the court found in the seventh finding that “said defendant Hughes had authority to give said note of the firm of Reid & Hughes;” but counsel for defendant Reid contend that the evidence in the case does not support this finding. On his cross-examination, Mr. Hughes testified:

Q. Did you talk the matter over with Mr. Reid before you went up to see Mr. Colson about taking the $700 note? [This evidently referred to the $600 note.]
“A. Not of that; I don’t think I did.
Q. He knew you went to get the license ?
“A. Yes.
Q. And he knew that you finally did get the license, did he not ?
"A. Yes, sir.
Q. Did you have authority to sign the name of the firm to that note ?
“A. Yes, sir.
Q. Did Mr. Reid, know how you got the license .that year ?
“A. Yes, sir.”

On redirect examination he was asked:

Q. You say you had authority. Did you tell Mr. Reid that you were going to give the firm note of $700?
“A. No; I don’t believe I did tell him that.
Q. Where did you get the $300 ?
“A. I got $300 of Mr. Reid.”

Defendant Reid testified that he never saw the note until the summer before suit was brought, and that he first knew of its existence when Mr. Colson came to see him, when the note was due; that he supposed it was for $200, and he offered to pay that amount, which was refused. He was asked if he ever authorized the making of this $600 note by Mr. Hughes, and stated that he did not.

We find nothing in this testimony showing any authority on the part of Mr. Hughes to make the note in question. It was not given for the payment of a partnership debt, but to pay the personal tax of Mr. Hughes upon a business in which Reid was not in any manner interested. Mr. Reid had already provided Hughes the means of paying the partnership tax. Mr. Colson must have known at the time of taking the note that it was given in part, at least, in payment of Mr. Hughes’ personal tax, as the tax of Reid & Hughes was only $500, while the note was given for $600.

But counsel for plaintiffs contend that, should it be found that the testimony set forth in this record does not support the finding of the court below above set forth, the finding cannot be disturbed, as the record does not show that the whole testimony taken upon the subject in the court below is returned in this record. We find, however, a certificate added by the trial court, as follows:

“ And, forasmuch as the matters set forth do not fully appear of record, the said Peter Reid tenders this, his bill of exceptions, and prays the same may be signed and sealed by the judge of this court, and that said testimony be set forth in full, questions and answers, for a necessary and full understanding of the same, which said bill of exceptions is accordingly signed, this 25th day of May, A. D. 1896.”

We think the certificate cannot be viewed in any other light than that the testimony is set forth in full, and that, therefore, the finding made by the trial court is not sustained by the evidence.

The judgment must be reversed, and a judgment entered here in favor of defendant, with costs of both courts.

The other Justices concurred.


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    PRESTON NATIONAL BANK OF DETROIT v. PIERSON.
    1. Bills and Notes—Liability of Indorser—Renewal—Fraud.
    The holder of a note does not lose his right to attack as fraudulent a conveyance of land by one of the indorsers by subsequently accepting a renewal of the note with the same indorsement.
    2. Fraudulent Conveyances—Husband and Wife.
    A deed of real property, executed by a husband to Ms wife with a view to protecting himself against the contmgency of failure in his business, and ptu-posely witMield from record until, the risks of such business having increased, his assets, aside from the premises so conveyed, are less than his liabilities, is void as against creditors, even though the grantor was solvent at the time of its execution.
    Appeal from Genesee; Smith (George W.), J., presiding.
    Submitted February 2, 1897.
    Decided April 27, 1897.
    Bill by the Preston National Bank of Detroit against Herman L. Pierson and Mary E. Pierson in aid of execution. From a decree for complainant, defendants appeal.
    Affirmed.

      Newton & Gold (Geer & Williams, of counsel), for complainant.

      D. P. Halsey (Ed. S. Lee and (George H. Durand, of counsel), for defendant Mary E. Pierson.
   Montgomery, J.

This is a bill filed in aid of execution. The defendant Herman L. Pierson was president of the Thread Flouring-Mills Company, and owner of one-fourth of its stock. On the 10th of November, 1892, the milling company made its note for $10,000, due in six months, which note was indorsed by defendant Herman L. Pierson and discounted by complainant. When this note became due it remained unpaid for some 30 days, when $1,000 was paid upon it, and new notes were given for $5,000 and $4,000, respectively. After the maturity of these notes, another $1,000 was paid, and two notes, each in the sum of $4,000, were given. Upon these last-mentioned notes judgment was obtained on the 17th of August, 1895, against the milling company, Herman L. Pierson, Clarence M. Harris, and Ira H. Wilder, who became indorsers upon these later notes. The liability of the milling company and Pierson continued throughout the transactions. After the making of the first note of $10,000, and before its maturity, namely, on the 28th of February, 1893, a disastrous fire occurred, by which the milling company lost its plant and a large quantity of wheat stored in its elevators; the total loss amounting to from $25,000 to $30,000, above insurance. Again, on December 1, 1894, the mill, which had been rebuilt by the company, burned, and a further loss was sustained by the company.

The property sought to be reached by this proceeding is a farm of 280 acres near the city of Flint, worth, substantially, $16,000. This was transferred by the defendant Herman L. Pierson to his wife, Mary E. Pierson, by a deed bearing date June 2, 1891, and recorded on the 29th day,of December, 1892; the consideration expressed being one dollar. The testimony of the parties is that this deed was without consideration other than natural affection, but that the defendant Mary E. Pierson, who was the second wife of defendant Herman L. Pierson, agreed at the time of the conveyance to divide the property at the death of the parties between the two sons of defendant Herman L.,—one by his former wife, and one by the defendant Mary E. Pierson. It further appears by the proofs that at the time of this conveyance, in June, 1891, defendant Herman L. Pierson, besides his interest in the milling company, which was valued at $9,000, owned $3,000 in bank stock, worth par; a mortgage, known as the “Middleton Mortgage,” of $2,000; lands in Dakota worth about $3,000; and a lot adjoining the homestead, of $250; or he owned unincumbered property amounting to $17,250. He also owned his homestead, in the city of Flint, worth $4,000 and upwards, subject to a mortgage to his wife of $2,500. His personal indebtedness at this time was $1,100 to his son, an indebtedness to his wife of $2,800 or thereabouts, $800 to his nephew, and about $500 additional. Shortly after the making of the first $10,000 note, the deed to Mrs. Pierson was placed of record, $2,000 of bank stock was transferred to his son, to whom he owed $1,100, and later, in October, 1894, the Middleton mortgage was transferred to his wife; so that, undeniably, at the time that the judgment was obtained, defendant Herman L. Pierson had no property subject to levy and sale on execution,— his homestead being worth nothing above his exemptions and the mortgage to his wife. The testimony fairly shows that at the time of their marriage, many years before the transactions in question, Mary E. Pierson received from her father’s estate about $3,750, and that defendant Herman L. Pierson had had the benefit of this money. The mortgage of $2,500 was given to secure a portion of it, and the balance, together with accumulations of interest, remained a debt against Herman L. Pierson. The court below entered a decree setting aside the conveyance of the farm, and subjecting it to a sale under the execution of complainant. Defendants appeal.

Two principal questions are presented:

First, whether, in accepting new notes in place of the first, the complainant has lost its right to pursue this remedy.

Second, whether, if it be determined that the complainant has the same right which it would have had if proceeding under the first note, the deeding of this farm was fraudulent as to this creditor.

1. The defendants, to sustain their contention under the first proposition, rely upon the case of Childs v. Pellett, 102 Mich. 567, and contend, on the authority of that case, that this note of $10,000 was paid by the giving of new notes in renewal of the first. That case is not in point. The question there involved was whether one who is liable upon paper as a partner continues liable upon the renewal of such paper by his former partner after the dissolution of the firm, and was well decided upon the principle that after the dissolution of a firm the retiring partner is a mere surety for the performance of the obligations of the firm, and any renewal or extension of time releases him from such obligations. See Smith v. Shelden, 35 Mich. 42 (24 Am. Rep. 529). But in this case the debt continued throughout, and the liability of Herman L. Pierson continued from first to last. We think, under these circumstances, the bank never lost its right to complain of the fraudulent transfer, if it be held fraudulent. See Boxheimer v. Gunn, 24 Mich. 372; Tucker v. Drake, 11 Allen, 145; McLaughlin v. Bank of Potomac, 7 How. 220; Thomson v. Hester, 55 Miss. 656; Moore v. Spence, 6 Ala. 506; Blue v. Penniston, 27 Mo. 272; Bump, Fraud. Conv. (4th Ed.) § 507.

2. At the time this conveyance was made, in June, 1891, the defendant Herman L. Pierson was solvent. If we include his interest in the milling company, he was worth, outside his interest in the farm, over and above his individual indebtedness, upwards of $12,000. He was indorser upon paper of the company to the amount of $5,000 at that date, and it does not appear that he became further obligated until the making of the $10,000 note. If the stock in the milling company be deducted, and the liability on the paper of the company be added to his personal liabilities, it will be seen that Pierson had not enough assets, outside his farm, to meet his total liabilities. If the validity of this transfer be referred to the date of the execution of the deed, June 2, 1891, there would be strong ground for holding that the transaction should be sustained. State Bank of Fenton v. Whittle, 48 Mich. 1. And the fact that the grantee failed to record the deed until some time after would not, of itself, render the transaction void by relation. As was said in Wooden v. Wooden, 72 Mich. 353, “The object of the registry laws is to protect bona fide purchasers, and the fact that it was not recorded would not divest the grantee of her rights, except as to a bona fide purchaser or incumbrancer.” See, also, Michigan Trust Co. v. Adams, 109 Mich. 181; Campbell v. Remaly, ante, 214. But it is contended by complainant that the transaction between the parties indicates that this transfer was made with the purpose of protecting the defendants against the contingencies of the business; that the liabilities of defendant 'Herman L. Pierson, after this deed was made, exceeded the amount of his available assets, and that the purpose was to provide against the contingency of failure in business; and that the transaction indicates that this deed was purposely withheld from record for some 18 months after its execution. The circumstances tend strongly to support this contention. The milling company was filing annual reports falsely representing the amount of its assets. The milling property was depreciating in value, and it was doubtless clear to Mr. Pierson that the business was somewhat hazardous. The defendant Mary E. Pier-son, on cross-examination, was asked:

“You stated in your answer that the making of this deed on the 3d day of June, 1891, had nothing whatever to do about the indebtedness between you and him. Is that so ?
“A. Only in this way,—that I had nothing to secure me for interest, and I felt as though, if I did not get anything in any other way, I would have that farm.
“Q. After you got the farm,- why did he have to turn the other out to you ?
“A. It did not have anything to do towards securing it, only I thought—
“Q. You didn’t talk that?
‘A. Simply thought it. I might have spoken of it to him.
Q. Notwithstanding you had it, you did not consider it given to you to secure you for anything of this kind; therefore had him turn out this other paper. Is that so ?
“A. It might have secured me in one way. If I never did get anything, T would have that much.
“Q. Is that the only way ?
“A. All I think of now.
“Q. Afterwards you did not treat it as yours, so you had him make an assignment of the mortgage ?
“A. I never treated it as any security for my notes or' what he owed me.
“Q. Or anything of that kind?
“A. No, sir.
“Q. There never was any such agreement between you and him ?
“A. We didn’t agree to that, only we supposed it would.”

The defendant Herman L. testified:

“Q. The notes didn’t have anything to do with the deed, did they ? Is it not a fact that those notes did not have anything to do with your making that deed ?
“A. They did have something to do with it.
“Q. What?
“A. Inasmuch, in my mind, as they were not secured; inasmuch as they were not secured—
“Q. There was no security ?
“A. None.
“Q. She got a little afraid of you?
“A. No, sir.
‘ ‘ Q. Why was not her security just as good that day as the day before or the year before ?
“A. She asked me to give her a deed.
‘ ‘ Q. What for ? What did she want you to give her a deed for?
“A. Because she said she wanted the farm.
‘ ‘ Q. Because she asked you for it, you gave it to her, did you ?
“A. Taking all the family relations into consideration, I did.”

This witness also testified in another proceeding that at the time of the execution of this deed a paper was executed by defendant Mary E. Pierson to him, declaring a trust, which he orally states to have been in favor of his two sons. This paper is not produced, and in this proceeding the witness testifies that the understanding or agreement was oral. These conflicting statements go far to discredit the witness, and we think, under all the circumstances of the case, that the inference is fairly deducible that this deed was not intended' to take immediate effect, and was not placed of record until it became apparent that the risk of the business was increasing ; that it was executed with a view to such possible contingency, and that when the contingency arose it was made use of; and that in the absence of such contingency it never would have made its appearance. It remained all the time after its execution, and before its record, in the secretary of the defendant Herman L. Pierson, to which he had at least common access with the defendant Mary. In this respect the case resembles somewhat Fetters v. Duvernois, 73 Mich. 481.

We think that the decree of the court below is right and should be sustained.

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