author: Hooker, J.

text:
    SCHAUB v. COFFIN.
    De Facto Corporation — Stockholders—Unpaid Subscriptions.
    Defendants, professing to act for and on behalf of a corporation, made a contract of employment with complainant, who thereafter recovered a judgment against the corporation for breach of contract. Held, on creditor’s bill filed, that complainant was entitled to relief against defendants, holding themselves out as stockholders, for unpaid subscriptions to stock, although no corporation was actually formed.
    Appeal from Wayne; Hosmer, J.
    Submitted November 6, 1903.
    (Docket No. 107.)
    Decided January 12, 1904.
    Creditor’s bill by Julius W. Schaub against Charles L. ■Coffin and Cyrus E. Lothrop, impleaded with the Welded-Barrel Company. Prom a decree for complainant, defendants appeal.
    Affirmed.

      Angelí, Boynton, McMillan & Bodman, for complainant.

      Orla B. Taylor, for defendants.
   Hooker, J.

In September, 1897, there were two corporations doing business in Detroit, one called “The Arc Welding Company,” the other “ The Welded-Steel Barrel Company.” One Coffin was a member of both companies.. The latter company was engaged in making welded steel barrels under patents obtained by Coffin, and at that time held by the Arc Welding Company, which was a company organized to hold and control similar patents, a large number of which had been issued upon Coffin’s inventions. The Welded-Steel Barrel Company appears to have owned no patent, but was operating under some sort of a license from Coffin, authorizing it to make barrels, given before the Arc Welding Company was organized. On September 7, 1897, Coffin and Lothrop made a contract with the complainant, professing to act for and on behalf of the Arc Welding Company and the Welded-Barrel Company, for the services of complainant for a period of years, each company to pay one-half of his salary. At that time complainant was given to understand that the Welded-Barrel Company was a corporation organized a few day before, to make steel barrels. Articles of association had been signed and filed with the county clerk of Wayne county and sent to the Secretary of State. They were rejected and returned by the latter officer upon the ground of the similarity of names between the Welded-Steel Barrel Company and the Welded-Barrel Company. Coffin and Lothrop signed said articles, the latter as trustee for Mrs. Medbury, who was a large stockholder in the other two companies.

The complainant entered upon the service of these companies, but was subsequently discharged, and has since recovered a judgment against each of the companies which employed him, and these judgments have been affirmed by this court. Schaub v. Arc Welding Co., 123 Mich. 487 (82 N. W. 235); Schaub v. Welded-Barrel Co., 125 Mich. 591 (84 N. W. 1095). No property being found from which the judgment against the Welded-Barrel Company could be collected, a creditor’s bill was filed against the Welded-Barrel Company, and testimony was taken before a commissioner. Defendants Coffin and Lothrop were sworn, and testified that the Welded-Barrel Company was intended to take the business previously carried on by the Welded-Steel Barrel Company; that an arrangement was made with one Beckwith, of Chicago, to promote the new company, the arrangement being that the new company should be capitalized at the sum of $150,000, of which $125,000 was to be paid by the transfer of two licenses to manufacture barrels, then owned by the Welded-Steel Barrel Company, and Beckwith was to sell $25,000 of treasury stock. Beckwith never sold this stock, and the witnesses testified that the scheme was abandoned, and that the licenses were never transferred to the new company.

Thereupon counsel for the complainant amended the bill, making the stockholders parties, and praying relief against them, upon the ground that they had not paid their subscriptions. The testimony was taken in open court, and Coffin and Lothrop again testified. The theory of the defense was changed, and it was claimed that the stock subscribed was paid for by transferring the licenses mentioned to the Welded-Barrel Company. Neither witness professed to know that the assignment was actually made and delivered, and the reason for changing their testimony was the fact that Lothrop had found the copy •of a letter in his copybook written to Beckwith. The following is a copy of it:

“Detroit, Mich., 31 Aug., 1897.
“W. L. Beckwith, Esq.,
“1521 Marquette Bldg., Chicago.
My Dear Sir: I inclose herewith certified copies in triplicate of license from Arc Welding Co. to Welded-Steel Barrel Co., and also of bill of sale from latter company to the Welded-Barrel Co.
“ I am having prepared copies of the minutes of the first stockholders’ meeting, and will send you same in a day or so. Please credit Mr. Coffin with $76.50 paid Sec’y of State,— $75 franchise fee, and $1.50 recording articles of association. Very truly yours,
“C. E. Lothrop.”

Upon the strength of this letter they expressed the belief' that they were mistaken in their testimony before the commissioner, and that the licenses were actually assigned.

We think this but slight evidence that the Welded-Steel Barrel Company transferred its licenses to the new company, and no evidence whatever that Coffin released it from the payment of royalties, which we infer from the testimony to have been a condition of such licenses. It is admitted that the value fixed, i. e., $125,000, was upon the basis pf an exclusive right to manufacture without payment of royalty.

The former testimony that the project was abandoned is corroborated by the fact that the stock was never issued. The franchise fee of $76.50 was returned by the Secretary of State and accepted by Mr. Lothrop. Coffin is still the creditor of the concern for $4,000 advanced in connection with the project, and apparently never attempted collection. The Welded-Steel Barrel Company continued in existence and business for a year or. two, and finally was succeeded by the Welded-Steel Barrel Corporation, to which Coffin says the Welded-Steel Barrel Company transferred its licenses, which were the same or similar to those previously referred to.

It is manifest that, whatever may have been contemplated or done, the Welded-Steel Barrel Company, and not the Welded-Barrel Company, has had the benefit of the licenses, and the stockholders who now ask to be relieved upon the ground that .they paid their stock with $125,000 worth of alleged property, i. e., licenses to manufacture, have had full benefit of said property, which. they applied to another project and another concern. We are convinced that the proj'ect was never carried out. The Welded-Barrel Company never obtained the property which was to be valued at $125,000 for stock-jobbing purposes, or, if a formal writing was made, it was never delivered, but was held until Beckwith should perform his undertaking; or, as Coffin testified, they were made, but kept in his possession, “ what you might call in escrow, pending the performance by Mr. Beckwith of his part of the agreement.” This project failed, and the stockholders-of the Welded-Steel Barrel Company made other disposition of the property, as heretofore stated. Having reached this conclusion, it is only necessary to add that the complainant had a right to recover against the Welded-Barrel Company as a de facto corporation, and his judgment should be paid by the persons who held themselves out to him as stockholders.

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

The other Justices concurred.


source: Caselaw Access Project

license: Public Domain

text:
    SHIRTS v. PHŒNIX ACCIDENT & SICK BENEFIT ASS’N.
    Insurance — Sick Benefits — Incapacity.
    Under a policy giving insured sick benefits if “ wholly incapacitated from transacting any and every kind of work or business pertaining to his occupation, and as a result thereof entirely confined to the house or bed,” he is not entitled to the benefits after he is out of the house and at his store, sitting around a couple of hours a day superintending his business.
    Error to Oceana; Russell, J.
    Submitted November 17, 1903.
    (Docket No. 120.)
    Decided January 12, 1904.

      Assumpsit by Loren A. Shirts against the Phoenix Accident & Sick Benefit Association of Benton Harbor on a certificate of insurance. From a judgment for plaintiff, defendant brings error.
    Reversed.

      E. J. Adams, for appellant.

      Hartwick & Sheets and A. E. Souter, for appellee.
   Hooker, J.

The plaintiff was a member of the defendant, a co-operative mutual benefit association; having made application for membership in February, 1898. On February 12, 1898, a certificate was issued to him. Soon after he became a member, he was attacked by the grippe, and received indemnity under the contract of membership, which included sick and accident benefits. On the 27th of November, 1901, he filed written proofs of loss arising from an injury to his eye. They show that he was taken sick October 8, 1901, and that it was “caused by a piece of steel, four weeks before, and that the doctor called it ‘iritis,’ ” and that the “external visible marks were eyes swollen and bloodshot;” that he had “done no work nor chores since;” that he “quit work on account of his disability October 8th;” and that he was “wholly disabled from any work from October 8 to November 25, 1901.” This was subscribed and sworn to on November 26, 1901. Some correspondence followed with regard to the time the plaintiff was actually confined to the house; defendant being apparently desirous of ascertaining when he first went out of the house after October 8 th, and informing him that he was not entitled to benefits for any time when he was not so confined. The plaintiff was a little slow about giving this information, but finally, on December 11th, wrote:-

‘ ‘ In regard to my claim for sickness under my policy, will say, in reply to yours of December 10th, that I was confined to the house from October 8th to November 26th, inclusive. ”

On receipt of this letter the defendant forwarded a check for $25.33, indemnity for 19 days, and plaintiff accepted the check, indorsing it as follows:

“Policy No. 3,752. Received December 13th, 1901, of the Phoenix Accident & Sick Benefit Association, twenty-five and 33/100 dollars, same being settlement in full for all claims against said association for indemnity as stated within.
“L. A. Shirts.”

It seems to be conceded that this check paid to November 10th; five days being deducted from the total, according to the terms of the policy.

On December 20, 1901, one A. E. Souter, an attorney, wrote defendant, on behalf of the plaintiff, that he would not accept pay for 19 days as final settlement of his claim, and that he would not wait very long before beginning suit to recover the balance. On December 23d defendant’s cashier replied that its auditor was out of the office for a • week, so that the writer could not answer him definitely, and added: “ However, would call your attention to the conditions of Mr. Shirts’ policy before you bring suit.” Soon after, the plaintiff’s claim was placed in the hands of Mr. Cady, a lawyer of Benton Harbor, who had several conferences with defendant’s auditor, at one of which he handed him Exhibits I and J. These were affidavits of the plaintiff and his physician. They were executed January 25th and 27th, respectively; and they state, in substance, that on October 13, 1901, the plaintiff called Dr. Wilson, goingtohisofficetosave expense, and that after that he was confined to the house until November 26th, when he went to the doctor’s office for medicine, and also to his shop, but did no work of any kind, and was not able to work, until during the first week in December. The uncontradicted testimony shows that defendant’s auditor folded these papers, and was about to file them, when Oady demanded and received them on the promise that he would send copies, and the auditor did not read them. The copies were not received.

In April, Hartwick & Skeels, representing plaintiff, had some correspondence with the defendant, which ended with the following letter from the defendant’s auditor:

“April 19, 1902.
“Hartwicic & Skeels,
“Hart, Mich.
“Dear Sirs: I am in receipt of yours of the 16th inst. in re L. A. Shirts, of Shelby, Mich., policy No. 3,752. In reply to the same will say that it would be almost impossible to furnish a copy of everything pertaining to this claim. We inclose herewith copy of the check sent Mr. Shirts on December 12th, 1901, and which you will note he cashed on December 13th. You will also note that it is receipted as settlement in full for his claim. You will also note that it was indorsed by a Mr. A. E. Souter. I am not acquainted with the latter gentleman, but I am of the opinion that he is a local attorney or justice of the peace in Shelby. This case was placed in the hands of attorney A. P. Cady, of Benton Harbor, who had several interviews with me. The last conversation we had was over the telephone, and at that time I informed him that we positively would not pay anything more on the claim, as it had been settled in full. There are some of the papers pertaining to this claim which Mr. Cady had in his possession and refused to return them over to us, although they were affidavits pertaining to the claim. I believe, after you have gone over this matter, you will decide that Mr. Shirts’ claim has been fully settled.
“ Thanking you for your consideration, I am,
“Yours truly,
“W. H. Chateield, Auditor.”

This action followed, resulting in a judgment for plaintiff for $61 and costs.

Counsel for defendant alleges the following errors:

1. In admitting testimony tending to show disability after November 26th.
2. Refusal to direct a verdict for the defendant upon the ground that plaintiff’s application contained a false statement as to prior illness.
3. Refusal to direct a verdict for the defendant upon the ground that the question of the validity of the plaintiff’s claim was not submitted to arbitration.
4. In permitting plaintiff to recover for time when he ■jvas not confined to his house.
5. Refusal to direct a verdict upon the ground that the action was not seasonably begun.
6. Admitting hearsay testimony that the company refused to arbitrate the case.
7. In refusing to award costs to the defendant instead of the plaintiff.
8. In denying a motion for new trial.

From the size of the verdict, it is apparent that the jury gave plaintiff sick benefits to December 27th, although the plaintiff’s own testimony shows that he was out of his house on the 11th and 12th of November, at the store on the 13th, and that he sat around a couple of hours a .day superintending his business until the 25th of November (i. e., directing his wife what she should do and how she should do it), and from November 26th he went to the store every day and did some work.

It evident from the history of this case, as shown by the testimony, that, when the plaintiff received the check for 19 days’ disability, he understood that he was not entitled to benefits after he left the house on November 11th, and that he subsequently learned of the holding of this court in the case of Hoffman v. Home & Hospital Ass’n, 128 Mich. 323 (27 N. W. 265, 54 L. R. A. 746), and that his subsequent action was inspired thereby. In that case it was held that one suffering from hemorrhage from the lungs, who was necessarily confined to his house the most of the time, but who went out in good faith, under the advice of his physician, for exercise, or to consult him, and who, under such advice, went to Chicago for medical treatment, and was clearly shown to be totally and continuously disabled from doing any work or business, was entitled to recover sick benefits, notwithstanding the fact that he left the house under the circumstances stated. There are some differences in the language of the policies, and, while we do not attempt to distinguish them here, this fact might justify a refusal to apply the doctrine of that case in the present instance; but, whether we should or not, the circumstances of this case are so different that it does not fall within the rulé there stated. The policy in this case provides:

“Forty dollars per month, or at that rate for any part of a month, after membership of sixty days, without delinquency, prior to the beginning of sickness, should the member become sick from any disease not caused by narcotics, intoxicants, excesses, or immoral actions on his part, and be wholly incapacitated from transacting any and every kind of work or business pertaining to his occu-' pation, and as a result thereof be entirely confined to the house or bed, and under the charge of some regularly qualified and registered physician, after the first five days, for the time he is so confined to the house: Provided, the total length of time to be paid for during any one illness shall not exceed one year. But if the member is sick for thirty-five continuous days, he shall receive payment from date of sickness, without deduction for the first five days.”

By the 12th or 13th of November, and continuously thereafter, this plaintiff was not “wholly incapacitated from transacting every kind of work or business pertaining to his occupation, and as a result thereof [i. e., such sickness] entirely confined to the house or bed,” etc. In the light of his own admissions, a verdict might properly have been directed for the defendant. It is unnecessary to discuss other questions.

The judgment is reversed, and no new trial ordered.

The other Justices concurred.


text:
    WILLIAMS v. WEIDMAN.
    Negligence — Proximate Cause — Infected Meat.
    Where defendant, a butcher, sold to a retailer a beef carcass without notice that it was infected, the negligence of defendant was not the proximate cause of an injury to an experienced clerk, who, in cutting it up with knowledge of its putrid condition, contracted blood poisoning through a cut upon his hand made shortly before.

      Error to Shiawassee; Smith, J.
    Submitted November 17, 1903.
    (Docket No. 125.)
    Decided January 12, 1904.
    Case by Fred H. Williams against Frank Weidman fqr damages sustained through a sale of infected meat. From a judgment for plaintiff, defendant brings error.
    Reversed.

      Selden S. Miner (Watson & Chapman, of counsel),' for appellant.

      Walsh & Pardee for appellee.
   Hooker, J.

Weidman, the defendant, was a butcher, and was in the habit of furnishing meat to Barnes, a retailer. The plaintiff was in Barnes’ employ, as clerk, his duty being to cut and sell meat. Weidman sold to Barnes a beef carcass, and it was put in Barnes’ refrigerator on Saturday. Plaintiff saw it, and helped put it in the refrigerator. The animal had been injured by á tree falling on it, and subsequently killed. It is claimed that this fact was unknown to Barnes and to the plaintiff, though there is a conflict in the testimony as. to Barnes’ knowledge. On Wednesday plaintiff found that the meat was putrid, and removed it from the refrigerator to the back room, and an hour or two later proceeded to cut it up and dispose of it. Soon after, he was taken ill, and after his recovery he brought this action against Weidman, claiming that in cutting up the meat he contracted blood poison through a cut, upon his hand made shortly before. He recovered a verdict and judgment, and defendant has brought error.

Had the defendant made known the fact that this meat was putrid, there would have been no liability, either civil or criminal, whether Barnes, the purchaser, informed the plaintiff of the fact or not. The only ground upon which the plaintiff can claim to recover is that this knowledge was concealed from him, and it is fully met by his own testimony that he was in possession of such knowledge before attempting a disposition of the meat which led to his injury. If there is any evidence that' the meat was infected when sold, it is conclusively shown that the plaintiff discovered its condition to be so bad as to demand removal. He was a butcher of a year or more of experience; he,had cut his finger the day before, and had the unhealed wound' upon his hand. Without taking any care to protect himself, he proceeded to handle and cut up meat that he knew to be in an advanced stage of putridity, and afterwards took no precautions against the consequences, and, without even washing his contaminated hands, proceeded to serve customers in the shop, which common decency and common prudence forbade. Without saying that this was contributory negligence, it is clear that defendant’s negligence, deceit, concealment, or even criminality, was not the cause of this injury. Instead of being induced to cut up this meat because he had been told that it was not putrid, the plaintiff did it because he knew that it was so.

The judgment is reversed, and, as these facts are fully admitted, there is no occasion to order a new trial.

The other Justices concurred.


author: Hooker, J. Hooker, J. Carpenter, J.

text:
    PHILIP v. HERATY.
    1. Street Railways — Steam Railroad Crossing — Negligence— • Question for Jury.
    Under 2 Comp. Laws, § 6464, providing that street-railway-companies shall require their drivers, before going upon a crossing of a steam railroad, to bring their cars to a full stop, and make sure that no engine or cars are approaching, the failure of the motorman of a street car to make sure that no engine or car is approaching before attempting to cross is not always negligence; and, having regard to the circumstances attending such failure in the case at bar, the question was properly left to the jury.

      3. Same — Death of Yardmaster — Evidence — Contributory Negligence.
    Where a rajlroad yardmaster in charge of a freight train, and riding thereon, was killed in a collision with a street car at a crossing, 'opinion evidence that it was negligent and unsafe, in the absence of a watchman, to back the train across the street without flagging, is not conclusive that decedent was guilty of contributory negligence, and was properly left to the jury, with the testimony tending to show an exceptionally dangerous crossing.
    3. Same — Failure to Employ Watchman.
    Negligence of the railroad company, if any, in failing to keep a watchman at the crossing, was not imputable to deceased.
    4. Same — Instruotions.
    An instruction that if it was negligence on the part of the railroad company to back the train across the track without flagging, and the deceased was in control of the train, no recovery could be had for his death, was proper.
    5. Action for Death — Damages—Evidence—Wife—Children.
    Under 3 Comp. Laws, § 10438, limiting the recovery in actions for death to pecuniary injuries to the persons entitled to distributive portions of decedent’s estate, evidence that plaintiff was not decedent’s lawful wife, but that he had a lawful wife then living other than plaintiff, and that he had children then living by such wife, was admissible.
    6. Same — Agreement for Adoption.
    Evidence that deceased had agreed with plaintiff to adopt her two children by a former husband was inadmissible.
    7. Same — Mortality Tables.
    In an action for death, the mortality tables are ordinarily admissible on the question of decedent’s life expectancy.'
    8. Trial — Argument of Counsel.
    The argument of counsel for plaintiff held subject to the criticism of being intemperate and unfair. A defendant is entitled to a dispassionate consideration of the questions at issue.
    on motion for rehearing.
    1. Judgments — Appointment of Administratrix — Widowhood— Con olusiveness.
    The adjudication that plaintiff was the widow of deceased, necessarily determined in the proceedings whereby she was appointed administratrix, is not conclusive as to the fact of widowhood, but may be attacked by defendant, not having appeared or taken part in the proceedings for letters of administration. James v. Mining Co., 55 Mich. 347, distinguished. Carpenter, J., and Moore, C. J., dissenting.
    2. Appeal — Evidence—Questions not Raised Below.
    Reasons for the admission of testimony whicK were not brought to the attention of the trial judge at the time of its exclusion cannot be urged on appeal.
    Error to Bay; Shepard, J.
    Submitted November 20, 1903.
    (Docket No. 148.)
    Decided January 12, 1904.
    Rehearing denied June 27, 1904.
    Case by Nellie M. Philip, administratrix of the estate of George Philip, deceased, against Michael P. Heraty and John C. Weadock, receivers of the Bay Cities Consolidated Railway Company, for the alleged negligent killing of plaintiff’s intestate. From a judgment for plaintiff, defendants bring error.
    Reversed.

      T. A. E. & J. G. Weadock, for appellants.

      Frank L. Edinborough {De Vere Hall, of counsel), for appellee.
   Hooker, J.

The defendants were receivers of a street railway in Bay City, and were conducting its business at the time of the occurrence of the accident which is the subject of this action. The plaintiff is the administratrix of one George Philip, deceased, and is alleged to be his widow. At the time of the accident, George Philip was yardmaster for the Grand Trunk Railway, and was in charge of a train of 13 freight cars, which was being backed across the street-railway tracks, which were laid along Midland street. The deceased was upon the first car, with his lantern in hand, as the train was backed southward towards Midland street, which car came into collision with a street car upon defendants’ road, whereby he was thrown from the car, and run over and. killed by his own train. At this point the street railway was crossed by two tracks belonging to the Grand Trunk Railway Company and one owned by tbe Michigan Central Railroad Company, and there is testimony in the record tending to show that the middle track, upon which deceased’s ^ train approached the crossing, was slightly lower than the others, — perhaps two inches or thereabouts. The train was moving at the rate of four or five miles an hour, and the deceased was acting as lookout upon the end of the train.

The street car was in charge of a conductor, and there was some testimony to the effect that he was upon the front platform of the car, with the motorman, when the collision occurred. Other testimony indicated that he was in the car, going to the rear platform, at that time. There is testimony that the street car did not come to a full stop before an attempt was made to cross the track. There is a dispute about this, however, and there is little doubt that its speed was checked. There is no claim that either the conductor or the motorm&n left the car and went to the track to see if it would be safe to attempt to cross; and it is claimed by the defense that the testimony shows that it would have been unsafe for the motorman to attempt to cross while the conductor was absent, for the reason that, owing to the nature of that particular crossing, the trolley was liable to slip off from the wire, and in such case the car would have been unable to proceed until the conductor should have returned and replaced it. It was also claimed that it would have been useless for the motorman to leave his car to see if the track was clear, for, had he done so, and found the track apparently clear, by the time he could have returned to the car it would have been as dangerous to cross as in the first instance.

The evidence showed that a flagman was kept at this crossing during the daytime by the Grand Trunk Company, but it was after his hours, and he was absent. It was also shown that the Michigan Central Company was in the habit of flagging its trains across this crossing, but that the Grand Trunk Company did not do so. The steam railroads were laid along Williams street, and at the corner of Williams and Midland there was a building that obstructed the view of the railroads to the north, and sometimes a car was left on the siding, — i. e., the first track, — still further obstructing the view. . There was a dispute as to whether such a car was there on this occasion. There was some dispute as to how far the motorman could see up the track, which depended somewhat on how near the track he ran his car before putting on the current to cross. After getting upon the track the motorman discovered the train, and reversed his motor, but did not succeed in quite clearing the car.

Counsel for defendants’ most comprehensive point is that the'court should have directed a verdict for the defendants, for the reasons, first, that there was no testimony /that there was any negligence in the management of the street car; second, that the undisputed testimony shows that the Grand Trunk Railway Company was negligent in not flagging its train across the street, by stopping it, and sending a man ahead of it, to see that the crossing was safe.

We cannot say that there was no negligence on the part of the street-car men. Aside from the statute (2 Comp. Laws, § 6464) which requires street-railway companies “to require their drivers to bring their cars to a full stop, before going upon a crossing of the tracks of a steam railroad, and make sure that no engine or cars are approaching, before they proceed to go upon the same,” it was necessary for the crew of the street car, in this instance, to use reasonable care in approaching and crossing this track. We do not agree with the argument of the plaintiff that, under this statute, the failure of the motorman to make sure that no engine or car was approaching was negligence, whatever the circumstances attending his failure, and the court could not say that negligence was conclusively shown for the reason that the fact of the collision shows that he could not have been sure that the crossing was safe. What the judge did was to leave it to the jury to determine whether the motorman took such measures as the circumstances required to ascertain whether a train was approaching, leaving to them the determination of what was done, as well as what was reasonably necessary to make sure, as required by law. There was no error in this, and defendants’ point that a verdict should have been directed upon that ground was not well taken.

Upon the other ground, the court instructed the jury:

“But, even though the employé of the defendant be negligent, in order for the administratrix to recover, the deceased himself, who was injured by the neglect, if there was neglect, on the part of the defendant, must also have been free from negligence; in other words, in the operation of his train, of which he had charge, it was his duty to comply with the rules and regulations under which he was acting, and to act with such care and caution as a prudent man would under like circumstances. In running his train down to cross the tracks, he should run it with care, and with such method and system as would be best calculated to avoid accident. He must comply with the rules and regulations of his road, and the man must not be negligent and careless, and thereby contribute towards the accident and injury which followed. If he himself, as the law says, contributed to the injury or accident by fault or carelessness on his own part, that would prohibit his administratrix from recovering, because, where both ■parties contribute to an injury, the law leaves them both to suffer the consequences, whatever they may be, and neither one has a remedy against the other. But if he was handling his train in a cautious, careful, and approved manner, and with no violation of the rules of good judgment and care, such as should be exercised by him under the circumstances, then he would be free from negligence himself, and, if the defendant’s agent’s negligence brought .about the hccident, the defendant is liable.”

Counsel offered the following request:

‘ ‘ If the Grand Trunk Railway Company was negligent in backing or pushing its cars across the track, at the time in question, without either stationing a flagman there, or leaving a man to flag the crossing for the cars in question, then the plaintiff cannot recover.”

The court gave this, but added to it the following quali.fication, viz.:

“ If he had anything to do with .or control over the matter, and he was. negligent in the matter, there could be no recovery in this.case.”

Counsel claim that it was shown, and not contradicted, that the only safe way to operate a train across that street would be to bring it to a full stop and flag the crossing. If this were so, and it conclusively appeared that deceased had full control of and responsibility for the management of the train, as is stated in defendants’ brief and the charge of the court, and not denied in plaintiff’s brief, so far as we can discover, such negligence would be his, and it is. possible that a verdict should in such case have been directed. There was opinion evidence from several witnesses, not objected to, that it was negligent and unsafe to. back the train across the street without flagging, in the absence of a watchman; but we think these opinions were not conclusive of the question, and were properly left to the jury, with the testimony tending to show an exceptionally dangerous crossing. Freeman v. Railway Co., 74 Mich. 86 (41 N. W. 872, 3 L. R. A. 594).

The appellants’ tenth request — i. e.: “ If you find that, the accident was the result of concurring negligence upon the part of the defendants and their employes, or either of' them, upon one side, and upon the part of the Grand Trunk Railway Company upon the other, then the plaintiff cannot recover in the action ” — was properly refused.. If the Grand Trunk Railway was negligent in not keeping a watchman, such negligence is not imputable to the intestate. The only theory upon which it can be so contended is that, by engaging in the operation of backing the train in the known absence of a watchman, he assumed the risk. As between himself and his employer this may be true, but these defendants have no rights, growing out of such assumption of risk. If, however, it was negligent to omit the precaution of keeping a watchman, it was negligent to back the train across the street without flagging, and, under the undisputed facts, the deceased was in charge and control of the train, and such. negligence (if it was negligence) was his, and, as the judge stated, would preclude a verdict for plaintiff.

The defendants’ counsel claim that the plaintiff was not the lawful wife of the deceased, and offered to prove it by showing that he had a lawful wife living other than the plaintiff. This evidence was excluded. They also offered, but were not permitted, to show that he had children by such wife living. On the other hand, the plaintiff was allowed to testify that the intestate had made an arrangement with her whereby he had agreed to adopt two children of hers by her first husband. • 3 Comp. Laws, § 10428, limits the recovery of damages to pecuniary injury to the persons entitled to distributive portions of the deceased’s estate. To arrive at the amount of these, it is necessary to know who such persons are, and how they have suffered. If the administratrix was not his widow, she was not entitled to a share of his estate; and the same is true of her children by her former husband, so far as appears by this record. It was therefore error to exclude the offered proof, and to admit the testimony about the alleged agreement to adopt her children.

The mortality tables are ordinarily admissible in such cases, as we have frequently held, and were in this case, if there was any foundation for their admission.

Error is assigned upon the argument of counsel, which is alleged to have been intemperate and unfair. We think it open to such criticism. A defendant has a right to have a dispassionate consideration of the questions in his case.

The judgment is reversed, and a new trial ordered.

The other Justices concurred.

ON MOTION FOR REHEARING.

Hooker, J.

Counsel for plaintiff having moved for a rehearing, we have examined the cause again. The claim that the adjudication that the plaintiff is the widow of the •deceased, necessarily determined in the proceedings whereby she was appointed administratrix, is conclusive upon the world, and therefore precludes the denial of her widowhood by these defendants, rests upon a failure to discriminate between the right to administratorship, which defendants cannot attack, and the fact of widowhood, which they may question in a different subject-matter; not having appeared or taken part in the proceedings for letters of administration. The statement that securing letters of administration upon the uncontested claim of widowhood establishes the latter fact against the world is startling in its possible consequences to heirs and to a true and lawful widow. It would be an easy way to forestall a prosecution for bigamy, if it were the law. But it is not, as the following authorities will show :

In Blackham's Case, 1 Salk. 290, plaintiff in trover proved goods to have been taken from his possession by defendant. Defendant showed that the goods had belonged to Jane Blackham in her lifetime, and that he had taken out letters of administration upon her estate, and so was entitled to the goods. Plaintiff then proved that she was married to him a few days before her death. The defendant answered that the court could not have issued letters of administration to him but upon supposing there-was no such marriage, and that this was conclusive upon, plaintiff. The court held otherwise.

An adjudication of death is a necessary fact to the issue-of letters of administration; yet the supreme court of Iowa held that, while such issue is prima facie evidence of death, the presumption raised thereby is very weak, and may be rebutted by slight evidence, in an action on a policy of insurance. Tisdale v. Connecticut Mut. Life-Ins. Co., 26 Iowa, 170 (96 Am. Dec. 136). See, also, s. c., 28 Iowa, 12. A companion case went to the Supreme Court of the United States, where it was held that:

“In a suit brought by the plaintiff in his individual character, and not as administrator, to recover a debt upon a contract between him and the defendant, where the right of action depends upon the death of a third person, letters of administration upon the estate of such person, granted by the proper probate court in a proceeding to which the defendant was a stranger, afford no legal evidence of such death.” Mutual Ben. Life-Ins. Co. v. Tisdale, 91 U. S. 238.

There is a discussion and review of the authorities in that case. A clear exposition of this distinction will be found in a criticism of this case in 3 Cent. Law J. 169.

The case of James v. Mining Co., 55 Mich. 347 (21 N. W. 361), upon which the plaintiff relies, was not, in our opinion, intended to lay down a different rule. The question put to the administratrix in that case was upon cross-examination, and as follows:

Q. Was not Thomas James married to another woman before he married you, and is not that wife still living, and not divorced ? ”

Plaintiff’s counsel objected to said question as incompetent and immaterial. The court sustained the objection, “and an exception was noted.” This was all there was of the cross-examination, and it followed the admission of her letters of administration against an objection upon the ground that it was not shown that the probate court had obtained jurisdiction to issue them. The appellee’s brief discusses the question of immateriality, insisting that the question of her right to administration was not open, and that she was not the heir, but the representative, of the deceased, by virtue of her appointment as administratrix, and that she could not reasonably have been expected to meet the question of the validity of her husband’s divorce; and the brief states that these were the views of the circuit judge. The opinion of the court indicates that the right to administration, rather than the fact of widowhood as bearing upon the amount of damages, was looked upon as the question, and both appellee’s brief and the opinion are silent upon the point first made in appellant’s brief, viz., that on the fact of widowhood depended, to some extent, the amount of damages.

Again, it is inferable that in that case, as in Waldo v. Waldo, 52 Mich. 94 (17 N. W. 710), which is the only case cited by counsel or court, tne question was whether the validity of a decree of divorce could be attacked collaterally, — a different question from the one before us.

The objection that this question went to the measure of damages was not called to the attention of the trial court specifically. It has often been held that grounds of objection 'must be specifically stated. People v. Foglesong, 116 Mich. 556 (74 N. W. 730); Jourdan v. Patterson, 102 Mich. 602 (61 N. W. 64); Mahiat v. Codde, 106 Mich. 387 (64 N. W. 194); Benedict v. Provision Co., 115 Mich. 527 (73 N. W. 802); Hynes v. Hickey, 109 Mich. 188 (66 N. W. 1090); Isaacs v. McLean, 106 Mich. 79 (64 N. W. 2); Rivard v. Rivard, 109 Mich. 98 (66 N. W. 681, 63 Am. St. Rep. 566); Farrell v. School District, 98 Mich. 43 (56 N. W. 1053); Ranson v. Weston, 110 Mich. 240 (68 N. W. 152); John Hutchison Manfg. Co. v. Pinch, 107 Mich. 12 (64 N. W. 729, 66 N. W. 340); Heddle v. Railway Co., 112 Mich. 547 (70 N. W. 1096); Krolik v. Graham, 64 Mich. 226 (31 N. W. 307); Abbott v. Chaffee, 83 Mich. 256 (47 N. W. 216); Merkle v. Township of Bennington, 68 Mich. 133 (35 N. W. 846); People v. Moore, 86 Mich. 134 (48 N. W. 693); Hutchinson v. Whitmore, 95 Mich. 592 (55 N. W. 438); Seventh-Day Adventist Pub. Ass’n v. Fisher, 95 Mich. 274 (54 N. W. 759); Gilbert v. Kennedy, 22 Mich. 117; Lobdell v. Bank, 33 Mich. 408; Jennison v. Haire, 29 Mich. 207; Rash v. Whitney, 4 Mich. 495; Jochen v. Tibbells, 50 Mich. 33 (14 N. W. 690); Young v. Stephens, 9 Mich. 500; Maxwell v. Kellogg, 55 Mich. 606 (22 N. W. 60); Heymes v. Champlin, 52 Mich. 26 (17 N. W. 226). The objection in James v. Mining Co. was well taken as to the ground stated and discussed in the trial court, and the defendant’s counsel made no claim there of the reason for the admission of the testimony which he afterwards urged in this court. Apparently it did not then occur to him. If it did, his conduct was unfair to the trial court. The province of this court is to pass upon questions raised and passed upon in the court below. Wierengo v. Insurance Co., 98 Mich. 627 (57 N. W. 833); Ross v. Township of Ionia, 104 Mich. 326 (62 N. W. 401). In Rogers v. Ferris, 107 Mich. 129 (64 N. W. 1048), we refused to consider a question that the attention of the trial court had not been called to. See, also, — a similar case,— Wolf v. Holton, 110 Mich. 166 (67 N. W. 1082); Thomas v. Railroad Co., 114 Mich. 59 (72 N. W. 40).

Under the rule of these cases, the court might well have refused to consider the point made for the first time in appellant’s brief; and its silence upon the subject, and the discussion of the other proposition, convince us that it did so. The importance of the question was too obvious to permit the inference that it would have been ignored if considered properly raised. It was an action brought by an administratrix and widow. It appears to have turned upon the question of her right to sue as administratrix, and it was held this could not be questioned. That is so in this case. The plaintiff may sue, but she must prove damages; and if she is not the lawful widow, and her children are illegitimate, or'the children of a former husband, the defendants are not liable for injury to them, and they are not foreclosed on either question by the letters of administration.

The rehearing is denied.

Grant and Montgomery, JJ., concurred with Hooker, J.

Carpenter, J.

(dissenting). I cannot assent to the opinion of my Brother Hooker. I think the precise question discussed in his opinion was decided in James v. Mining Co., 55 Mich. 335 (21 N. W. 361), and I cannot con-' sent to overrule that decision. Defendant’s plea in that case was the general issue, with notice that it would prove that plaintiff was not the administratrix of the estate of the decedent. In this case it was the general issue merely. There was involved in that case, as in this, the right of defendant to show that the plaintiff administratrix, though formally, was not legally, married to decedent; that decedent, at the time of the marriage with plaintiff, had another wife living, from whom he was not divorced. This testimony was objected to by plaintiff on the ground that it was incompetent and immaterial. If, as claimed by my Brother, this testimony had a legitimate bearing upon the-measure of damages, it was neither incompetent nor immaterial. The objection, in other words, was not well taken, under that theory.

When the case was brought to this court for review, if it could have been said that this testimony was offered as. bearing upon the plaintiff’s cause of action, and not as bearing upon the question of her damages, then I agree that this court should have considered it solely from the first point of view; or, if this court could have said that the trial court proceeded upon the theory that its admissibility was to be looked at from the point of view of its. bearing upon the cause of action, solely, and that defendant’s counsel did not suggest another point of view, then in that case the question of its bearing on damages, should not have been considered. But I do not think the recqrd warranted this court in making either of these answers to the claim of defendant that the testimony was admissible as bearing on the question of damages, and I think it clear that it did not attempt to make either of those answers. As I read that case, the court clearly said that the excluded testimony was not admissible as bearing on the cause of action, and I think, too, that it intended to hold that it was not admissble, under the plea of the-general issue, as bearing on the measure of damages.. That is the construction which I give to this language: “It is not competent on this issue to inquire into matters which no one could fairly anticipate, and which would be no bar to the action.” Page 347.

I cannot, therefore, regard the question discussed in this, opinion as unsettled. I think it is authoritatively settled by the decision of James v. Mining Co. I am bound to-add that, in my judgment, no injustice will result from following that decision.

Moore, C. J., concurred with Carpenter, J.


author: Moore, C. J. Carpenter, J.

text:
    GREAT CAMP KNIGHTS OF THE MACCABEES FOR MICHIGAN v. SAVAGE.
    Witnesses — Matters Within Knowledge of Decedent — Life Insurance — Contesting Beneficiaries.
    3 Comp. Laws, § 10313, providing that when a suit is prosecuted or defended by the heirs, assigns, devisees, legatees, or personal representatives of a deceased person, the opposite party, if examined as a witness on his own behalf, shall not be admitted to testify to matters which, if true, must have been equally within the knowledge of the deceased, applies to a contest between two beneficiaries, under separate designations, of a deceased member of a benefit society, each of whom claims to be entitled to the fund. Wallace v. Mystic Circle, 127 Mich. 387, followed. Moore, C. J., and Grant, J., dissenting.
    Appeal from Macomb; Law, J., presiding.
    Submitted June 10, 1903.
    (Docket No. 53.)
    Decided January 26, 1904.
    Bill of interpleader by the Great Camp of the Knights of the Maccabees for Michigan against Nellie O. Savage and Moses Savage to determine the right to the proceeds of a benefit certificate. From a decree for defendant Nellie O. Savage, defendant Moses Savage appeals.
    Reversed.

      Fox & Parker (Seth W. Knight, of counsel), for appellant.

      Robert F. Eldredge (B. R. Erskine, of counsel), for appellee.
   Moore, C. J.

(dissenting). In 1888 James A. Savage took out a certificate of insurance in the order of the complainant in the sum of $2,000. His wife, Nellie O. Savage, was named as beneficiary therein. In December, 1899, without the knowledge or consent of his wife, he surrendered that certificate, and caused a new one to be issued, naming his brother, Moses Savage, as his beneficiary. James A. Savage died in May, 1900. The complainant order paid the $2,000 into court. Each of the defendants claims to be entitled to it. A hearing was had before the circuit judge. He filed a written opinion, in which he stated, among other things:

“ In 1896 said James A. Savage became sick, and, fearing he would not again be able to work, said to his wife, in substance, that he would not be able to keep up the dues and assessments; that he would not borrow the money to do so; and that the same would have to go down and be lost unless she chose to take the responsibility of seeing that said dues and assessments were paid; and assured her that, if she would do so, the insurance should be hers. In accordance with said agreement between Nellie O. Savage and James A. Savage, from that time on until his death Nellie O. Savage has, in reliance upon the promise then and there made to her, through herself, her friends and agents, seen that they were paid in due season to prevent the lapsing of said benefit certificate. A considerable number of said dues and assessments have been paid by Nellie O. Savage out of her own means, obtained from the rent of her'own house, of which she was possessed at the date of her marriage with James A. Savage, and which she built out of means left her by her first husband. These payments of said dues and assessments were made with the knowledge and acquiescence, and undoubtedly at times at the request, of James A. Savage, and in compliance with and in reliance on by Nellie O. Savage of the aforesaid agreement made in 1896.
“ In July, 1899, while the said defendant Nellie O. Savage was living with said James A. Savage in their homestead in the city of Mt. Clemens, the said James A. Savage announced to said Nellie O. Savage that he desired to give a second mortgage upon said homestead, and requested her to sign the same when the papers were brought up that afternoon for execution. In response to her statement that she feared that said second mortgage would mean that they would lose their home, said James A. Savage stated to her that he must have the money, and had no other means of raising the money except by mortgage on said homestead, and, in substance, that she would be provided for, even if he used up all of said homestead, because she would have the benefit of the insurance (thereby meaning said benefit certificate in said complainant order). In reliance upon said assurance so given her by said James A. Savage, the said defendant Nellie O. Savage joined with said James A. Savage in the execution of a mortgage on the 11th day of July, 1899, upon the said homestead of said parties, to secure the payment of $350. The said homestead was already mortgaged in the sum of $425 to secure a portion of the cost of the building of the house thereon. The only evidence tending to prove the conversation above described between Nellie O. Savage and her husband, James A. Savage, is that of Nellie O. Savage herself, and no direct testimony has been offered tending to deny this conversation as related by her.
“On the 23d day of December, 1899, said James A. Savage applied to said complainant order for a change of the beneficiary named in said certificate, and in pursuance of said request a new benefit certificate was issued to James A. Savage, wherein Moses Savage was named as beneficiary. Said change of beneficiary was without the knowledge or consent of Nellie O. Savage, and without the knowledge of the defendant Moses Savage. Said Moses Savage in no way contributed towards the expense of keeping up said benefit certificate, nor of the support of said James A. Savage; and the said James A. Savage was in no wise indebted to or under obligations to said Moses Savage. The said Moses Savage was in no wise dependent'upon the said James'A. Savage, his brother, and in this matter occupies the position of a purely volunteer beneficiary.”

The judge rendered a decree in favor of the wife, from which decree the brother has brought this case here by appeal.

The first question is, Was the wife competent to be a witness ? It will be observed this is not a contest between the beneficiary and the insurance order, but is one between the beneficiaries, each of whom claims the fund. The appellant claims the appellee could not testify in relation to things within the knowledge of her dead husband, because prohibited by section 10212, 3 Comp. Laws, and cites the following cases in support of this contention: Mundy v. Foster, 31 Mich. 313; Downey v. Andrus, 43 Mich. 65 (4 N. W. 628); Wright v. Wilson, 17 Mich. 200; Chambers v. Hill, 34 Mich. 525; Schuffert v. Grote, 88 Mich. 650 (50 N. W. 657, 26 Am. St. Rep. 316); Ripley v. Seligman, 88 Mich. 189 (50 N. W. 143); Metropolitan Life-Ins. Co. v. O’Brien, 92 Mich. 584 (52 N. W. 1012); Wallace v. Mystic Circle, 127 Mich. 387 (86 N. W. 853); Supreme Court, Order of Patricians, v. Davis, 129 Mich. 318 (88 N. W. 874); Gustafson v. Eger, 132 Mich. 387 (93 N. W. 893). Counsel for the appellee insist the above cases do not apply to this case, for the reason that Mrs. Savage is not litigating with a representative of the' estate of her deceased husband, or with his heirs, assigns, devisees, or legatees; that the determination of the litigation will in no way affect the corpus of his estate; and that Mrs. Savage is not brought within either the letter or the spirit of the statute.

In Supreme Court, Order of Patricians, v. Davis, supra, the question of the competency of the witness was not involved. In Gustafson v. Eger, the administrator sued upon a note. The agent of the maker of the note was allowed to testify as to sales of goods made to deceased, which were attempted to be set off against the note. A majority of the judges were of the opinion the agent was within the terms of the statute. Wallace v. Mystic Circle involved the competency of an agent of a corporation to testify. In Metropolitan Life-Ins. Co. v. O’Brien the dispute was between the beneficiary named in the policy and the heirs at law of the insured. In the other cases the same principle was involved. As before stated, this is not a litigation between Mrs. Savage and the insurance company, or between her and an heir at law of the insured, or his grantee, or the administrator or executor of his estate. The estate of James A. Savage will not be diminished or increased in any way by the result of this litigation. We think the judge was justified in ruling the testimony of Mrs. Savage was competent, under the following cases: Brown v. Bell, 58 Mich. 58 (24 N. W. 824); Schofield v. Walker, 58 Mich. 96 (24 N. W. 624); Lautenshlager v. Lautenshlager, 80 Mich. 285 (45 N. W. 147); Lake v. Nolan, 81 Mich. 112 (45 N. W. 376); Jackson v. Cole, 81 Mich. 440 (45 N. W. 826). See Penny v. Croul, 87 Mich. 15 (49 N. W. 311, 13 L. R. A. 83).

It is argued that Mr. Savage had the right to change his beneficiary, and, having done so by naming Moses Savage, he is entitled to the fund. This would undoubtedly be true if other elements did not enter into the case. The trial judge found, and rightly so, if the testimony of Mrs. Savage was competent, that Mr. Savage decided to let this insurance lapse unless his wife would keep up the payments to become due thereon, and said to her if she would do so she should have the insurance. He also found that a mortgage was signed by Mrs. Savage upon the homestead, she relying upon his statement that she would be protected in doing so by the insurance. After-wards, and without consulting her, and without any consideration from Moses Savage to James A. Savage, the change in beneficiaries was made. This does not appeal to our sense of justice, and is not in accordance with the law, as found in the following authorities: In Maynard v. Vanderwerker, 30 Abb. N. C. 134 (24 N. Y. Supp. 932), it is said:

‘ ‘ The plaintiff was not an assignee of the certificate for value. During the lifetime of his wife, ‘ the designation was in the nature of an inchoate or unexecuted gift, revocable at any moment by the donor’ (Smith v. Benefit Society, 123 N. Y. 85 [25 N. E. 197, 9 L. R. A. 616]); that is, assuming that the donor has not previously made a contract by which a vested interest had passed to her aunt. * * * Miss Smalley [the deceased] had told her all these things twice, and always said that the policy was not hers, but her aunt’s. In addition to these admissions and declarations, we have the direct and positive testimony of Mr. Vanderwerker, showing that it was the original intention of the niece to be insured for the benefit of her aunt, who should pay the assessments, and that the money for some of the assessments, at all events, was furnished by the defendant. * * * If this is so, it seems to me clear that Mrs. Vanderwerker, by virtue of the agreement with her niece before any certificate was taken out, and by reason of having furnished the money to pay the assessments thereon, had acquired a vested interest in the certificate, of which her niece was powerless to deprive her by procuring a new certificate to be issued. * * * I think such a vested interest did pass to Mrs. Vanderwerker before the new certificate was obtained, substituting Mr. Maynard’s name for hers, and consequently the attempt on the part of the insured to transfer the right to collect the insurance money by means of such new certificate must be deemed ineffectual in law.”

Smith v. Benefit Society, 123 N. Y. 85 (25 N. E. 197, 9 L. R. A. 616); 2 Joyce, Ins. § 742; Benard v. Grand Lodge A. O. U. W., 13 S. Dak. 132 (82 N. W. 404); Jory v. Supreme Council A. L. H., 105 Cal. 20 (38 Pac. 524, 26 L. R. A. 733, 45 Am. St. Rep. 17); Anderson v. Groesbeck, 26 Colo. 3 (55 Pac. 1086); Supreme Council Royal Arcanum v. Tracy, 169 Ill. 123 (48 N. E. 401); Swift v. Benefit Ass’n, 96 Ill. 309; Supreme Council Catholic Benevolent Legion v. Murphy, 65 N. J. Eq. 60 (55 Atl. 497); Barton v. Relief Ass’n, 63 N. H. 535 (3 Atl. 627); Masonic Mut. Ben. Soc. v. Burkhart, 110 Ind. 189 (10 N. E. 79, 11 N. E. 449); Mulderick v. Grand Lodge A. O. U. W., 155 Pa. St. 505 (26 Atl. 663).

The decree should be affirmed.

Grant, J., concurred with Moore, C. J.

Carpenter, J.

We think the case is within Wallace v. Mystic Circle, 127 Mich. 387 (86 N. W. 853), and that Mrs. Savage was an incompetent witness. With her testimony eliminated, no equities are shown in her favor which should estop the actual beneficiary named in the certificate, which was in existence when Mr. Savage died, from receiving the fund. See Bailey v. Holden, 113 Mich. 402 (71 N. W. 841).

The decree is reversed, and one will be entered here in accordance with this opinion.

Montgomery and Hooker, JJ., concurred with Carpenter, J.


author: Moore, C. J.

text:
    WALKER v. MELLISH.
    Declaration — Action on the Case — Bailments.
    A declaration alleging the letting of a team of horses to defendants, and a promise by defendants to drive the team no greater distance, and to no other place, than that designated, and to use and drive the horses in a moderate and careful manner, and further averring that defendants drove a greater distance and to a different place, and so immoderately, violently, and carelessly used and drove said horses that they were greatly injured, etc., shows a distinct and positive wrong, and^states a cause of action in case.
    Error to Washtenaw; Kinne, J.
    Submitted October 8, 1903.
    (Docket No. 25.)
    Decided January 26, 1904.
    Case by Adelbert B. Walker against Ered Mellish and Adam Eerguson for injuries to a team of horses by over-driving. From a judgment for plaintiff, defendant Mellish brings error.
    Affirmed.

      J. • W. Bennett, for appellant.

      A. J.. Sawyer & Son, for appellee.
   Moore, C. J.

This case was commenced by declaration, the material portion of which, omitting the formal part, is as follows:

“ Adelbert B. Walker, by A. J. Sawyer & Son, his attorneys, comes and complains of Fred Mellish and Adam Ferguson, defendants herein; the said Fred Mellish having been duly summoned to answer the said plaintiff of a plea of trespass on the case.
“For that whereas: That in consideration that the said plaintiff, on June 2, 1901, at said defendants’ request, would let to hire and deliver to them a team of horses of the said plaintiff, for the said defendants to go and perform a certain journey therewith, to wit, from Ann Arbor, in the said county, to Whitmore Lake, in said county, and from thence back again to the said city of Ann Arbor, for a reasonable reward to the said plaintiff, therefore the said defendants promised the said plaintiff that they would drive the said team to no other place and no greater distance, and that they would use and drive the same horses in a moderate, careful, and proper manner for the purposes aforesaid. And the said plaintiff avers that, in confidence of the said promise of the said defendants, he, the said plaintiff, did afterwards, to wit, on the 2d day of June, 1901, let to hire and deliver to them the said horses for the purpose and on the terms aforesaid.
“Yet the said defendants did drive said horses not only to Whitmore Lake aforesaid, but to Ypsilanti and return, and, in driving and using the said horses for the purposes aforesaid, so immoderately, violently, carelessly, and improperly drove and used the said horses that thereby they were greatly hurt and injured, so much so that after-wards, to wit, on the 12th day of June aforesaid, at Ann Arbor aforesaid, one of the said horses died, and the other one became sick, sore, and lame, and utterly useless, and of no value, and so remained, to wit, from thence hitherto, during which the said plaintiff has lost the use of said last-mentioned horse, and was put to great cost and expense-in physician’s services, and in nursing, feeding, and caring for said last-mentioned horse. And the said plaintiff was also put to great cost and expense in the employment of veterinary services, and in and about trying to heal and cure the said horse which afterwards, to wit, on the 12th day of June, 1901, aforesaid, died from the effects of the aforesaid hard and improper driving of the same horse.”

Then followed a second count and the ad damnum clause.

The defendants pleaded the general issue, and gave notice that the contract mentioned in the declaration was made on Sunday, and void.

The facts set out in the statement of facts in the declaration were proven by the plaintiff. The defendants asked the judge to dismiss the case because “this is an action begun against Mellish and Ferguson in assumpsit. The plea in the case is that the contract was one for a pleasure ride on the Sabbath day, and consequently it is void under the statute, and the proof introduced by the ■plaintiff himself is that he let the rig for a pleasure ride on 'Sunday.” The judge declined to do so, and, the jury returned a verdict in favor of the plaintiff.

The sole question is whether the declaration is one in assumpsit or one in trespass on the case. The first part of the declaration states the inducement which led the plaintiff to let the defendants have the property in question. The declaration then sets out a state of facts which amounts to more than a mere breach of the con-bract. It shows a distinct and positive wrong, for which an action in trespass on the case would lie. See Eaton v. Hill, 50 N. H. 235 (9 Am. Rep. 189).

Judgment is affirmed.

The other Justices concurred.


text:
    EXCELSIOR FOUNDRY CO. v. WESTERN ASSURANCE CO.
    Fire Insurance — Conditions—Change oe Interest.
    A fire policy was issued on factory buildings erected on land held by the insured under a part-paid contract from W. Subsequently the insured contracted to sell the plant to W. and reassign the contract. The contract was reassigned, half the consideration paid to the insured, and a bill of sale of the plant delivered to a third person, to be delivered to W. on full payment; it being agreed that title was not to pass until then., Before delivery of the bill of sale, a fire occurred. Held, that the policy was avoided, under a provision therein making it void in case of any change, other than by the death of the insured, in the interest, title, or possession pf the subject of insurance.
    Error to Bay; Shepard, J.
    Submitted October 21,1903.
    (Docket No. 54.)
    Decided January 26, 1904.

      Assumpsit by the Excelsior Foundry Company against the Western Assurance Company on a policy of insurance. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Affirmed.

      T. A. JS, & J. C. Weadock, for appellant.

      Chamberlain & Quise (M. L. Courtright, of counsel), for appellee.
   Moore, C. J.

This is a suit to recover an insurance loss. The circuit judge directed a verdict in favor of defendant. The plaintiff brings the case here hy writ of error.

It is conceded that, if anything is due plaintiff, it is the sum of $8?0 and interest. The insurance policy contains, a provision that the policy shall be void “ if any change, other than by the death of an insured, take place in the interest, title, or possession of the subject of insurance,” etc. The sole question is whether, after the policy was obtained, there was such a change in the interest of the insured in the property at the time of the fire as to relieve the defendant from liability. There is not much dispute about the facts. When the policy- was obtained, the land on which the buildings stood was held by plaintiff under a part-paid land contract from Frank W. Wheeler. Mr. Wheeler entered into negotiations for the purchase of plaintiff’s, plant, resulting in the making of the following paper:

Know all men by these presents, that at a regular meeting of the stockholders of the Excelsior Foundry Company, held at West Bay City, Michigan, on the 12th day of June, 1899, the following resolution was unanimously adopted by the stockholders of this company, to wit :
‘Resolved, that, the directors of this company be, and they are hereby, authorized and directed to sell and convey all of the property, including the plant, machinery, tools, etc., belonging to this company, by bill of sale and other instruments of conveyance, and to assign the contract for the purchase of block four of F. W. Wheeler & Co.’s Second Addition to West Bay City, thus conveying ■all of the assets of this company, excepting its bills and accounts receivable and certain stock and materials on hand, at and for the sum of $20,000.00.’

“And whereas,'.subsequently, and on the same day, at ■a meeting of the directors, of said company, duly called, the following resolution was unanimously adopted:

“ ‘Resolved, that this company accept the proposal of Mr. Frank W. Wheeler to purchase its plant, and all of its tools, machinery, ;and appliances, and fake a reassignment to him, or his nominee, of its contract for the purchase of block four, F. W. Wheeler & Co.’s .'Second Addition to West Bay City, being all of its assets, excepting bills and accounts receivable and its stock of merchandise, which ;stock was not inventoried, all of such property to be sold to Frank. W. Wheeler, or his nominee, for the sum of $20,000.00.’
“Now, therefore, in consideration of the premises-, and of the sum of twenty thousand dollars ($20,000.00), to it in hand paid by Frank W. Wheeler, the receipt of which is hereby confessed and acknowledged, and in pursuance of the resolutions of the shareholders and directors of this company, the Excelsior Foundry Company does.hereby sell, assign, transfer, and set over unto the said Frank W. Wheeler all of the following property, to wit: The buildings occupied by it, and situated in block four of F. W. Wheeler & Co.’s Second Addition to West Bay City; all machinery, tools, and appliances of every kind, name, and description now in said buildings; the contract interest from F. W. Wheeler & Co. of said block four; and all shop rights and other rights and licenses belonging to it, and all other property of every name, kind, and description belonging to this company, excepting bills and accounts receivable, account-books, and all stock or merchandise now in and about said premises, consisting of pig and .scrap iron and coke, etc.; it being the intention of this bill of sale to convey to said grantee all of the property of thiscompany whatever, except such as was not shown on the-inventory furnished Messrs. Punt and Logan on June 3d, 1899.'
“The Excelsior Foundry Company covenants and agrees it has a good, perfect, and unincumbered title to said assets hereby conveyed, and that the same are free and clear from any liens or incumbrances whatsoever, and that it will warrant and defend the same against all lawful claims whatsoever. ■
“ In witness whereof, the said company has hereunto set its corporate seal, and its hand, by the hand and seal of its vice-president and secretary, who are duly authorized to execute the same by virtue of said resolutions.
“The Excelsior Foundry Co.,
“By Charles T. Wilkes, Vice-Pres. [L. S.'
_ [Seal.] “W. H. Le Fevre, Secty. [L. S/
_ “ Signed, sealed, and delivered in presence of “William Burnett. /
“W. C. Penoyer.”

The secretary of the company testified that on the 16th of June, 1899, this bill of sale was delivered to Mr. Wheeler, and he received for the' company a check of $10,000, and Mr. Wheeler’s three-months note for $10,000, secured by an equal amount of stock as collateral. The following entries were made in the journal of plaintiff company:

“ 1899, June 16th. Shipyard trust deal, by F. W. Wheeler’s three-months note, at 6 per cent., to be secured by equal amount of American Shipbuilding’s preferred stock as collateral, the same being in full for foundry plant.
“Q■ Will you turn to the item that treats of the cash that was received ?
“A. Same date: ‘Ship trust deal, F. W. Wheeler and James Hoyt, on account of sale of foundry plant, $10,000.’”

He further testified that he was instructed to take the bill of sale to Detroit, and, upon payment of the consideration in full, to deliver it to the necessary parties. At the time this bill of sale was made, the land contract held by the plaintiff from Mr. Wheeler was reassigned to him. Mr. Wheeler made a warranty deed of property which included the land mentioned in the land contract to the West Bay City Shipbuilding Company. This deed was dated June 14, 1899, and was put upon record June 17, 1899. The $10,000 note was paid to the plaintiff company July 28, 1899. The secretary afterwards modified his statement so as to say the bill of sale was handed to Mr. Wheeler, and then to Mr. Hoyt, to be by him delivered to Mr. Wheeler when the note was paid, and that the title was not to pass until the note was paid. The record shows that $20,000 was all the property was worth.

Mr. Hoyt testified:

“Mr. Le Fevre wanted to know whether or not he would be assured in the possession of his foundry, so that he could carry out his contract that he had for the construction of a vessel that was then in process of construction at the yard, and which, under the terms of Mr. Wheeler’s arrangement with us, Mr. Wheeler himself was to complete. The bill of sale was then shown me by Mr. Le Fevre, and Mr. Le Fevre then took me to one side, and stated to me the fact about the uncompleted contract, which he did not expect to get through until August 1st, and also stated to me that only one-half of the purchase price was paid in cash that day, and a note was given for the balance; and he intimated that he wanted to be sure he was going to get his money, and he wanted to be sure he was going to have possession of his foundry in order to complete his contract. I told him at once that I would take the bill of sale, and that it should hot be delivered to Mr. Wheeler at all; that it would be delivered to me, as the representative of Mr. Le Fevre; that I would hold it; that I would not deliver the bill of sale to Mr. Wheeler until Mr. Wheeler’s note was paid, and until Mr. Le Fevre had been left in possession of these premises until he could complete his contract. I said: ‘ If you can trust me, it will be entirely safe. I will not make that delivery. I will hold the bill of sale. Mr. Wheeler shall not have it at all. I will keep it.’ Mr. Le Fevre immediately said he was satisfied. I took the bill of sale, put it in my pocket, and this is the original bill of sale, and I have had it ever since.”

—And that it was understood the title should not pass until the delivery of the bill of sale. Mr. Wheeler testified substantially to the same thing. The fire occurred July 8, 1899.

It is said that, in construing an insurance contract, when doubt arises, that construction most favorable to the insured should be applied. Counsel say:

“A provision in a policy forfeiting same in case of sale or transfer must be strictly construed against the company. Kempton v. Insurance Co., 62 Iowa, 83 (17 N. W. 194). The same rule applies to a provision for forfeiture in case of change of interest, title, or possession. Erb v. Insurance Co., 98 Iowa, 606 (67 N. W. 583, 40 L. R. A. 845); Arkansas Fire-Ins. Co. v. Wilson, 67 Ark. 553 (55 S. W. 933, 48 L. R. A. 512, 77 Am. St. Rep. 129), The title, by the agreement of the parties, remained in the plaintiff. There was an agreement to sell, and a payment on account. By an understanding of the parties, no title was to pass until the last penny of payment had been made, and until plaintiff should have completed a certain construction contract. On the question of change of title, the test usually applied by courts is whether or not the vendee under tbe contract could have enforced a specific performance. Ostrander,Fire Ins. § 65, and cases cited.”

They also cite many other cases.

The cases, as a rule, do not aid in reaching a conclusion in this case, because the conditions in the policy are not the same, or the facts are not the same. In a note to Morrison’s Adm’r v. Insurance Co., 59 Am. Dec., at page 306 (s. c., 18 Mo. 262), there is a classification of the clauses in insurance policies in restraint of alienation. The second class of policies mentioned are those containing a clause restricting a transfer, change, or termination of the interest of the insured in the property insured. At page 308 it is said of this class that the generally accepted interpretation is that the whole interest of the insured must pass, and while an insurable interest remains he may recover. To the same effect is the opinion in Grable v. Insurance Co., 32 Neb. 645 (49 N. W. 713).

There are many cases which hold a contrary doctrine. In Gibb v. Insurance Co., 59 Minn. 267 (61 N. W. 137, 50 Am. St. Rep. 405), the language of the policy is, word for word, the same as in the policy in this case. The policy of insurance was issued February 29, 1892. The insured gave a land contract March 23, 1892, agreeing, upon the payment of $2,500, to convey by warranty deed the property. Three hundred dollars was paid down, and $50 every 60 days thereafter. The fire occurred February 28, 1893. The plaintiff claimed that, as he was the owner -of the legal title, he could recover. In disposing of the case, the court said:

“It is contended by appellant that, by the transactions with Kelly, there took place a change in the interest, title, and possession of Gibb, and the condition against any such change was broken, and the policy avoided as to him. It seems to us that there was a breach in the condition against any change of interest. It is not claimed by respondents that there was any waiver of this condition, and the authorities cited by counsel are nearly all cases where the breach claimed was not of a condition against a change of interest, but a change of title. It is held by the great weight of authority that, where the condition is against any change in the title, there is no breach unless there is a change in the legal title; that, as long as the insured retains the legal title and an insurable interest in the premises, the policy is not avoided by a transfer of the equitable title or of equitable interests. But we cannot apply this doctrine to a condition against any change of interest. The terms are not synonymous, as contended by counsel. The word ‘ interest ’ is broader than the word ‘title,’ and includes both legal and equitable rights. It is not necessary to consider the question of the change of possession, except so far as it has an "influence on the change of interest by strengthening and fortifying the interest acquired by Kelly. This disposes of the case.”

In the case of William Skinner & Sons’ Shipbuilding Co. v. Houghton, 92 Md. 68 (48 Atl. 85, 84 Am. St. Rep. 485), the case of Gibb v. Insurance Go., supra, is cited with approval. A similar clause in a policy is also construed in the same way in the case of East Texas Fire-Ins. Co. v. Clarke, 79 Tex. 24 (15 S. W. 166, 11 L. R. A. 293). See, also, Fire Ass’n of Philadelphia v. Flournoy, 84 Tex. 632 (19 S. W. 793, 31 Am. St. Rep. 89); Germond v. Insurance Co., 2 Hun, 540; Southern Cotton-Oil Co. v. Fire Ass’n, 78 Hun, 373 (29 N. Y. Supp. 128).

In Ostrander, Fire Ins. (2d Ed.) at page 245 (§ 77), it is said:

“Where the policy provides that it will become void whenever any change takes place in the title, interest, or possession of the property insured, it is not necessary, to create a forfeiture, that an actual sale should be made. A change of interest or possession will often occur while the legal title will continue unchanged. The underwriter is alone concerned in the protection of the property, and these provisions of the insurance contract have no other purpose than to secure guaranties of good faith on the part of the insured. When a risk is accepted, it may be fairly presumed that the company taking the hazard has ascertained and considered carefully all important facts and circumstances affecting its character, and is satisfied to undertake the venture; but, to prevent anything from being concealed that ought to be disclosed, the validity of the policy is made contingent on a full and truthful expression of certain facts, which the policy specially mentions, and which the company deems material for its understanding of the risk, and for a basis of its judgment in regard to whether it should be accepted or declined. The character of the hazard being established to the satisfaction of the insurer, its next concern is that no material change shall take place without its consent, and this, too, is provided for by the terms of the policy. The insurer cannot watch its many ventures. They are often remote and widely scattered, and besides, too, the greatest dangers that menace property are those that are frequently hidden from public scrutiny. The only practicable plan, therefore, of preserving the status of the risk, is to make the-validity of the policy depend upon the insurer being informed of any material changes made, and its consent obtained. In most cases the insured is constantly apprised of the situation of his property, while the company which has assumed the whole responsibility in case of loss has its office in a distant city, and is entirely without the means of information. The necessities of the case are apparent, and the requirements contained in the policy in regard to notice and consent are reasonable, and will be enforced by the courts with strictness. Mankind has not yet so far advanced in morals as to be no longer governed by motives that arise from considerations of personal' interest. This fact is too well understood to need stating. It is recognized by all, and no business undertakings will succeed that are not based upon this underlying principle of human conduct. The underwriter acknowledges his belief in this general infirmity of the race by the careful provision he makes to guard against any motive for the destruction of the property he insures. He has learned in the lessons of experience that the chances of loss are increased in proportion- as the interest of the holder of his policy is diminished. The supreme court of Iowa, in- discussing this matter ip connection with title, very properly said:
“ ‘ The object of the insurance company by this clause is that the interest shall not change, so that the insured shall have a greater temptation or motive to burn the property, or less interest and watchfulness in guarding and preserving it from destruction by fire. Any change in or transfer of the interest of the insured in the property, of a nature calculated to have this effect, is in violation of the policy; but if the real ownership remains the same, — if there is no change in the fact of title, but only in the evidence of it, and if this latter change is merely nominal, and not of a nature calculated to increase the motive to burn, or diminish the motive to guard the property from loss by fire, — the policy is not violated.’ Ayres v. Insurance Co., 17 Iowa, 176.”

While there is some conflict in the authorities, we think the weight of authority is that, under a policy like the Michigan standard policy, any material change in the interest of the insured in the property insured will avoid the policy. In this case the contract for the premises upon which the buildings were was reassigned to Mr. Wheeler. The insured had been paid $10,000 in cash, and had a note for the balance of the purchase price, secured by a large block of valuable stock, and the note itself was paid within 20 days after the fire. The circuit judge was right in holding there had been such a material change in the interest of the insured as to avoid the policy.

Judgment is affirmed.

The other Justices concurred.


author: Montgomery, J.

text:
    MORRIS v. IMPERIAL CAP CO.
    Partnership Associations —Liquidation —Purchase op Outstanding Claims by Chairman.
    A partnership association determined to go into liquidation, and three liquidating trustees were appointed under 2 Comp. Laws, § 6087. They procured an order of the court authorizing them to manufacture the stock on hand, and employed the chairman of the association as superintendent. While the trustees were thus acting under the authority of the court, the chairman purchased outstanding claims against the association. Held, that his - relation to the association was not such as to preclude him from purchasing them for his own benefit.
    Appeal from Wayne; Hosmer, J.
    Submitted October 21, 1903.
    (Docket No. 50.)
    Decided January 26, 1904.
    Bill by Edmund A. Morris against the Imperial Cap Company, Limited, James McKnight, Adolphus Fixel, and others, tc enjoin the payment of certain claims against defendant company. From a decree dismissing the bill, complainant appeals.
    Affirmed.

      Graves, Hatch & Millis, for complainant.

      William E. Henze, for defendants McKnight and Fixel.
   Montgomery, J.

The Imperial Cap Company, Limited, was, prior to February 10, 1902, engaged in manufacturing. The complainant was a stockholder. The defendant James McKnight was also a stockholder and chairman.. The company, having met with a fire loss, determined on the date named to go into liquidation. Thereupon three liquidating trustees were appointed under the statute (2 Comp. Laws, § 6087). The liquidating trustees procured an order from the circuit court of Wayne county authorizing them to manufacture the stock on hand, and to hire the necessary employés for that purpose. Defendant James McKnight was employed to prosecute this work for the trustees. As testified by one of the trustees:

“He was engaged as superintendent to manufacture the salvage. He was not employed as our financial man. He was not our adviser as regards settlements of the debts t of the company. The accounts were paid by check signed by two trustees.”

Mr. McKnight also held a power of attorney to represent complainant at meetings of stockholders.

"While the trustees were so in control of the business, McKnight and his codefendant Pixel became the purchasers of certain claims against the Imperial Cap Company, which they' bought at a substantial discount from the face value. Complainant, having succeeded to the rights of the Imperial Cap Company, files this bill asking to have it determined that the relations of McKnight to the company were such that he should not be permitted to purchase claims against the company on his own account, but should be decreed to hold the claims in the interest of the corporation on being reimbursed his advancements. In support of this contention it is claimed that the functions of the liquidating trustees under the terms of the statute are confined to the winding up of the concern and distributing the net assets among the members of the association after the association has itself paid its debts, and from this it is argued that the duties of McKnight as chairman still continued.

The answer to this contention, as it seems to us, is that all parties to this proceeding have acquiesced in a different interpretation of the statute and in quite a different line of action than that indicated. There can be no doubt that all concerned surrendered the management of this business into the hands of liquidating trustees. Not only this, but the trustees acted under the authority of the court. No one appears to have doubted, nor is it now denied, that in fact the control of this business had passed into the hands of the trustees. The question presented is whether, under these circumstances, the rule of technical morality precludes the defendant McKnight from purchasing claims against the company. u

It is undoubtedly true that an officer of a corporation who is charged with the duty of making provision for the payment of its debts cannot, in neglect of this duty, become a purchaser of its outstanding obligations at a discount, and collect the full face from his principal. It is stated that it is a fraud on the corporation or corporate creditors for the directors to buy up at a discount the outstanding obligations of the corporation, and compel it to pay them at the full face value. 2 Cook, Corp. § 660. But á director may buy bonds of the corporation at a discount, and enforce them at par, where there are no special equities against such a purchase, and no present duty in regard to them from him as a director. See, also, 1 Mor. Corp. § 521; Hammond’s Appeal, 123 Pa. St. 503 (16 Atl. 419); Higgins v. Lansingh, 154 Ill. 385 (40 N. E. 362); Inglehart v. Hotel Co., 32 Hun, 377; Id., 109 N. Y. 454 (17 N. E. 358); St. Louis, etc., R. Co. v. Chenault, 36 Kan. 51 (12 Pac. 303). In the present case no creditor is complaining. No fraud was perpetrated upon the creditors, and the relations of McKnight to the corporation were not, at the time of the purchase, such as imposed ' any duty upon him as to the payment of the debts of the company. The assets had all been surrendered to the trustees in liquidation. The circuit judge held that, under these circumstances, the defendant McKnight was entitled to receive full payment.

The decree will be affirmed, with costs.

The other Justices concurred.