author: Steere, J.

text:
    MacQUEEN v. CITY COMMISSION OF CITY OF PORT HURON.
    1. Schools and School Districts — Constitutional Law — Pouter of State — State Legislature.
    The Constitution of Michigan has delegated to, and lodged in, the State legislature the control of the public school system, and the general policy of the State has been to retain such control, through local State agencies independent of, but closely associated with, the local govern-* - ment.
    2. Same — Special Acts — General School Law.
    While, to meet the necessities of certain cities and villages, the legislature had the power and did pass many local and special acts, sometimes as a chapter in the local charter, granting unusual powers to the board of education, yet the latter retained its entity as a quasi corporation, and was governed, aside from the plain provisions of the special act, by the general school law (section 4774, 2 Comp. Laws, 2 Comp Laws 1915, § 5760).
    3. Same — Eeectoes—City Charters — Power to Change School Charter — Home-Ruee Act.
    It was not within the power of the electors of a city to change the corporate powers of the local board of education through the adoption of a new charter under the home-rule act (section 4, Act No. 279, Pub. Acts 1909, 1 Comp. Laws 1915, § 3307), as public school matters were expressly exempted from its operation.
    4. Same — Corporate Entity — Powers and Duties.
    That the new charter, in the reorganization, provided for and furnished qualified officials to carry out the obligations relating to school matters, and designated them by other titles, is immaterial so long as the new local bodies or officials were vested with the same powers and burdened with the same duties in relation to school matters as those designated under the old charter.
    5. Municipal Coeporationst-City Charter — Change of Wards —Presumptions—Number of Members of School Board.
    Where, under the old charter, the city council had authority to lay out and change its wards, and authority was granted by the legislature to the people to reduce the number of wards to one in adopting a new charter, it must be presumed that it was contemplated that the number of members of the board of education might change accordingly.
    6. Same — Members of School Board — De Jure Officers.
    Where members of the board of education of a city were selected in, compliance with the requirements of the old, as well as the new, charter, and they and their successors have continued to act as such for over five years, they are de jure school officers with all the rights, powers, and duties granted to, and imposed upon, school boards, under the provisions of section 5, Act No. 31, Pub. Acts 1909 (2 Comp. Laws 1915, § 5652).
    7. Same — School Bonds — General Act.
    The provisions of a city charter authorizing the city to bond for school purposes and precluding the school district from doing so, were repealed by Act No. 150, Pub. Acts 1915 (2 Comp. Laws 1915, §§ 5865, 5866), sucb act being in harmony with the general policy of the State in educational matters and tending towards greater uniformity in the school laws.
    8. Constitutional Law — Schools and School Districts — Classification — Statutes.
    It is settled law in Michigan that a general law is not unconstitutional because based upon classification of school districts according to population. Burton v. Koch, 184 Mich. 250.
    9. Same — Statutes—Title—Object.
    Act No. 150, Pub. Acts 1915, is not unconstitutional in that its object is not expressed in its title, and in that it embraces more than one subject.
    10. Statutes — Construction—State Legislature.
    It .is a cardinal rule that the legislature must be held to intend the meaning which it has plainly expressed, and in such casé there is no room for construction or attempted interpretation to vary such meaning.
    11. Municipal Corporations — Powers — School Bonds — Ultra Vires — Statutes—Injunction.
    The issuance of bonds for school purposes by a city after the enactment of Act No. 150, Pub. Acts 1915, transferring said authority from the city to the school authorities, was ultra vires, and a decree restraining such contemplated action is entered in the appellate court.
    Appeal from St. Clair; Tappan, J.
    Submitted October 17, 1916.
    (Docket No. 153.)
    Decided December 22, 1916.
    Bill by Donald MacQueen against the city commission of the city of Port Huron and others to restrain the issuance of bonds for school purposes. From a decree dismissing the bill, complainant appeals.
    Reversed, and decree entered.

      Thomas Wellman, for complainant.

      Burt D. Cady, City Attorney, for defendants.
   Steere, J.

Plaintiff, a resident elector and taxpayer of the city of Port Huron, filed this bill of complaint, asking injunctive relief to prevent the commission of that city from negotiating and selling a $100,000 issue of its bonds for the purpose of providing funds with which to purchase a site and erect a new schoolhouse thereon, for which preliminary steps had been taken under and as prescribed by its city charter.

In outline, the city commission of Port Huron, acting under its charter on a requesting resolution of the board of education of that city, declared by resolution of date December 17,1915, that a necessity existed for borrowing the sum proposed for the purpose stated “on the faith and credit of the city of Port Huron and the faith and property of the board of education” and issuing' bonds of the city therefor, and called a special election of the “qualified electors of said city” to be held on the 31st day of January, 1916, to vote upon the proposed bond issue. An election was held on the day named, and the proposition to issue said bonds was indorsed by a three-fifths majority of the electors of the city voting at said election. A form of bond was prepared and adopted by the city commission, which recited, among other things, that “the full faith, credit and resources of the city of Port Huron are hereby irrevocably pledged” for prompt payment of principal and interest, and that “said series of 100 bonds of which this is one has been issued for the purpose of providing moneys for its educational fund.” Bids were asked for, and several had been received when this suit was commenced.

No question appears to be raised as to the charter provisions having been followed in these preliminary proceedings, which therefore need not be reviewed in detail, but it is contended by plaintiff that through the transition of the city of Port Huron, on January 1, 1911, from its old form Of government under a charter granted by the State legislature to a commission form of government under a new charter adopted by its electors pursuant to the so-called “home rule” act, the city was divested of all authority to borrow money for school purposes, and the school organization lost whatever previously existing legal entity it possessed.

The objections urged and argued against the.validity of the proposed bond issue, as summarized from plaintiff’s bill and brief, are:

“(a) The issuance of the bonds is ultra vires; (h)' They are not for a municipal purpose; (e) the city cannot pledge the property of the board of education for their payment; (d) the proposition was not submitted to the electors of the school district of the city of Port Huron; (e) the board of education is not a legally constituted board; and (/) there was no request for the issuance of the bonds from a legally constituted board.”

It was attempted by a chapter of the new home rule charter to continue the city schools along the lines provided in the old charter, so far as adaptable to the changed organization of the city, which resulted amongst other things in reducing the school board from 14 to 4 members and in putting the responsibility for and control of school finances, and also the selection and appointment of members of the board of education, in the hands of the city commission, instead of the common council, which the commission succeeded as the governing body of the city when the new charter went into effect on January 1, 1911. By a provision of this new charter the city was composed of but one ward, and its adoption appears to have been claimed to automatically reduce the number of members of the school board to 4.

When the new home rule charter went into effect and the city government was reorganized to operate under it with the 11 wards, each of which was represented by a member of the school board, reduced to one, the charter commission apparently assumed, and' by resolution declared, that a vacancy existed in the offices of all members of-the school board who had held under the former charter, and appointed a new board consisting of 4 members, composed of the mayor, two inspectors at large, and 1 member from the then single ward of the city. The board of education so chosen, with its successors, has continued as the acting school board until the present time.

The city of Port Huron was incorporated in 1857 by a local act of the legislature (Act No. 46, Laws 1857). The charter then granted contained no chapter devoted to the details of a school system, but in section 5, included amongst the officers to be chosen “in and for the said city” were “one recorder who shall be ex officio school inspector” and two school inspectors, and section 39 provided:

“The city of Port. Huron for all purposes in regard' to common schools and school money, shall be deemed a township; and the recorder shall discharge all the. duties and be subject to all the liabilities of a township» clerk. The city treasurer and school inspectors shall., discharge the duties of such corresponding officers except the collection of taxes.”

Under the general laws of the State, township boards: of school inspectors within their respective school districts were and are given large discretionary powers in the establishment and control of schools, the levying of taxes for their maintenance, and the management and disposition of school funds, and the school board of Port Huron as inaugurated possessed such rights, powers, and independent control of educational affairs within the city; but during the years which intervened between that time and the adoption of the home rule act for cities the charter- of Port Huron underwent some 15 amendments and revisions at the hands of as many different legislatures, in the progress» of which, various changes were made in the school system, subordinating it more directly to dependence upon and control by the city government. The suggestion in Hatheway v. Sackett, 32 Mich. 97, that “strict regulations are necessary to prevent our city and village organizations from drawing to themselves the supervision of the common schools within their borders” was seemingly overlooked or not seriously regarded. Under the old city charter as it stood when the new went into effect on January 1, 1911, the school board was yet a body corporate by the name of the board of education of the city of Port Huron, with its authority and activities, limited to running the schools with whatever funds the city raised and turned over to it for that purpose. By its charter the city was vested with exclusive authority to raise, by city taxation, revenue for school purposes and to issue city bonds, for the purchase of sites and erection of school buildings, while the board of education was authorized to spend the same, when received, for educational purposes ; all members of the school board were appointed by the common council of the city except the mayor, the only member chosen by popular election, who became ex officio president of the board; the city clerk and city treasurer were ex officio, respectively, secretary and treasurer of the board. While thé .school board could recommend, it rested with the city to issue bonds for the purchase of new grounds, erection of new buildings, and to levy and collect taxes for school purposes, the latter mandatory only to a certain minimum rate per capita of school children. As to borrowing and bonding, the old charter further provided:

“The common council shall, with the approval of the board of estimatés, also have power to provide money for the water fund, the sewer fund, the educational fund, * * * by borrowing upon the faith and credit of said city and upon the best terms that can be made, such sums of money as shall be deemed necessary and expedient, and to issue the_ bonds of the city therefor. . And the common council shall have power to provide money by borrowing on the faith and credit of the city to pay the present bonded indebtedness of the city or of the board of education or any part thereof, whether due or not, and to issue bonds therefor; or said bonds may be issued by the common council for the purpose of refunding said bonded indebtedness and exchanged for the present outstanding bonds .of the city or board of education. * * *
“Bonds issued under the preceding section shall be respectively denominated water bonds, sewer bonds, school building bonds, public building bonds,” etc. Act No. 390, Local Acts 1885, chap. 15, §§ 6, 7.

Amongst the funds into which the revenues and moneys of the city were required to be divided was included:

“Eighth. Educational fund, to defray the expenses of maintaining the public schools in said city, and of obtaining grounds, erecting and repairing buildings. * * *” Act No. 390, Local Acts 1885, chap. 15, § 1, subd. 8.

The result of this legislation was that for some time prior to the adoption of the new charter the board of education had in effect become divested of all power to raise funds for the maintenance of the schools, its authority, control, and duties being limited chiefly to ministerial matters in conducting the schools, while the city had, primarily, authority to raise, and absolulute control over, the revenue for school purposes, except the minimum which it was required to raise for ordinary expenses.

The public school system of this State and the general policy in regard to it, as evidenced by constitutional and legislative provisions, has too often been reviewed and discussed in former decisions of this court to call for extended consideration or citation of authorities, but there are a few well-recognized basic principles in the education organization and policy of the State which are to be borne in mind in connection, with the questions raised here.

Fundamentally, provision for and control of our public school system is a State matter, delegated to and lodged in the State legislature by the Constitution in a separate article entirely distinct from that relating to local government. The general policy of the State has been to retain control of its. school system, to be administered throughout the State under State laws by local State agencies organized with plenary powers independent of the local government with which, by location and geographical boundaries, they are necessarily closely associated and to a greater or less extent authorized to co-operate. Education belongs to the State. It is no part of the local self-government inherent in the township or municipality except so far as the legislature may choose to make it such. Belles v. Burr, 76 Mich. 1 (43 N. W. 24); Attorney General v. Board of Education, 154 Mich. 584 (118 N. W. 606). The general school laws were carefully planned and enacted to guard that distinction; provision was made for organization of the common school districts, with officers elected at school meetings by electors with defined qualifications, and who as a school board were given large plenary powers and control of school matters, practically independent from the local government of municipalities in which the schools were situated.

In recognition of the demand, and often evident necessity for, graded, union, and high schools in large centers of population organized into cities and villages, many local and special laws were passed, organizing their schools according to local requirements or desires, frequently as a chapter of the municipal charter granted to the municipality in which the school was located. In some of these, unusual powers are given the board of education, even to bonding the district without submitting the question to the electors, while in others are indicated concessions to the previously noted tendency of city or village organizations to draw to themselves “the supervision of the common schools within their borders,” as in the instant case. Such was clearly within the power of the legislature. With whether it was good or bad policy we are not concerned. But here, as in all such cases so far as we can discover, the school board yet retained its entity as an involuntary public corporation, or quasi corporation, organized with limited powers for strictly educational purposes, and governed, aside from the plain provisions of the special act, by the general school laws of the State which provide (section 4774, 2 Comp. Laws; 2 Comp. Laws 1915, § 5760) as follows:

“All provisions of this act shall apply and be in force in every school district, township, city and village in this State except such as may be inconsistent with the direct provisions of some special enactment of the legislature.”

It was not within the power of the electors of the city of Port Huron to dissolve, or alter in the essentials of its creation for educational purposes, the corporate body known as the board of education of Port Huron, or to relieve the city of its obligations in that connection by a change in the local form of government for the city through adoption of a new charter under the home rule law. That law (Act No. 279, § 4, Pub. Acts 1909) guarded this as follows:

“Each city may in its charter provide: * * * (/) For the establishment of any department that it may deem necessary for the general welfare of the city, and for the separate incorporation thereof: Provided, however, That these provisions shall not be construed to extend to public schools; * * * (p) For altering, amending or repealing any special act affecting any existing municipal department, but the department in control of the public schools shall not be construed to be a municipal department” (amended in form, but not in substance, by Act No. 210, Pub. Acts 1915, 1 Comp. Laws 1915, § 3307).

The change in its charter did not change the corporate entity of the city of Port Huron. It continued with all its rights, powers, and obligations as they existed under the old charter except as other provisions were lawfully made, either by the electors in matters strictly pertaining to local government within the limits of the home rule law, or by the legislature of the State in matters of State concern where general laws were or might become applicable. Detroit Common Council v. Engel, 187 Mich. 88 (153 N. W. 537). It was manifestly contemplated in the general act that in adopting a home rule charter radical alterations would or might be made in the forms of local government necessarily resulting in changes in numbers, names, and duties of city officials and departments. So long as the city in its reorganization provided for and furnished qualified officials to carry out its obligations relating to school matters as imposed by the old charter, that such officials were designated by other titles or in strictly local matters may have performed other duties than were imposed upon the officials named in the old charter may be regarded as anticipated, and immaterial so long as the new local bodies or officials were vested with the same powers and burdened with the same duties in relation to school matters as those designated under the old charter, for whom they were substituted.

The home rule law (section 3) (1 Comp. Laws 1915, § 3306) states that:

“Each city charter shall provide * * * (d) For the establishment of one or more wards.”

Under the old charter the city council had authority to lay out and change its wards. When the legislature granted authority to the people of a city to reduce the number of its wards to one in adopting a new charter, it presumptively contemplated as a natural consequence that when this was done, as in the instant case, the number of members of the board of education might change accordingly; otherwise the board of education was constituted as before, with the mayor of the city éx officio president, 2 members at large and 1 from the remaining ward elected or appointed by the governing body of the city composed, however, of a city commission, which took the place of the former city council. Whatever irregularities may have occurred at the time of change to the new charter, the selection of the members of the school board and their appointment, so far as related to their qualifications and election or appointment by the governing body of the city was concerned, were in compliance with the requirements of the old charter, as well as the new. They, with at least colorable rights to the office, and their successors, have continued to act until the present time, a period of over five years, certainly'from the beginning as the de facto, and we think now as the de jure, school board of the city, with all the rights, powers, and duties granted to and imposed upon school boards by the general school laws, except such as are inconsistent with some special enactment of the legislature. Section 5 of Act Ño. 31, Pub. Acts 1909 (2 Comp. Laws 1915, § 5652), provides:

“Every school district shall in all cases be presumed to have been legally organized when it shall have exercised the franchises and privileges of a district for the term of two years; and such school district and its officers shall be entitled to all the rights, privileges and immunities, and be subject to all the duties and liabilities conferred upon school districts by law.”

While it is urged by plaintiff and denied by defendants that the new charter contains language prohibiting the city from pledging its credit or raising city revenue by taxation to be turned over to the school board for educational purposes, we regard that question as immaterial here, for the reason that the electors of Port Huron had no power, when adopting their new charter, to embody in it any provision relieving the city of rights, duties, and obligations granted or imposed by the legislature upon it as a State agency in relation to that part of the public schools within its borders.

The legislature of the State did, however, have power in its discretion to increase or decrease such authority-by a public law of general application to cities of the; class in which defendant falls; and, as to bonding, we are unable to escape the conclusion that it has relieved the city of that duty and precluded it from that, right by Act No. 150,- Pub. Acts 1915 (2 Comp. Laws, 1915, §§ 5865, 5866), entitled:

“An act to prescribe and limit the power of school, districts having a population of more than 15,000 and less than 100,000 to borrow money and issue bonds- of such district therefor, and to repeal all acts and parts of acts inconsistent therewith.”

That the school district of the city of Port Huron contains within its limits a population exceeding 15,-000 and less than 100,000 is unquestioned. The act is concise, consisting of two short sections which are as follows:

“Section 1. Any school district within the State of Michigan, whose population shall exceed 15,000 and be less than 100,000, shall have power and authority to borrow money and issue bonds to an amount not greater than five per cent, of the total assessed valuation of said district. Subject, however, to all provisions of law now or hereafter in force relative to the submission to the electors of such districts of any or all questions relative to such borrowing of money and issuing of bonds therefor.
“SEC. 2. All acts or parts of acts, whether local or general, in any wise conflicting with the provisions of this act are hereby repealed.”

The provision of the old charter of Port Huron, authorizing the city to bond for school purposes and precluding the school district from doing so, is a part of a local act, manifestly conflicting with the provisions of this act.

The complications in connection with city schools which adoption of new charters under the home rule law have given rise to, or threatened, suggest the propriety of this legislation, which in an important particular makes definite the independent power of school boards, tends towards greater uniformity in the school laws, and as a whole sounds in harmony with the general policy of the State in educational matters.

Whatever diversity of views may have heretofore arisen, it is now authoritatively settled in this State that a general law is not unconstitutional because based upon classification of school districts according to population. Burton v. Koch, 184 Mich. 250 (151 N. W. 48).

It is suggested that the act is unconstitutional because its object is not expressed in its title; and it embraces more than one subject in the particular that it purports to take from one governmental agency the power to borrow money for school purposes and confer it upon another, and it also limits the amount which may be borrowed by the other, also reducing the limits for school districts as fixed by the general law from 10 to 5 per cent, of the assessed valuation of the district.

We think those matters are but detail, clearly germane to the declared general purpose of the act, which is to confer exclusive authority upon all school districts of population within a defined limit to borrow money for school purposes up to a certain percentage of the assessed valuation of their respective districts. The title of this concise law fairly gives notice of and points to the subject dealt with in its two brief sections, and of the ultimate object intended.

The wording of the act is clear and plain. It is within the power of the legislature. It declares the law in distinct language. It is a cardinal rule that the legislature must be held to intend the meaning which it has plainly expressed, and in such cases there is no room for construction, or attempted interpretation to vary such meaning.

Agreeable to the reasons stated, we are constrained to conclude that the issuance of bonds by the city for school purposes is now ultra vires; and that such authority rests only with the board of education of the city of Port Huron, which by the general school law is authorized under its provisions to take the prescribed action to that end and, if ratified by a plebiscite of the qualified electors of the school district as defined in the general law, has power to borrow money for the purpose proposed to the limit specified in the act quoted.

The decree of the trial court is therefore reversed, without costs, and a decree may be entered herein, granting plaintiff the restraint prayed for as to the contemplated issuance of bonds by the city.

Stone, C. J., and Kuhn, Ostrander, Bird, Moore, and Brooke, JJ., concurred. Person, J., did not sit.


source: Caselaw Access Project

author: Steere, J. Kuhn, J.

license: Public Domain

text:
    VOUGHT v. MICHIGAN UNITED TRACTION CO.
    1. Street Railways — Negligence—Contributory Negligence.
    Where plaintiff’s traction engine while stalled upon defendant’s track at night, at a farm crossing near a regular stopping place for local cars, was struck and damaged by defendant’s limited car, which plaintiff, after several minutes’ delay, attempted to flag with a white light, and the evidence showed that plaintiff failed to comply with the provisions of Act No. 145, Puh. Acts 1887, as amended (1 Comp. Laws 1915, § 4793), requiring steam traction engines to carry and use planks at crossings and carry a red light at night, and plaintiff admitted that the accident would not have happened. if he had used planks, and defendant’s evidence showed that the motorman had orders to stop for a red light but to pay no attention to a white light, plaintiff was guilty of contributory negligence precluding recovery, irrespective of defendant’s negligence.
    2. Same — Negligence—Gross Negligence.
    Where defendant’s motorman on a limited car was running at the regular rate of speed, on scheduled time, kept the customary lookout, and gave the regular signals for crossings, but failed to stop at a signal by a white light near a regular stopping place for local cars, which he thought was given by some one wanting to take a local car, and in consequence, a collision with plaintiff’s traction engine, which was stalled on the track, occurred, he was not guilty of gross, wanton, or wilful, negligence amounting to an intentional failure to perform a manifest duty, entitling plaintiff to recover, in an action for damages. Kuhn and Bird, JJ., dissenting.
    Error to Calhoun; North, J.
    Submitted October 24, 1916.
    (Docket No. 104.)
    Decided December 22, 1916.
    Case by A. Barrett Vought against the Michigan United Traction Company for damages to a traction engine. Judgment for defendant on a directed verdict. Plaintiff brings error.
    Affirmed.

      Albert C. Kingman and Burritt Hamilton, for appellant.

      Sanford W. Ladd (Charles E. Lewis and Warren, Cady, Ladd & Hill, of counsel), for appellee.
   Steere, J.

Plaintiff, a resident of Bedford township, Calhoun county, owned a steam traction engine, used in connection with his business of threshing grain, baling hay and straw, filling silos, etc. Defendant owns and operates an electric interurban railway line, a portion of which passes through Bedford township along the east and west highway between the village of Augusta and the city of Battle Creek, in said county.

On the afternoon of September 21, 1914, plaintiff was engaged in baling straw at the “Powers farm,” in Bedford township, located something less than three miles west of Battle Creek, lying north of the highway along the northerly side of which defendant’s track ran. When he attempted to drive his traction engine out into the highway over the Powers farm crossing that evening, it became stalled upon the railway track and was demolished by one of defendant’s limited cars which came upon it from the west. He brought this action to recover for the damage thus done his engine, charging that defendant “wantonly, wilfully, and negligently” caused it. At the trial a verdict was directed for defendant on the ground that it conclusively appeared plaintiff’s own negligence caused or contributed to the accident.

The undisputed testimony shows that at about noon on the day in question plaintiff went to Powers’ farm with his traction engine to bale some straw and drove it over defendant’s track at the farm crossing without difficulty. He completed the baling that evening at about 6:80, and after supper started to leave, some time between 7:30 and 8 o’clock, with his engine hauling a silo filler which he had sent for during the afternoon. It was then after nightfall and very dark. On approaching defendant’s track he looked and listened, and after ascertaining no car was within sight or hearing he proceeded to drive across to the portion of the highway traveled by vehicles. The front wheels passed over both rails of the track safely, but the rear wheels slipped and the engine stalled. He tried unsuccessfully to go ahead and to back, but some portion of the machinery broke down and left the engine powerless to move, standing with the forward wheels on the south side of the south rail and the rear wheels on the north side of the north rail. Plaintiff had three men with him, but did nothing to guard against an approaching car until one was heard coming from the west, variously stated by plaintiff and his witnesses at from two or three to five minutes after the engine was stalled and discovered to be broken down. He then directed one of his men, named Van Fleet, to go down the track with a lantern and flag the car. Van Fleet started at once, running down the track swinging his lantern, but the car was not checked until the motorman saw the obstruction on the track ahead and too late to avoid the accident. Van Fleet testified of the intervening time:

“Before I started we had been on the track two or three minutes. I couldn’t tell anything about, whether it might be four or five minutes. We were trying to get the engine off up to that time. We had given it up and had decided it was broken down and was stuck.”

Plaintiff stated:

“I see right away that I couldn’t get it off, so I unhitched the silo filler in order to get that out of the way.”

The following facts are shown by plaintiff’s own testimony, either on direct or cross-examination; This farm crossing was not planked, and the rails were about four inches above the ground. He carried no planks, but, had he done so and used them, he could have crossed without any trouble. He had a white lantern but carried no red light. He was familiar with the surroundings, and knew limited cars passed over the track each day about every two hours and local cars about every two hours. That a limited car would not stop for a signal at a local stop. That a white light was the customary way of signaling local car's for a local stop. That “Stringham’s road,” which connected’ with the road upon which the track ran (less than 300 feet west of the Powers’ farm crossing), was a regular stop for local cars only. That he was familiar with the operation of the interurban electric railway along there, and thought there were 15 or 16 cars going over that track in each direction each day. That he knew a car was liable to come along any time and limited cars would not stop there, and, although he knew for two or three minutes before he heard the car that he was stuck on the track, he did nothing during that time to try to stop any car which might be approaching.

A witness of plaintiff named Miller, who was working for and with him that evening, estimated that from the time the engine was stalled until the accident was eight minutes. Mrs. French, a witness for plaintiff, who lived with her husband at Stringham’s Corners, testified that she heard and saw the engine stalled on the track at Powers’ farm crossing, and, knowing the limited was due, called her husband, who had retired; that she thought about five minutes intervened before Van Fleet started down the track with a white lantern, and as he passed she called to him from her porch that they would not stop a limited car for a white lantern. Mr. French, called also by plaintiff, testified that when his wife first told him of the engine being stalled on the track and the limited due he did not get up, but pretty soon she came back saying, “The limited is coming, and they are going down the track with a white lantern, and they won’t stop,” when he arose and went out on the porch with her and saw the car coming and the man with the lantern running down the track; that he had gone about seven rods from the traction engine when it was struck. Under the circumstances disclosed the testimony of plaintiff and his witnesses indicates not only unreasonable delay, but an improper method in attempting to warn an approaching car of the danger.

Act No. 145, Pub. Acts 1887, amended by Act No. 71, Pub. Acts 1903 (2 How. Stat. [2d Ed.] § 4235; 1 Comp. Laws 1915, § 4793), provides, so far as material here:

“It shall be unlawful for any person * * * owning or controlling any carriage, vehicle, traction or other engine propelled by steam, by themselves, their servant, agent or employee, * * * to permit or use the same to pass over, through or upon any public highway, road or street, unless such owner, * * * shall send before the same a person of mature age, at least ten rods and not more than 40 rods in advance, * * * and at night such person shall carry a red light; and such persons shall carry and use planks sufficient to plank all crosswalks,” etc.

A violation of any of the provisions of this act is made a misdemeanor punishable by fine or imprisonment, or both, in the discretion of the court. It seems clear that, had plaintiff complied with this act, or exercised a reasonable degree of care and caution after his engine was stalled, this accident could not have occurred. That he was guilty of continuing negligence which caused or contributed to the accident is conclusively shown by his own testimony. Good Roads Construction Co. v. Railway Co., 173 Mich. 1 (138 N. W. 320).

Plaintiff himself testifies that, had he equipped himself with, planks as the statute required, and used them, the accident would not have happened. That the use of a red light which the statute required him to carry at night would have prevented the accident is shown by the undisputed testimony of the motorman that his instructions were to stop for a red light, and, had there been a red light exposed instead of a white light, he would have put on the emergency brake and stopped his car back where he first saw the light, the rules being that limited cars do not make local stops, and “if he (Van Fleet) had got in between stops, I would have known something was wrong and slacked up.” It was a dark night, and the stalled traction engine was allowed to stand in the darkness across defendant’s track with no attempt before the accident to light or illuminate it, and after a car was heard Van Fleet was sent to “flag it,” but in the attempt he went to and a short distance beyond a local stopping place, as it happened, and tried to flag, with the customary signal for a local stop, an approaching limited car, which did not make local stops and was only authorized to stop there for a red light, the customary and well-known danger signal. Not only was plaintiffs negligence continuing, but it was a concurrent, proximate, and contributing cause of the accident. It was shown the car was running over 50 miles an hour, and it is urged in plaintiff’s brief that:

“Such reckless conduct in operating a car upon a public highway was gross and reckless negligence on the part of defendant, and the jury would have been justified in so finding.”

Whether defendant was negligent in running its car at the shown rate of speed, at the. particular time and place,'might properly be a question for the jury in case plaintiff was not shown to be guilty of contributory negligence precluding a recovery, irrespective of defendant’s negligence.

In Rouse v. Railways Co., 158 Mich. 109 (122 N. W. 532), it was held that one injured when driving across the tracks of a street car line by an on-coming car could not recover when he was himself guilty of contributory negligence, although the car might have been running at an excessive rate of speed prohibited by a city ordinance.

In Nissly v. Railway Co., 168 Mich. 676 (131 N. W. 145, 135 N. W. 268, Am. & Eng. Ann. Cas. 1915C, 719), this subject is discussed in part as follows:

“We cannot lose sight of the public convenience, and its desire for rapid transit, with the inducement to run these cars at a much higher speed than 30 miles an hour. They are in competition with steam roads, which run faster than that. Where they run in the highways, which are also used' by other vehicles, the circumstances of such use are to be considered. The legislature has power to control and regulate speed, and may require adequate protection. Until this power is exercised, we can recognize only the rule that the rate is Unlimited, except by the general rule that it must be reasonable under all the circumstances” — citing cases.

Under the testimony in that case the negligence of each party was a question for the jury, but it was held that, if the animal killed by defendant’s car for the value of which the action was brought got upon the track by reason of plaintiffs negligence, he should not have had a verdict, because of his contributory negligence.

We find nothing in the testimony to sustain plaintiff’s contention that the motorman was guilty of gross, wanton, or wilful negligence in the operation of his car. He had ten years’ experience in that employment, and was in charge as a motorman of a limited car on a fast run between Kalamazoo and Battle Creek, practically on time and running at the regular rate of speed, scheduled to leave Kalamazoo at 7:10 and arrive at Battle Creek at 8:05. He kept the customary lookout and gave the regular signals for crossings; he saw Van Fleet’s signals at or near Stringham’s Corners, and states:

“I thought it was somebody wanting to take a local car, trying to stop a limited with a white light.”

A witness named Pallister, who was in front of his house about six or seven rods east of the Powers farm crossing and looking to the west past the stalled engine towards the approaching car, stated that he thought the same thing, did not then see the stalled engine or anything on the track, and there was no other light to be seen except the white one waved by a man who ran out, and wondered “what fool was trying to stop a limited car” until it came around a curve and he saw the traction engine when the headlight shone upon it. It was shown there was a slight curve in the track to the west of the traction engine which threw the rays of the headlight of the car to one side for a time. The signal as given actually served to divert attention and mislead rather than to warn. The motorman testified that the first intimation to him of anything on the track was when he saw the white steam of the traction engine, and then he immediately threw on the emergency brake, making every possible effort to stop the car before reaching it. Of a lantern signal given under somewhat similar circumstances it was said in Gurrie v. Traction Co., 151 App. Div. 57 (135 N. Y. Supp. 833):

“The fact that Dietz ran a distance of 50 feet,, swinging a lantern * * * was not notice to the defendant that the plaintiff’s intestate, with his team, was fastened in the tracks. * * * The first and most natural impulse would be to accept it merely as a signal to stop and take on a passenger. * * * If every traction car traversing a suburban highway on a dark night was to be stopped every time a lantern appeared in the highway, there would be more complaint than at present about the delays in transportation.”

In Frost v. Railroad Co., 96 Mich. 470 (56 N. W. 19), where it was shown that in the daytime the engineer of a freight train ran it into a load of logs stalled on the tracks with horses attached, at a private crossing, the court held that there was no evidence on which to base a finding of wilful, wanton, and reckless conduct, because it was not shown that the engineer knew the situation at the crossing in time to stop his train, and in spite of such knowledge, knowing the consequence if he failed to stop, ran on without making all reasonable effort to do so and avoid it, quoting as follows from Denman v. Johnston, 85 Mich. 396 (48 N. W. 565).:

“The term ‘gross negligence’ has been used in cases decided by this court, and has a definite meaning, when referred to, as authorizing a recovery for a negligent injury notwithstanding the contributory negligence of the plaintiff. It means an intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another. It also implies a thoughtless disregard of consequences, without the exertion of any effort to avoid them.”

This definition has several times since been referred to and applied by this court. Borschall v. Railway, 115 Mich. 473 (73 N. W. 551); Redson v. Railroad Co., 120 Mich. 671 (79 N. W. 939); Labarge v. Railroad Co., 134 Mich. 139 (95 N. W. 1073); Allworth v. Lighting Co., 142 Mich. 25 (105 N. W. 75); Knickerbocker v. Railway Co., 167 Mich. 596 (133 N. W. 504); Berry v. Railway Co., 173 Mich. 181 (138 N. W. 1038).

As a result of plaintiff’s exertions and omissions, a dangerous, unlighted obstruction rested across defendant’s track upon this dark night, imperiling, to him, but the property he had put there, while, to defendant, it jeopardized not only its property, but the safety and lives of its passengers and employees. The evidence conclusively shows him guilty of serious negligence, while it falls short of tending to show that the motorman was guilty of any wilful, wanton, or gross negligence amounting to an intentional failure to perform a manifest duty in reckless disregard of the consequences to the life or property of others.

We find no occasion to disturb the judgment of the nisi prius court, and the same will stand affirmed.

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

Kuhn, J.

I cannot agree that the defendant should be held to be free from negligence. In my opinion, the motorman should have stopped or slowed down upon seeing the light on the track and ascertained what the cause of the signal was. It should be so held in the interests of the traveling public; I agree, however, that the plaintiff was guilty of contributory negligence, and therefore concur in the result.

Bird, J., concurred with Kuhn, J. Person, J., did not sit.


text:
    FELDMAN v. PRESTON.
    1. Attachment — Affidavit.
    The extraordinary and harsh remedy of attachment, permitting a plaintiff to impound a defendant’s property to secure a prospective judgment, is allowed hy statute, under special circumstances.

      2. Same — Showing—Statutes—Construction.
    Because of the harshness of the remedy the statute will be strictly construed, and a claim must be well grounded to entitle plaintiff to its benefit.
    S. Equity — Trusts—Payment of Debts — Jurisdiction.
    Trust property, unless otherwise provided by statute, can only be subjected to the payment of debts in a court of equity.

      4. Trusts — Binding Estate — Powers of Trustee — Personal Liability.
    A trustee cannot bind the trust estate, but will be held personally bound by contracts he makes as trustee, for the obvious reason that the person contracted with would otherwise be without remedy; the mere use of the name of trustee will not discharge the trustee, but to protect himself from individual liability he must expressly stipulate that he is not to be personally responsible.
    5. Attachment — Execution—Trusts.
    In Michigan the estate of a cestui que trust is not subject to attachment or execution.
    6. Same — Equity—Reimbursement—Personal Judgment.
    The property held by defendant as trustee, not being subject to attachment, plaintiff’s action can only lie against defendant personally, and the latter might, by authority of the equity court, be reimbursed out of the assets of the estate in his hands for any judgment enforced against him.
    7. Trusts — Trust Deeds — Lien of Trustee — Execution.
    Where a trust agreement provided that any funds advanced or compensation earned by the trustee should be repaid before he would be required to reconvey the property, he became a secured creditor with a lien in the nature of an equitable mortgage; such interest being no greater than that of an ordinary mortgagee, which is not subject to attachment.
    8. Attachment — Affidavit — Sufficiency — Issue — Burden of Proof.
    Where plaintiff’s affidavit charged that defendant fraudulently contracted a debt then due him, grounds under the statute for the issuance of the writ, and defendant by his motion, to quash challenged and denied the truth of such grounds, a question of fact was raised upon which an issue might have been framed at the instance of plaintiff; the burden of proof being upon the plaintiff.
    9. Same — Appeal and Ebeob.
    If, at the time the motion was decided, it turned upon a controlling issue of fact, fairly raised by conflicting evidence, the conclusions or inferred finding of fact thereon by the trial court might not be disturbed.
    10. Same — Dismissal.
    ' Where, at the time defendant’s motion to quash. the writ was denied, the cause of action set up by plaintiff in his declaration was based upon a breach of a contract and was not such as would support the grounds for attachment stated in plaintiff’s affidavit therefor, viz., that defendant fraudulently contracted the debt for which the action was brought, plaintiff had, as a matter of law, failed to sustain the verity of his affidavit, and defendant’s motion to quash ought to have been granted.
    Certiorari to Presque Isle; Emerick, J.
    Submitted October 10, 1916.
    (Docket No. 99.)
    Decided December 22, 1916.
    Attachment proceedings by Sam Feldman against Thad B. Preston, individually and ap trustee. From an order denying a motion to quash, defendants bring certiorari.
    Reversed.

      Hawley & Eldred, for appellants.

      I. S. Canfield, for appellee.
   Steere, J.

On February 26, 1916, plaintiff, Feldman, a resident of Onaway, Presque Isle county, Mich., began this action by attachment in that county against defendant Preston, who was a resident of Ionia county, Mich.

Plaintiff made an affidavit stating as the grounds and foundation for his writ of attachment:

“That Thad B. Preston, trustee, and Thad B. Preston, the defendant named in said writ, is now justly indebted to Sam Feldman, the plaintiff named in said writ, in the sum of $1,500, as near as may be over and above all legal set-offs, and that the same is now due and payable upon contract.
“And this deponent further says that he has good reason to believe and does believe that the said Thad B. Preston, trustee, and individually, has fraudulently contracted the debt and incurred the obligation respecting which this suit is brought.”

The writ of attachment, made returnable on March 28, 1916, was first caused to be levied upon certain real estate in Presque Isle county, appraised at upwards of $20,000, standing in the name of said Thad B. Preston as trustee for his grantors Merritt Chandler and wife, and their creditors. The habendum clause in the trust deed of this property to Preston stated that it was given in trust for the uses, interests, and purposes limited and described in a certain instrument of trust executed between the parties of even date with the deed:

“That is to say, the said second party (Preston> is to have full power and authority to sell and disposeí of the property and premises herein described for the; purpose of liquidating the debts and obligations of the; first parties and after the payment of said debts and! expenses of the trust and the compensation agreed upon in said trust instrument to said trustee suck property as remained in said trustee’s hands shall be reconveyed to said party of the first part, their representatives or assigns and the said trustee is herein and hereby given a period of five years from the date hereof to complete and carry out the trust, if necessary,” etc.

In connection with and supplemental to the levy upon said real estate in Presque Isle county, the sheriff of Ionia county, on March 14, 1916, personally served upon said Preston, in Ionia county, certified copies of the writ, levy, etc. Returns of the two sheriffs, duly filed with the clerk of Presque Isle county, showed that the statutory prerequisites and formalities prescribed in such cases were complied with by them. No question is raised as to the manner in which the levy and service were made by the two officers. It is undisputed that Preston was not then a resident of Presque Isle county and never had been, but then was and had been for many years a resident of Ionia county.

On March 28, 1916, defendant, appearing specially by counsel, made and filed in the circuit court of Presque Isle county a special motion to vacate the proceedings, requesting the court “to set aside, quash and, dismiss the writ of attachment and all proceedings thereunder” for the several reasons assigned in said motion, which was accompanied by an affidavit of defendant traversing and denying the facts stated in plaintiff’s affidavit as ground for the attachment, deposing amongst other things that he never was a resident of Presque Isle county, but is and then was a resident of Ionia county, worth in money and property upwards of $100,000 in his own name and owned by him over and above any indebtedness, or property held by him in trust for others, and amply able to pay all his just debts, denied indebtedness to plaintiff, fraudulently or otherwise incurred, and asserted that each and all allegations contained in the affidavit as a foundation for said writ,

“and thereunder stated as a basis or reason for the issuance of any attachment, are false and untrue and are made solely And only for the purpose of wrongfully and unlawfully obtaining a writ of attachment in said county of Presque Isle, taking this deponent away from the forum of his residence and from the county in which he resides, and compelling him to contest said suit at a long distance from his said home, * * * and that the issuance of such writ of attachment constitutes an abuse of the process of this court and is oppressive and illegal.”

On the 28th of March, 1916, plaintiff filed his declaration in said cause containing the common counts in assumpsit, and two special counts alleging the sale of certain cattle to plaintiff by defendant, personally and as trustee, the payment of a certain sum by plaintiff as part of the purchase price, the subsequent neglect or refusal of defendant or his agents to deliver the cattle when demanded or return the money therefor, under circumstances charged to constitute fraudulent conduct, and failure of consideration. This motion was heard on the 15th of May, 1916, and, after argument, taken under advisement by the court, following which, on the 1st day of June, 1916, plaintiff filed in said cause an affidavit in opposition to said motion, and on the 14th day of June defendant filed a counter affidavit .thereto.

On the 19th of July, 1916, an order was made by the circuit court of Presque Isle county denying defendant’s motion, and he removed the proceedings to this court for review by certiorari. The grounds assigned in said motion to quash are, briefly stated:. That plaintiff’s affidavit for the writ of attachment was not true in fact and no valid grounds existed for the issuance of'a writ of attachment; that plaintiff knew his affidavit was false in fact, and made the same solely for the purpose of obtaining a writ of attachment by which to commence proceedings in Presque Isle county, and, under a levy upon the land there located in defendant’s name as trustee, secure service on him in the county of Ionia; that the property levied upon by virtue of the writ of attachment was trust property consisting entirely of real estate, not owned by defendant but held by him as trustee for the benefit of Chandler and wife and théir creditors, and therefore not subject to levy and seizure under a writ of attachment for the individual debts of or liabilities incurred by Preston, and such void levy upon trust lands in the county of Presque Isle afforded no basis for service of process upon defendant in the county of Ionia, and gave the Presque Isle court no jurisdiction over him; and that in any event jurisdiction was lost by failure of plaintiff to file his declaration before 15 days had elapsed following the issuance of said attachment.

It apparently stands undisputed that defendant is a permanent resident of this State and of ample financial responsibility to be holden under process for any judgment which might be obtained against him. Neither nonresidence, insolvency, nor concealment of person or property are claimed. The inadequacy of ordinary process within the State, as usually, understood in attachment proceedings, is not suggested in the record or set up as the ground of attachment. The only ground laid in plaintiff’s affidavit is that defendant fraudulently contracted or incurred the debt, sometimes designated an exceptional and anomalous ground even in the extraordinary and harsh remedy by attachment, which under special circumstances permits a plaintiff to impound a defendant’s property to secure a prospective judgment. Waples on Attachment (2d Ed.), § 73. The inference is persuasive that plaintiff’s primary purpose in resorting to attachment was that he might select his forum. He was entitled under the statute to this incidental benefit if his attachment was well grounded, just as defendant is entitled to any technical defense which recognized strict construction of the statute, because of the harshness of the remedy, makes available in attachment cases. The actual merits of this case are not before the court, and we are not impressed by the reciprocal charges of lack of merit in opposing parties’ claims because of resort to technicalities. From the standpoint of either party only strictly legal rights are involved. The question before the court is one of jurisdiction.

This attachment was only levied upon real property, title to which was held in. trust by defendant. It is a well-settled general rule that trust property, unless •otherwise provided by statute, can only be subjected to the payment of debts in a court of equity (39 Cyc. p. 451), and it is also the general rule that a trustee •cannot bind the trust estate, but “will be held personally bound by contracts he makes as trustee, for the obvious reason that the person contracted with would otherwise be without remedy. The mere use of the name of trustee * * * will not discharge the trustee. In order to protect himself from individual liability he must expressly stipulate that he is not to be personally responsible.” 28 Am. & Eng. Enc. Law (2d Ed.), p. 1074, where numerous cases are cited, including Packard v. Kingman, 109 Mich. 497 (67 N. W. 551), where it is said: “This doctrine is established by a list of cases, long and generally uniform.” It is again affirmed as applied to a guardian, in Lothrop v. Duffield, 134 Mich. 485 (96 N. W. 577). It was early held in this State that the estate of a cestui que trust is not subject to attachment or execution. Trask v.Green, 9 Mich. 358; Gorham v. Arnold, 22 Mich. 247.

Applying those principles to the facts in this case so far as disclosed, plaintiffs action can only lie against Preston personally even though the alleged contract was made by him as trustee. If he were held individually liable and made to respond to a personal judgment against him, he might by authority of the equity court be reimbursed out of the assets of the estate in Ms hands, but the property held by him as a trustee is not subject to direct attack and seizure by attachment for his personal liability or debts thus incurred. 6 C. J. p. 206; Hussey v. Arnold, 185 Mass. 202 (70 N. E. 87).

It is urged, however, in this connection, that Preston owned and held for himself an individual interest in the land attached to the extent of any funds he advanced or compensation he .earned as trustee, for the reason that the trust agreement and declaration of trust provide for the same being repaid to him before he is required to reconvey the remaining property to his grantors, and under authorities cited attachment will lie upon a trustee’s individual undivided interest in land, to the extent of his personal interest.

That such sums when advanced or earned under the terms of a trust agreement become secured by, or a lien on, the trust property in his hands, is evident, and it seems equally clear that by paying the same the Chandlers could release their property from the burden and, so far as it was concerned, compel reconveyance to them. He became a secured creditor under the trust deed, operating in that particular in the nature of an equitable mortgage. His individual interest was no greater than that of an ordinary mortgagee in mortgaged lands, and such an interest is not subject to attachment. Columbia Bank v. Jacobs, 10 Mich. 349 (81 Am. Dec. 792); Clark v. Watson, 141 Mass. 248 (5 N. E. 298); 3 Am. & Eng. Enc. Law (2d Ed.), p. 210.

It is strenuously urged for plaintiff that the question of Preston’s personal interest in the land attached cannot be properly or fairly passed upon in this preliminary motion and manifestly incomplete record, but is a material issue of the case which ought to be left open for determination upon final trial of the cause. If Preston had other or further interest in the land than that shown in his affidavit in support of this special motion and by the habendum clause of his trust deed, made a part thereof, it was competent for plaintiff to have so shown; but even conceding he had, or that for any reason the question should be reserved as urged, we are impressed that upon the record as it stood when the motion was denied plaintiff had as a matter of law failed to sustain the verity of his affidavit for the writ.

Defendant by his motion and showing challenged and denied the truth of the ground for an attachment stated in plaintiff’s affidavit therefor, and it may be conceded thereby raised a question of fact upon which an issue might have been framed at the instance of plaintiff, as in the case of a plea in abatement, for the charge in plaintiff’s affidavit that defendant fraudulently contracted a debt then due him furnished grounds under the statute for the clerk of the court to issue the writ. The record discloses no findings by the trial court, and the framing or recognition of an issue is but inferable from denial of defendant’s motion, which operated necessarily to sustain plaintiff’s affidavit. If at the time the motion was decided it turned upon a controlling issue of fact fairly raised by conflicting evidence, the conclusions or inferred finding of fact thereon by the trial court might not be disturbed; but, when such an issue was raised, the burden of proof to sustain the truth of his affidavit in support of his claimed grounds of attachment rested upon plaintiff. His brief affidavit for attachment, destitute of detail, asserted a debt then due “upon contract” and, as ground of attachment, that he “has good reason to believe and does believe” said Preston “has fraudulently contracted the debt and incurred the obligation respecting which this suit is brought.” When an issue was raised as to the truth of such an affidavit, the fundamental question became whether defendant is shown to have been guilty of some material deceptive act, word, or concealment done, said,'or suffered by him with intent to induce, and which did induce, plaintiff to enter into the contract sued upon and consent to the debt, not merely whether he subsequently dishonestly breached the contract and thereby wronged or defrauded plaintiff, which is the real grievance here, as disclosed in plaintiff’s counter showing and declaration. Of the contract itself we discover no complaint made, or facts stated, to sustain the charge of fraud.

“It is a sufficient ground for a motion for the .quashal of an attachment that the cause of action set up by the attaching plaintiff is not such as will support an attachment; and this has been held to be true, although, the affidavit for attachment does state such a cause of action.” 6 C. J. p. 423.

The contract out of which this action arose is shown by plaintiff’s declaration and counter showing to have been entered into on September 19, 1914, at Onaway, for the purchase from defendant of a certain number of fat cattle at an agreed price, to be delivered on or before November 1, 1914, upon which he paid, on or before November 2, 1914, $1,000; it being “agreed that the balance of the said purchase price of said cattle wás to be paid when the said plaintiff should ship the cattle to market and dispose of the same.” Not only is his showing barren of any suggestion of misrepresentation or fraudulent inducement by defendant which led him to enter into this contract of September 19, 1914, but he makes manifest that all the trouble between the parties, in which he claims defendant through his agent acted dishonestly and fraudulently, occurred in November, and grew out of a then foot and mouth disease quarantine against shipping cattle from the State, as a result of which two carloads of the cattle shipped from Onaway on November 1st, consigned by defendant to Chicago, accompanied by plaintiff and defendant’s agent, were stopped from leaving the State when they reached Jackson, and defendant’s agent refused to divert the shipment to where plaintiff desired within the State, and shipped them back to Onaway.

The merits of that controversy are not involved here, but upon this record as it stood when defendant’s motion was denied the cause of action set up by plaintiff was based upon a breach of that contract and was not such as would support the grounds for attachment stated in his affidavit therefor. It cannot be found as a matter of fact or law that he has by a preponderance of evidence shown that defendant fraudulently contracted the debt for which this action is brought.

We are therefore constrained to conclude that defendant’s motion ought to have been granted, and the judgment, or order, denying the same is, accordingly, reversed.

Stone, C. J., and Kuhn, Ostrander, Bird, Moore, and Brooke, JJ., concurred. Person, J., did not sit


text:
    PEOPLE v. HARRISON.
    1. Statutes — Construction—State Lesislature.
    It is competent for legislative bodies, when enacting laws, to include interpreting clauses or general rules of construction, for present or future statutes.
    2. Criminal Law — Statutes—Local-Option Law — Presumptions.
    It will be presumed that the legislature, in enacting section 16 of the local-option law (Act No. 207, Pub. Acts 1889, as amended, 2 Comp. Laws 1915, § 7094), had in mind and legislated in reference to the general law (5 How Stat. [2d Ed.] § 15164; 3 Comp. Laws 1915, § 15846) relating to judgments in criminal cases, and inferentially knew that it prescribed a rule of construction for the punitory provisions adopted, by which it made no difference whether the conjunctive “and” or disjunctive conjunction “or” was used.

      3. Same — Statutes—Local-Option Law — Penalty — Discretion of Judge.
    So where respondent was convicted of a violation of the local-option law, the court below was in error in refusing to exercise his discretion in imposing a fine and jail sentence where he would have imposed a fine only had he construed the law as giving him any discretionary power.
    4. Same — Appeal and Error — Sentence—Remand.
    Where the record discloses a valid conviction in a criminal prosecution and an irregular sentence which may be set aside and a new sentence imposed, the sentence imposed will be vacated, and the case remanded to the court below with directions to set same aside and impose such sentence under the law as in his discretion seems just and right.
    Error to Lapeer; Williams, J.
    Submitted October 16, 1916.
    (Docket No. 174.)
    Decided December 22, 1916.
    James Harrison was convicted of violating the local-option law and sentenced to pay a fine of $200 and to be confined for 30 days in the county .jail.
    Sentence vacated and remanded for new sentence.

      Grant Fellows, Attorney General, and Herbert W. Smith, Prosecuting Attorney, for the people.

      Theo. D. Halpin, for respondent.
   Steere, J.

In the circuit court of Lapeer county, on June 20, 1916, defendant was convicted on his plea of guilty of a violation of the local-option law then in effect in said county, and upon the same day sentenced by the court to pay a fine of $200 and to be confined in the common jail of said county for a period of '30 days, with the added provision that, if the fine imposed was not paid within the 30 days, defendant should be further confined in jail until the same was paid; the period of his confinement not to' exceed in all six months.

Sentence was pronounced under section 5427, 2 •'Comp. Laws, being section 16 of the so-called local-option law, originally passed in 1889 (Act No. 207), subsequently amended by Act No. 183, Pub. Acts 1899, and Act No. 107, Pub. Acts 1909 (2 Comp. Laws 1915, § 7094), and which now, as when sentence was imposed, provides, so far as material here, that:

“Any person who himself, or by his clerk, agent or employee, shall violate , any of the provisions of this act, shall, for the first offense, be deeméd guilty of a misdemeanor, and upon conviction thereof be sentenced to pay a fine of not less than $50 ñor more than $200 and the costs of his prosecution, and to imprisonment in the county jail not less than twenty days nor more than six months, in the discretion of the court.”

Defendant’s single assignment of error concisely presents the question raised for review as follows:

“The court erred iñ imposing a jail sentence on respondent when the discretion of the court, if exercised,, would have imposed a fine without a jail sentence/’

In pronouncing sentence the presiding judge stated5, that he would be glad to accept a construction of the= statute giving him discretion to impose either fine or-imprisonment, as contended for by defendant’s counsel, if his view of the law permitted, and said to; defendant, in part:

“If I could see my way clear to do so, I should impose a fine without a jail sentence; but, as I understand the law and my duty under that law, I cannot do that, and I put it upon the ground that I have no discretion in the matter.”

It is said, and seems manifest, that the trial court was constrained to the views expressed and construction put upon the provisions of section 16 by language found in the case of People v. Sharrar, 164 Mich. 267 (127 N. W. 801, 130 N. W. 693), where upon the first hearing such construction was approved; but upon a rehearing before- the full bench it was held and said:

“We are satisfied, after a careful re-examination of the record, that whether the court properly construed, the statute as requiring the imposition of a fine and a term of imprisonment is a question not involved.”

The case was then affirmed on other grounds, and what is there said relative to the statute making imperative imposition of both fine and imprisonment may be regarded as dictum, being neither controlling of nor essential to the decision ultimately rendered.

It is competent and not uncommon for legislative bodies, when enacting laws upon some important subjects, to include interpreting clauses, or general rules of construction, for present or future statutes. Such course has been followed by the legislature of this State at various times, as evidenced by the chapters in our Compiled Laws relating to estates in real property, uses and-trusts, powers, etc. Very early in the history of the State, when dealing with the subject of “judgments in criminal cases and the execution thereof,” the legislature took note of and provided a statutory interpretation to meet the well-known loose and often confusing use of the conjunctive and disjunctive words “or” and “and” by the following enactment:

“Whenever it is provided that an offender shall be punished by imprisonment in the county jail and a fine, such offender may, at the discretion of the court, be sentenced to be punished by such imprisonment without the fine, or by such fine without the imprisonment; and, whenever it is provided that an offense shall be punished by fine or imprisonment, the court may impose both such fine and imprisonment in its discretion.”

The Revised Statutes of 1838 (page 678, § 4) con-' tain the first provision of this section, the last being added in substance the following year (Session Laws of 1839, p. 233, § 52 [§ 15]), and with immaterial alterations to correct grammatical inaccuracies it was embodied, as quoted, in the Revised Statutes of 1846, p. 705, § 4.

This general rule of statutory interpretation -has remained unchanged on our statute books until the present time, appearing in our various compilations as follows: 2 Comp. Laws 1857, § 6103; 2 Comp. Laws 1871, § 7987; 2 How. Stat. (1st Ed.) § 9603; 3 Comp. Laws 1897, § 11973; 5 How. Stat. (2d Ed.) § 15164; and 3 Comp. Laws 1915, § 15846. It was first questioned in People v. Minter, 59 Mich. 557 (26 N. W. 701), in 1886. The respondent in that case was sentenced for violation of the liquor law, both fine and imprisonment being imposed. The judge in pronouncing sentence announced there, as here, that he was impelled to impose both, being satisfied that the law gave him no discretion, as the act under which respondent was convicted provided that punishment should be by fine “and” imprisonment. It was there squarely held that, by reason of the legislative rule of construction above quoted, discretionary power was given to the court, and it was error not to exercise the same.

That the general statutory rule of. construction long ago provided, and persistently retained unchanged, for pronouncing “judgments in criminal cases and the execution thereof,” is in point and controlling, if not repealed or amended, cannot be questioned. It does not change or modify the provisions of section 16, but only prescribes a rule of interpretation for the language found there. Presumptively the local-option law was enacted and amended with reference to section 9603, 2 How. Stat. (1st Ed.), the requirements of which became applicable and, in effect, a part of its punitory provisions. The general rule is thus concisely stated in 36 Cyc. p. 1105:

“It is competent for the legislature to enact rules for the construction of statutes, present or future, and, when it has done so, each succeeding legislature, unless a contrary intention is plainly manifested, is supposed to employ words and frame enactments with reference to such rules. * * * Such acts of legislative construction are not binding upon the courts as to transactions occurring before their passage, but as to matters occurring thereafter such legislation guides all departments of government, even though plainly contradictory to the act construed.”

Can it be said that any contrary intention, adequate to operate as an implied repeal or amendment of this general statute of interpretation, is plainly manifest by the fact and character of the intervening amendments ? Section 16 of the local option law as originally enacted (Act No. 207, Pub. Acts 1889) provided that any person who violated the “provisions of section one” of the act should upon first conviction be sentenced to pay “a fine of not less than $50 nor more than $200 and the costs of his prosecution, or to imprisonment in the county jail not less than 20 days nor more than six months, in the discretion of the court.” In 1899 (Act No. 183, Pub. Acts 1899), several sections of the local-option law were amended, and a new section was added, numbered 25, relative to the duties of druggists in counties where the law was operative. To make the penal provisions found in section 16 applicable, it was amended to include the added section 25, and in recasting the section for that manifest purpose the word “or” was replaced by “and” in the portion relating to imprisonment in the county jail. By Act No. 107, Pub. Acts 1909, the law was further amended in various particulars, and section 16 was again changed by substituting, for “shall violate any of the provisions of sections one or twenty-five of this act,” the more comprehensive phrase “shall violate any of the provisions of this act,” otherwise remaining the same as before, and as now in force.

It is a general rule of construction that lawmaking bodies are presumed to know of and legislate in harmony with existing laws, and the language of every enactment is, so far as possible, to be construed consistent with other laws which it does not in plain and unequivocal terms modify or-repeal. In enacting and amending section 16, the legislature presumptively had in mind and legislated in reference to the general law relating to judgments in criminal cases and, inferentially at least, knew that it prescribed a rule of construction for the punitory provisions adopted by which it made no difference whether the conjunctive “and” or disjunctive conjunction “or” was used. Whichever is used, the language of both acts may have their proper force and harmonious operation without doing any violence to either. How then can there be a repeal by implication when one equivalent word takes the place of another in the course of important amendments of the act for other purposes ? There is scant significance and no magic to repeal a prior long-operative law in the unexplained substitution of “and” for “or” in a lengthy clause where both operate in a sense conjunctively.

The confusion arising from questionable use of those words is proverbial, and the wisdom of legislative construction, pinning them down so far as possible to a definite meaning when used in defined relation with other words or phrases, is graphically made manifest by the tomes of cases upon the subject which can be found cited in volume 2 of Corpus Juris, p. 1339, and following, or the elaborate discussion of their bewildering use and endless citation of relevant cases in any text-book on rules of construction. All of which is very convincing that the change from “or” to “and” in section 16 may have meant anything or nothing in the minds of legislators.

It is well said in 2 Lewis’ Sutherland on Statutory-Construction (2d Ed.), § 397:

“The popular use of ‘or’ and ‘and’ is so loose and so frequently inaccurate that it has infected statutory enactments.”

Of changes in phraseology it is said (section 401):

“Every change of phraseology, howeyer, does not indicate a change of substance and intent." The change may be made to express more clearly the same intent or merely to improve the diction. The change is often found to be the result of carelessness or slovenliness of the draftsman. The changes of phraseology may result from the act being the production of many minds, and from being compiled from different sources. Hence the presumption of a change of intention from a change of language is of no great weight, and must mainly depend on the intrinsic difference as resulting from the modification. A mere change in the words of a revision will not be deemed a change in the law unless it appears that such was the intention. The intent to change the law must be evident and certain; there must be such substantial change as to import such intention, or it must otherwise be manifest from other guides of interpretation, or the difference of phraseology will not be deemed expressive of a different intention.”

To the same effect, see Maxwell on Interpretation of Statutes (5th Ed., by Stroud), p. 520.

The mere change from “or” to “and” in section 16, during the process of amending the local-option law in other important particulars, cannot be deemed a substantial change which, by settled rules of construction, implies an intention to modify or repeal a well-seasoned statute which is applicable, was presumably legislated in reference to, and which by its plain terms operates upon, and harmoniously with, the exact language of the change.

“If two statutes can be read together without contradiction, or repugnancy, or absurdity, or unreasonableness, they should be read together, and both will have effect.” 1 Lewis’ Sutherland on Statutory Construction (2d Ed.), § 267.

We find no occasion to disturb the conclusions reachd in People v. Minter, supra, touching the discretionary powers of the trial court in imposing sentence, which controls the question involved here.

The record discloses a valid conviction and irregular sentence which may be set aside and a new sentence imposed, defendant having been released on bail pending these proceedings and nothing done by way of executing the first sentence.

The sentence imposed and here passed upon must therefore be vacated, and the case remanded to the trial court, with directions to set the same aside and impose such sentence under the law as in his discretion seems just and right.

Stone, C. J., and Kuhn, Ostrander, Bird, Moore, and Brooke, JJ., concurred. Person, J., did not sit.


text:
    NORTHERN ASSURANCE CO. v. MEYER. SAME v. KRAENZLEIN.
    1, Evidence — Bills and Notes — Pabol Testimony — Contracts.
    Valid notes, signed by defendants in payment of life insurance premiums, are controlling written evidence of what agreements were finally made between them and the insurance company.
    2. Insurance — Anti-Rebate Law.
    The buying of drinks of intoxicating liquor for defendants whom he was soliciting, by the agent of a life insurance company, where the defendants were sober and mentally normal, cannot be classed as a distinction or discrimination, in favor of defendants within the purview and intent of; the anti-rebate law (Act No. 181, Pub. Acts 1907, 2 Comp.. Laws 1915, § 9353).
    3. Same — Interest.
    Neither does the failure to exact interest upon notes given for premiums for the short time necessarily consumed in the expeditious consummation of the transaction, according to due course of mail and customary manner of doing _ business, contravene the purpose . or spirit of the law.
    4. Same — Premium Notes — Payment.
    The acceptance by an insurer of an insured's note for the first premium will make the contract of insurance binding, even though the policy required the premium to be paid before the contract should become effective.
    5. Same — Premium Notes — Fraud—Estoppel—Rescission.
    Where defendants gave notes for the first year’s premiums on life insurance policies, took possession of the policies and receipts and retained them during the entire year, and had the benefit of the insurance, they are estopped from asserting that the notes were obtained by fraud, in an action to recover thereon, where they took no active steps to rescind, but allowed their claim to rest in parol.
    Error to Bay; Sharpe, J., presiding.
    Submitted October 3, 1916.
    (Docket No. 14.)
    Decided December 22, 1916.
    Assumpsit in justice’s court by the Northern Assurance Company against John George Meyer and Rudolph Kraenzlein for' the amount of premiums on certain policies of life insurance. From judgments for plaintiff, defendants appealed to the circuit court where both were tried as one suit. Judgment for plaintiff on a directed verdict. Defendants bring error.
    Affirmed.

      Charles W. Hitchcock, for appellants,

      Weadock & Duffy, for appellee.
   Steere, J.

The above-entitled causes were apparently begun in justice’s court, as the pleadings were oral, but heard together in the circuit court of Bay county and brought here upon a single, record, with the explanation in the bill of exceptions that:

“The defendants were separately sued, but the cases involved one and the same question, and both suits were tried together,” and “it was agreed on the trial that the evidence submitted should be applicable to both of these cases.”

Plaintiff declared orally upon the common counts in assumpsit and especially upon two notes signed by defendants. That signed by defendant Meyer is as follows:

“Bay City, Mich., July 16th, 1913. $155.76.
“On delivery of policy after date for value received I promise to pay to the order of Northern Assurance Co., one hundred fifty-five and 76/100 dollars, at the Bay County Savings Bank, Bay City, Mich., with interest thereon at the rate of seven per cent, per annum after maturity.
“No........ Due on delivery of policy.
[Signed] “John George Meyer.”

Indorsed on back:

““For collection.
“Northern Assurance Co.,
“C. L. Ayers, Prest.”

The one bearing defendant Kraenzlein’s signature is identical in form and date, the amount being for $158.46, owing to a difference in their ages and consequent cost of the policies for which it is claimed the notes were given. The plea is stated as follows:

“The defendants respectively orally pleaded the general issue and gave notice under said plea that plaintiff was not the proper party to commence suit, that if plaintiff accepted a note that did not bear interest from the date of its execution, it was guilty of rebating under the law; that if Mr. Fitzgerald paid the note, less his commission, the note was his; that there was a lack of consideration and the policy was void under’ the statute because it was not in force until the first premium was paid; that plaintiff’s agent, Fitzgerald, made misrepresentations in securing said insurance.”'

At conclusion of the testimony the court directed a verdict in favor of plaintiff, and entered judgment, or judgments, thereon for the amount of the notes, with interest, according as they read.

Plaintiff is, and was in 1913, a Michigan corporation, with its headquarters and home office in the city of Detroit, duly authorized to engage in the business of selling life insurance in this State. It had in its employ a soliciting agent named Fitzgerald, who, residing in Bay City, worked that territory. He used an automobile in his business, and on the afternoon of July 16, 1913, drove out to a place of entertainment called the “Farmer’s Home,” owned by a man named Martin, located about nine miles southwest of Bay City, where defendants- were at work putting down a cement floor in the basement of the saloon building. Defendants were workmen, contracting masons as stated by Kraenzlein, and both testified that they had been together for a number of years as contractors, bidding on jobs and taking contracts in their line around through the country, at times also doing work by the day. Fitzgerald solicited them for insurance, and secured from each an application for a $5,000 policy of life insurance. After securing their written applications .Fitzgerald procured a medical examiner, who examined and passed them for insurance. A record of their medical examination was prepared, and the two notes in question for the amounts of the first year’s premiums on their respective policies were signed by them. The applications were promptly forwarded to the home office by Fitzgerald, there approved, and the policies, dated July 16, 1913, with receipts for the first year’s premiums, were issued and forwarded to Fitzgerald, who, on July 21, 1913, took them to defendants, who were working at another place, not far from where one or both of them resided, in Frankenlust township. The foregoing facts are undisputed. Defendants, however, contend that they did not knowingly sign the notes; that they declined to pay for or accept the policies when Fitzgerald tendered them, and repudiated the whole transaction when he claimed to have their notes.

Fitzgerald testified that after securing their applications for insurance he explained to them that by giving their notes for the first year’s premiums, payable on delivery of the policies, he could give them a binding receipt, so that they would be insured from that time, provided their applications were accepted; that they assented to this proposition and sighed the notes, receiving from him the binding receipts; that he made no other proposal or promise touching time or terms of payment, and when he delivered the policies to them, there was no refusal or demurrer in regard to taking them, nor denial of their notes, but they told him they did not have the money collected yet, or on hand, Meyer saying he would. leave the money at his brother’s hotel later, and Kraenzlein said he did not want to draw money from the bank and pay interest; that witness thereupon said it was all right, as the notes were bearing interest, and went away, leaving the policies and receipts for premiums with them.

Defendants testified that their applications were made on assurances by Fitzgerald that they should have a year, without interest, to pay the first premiums; that they did not understandingly sign the notes, their signatures to which are not denied; and that when the policies were offered to them on July 21st they told Fitzgerald they did not have the money and could not pay them, in reply to which he insisted on their accepting the policies, said he had their notes and requested payment; that they then each denied signing a note, accused him of deceiving them, declined to accept the policies, and offered them back to him, but he refused, telling them they had their policies and he had their notes, which they would have to pay, and went away. Each, however, took and kept his policy and receipt for premium until produced at the trial; counsel for plaintiff having requested their production.

Attached to the policies were copies of their applications, with “supplementary statement” as to residence, occupation, relatives, health, habits, etc., which they admittedly signed, and with them a receipt for the first year’s premium. Kraenzlein’s is as follows:

“Received from Rudolph Kraenzlein of Bay City, Michigan, the sum of one hundred fifty-eight and 46/100 dollars, being the annual premium on policy No. -for $5,000 due on the 16th day of July, 1913, which pays the regular premium up to the 16th day of July, 1914.
“This receipt to be valid must be signed by the president or secretary, and countersigned by an authorized agent of the company.
“C. L. Ayres, President.
“Countersigned this 21st day of July, 1913.
“James E. Fitzgerald, Agent.”

That of Meyer is the same, excepting name and amount. Kraenzlein testified that the receipt was. inside his policy, which he took home and read. Asked, “From that time to this you have had it?” he answered, “Yes.”

The questions raised and argued under defendants.’ assignments of error are, in brief, that plaintiff by the undisputed evidence was guilty of rebating under Act No. 181, Pub. Acts 1907 (2 Comp. Laws 1915, § 9353), and a verdict should have been directed for that reason; that, irrespective of the question of rebate, whether a binding receipt was given defendants when they made application, and whether they were deceived and fraudulently misled into signing these papers, particularly the notes in question, were controlling issues of facts which should have been submitted to the jury. The so-called “anti-rebate law” provides in part:

“Nor shall any such company or agent thereof make any contract of insurance or agreement as to such contract other than is plainly expressed in the policy issued thereon; nor shall any such company, or any officer, agent, solicitor or representative thereof, pay, allow or give, or offer to pay, allow or give, directly or indirectly, as inducement to insurance, any rebate of premium,” etc.

The particulars in which it is claimed this law was violated are that inducements were held out to defendants by Fitzgerald buying the drinks, offering them a year in which to pay without interest, and taking their notes without interest until the policies were delivered. If the notes signed by defendants are valid, they not only sustain Fitzgerald’s testimony that no proposal was made during negotiations for a year’s time in which to pay, but are the controlling written evidence of what agreement was finally made. It is undisputed that Fitzgerald treated defendants and others working in the basement of the saloon, and bought drinks for defendants during, or after, the negotiations for insurance. Kraenzlein, who testified to drinking several times, said:

“We did not have any drinks while Fitzgerald was taking the application. * * * He bought a few drinks before we went out.”

Both defendants testified that they drank occasionally and were familiar with barrooms. Kraenzlein had tended bar in a hotel at one time, and Meyer admitted a reasonable familiarity with such placés, in the capacity of patron. They testified that they were not under the influence of liquor, but were in full possession of their faculties, returning to their work when the business was finished; Meyer suggesting, however, that as a result of the drinks “a fellow would be liable to be a little easy.” While this crude and decadent method of lubricating solicitation of business is to be deprecated, it cannot be classed as a distinction, or discrimination, in favor of defendants within the purview and intent of the anti-rebate law, where the parties solicited are sober, and mentally normal; neither does the failure to exact interest upon these notes for the short time necessarily consumed in the expeditious consummation of the transaction, according to due course of mail and customary manner of doing business, contravene the purpose or spirit of this law. Under plaintiff’s undisputed testimony, the premiums sought to be recovered as evidenced by the notes are the exact rates charged to others of like ages for policies of the same kind and amount; the agent was authorized to take notes for premiums; the papers were promptly forwarded to the home office, approved, notes accepted in payment, policies and receipts in full for the premiums were prepared, sent to Bay City by mail, and delivered to defendants' within five days. In Heffron v. Daly, 133 Mich. 613 (95 N. W. 714), cited by defendant, there was a division of commission with the insured, and his note given for the balance. As evidenced by the note and a written agreement between the parties, the transaction from its inception clearly showed a marked discrimination against the letter and spirit of the law.

The giving and accepting a note is a payment in advance in compliance with the statute. Sebring v. Hazard, 128 Mich. 330 (87 N. W. 257).

“In general, the acceptance by an insurer of an insured’s note for first premium will make the contract of insurance binding, even though the policy requires the premium to be paid before the contract shall become effective.” 1 Cooley’s Briefs on Insurance, p. 486.

Of their admitted signatures to the notes, which defendants claim to have been misled by Fitzgerald into inadvertently signing, they testify that after they signed their applications in the back room of the saloon above where they were working, Fitzgerald shoved a slip or piece of paper over to each of them at the table where they were sitting, and requested their signatures. Kraenzlein testified he asked Fitzgerald what it was and—

“he said, ‘It is only a certificate’;'and I signed it, and that was all there was to it. * * * I simply took the man’s word for it.”

Meyer testified:

_ “He shoved me over a slip of paper while he was sitting at the table. I asked him what it was. He said that is nothing; T just want your signature.’ So I signed that and that is all there was to it.”

Defendants were mature men of at least average intelligence and business experience. They were mechanics who had been working for themselves in partnership as contracting masons for several years, making and performing independent contracts in the line of their calling, necessarily requiring independent thought and action. They had been to school, and were not ignorant or illiterate. The trial court said of them:

“They both could read and write, and from their appearance on the stand were young men of more than ordinary intelligence.”

They knew this was a business transaction of some importance; that the essentials were reduced to writing and no fiduciary relations existed between them and Fitzgerald. This is not of that class of cases where the parties claiming to have been deceived are shown to be inexperienced in the business world, illiterate or mentally deficient, or dealing with one in whom by reason of their relations they had reason to repose confidence, or even the misreading of an instrument to them. These notes placed before them upon the table at which they sat were short, plain, and unambiguous. An examination of the original record in the case of Price v. Marthen, 122 Mich. 655 (81 N. W. 551), shows in many material respects a marked analogy between the claims made here and those urged by defendant there. In holding the defense could not be' sustained in that case the court said of the contract under consideration, which it was claimed defendant had been tricked into signing by misrepresenting its contents:

“The defendant had ample opportunity to read it. It was his own folly if he chose not to do so. It was not a long one. He knew that it was to be sent by the agent to the plaintiff, to be acted upon by them. It contained definite terms of payment, and provided for an absolute sale. It was unambiguous.”
“Before plaintiff is entitled to relief based upon fraudulent representations of the defendant, he must have exercised ordinary prudence and discretion in reference to faith in the representations made. _ In other words, if the representations relate to a subject-matter which is within his power to investigate for himself by the exercise of reasonable care and prudence, he must do so.
“Where it appears that an instrument is signed without reading, or hearing it read, and with all the means of knowing the truth in his power, and a blind confidence is reposed in the representations of another which are not calculated to deceive a man of ordinary prudence and circumspection, it is not fraud.” Smith on Frauds, §§ 75, 78.

But whatever the truth may be in regard to those matters, it appears undisputed from their own testimony that, after knowing plaintiff had accepted their applications, held their notes in payment for the first year’s premium, issued to them their policies according to the terms of their applications and sent receipts for the premiums, they took possession of these policies and receipts and retained them during the entire year they were in force, and had the benefit of the insurance. The receipts they held so advised them, and the last statement in their applications just above their signatures, copies of which they held attached to the policies, read, in Kraenzlein’s case:

“I have paid to the subscribing agent $158.46 on delivery of policy and hold’ binding receipt No. 8121, showing such payment.”

And in Meyer’s case the same, except the amount stated paid was $155.76 and number of binding receipt, 8122. Although they claim to have protested and refused payment to Fitzgerald on the ground that they did not knowingly sign the note, they stood on their refusal, took no active steps to rescind, left their claim resting in parol, retained the written policies and receipts in their possession with full knowledge of all the facts, true or claimed, and in a position where they, •or their beneficiaries, could enforce payment of the policies should loss, occur. By so doing they have estopped themselves from asserting that the notes they signed, and which they knew plaintiff accepted and receipted for in payment of the premiums, were obtained by fraudulent representations of the soliciting agent.

“The insured cannot defeat payment of the premium upon a policy of insurance, issued at his instance, while he still retains the contract, the very issuance and delivery of which depend upon a cross-obligation that the premiums will be paid.” Boykin v. Insurance Co., 14 Ga. App. 666 (82 S. E. 60).

The judgment is affirmed.

Stone, C. J., and Kuhn, Ostrander, Bird, Moore, and Brooke, JJ., concurred. Person, J., did not sit.