author: Long, J.

text:
    OSIUS v. O’DWYER.
    Mutual Eire Insurance — Standard Policy—Construction — Members—Liability for Assessments.
    Defendants applied to an insurance agent for an ordinary policy of fire insurance, and received a Michigan standard policy, paying the regular premium therefor. The policy was issued by a mutual company. It contained the usual provision that, if made by such a company, any special regulations applicable to its organization should form a part of' the policy, as they might be written or printed thereon or attached thereto, and also a further provision that the articles of association and by-laws of the company should form a part of the policy, and be resorted to in order to determine-the rights and obligations of the respective parties; but no special provisions or regulations were indorsed or appended. Held, that the policy was an ordinary contract of insurance, and did not make defendants members of the-company, and liable for assessments.
    Error to Wayne; Carpenter, J.
    Submitted January 10, 1901.
    Decided July 2, 1901.

      Assumpsit by Adolph E. 0. Osius, receiver of the Protective Fire Association of Detroit, against James G. O’Dwyer and Edward F. Ward, to recover the amount of an assessment. From a judgment for defendants on verdict directed by the court, plaintiff brings error.
    Affirmed.

      Tarsney, Hayes, Lawson & Fitzpatrick (William H. McBryan, of counsel), for appellant.

      William Bolston Brown (Alfred Lucking, of counsel), for appellees.
   Long, J.

This action was commenced in justice’s court. Plaintiff filed a bill of particulars, as follows:

“To defendants’ pro rata assessment as members of the Protective Fire Association of Detroit, Michigan, insolvent, for losses occurring during the period of their membership, as per policy No. 25,002, dated April 5, 1897, and expiring April 5, 1898, for $2,500, and expenses of the receivership, $75.”

Defendants pleáded orally the general issue, with notice that the contract of insurance with the Protective Fire Association was brought about by the misrepresentations of the agent of said company, one Wood, that said company was not a mutual company, but a regular stock insurance company, which representations were untrue, were believed by said defendants, and relied upon by them in entering into said contract of insurance; that said defendants paid the cash premium required of them by said company upon the express representations of said .Wood that they would in no way be held further liable by said company. The cause was tried in justice’s court, and, upon judgment there, appealed to the circuit court, where, upon a trial before a jury, a verdict was returned, under the direction of the court, in favor of defendants.’ Plaintiff brings error.

The court charged the jury as follows:

“ In any view that may be taken of this case, it is to be disposed of by the court, because, if the plaintiff is right, the plaintiff is entitled to a verdict as a matter of law; and, if the defendant is, the defendant is. There is no dispute of facts which I regard, or that I' think counsel seriously regard, as disposing of any material issue. The defendants insist that a verdict should be directed in their favor on several grounds, which, for the purpose of getting them on the record, I will state:

“(1) That the plaintiff was not appointed receiver by the proper judicial tribunal, his appointment having been made by the court of chancery, and not by the court of law.

“(2) This case having been commenced in justice’s court, it should be treated here the same as it was to have been treated there, and it is contended that the justice’s court has no jurisdiction of such matters.

“ (3) It is objected that the proceedings in this case do not properly describe the plaintiff; that he is described simply as receiver, and it is not stated that he is receiver of the Protective Fire Association.

“ (4) It is objected that recovery cannot be had under the common counts in assumpsit.

“(5) It is objected that the defendants never became members of the Protective Fire Association.

“I shall not pass upon any of the first four of the objections, because, in my judgment, the fifth is decisive. I prefer to rest the case upon that proposition, because it forever ends litigation, if I am right. If the defendants should prevail upon any of the first four contentions, it would simply result in other litigation. Now, the question is whether, under the facts of this case, the defendants ever became members of the Protective Fire Association. If 'they did become members, even though they were induced j;o become members by fraud, they would be liable in this case, because the. Supreme Court has decided in the case of Bissell v. Heath, 98 Mich. 472 (57 N. W. 585), that fraud will not be permitted to be urged as a defense where the rights of third persons have intervened, as they have in this case. On the other hand, if the legal effect of the contract made by the defendants did not make them members, that principle can have no application. If, for instance, the defendants had agreed to rent a building, to put an extreme case, to the plaintiff association, obviously it could not be urged that the effect of that contract made them members. Of course, that is not the case before us. This case is much more difficult than that.

“It appears that on the 5th day of April,- 1897, the policy which I hold in my hand, issued by the Protective Fire Association, was delivered to the defendants, and the question is whether the effect of that delivery ever made them members of the association. The policy itself purports to be, and is, the Michigan standard policy. It is precisely such a policy as an insurance company issues to an insured when there is no other obligation upon his part than to pay the premium. It provides, among other things, that the policy should be canceled at any time at the request of the insured, or by the association by giving five days’ notice. If the policy shall be canceled as hereinbefore provided, or become void or cease, the premium having been actually paid, the unearned portion, on surrender of this policy or last renewal, shall be returned, this association retaining the customary short rate. Obviously, the legal construction to be given to this contract is that the obligation of the insured is to pay his premium, and, when he has paid his premium, that ends his liability. Now, the question is whether any other construction is permissible. Very near the close of the policy we find this statement:

“ ‘If this policy be made by a mutual or other company having special regulations lawfully applicable to its organization, * * * such regulations shall apply to and form a part of this policy, as the same may be written or printed upon, attached, or appended hereto.’

“So that any one reading this policy, and observing that, would have a right to suppose that, if this policy were issued by a mutual company, any regulations of that company affecting that contract would be written or printed upon it or appended to it; and their not being written upon it or appended to it would be convincing to me that it was not so issued by a mutual company having such regulations.

“ My attention has been called to this language, which is in addition to the language usually contained in a standard policy:

“ ‘The articles of association and by-laws of this association are hereby declared to be and form a part of this policy, and are to be resorted to in order to determine the rights and obligations of the several parties hereto.’

“Now, it is urged that those articles and by-laws, which are not referred to in any other way than by this language, do form a part of this policy. ' Granting that it did, what follows ? As I have stated, the legal construction that must be given to this policy is that of creating an insurance between the company on the one hand and an outsider on the other, and with no further obligations. Now, if he were to look to those articles of association or to the by-laws, he would have been informed of what ? At most, of this: That the company had not any right to insure an outsider; because, as I have stated, the legal effect of this contract did not make him a member. So that, without looking to the fraud that took place at the time, if there was a fraud, without resorting to anything except the document itself, it seems to me, I am bound to say, that the contract which was made, and the legal construction which must be given to that contract, was that the ordinary contract of insurance was effected, and not a contract by which the insured became members. It results, therefore, that the principle of Bissell v. Heath, 98 Mich. 472 (57 N. W. 585), to which reference has been made, has no application, and that there was no contract in this case by which an obligation to pay assessments arose; and it also results that there can be no verdict against the defendants, and your verdict should be, and I direct you to render it, in favor of the defendants, and against the plaintiff.”

We think the court was not in error in this charge. It appears that the application was not made by the defendants nor by their authority. It was made and signed by the agent of the company. The contract of insurance, therefore, is contained in the policy. Mr. O’Dwyer bargained for and paid for a Michigan standard policy, and his stipulation was for fire insurance of the usual and ordinary kind, and he received such a policy, paying therefor the usual price. The court below held that the policy delivered was, by its terms, an ordinary contract of insurance, and not a contract by which the defendants became members of the company. In this the court was not in error.

Judgment must be affirmed.

The other Justices concurred.


source: Caselaw Access Project

author: Montgomery, C. J.

license: Public Domain

text:
    CALKINS v. BEEKMAN.
    Benefit Societies — Endowment Insurance — Insolvency — Trust Fund.
    Where a benefit society issued certificates payable at the expiration of a fixed period, which it was not authorized to do by the act under which it was organized, and afterwards went into the hands of a receiver, one who received moneys from the society for distribution among the holders of matured certificates, and distributed the same accordingly, without knowledge of the insolvency of the society, cannot be held liable to the receiver for the moneys so distributed, on the theory that he participated in the diversion of a trust fund.
    Appeal from Alpena; Emerick, J.
    Submitted January 11, 1901.
    Decided July 2, 1901.
    Bill by Charles W. Calkins, receiver of the Supreme Assembly of the National Dotare, against John G. Beekman, John B.„Tackabury, and Benjamin P. Pratt, for an accounting as to an alleged trust fund. Prom a decree for defendants, complainant appeals.
    Affirmed.
    Crane, Norris & Drew, for complainant.

      Joseph H. Cobb, for defendants.
   Montgomery, C. J.

The complainant in this cause brings this suit to compel an accounting and payment by the defendants of the sum of $3,922.75, which he claims was received by them under such circumstances as to constitute them trustees, and liable in law for this money, at his suit, as receiver of the Supreme Assembly of the National Dotare. The facts are not much in dispute, and are as follows:

The defendants Beekman and Tackabury and 20 other persons, whose names are stated in the bill of complaint in this cause, including Estella M. Pratt, the wife of the other defendant, Benjamin E. Pratt, were members of local assembly No. 11 of the National Dotare, and were each the holder of a matured certificate, entitling them, upon its face, to the payment of a definite sum of money. In November of the year 1896 the supreme assembly was not able to pay these sums in full, and entered into an agreement, which has been made an exhibit in this case, with these 22 certificate holders, to pay the amount of the certificates in three payments; 25 per cent, to be paid in cash on the 5th day of January, 1897, 25 per cent, to be paid in cash on the 5th day of February, and 50 per cent, to be paid on the 5th day of August, 1897; and, for the purpose of securing the payment of the 50 per cent, upon the said 5th day of August, they agreed that upon the 5th day of February, after the payment of the second installment of 25 per cent, of these certificates, they would assign to the defendants in this case real-estate mortgages to secure the payment of said 50 per cent., falling due, under the terms of the agreement, upon the 5th day of August. The defendants, Beekman, Pratt, and Tackabury, were named in that agreement as trustees to receive the assignment of these real-estate mortgages, and hold the same as security for the payment of said last-named installment of 50 per cent., and, after such payment was made by the supreme assembly, to reassign said mortgages.

It does not appear that these assignments were ever made, or that any action whatever was ever taken,under this written agreement of November 10, 1896, between the supreme assembly on the one hand and these 22 certificate holders on the other. But it does appear that, for the mere convenience of the supreme assembly on the one hand and these 22 certificate holders on the other, the defendants acted as a committee to receive from the supreme assembly this sum of $3,922.75, and to distribute the same among the certificate holders already mentioned ; and they did, on February 8th, or about that time, receive this sum, and deposit the same in the Alpena National Bank to the order of the National Dotare, and afterwards checked out to each of these 22 certificate holders the respective shai’e or sum due for the payment of 25 per cent, of such certificate holder’s claim or obligation upon his certificate.

The complainant was appointed receiver on the 17th day of May, 1897. The defendants had no knowledge that the society was insolvent at the time the payments were made through them to the certificate holders. It is true, they knew the officers had not the money in hand to pay all matured certificates, but they were assured that they had securities which were ample when converted. The circuit judge decreed that the defendants Beekman and Tackabury repay the money paid them on their own certificates, but-declined to charge any of the defendants with the money disbursed by them to the other holders of certificates. The complainant appeals, and complains that the defendants should be charged with the money which passed through their hands, on the ground that this fund is a trust fund, and that they have diverted it.

The case of Calkins v. Bump, 120 Mich. 335 (79 N. W. 491), is relied upon to sustain this claim. It is important to understand just what was decided in Calkins v. Bump. In that case an assignment of certain mortgages had been made to Bump by the officers of the National Dotare as collateral security to secure the payment by the society to certain certificate holders of the amount of their certificates in installments. Before the mortgages were in any part collected, the society became insolvent, a receiver was appointed, and Bump had notice of the appointment of a receiver. It was held that the certificates were not authorized by the law of the company’s organization; that those who had paid in the money were equitably entitled to receive it back proportionately. The mortgages were decreed to belong to the receiver, and the defendant required to reimburse the receiver for the fund distributed. The case is distinguishable from this in the important particular that the money was collected and distributed by Bump after a receiver had been appointed to distribute the funds under the rule laid down in Burton v. Schildbach, 45 Mich. 504 (8 N. W. 497), and Stamm v. Benefit Ass’n, 65 Mich. 317 (32 N. W. 710). The Bump Case does not hold that one who-has been so unfortunate as to act as the mero conduit through which money has passed to those entitled to it under the scheme of the organization, and this while the corporation is a going concern, can be charged with the fund which has passed through his hands. Such a holding would, to us, seem inequitable. The complainant represents holders of certificates who have paid money into the treasury on the distinct understanding that it should be paid to the holders of the certificates on the maturity of. the same. It does not seem to us that they should be heard to say, nor that their representative should be heard to say, that one whose agency in paying over this money was made possible by their own act, and who has in no way profited by said agency, should sustain the loss which the folly of the policy holders has brought upon themselves.

The decree should be affirmed.

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


author: Grant, J.

text:
    UNION TRUST CO. v. DETROIT & RIVER ST. CLAIR RAILWAY.
    Mortgage Bonds—Bona Fide Purchaser—Railroads—Lien of Laborers.

      1. Under the facts stated in the opinion, the purchase of mortgage bonds is held not to be bona fide, and the purchaser is entitled to recover only what he has actually paid therefor.
    2. Where such purchaser gave a note to his vendor for the purchase price of the bonds, held that such note cannot be impounded to pay the debts of the vendor, though due to laborers for the construction of the roadbed.
    Cross-appeals from St. Clair; Vance, J.
    Submitted January 29, 1901.
    Decided July 2, 1901.
    Bill by the Union Trust Company against the Detroit & River St. Clair Railway, impleaded with Henry J. Robeson, to foreclose a trust mortgage. From the decree rendered, both parties appeal.
    Modified.
    The bill in this case was filed to foreclose a trust mortgage, of "which the complainant was trustee. The mortgage was executed by the Detroit & River St. Clair Railway. The bonds mentioned in the mortgage amounted to $350,000, of which only 130 were in fact issued, amounting to $65,000. All but $26,000 of that issue had been taken up before this case was heard in ‘ the court below. Those were issued to one John A. Smith, who took a contract to construct the roadbed and lay the rails; and were transferred by Mr. Smith to Merrill B. Mills, who claims to be a bona fide purchaser, and entitled to receive the face value of the bonds, and interest thereon. Defendant denies that Mills was a bona fide purchaser, and contends that he is entitled to receive only $12,770. The proofs were taken in open court, before the late Judge Vance, who filed a written opinion. In that opinion he gave a connected history of the transactions from the organization of tho defendant company to the time of the rendition of the decree, and made a full statement of the facts. That statement is as follows:
    “The Detroit & River St. Clair'Railway Company was incorporated under the street-railway law (Act No. 35, Laws 1867, as amended), and had for its object the building and operating of an electric railway from Mt. Clemens, in Macomb county, to Marine City, in St. Clair county. Its capital stock was $350,000, and to construct and equip the road it issued $350,000 first mortgage, ten year, six per cent, gold bonds, and secured them by a mortgage on all its property and assets, present or prospective, to the Union Trust Company, as trustee. The River St. Clair Construction Company, Limited, was a copartnership, limited, organized for the purpose of constructing the Detroit & River St. Clair Railway.' Its stockholders and officers were for the most part the same as those in the Detroit & River St. Clair Railway. Lester B. French was the promoter of this road, was the general manager of the railroad company, a stockholder, director, and president. He was the general manager of the construction company, and a director of that company, also.
    “In the fall of 1895 the Detroit & River St. Clair Railway Company entered into a contract with the construction company to build the road and equip it for $325,-000 of the stock and all the bonds of the railway company. The stock and bonds were to be delivered to the construction company as the work progressed, on the estimates of the engineer employed on the work. Estimates were to be made as often as either party required, and payments were to be a pro rata of the stock and bonds for a pro rata of the work actually accomplished, labor performed, and material actually supplied. The construction company was to get the balance of the right of way, furnish all material, and complete and equip the road with electricity within two years.
    “The railway company, on September 27, 1895, after having issued its bonds and stock, and placed them in the hands of the trustee, wrote the Union Trust Company, as such trustee, as follows:
    “ ‘The 700 bonds of the Detroit & River St. Clair Railway Company, amounting to §850,000, now in your hands, belong to the River St. Clair Construction Company, Limited. You will therefore please hold said bonds as agent for, and deliver them only upon the order of, said River St. Clair Construction Company, Limited.’
    “About the same time, the construction company sublet a portion of the work to John A. Smith. Mr. Smith was to grade, bridge, trestle, tie, iron, and ballast the road from Chesterfield to Marine City,— the construction company to furnish the ties and iron,—-and have it completed on or before December 14, 1895. For this work Mr. Smith was to have $50,000, made up of cash $2,500, and bonds of the railway company, issued as aforesaid, $47,500. He was to have $1,000 in bonds for each mile

      when ready for ties and iron, and $800 more for each mile when tied, ironed, and ballasted, and the balance when the road was completed. It was further provided that, when the road was completed from Chesterfield to New Baltimore, the $2,500 in cash should be paid, and stand in lieu of bonds, as before stated.
    “Mr. Smith commenced the work, and proceeded with its construction until- December 7, 1895, when all work stopped. At this time Mr. Smith had graded the roadbed from Chesterfield to within about, two miles of Marine City, excepting some portions which had been left for the time being. Only two bridges were completed, some ■others were started, and there were some on which nothing had been done. The roadbed was tied and rails laid from Chesterfield about five miles easterly, to within a short distance of New Baltimore. The grading was not, in fact, in accordance with the contract, as appears from the evidence; the spiking was by no means complete; and the ballasting was not done at all on that portion of the road that was ironed. Up to this time Mr. Smith had received on the contract about $6,000 in bonds and $2,500 in cash. He was unable to negotiate these bonds, or raise money on them, and, being without means otherwise, could not pay his men, and for that reason, on December 7, 1895, the men refused to longer work. He had doubtless been delayed somewhat by the failure of the construction company to furnish iron and ties, but I am satisfied the work would have continued for some time longer but for Smith’s inability to pay his men.
    “Negotiations then commenced between Smith and the construction company for an adjustment under the contract between them, and, this failing, Smith demanded, in writing, $20,000 in bonds, claiming that amount was due-him under his contract. The officers of the construction company, after consulting with their attorney and the engineer in charge, directed the Union Trust Company, on December 10, 1895, to give Smith $20,000 in bonds, and they were delivered to him. The delivery of these bonds was not pursuant to a settlement, nor was it so understood by either party. Mr. Smith was threatening legal proceedings unless these bonds were delivered, and the construction company delivered them under the advice of their counsel that it was better to deliver the bonds-than to have any controversy at that time. The delivery of these bonds to Smith was as a payment on the contract. Mr. Smith at this time had abandoned his contract with the construction company, and was then aware that the construction company were unable to complete their contract with the railway company. Nothing-further was ever done either by Smith or the construction company towards constructing the road. At this time these bonds had no actual market value. They were practically valueless unless the road was completed.
    “The construction company was unable to realize on the bonds they held under their contract with the railway company, and, while efforts were made from time to time to induce parties with means to raise money on these bonds to complete the road, they were not successful. - Up to this time but $65,000 in bonds had been actually delivered to the construction company,-or to any one else on its. order. Of this amount $29,000 was held by the Grand Trunk Railway Company as collateral for iron furnished, the construction company, amounting to $14,000; $5,500 was held by Culligan & Doyle as collateral for ties furnished the construction company, amounting to $4,500; $4,000 was held by John Chester as collateral for a loan of $2,000 to the construction company; $500 was held by John Donahue, delivered to him by the construction company in payment for ties; and $26,000 was held by Mr. Smith under the circumstances aforesaid.
    “The work done and materials furnished by the construction company and Mr. Smith up to the time work stopped amounted to the total of the following items:
    Construction company, to the Grand Trunk, for iron..................—..................... $14,000 00
    Construction company, to Culligan & Doyle, for ties............. 4,500 00
    Construction company, to John Chester, for a loan........ 2,000 00
    Construction company, to John Donahue, for ties...........-.............................. 500 00
    Total............ $21,000 00
    John A. Smith, cash disbursed, as shown by his books........ $2,872 38
    John A. Smith, labor claims unpaid, as shown by his books..................- ............... 4,936 06
    John A. Smith, debt to Wing & Co. on account 500 "00
    John A. Smith, outlay for timber for bridges (about)..................................... 500 00
    Total.-.:............................... $8,808 44

      Less cash received by Smith from the construction company under his contract............. $2,500 00
    Actual cost.............................- $6,808 44
    “ I am of the opinion that some of the items of expense which Smith incurred, did not appear upon the books.
    “ October 15, 1896, the Union Trust Company, at the request of John A. Smith, filed its bill, as trustee, to foreclose the mortgage given to it by the Detroit & River St. Clair Railway Company to secure the issue of $350,000 in bonds, asking for a receiver; and on October 31, 1896, filed its petition asking for the appointment of a receiver, supported by affidavits. Counter affidavits were filed, and the matter was adjourned from time to time until January 9, 1897, when, by consent of the parties in interest, James G. Tucker was appointed receiver, qualified, and took charge of the road and all the property covered by the mortgage, which was all the property the Detroit & River St. Clair Railway Company owned.
    “On February 7, 1897, the receiver petitioned the court for authority to obtain renewals of the franchises from the cities, villages, and townships through which the road passed, for the reason that all had lapsed excepting in' the township of Ira, St. Clair county, and asking authority to enter into a contract with the United States Equipment & Construction Company to complete the road from Mt. Clemens to Marine City in first-class manner for $500,000, to be paid in receiver’s certificates issued under the order of the court, the equipment and construction company to pay the amount of the investment of the holders of the bonds out of the proceeds of said certificates. On the same day a stipulation was signed by the solicitors for the Union Trust Company, Detroit & River St. Clair Railway Company, the Grand Trunk Railway Company, the Delta Lumber Company, for John A. Smith and for Henry J. Robeson, who claimed to represent the outstanding labor claims, being all the parties in interest. This stipulation was filed, requesting the court to make an order, a copy of which -was attached. This order was signed the same day, and granted the prayer of the petition; the contract, however, to be subject to the approval of the court. The contract, by the terms of the order, required the equipment and construction company to pay the bondholders the amount invested in the construction, or material used or furnished for use, and all labor performed, in the construction of the road, and required the equipment and construction company to give a $25,000 bond by way of security for the performance of the work.
    “Preparatory to entering into this contract, the equipment and construction company, represented in fact by C. H. Lawrence, entered into a contract with John A. Smith, about April 14, 1897, by which Lawrence was to pay Smith $12,770 for the bonds held by him, and all his interest in or claims against the road. This contract was drawn by Elliott G. Stevenson, the attorney for the receiver, and the facts cited therein were furnished to him by John A. Smith and his attorney, Frank FT Robson. In this contract it is stated that the ábove amount represents the unpaid balance .of the value of the work done and materials furnished by Smith in the construction of the road, and also that the bonds held by him were to secure such indebtedness. Out of the $12,770 Smith was to pay a note of his, held by the Union Trust Company, of $2,000; pay all outstanding labor claims contracted by himself and unpaid, estimated at $5,000; receive $2,000 in cash, and take $3,770 in receiver’s certificates. The terms of this contract were known to the receiver. For some reason Mr. Lawrence failed to go on with this contract, and nothing was afterwards done under it.
    “It was generally understood by all the parties in interest that the outstanding labor claims, estimated at $5,000, and the interest on those old bonds, could not be paid unless the road was completed, so as to make it salable, and thus preserve the interests of the different parties. To this end various plan's were suggested during the summer of 1897, but none took tangible form until November 17, 1897, when the receiver presented his petition to the court, stating, among other things, his inability to dispose of the road for enough to pay the indebtedness of the company, or in fact pay anything but a trifling sum, and asking authority to complete the road from Chesterfield to Algonac, and for the authority to issue $60,000 in receiver’s certificates, to be sold at not less than 90 cents on the dollar, to defray the expense. At the same time a stipulation was filed, signed by the Union Trust Company, the Detroit & River St. Clair Railway Company, the Grand Trunk Railway, the Delta Lumber Company, Lester B. French, and John A. Smith,-consenting that the prayer of the petition be granted. A hearing was had on this petition, and it was made to appear by testimony that the road, when constructed, would, in all probability, take care of the receiver’s certificates, and eventually pay off the other indebtedness of the road. Before the signing of the petition last referred to, the plan of constructing the road by the receiver was fully discussed between the receiver, Mr. Stevenson, his, attorney, John A. Smith, and Mr. Robson, his attorney; and in this discussion Mr. Stevenson agreed to find a market for the receiver’s certificates. At this time Mr. Stevenson had no interest in the road, and he and the receiver then understood that Mr. Smith’s claim amounted to not to exceed $12,770, and that out of that the labor claims, estimated at $5,000, were to be paid, and on payment of that amount the $26,000 in bonds would be canceled; and Smith was aware of this understanding. On November 20, 1897, an order was entered granting the prayer of the petition.
    “In order to protect himself against the liability he would incur in finding a market for the receiver’s certificates, Mr. Stevenson, about December, 1897, took an option on the stock of the Detroit & River St. Clair Railway Company, and advanced $1,000 on it. By this option he was to have the entire stock of the road on paying $14,000 for it within one year. Subsequently, on April 23, 1898, on the application of the receiver, and a full hearing had thereon, the receiver was authorized to issue $15,000 in receiver’s certificates, in addition to those already issued, to complete the road from Algonac to Marine City, and to aid in the equipment. On December 3, 1898, the receiver was authorized, after a full hearing, to issue $35,000 in receiver’s certificates, in addition to those already issued, the greater portion of which was for money advanced to the receiver by E. G. Stevenson, and other balances for expenses incurred. Of the $110,000 in receiver’s certificates authorized, only $102,114.80 was actually issued and used. Of this amount in certificates issued Mr. Stevenson purchased for cash upwards of $31,500, the Michigan Construction Company—which was, in effect, Mr. Stevenson—$25,000, and he guaranteed about $-, in order to make the certificates marketable. The road was completed from Chesterfield to Marine City in July, 1898, so that cars ran over it, but the equipment was insufficient for good service. In lieu of building the toad from Chesterfield to Mt. Clemens, a lease was taken from the Grand Trunk Railway Company to rryi over its track between these tw'o points. Owing to the incomplete condition of the road and its equipment, which cost much more than anticipated, and the fact that it was equipped with steam, and not electricity, its earnings did not furnish enough to pay operating expenses and the indebtedness incurred by the receiver.
    “In the meantime the Detroit, Lake Shore. & Mt. Clemens. Railway Company had completed and equipped its road from Detroit to Mt. Clemens by way of the lake shore and McSweeney’s Club House. The Rapid Railway had been in operation from Mt. Clemens to Detroit for some years. Each of these competing lines was anxious to control the Detroit & River St. Clair Railway Company. In the meantime Mr. Stevenson and others interested with him nominally, in order to protect himself, obtained control of the Mt. Clemens & Lakeside Traction Company, which company controlled the street-car system in the city of Mt. Clemens. About October 15, 1898, he negotiated with Merrill B. Mills, of Detroit, who prac-tically owned all of the sto'ck and bonds of the Detroit, Lake Shore & Mt. Clemens Railway Company, was a director and one of the principal officers of that company, for a sale to Mr. Mills of the traction company’s property in Mt. Clemens, and as a part of the sale Mills was to assume and pay all the debts of the receiver, including certificates issued, and relieve Mr. Stevenson from any obligation thereon, and he was to have what right Mr. Stevenson had in or to the stock of that company, including the option aforesaid. In these negotiations with Mr. Mills, the indebtedness of the receiver and the old debts of' the Detroit & River St. Clair Railway Company, including the bonds issued, and the amounts due thereon, and outstanding labor claims, were fully discussed, and he-was then advised that John A. Smith held $36,000 in bonds; that there was due Smith on these bonds $13,500 or $13,770; and that out of this amount the so-called ‘labor claims,’ amounting to about $5,000, were to be paid; and that Mr. Stevenson so understood it. At this time Messrs. Ranney and Eordyce, who were directors and officers in the shore road, held an option on Smith’s bonds, which was in fact in the interest of the shore road, for $13,000, dated August 3, 1898, by which payment was to be made in 30 days, but with a proviso for a 30-day renewal. Mr. Mills knew of this fact at least as early as October 15th. On this option Ranney and Eordyce had paid Smith from the funds of the railway company $900.
    “On February 7, 1899, E. G. Stevenson entered into a contract with Cornelius J. Reilly and Charles M. Swift, principal owners of the Rapid Railway Company, by which he sold them the Mt. Clemens & Lakeside Traction ■Company’s property in Mt. Clemens, and all the stock of the Detroit & River St. Clair Railway Company, agreeing to pay all outstanding certificates and indebtedness of the receiver, the bonds and other debts of the Detroit & River St. Clair Railway Company, including the labor claims and other debts that had become a lien on the road, or for which it was liable. Merrill B. Mills learned of this contract shortly after its execution, and that Stevenson had, by its terms, obligated himself to pay all the -debts of the road. Subsequently, and about March 16, 1899, Mr. Mills purchased from Mr. Smith his $26,000 in Bonds for $12,500, and took a bill of sale therefor, in which Smith agreed to pay all labor claims that were a lien upon the road. Mr. Mills was to pay for these bonds as follows: A note for $7,000, cash $4,600, and have credit for the $900 paid by Ranney and Fordyce from the railroad company’s funds to Smith under his option of August 2d. The note of $7,000 was executed by Mr. Mills, and delivered to Frank E. Robson, the attorney for Mr. Smith, and is still held by Robson, who is still Smith’s attorney. This note in fact belongs to Smith. It is subject, however, to $1,200 borrowed by Robson, and for which this note is given as collateral security. During all this time Mr. Tucker, the receiver, and Mr. Stevenson, who was counsel for the receiver, understood and believed that Mr. Smith’s claim did not exceed $12,770, and that the bonds were held by him as security; and Smith himself furnished this information, and knew that they so understood it. Neither of them knew that Mr. Smith claimed these bonds were delivered in payment until after Mr. Stevenson had sold to Reilly and Swift, on February 7th.
    “Owing to the fact -that the road was equipped with steam, instead of electricity, the terms of the franchises through the different townships, cities, and villages' were not complied with within the time therein limited. The outstanding claims—and especially the labor claims— contracted by Smith, and remaining unpaid, were owned largely in the locality through which this road was to run, and the holders of such claims were complaining bitterly. The officers of the municipalities from which a renewal of the franchises was sought, being aware of these facts, insisted that the renewal of the franchises be only upon condition that these outstanding labor claims should be paid. The receiver, in order to procure a renewal of the franchises and preserve the property, was compelled to accept this condition, and did so with the knowledge, consent, and acquiescence of John A. Smith; and Mr. Smith himself assisted in procuring some of them, and knew that the receiver was accepting them on the understanding above stated.
    “ While the men were working for Smith under his contract in the fall of 1895, it was the custom to issue to the men time checks when he was unable to pay them. The checks were exchanged by the men for goods and other things, with Smith’s knowledge and consent, and with the understanding with Smith that the holders of these checks, on reporting to him, would be entitled to credit therefor; and, as fast as they were reported to him, the men to whom they were given were charged with the amount, and the holder credited, on Smith’s books. In other instances the men ran bills at stores and for board, and, by an understanding with Mr. Smith, the boarding-house or store keeper would report the names of - the men, or their number, and the amount of his bill, to Mr. Smith, and the men were charged on Smith’s books with the amount, and the boarding-house or store keeper, as the case might be, was given credit. All these matters, whether represented by time checks, store accounts, or boarding-house accounts, were in fact labor claims, and ought to be so considered in construing the provisions of the different franchises.”
    From the above statement of facts the learned circuit judge reached the following conclusions, which he put in writing and filed:
    “The foregoing sufficiently states the facts shown by the testimony for the purpose of disposing of the matters involved. By an understanding in open court, Mr. Stevenson, under his contract with Swift and Beilly, is to take care of the outstanding receiver’s certificates, and all the bonds and other debts that have become a lien on the road, excepting the so-called Tabor claims ’ and the Smith bonds, and as to these matters a determination is asked for.
    “As to the Smith bonds, so called, now claimed by Mr. Mills, I am of the opinion that, under the facts and circumstances of this case, Mr. Mills is estopped from claiming, as against the railroad company, the full face value of those bonds, and that he is entitled only to the amount of $12,770, with interest at the rate and payable in the manner specified in the coupons attached to said bonds.

      “As to the so-called ‘labor claims,’ I am of the opinion that the ‘boarding-house claims’ and the ‘storekeepers’ claims,’ so called, were intended to be included and considered as labor claims in the preparation and adoption of the franchises in the different municipalities through which the road passed, and that they must now be considered as labor claims in the construction of said franchises. Inasmuch as the provisions of these franchises were demanded by the municipalities granting them, and consented to by the receiver in receiving them, and inasmuch as it is just and equitable that these claims should be paid, I am inclined to hold that the municipalities may forfeit the franchises unless these provisions are complied with. They had a right to refuse the franchise in the first instance, or to refuse a renewal; but, having granted them upon conditions which were accepted by the receiver, I am of the opinion that they are valid, and should be enforced according to their tenor and meaning. I am also of the opinion that the provisions in some of the franchises with reference to the filing of claims with the receiver or placing them in judgment, etc.,'are directory only, and that all these labor claims are covered by one or other of these franchises. Inasmuch as these debts were contracted by Mr. Smith, and ought of right to be paid by him, and inasmuch as the note of $7,000 in the hands of Frank E. Robson is still the property of Mr. Smith, at least to the amount of $5,500, with accrued interest, I am of the opinion that the proceeds of this note should be applied to the payment of these so-called ‘labor claims.’ If it is insufficient to pay the whole, then it should be applied pro rata on them. If it is more than enough to pay them, the surplus should be turned over to Mr. Smith.
    “Evidence was presented of other claims, but I am of the opinion that the testimony in this casé does not show that they were in any way a lien upon the railroad, its property or franchise, or were debts owing by the railroad, and for that reason provision for their payment cannot be made in this decree; but the proceedings herein should be without prejudice to the enforcement of such claims in such other manner or by such other process as the holders thereof may see fit to adopt.'
    ‘ ‘ Inasmuch as the two questions above referred to were not of general interest to all the bondholders, the so-called ‘ labor claims ’ being matters in which Mr. Smith was particularly interested, and the Mills bonds being a matter in which Mr. Mills was particularly interested, and inasmuch as Mills and Smith were both represented by counsel, I am of the opinion that the claim for solicitors’ fees is in excess of what would be just and right in the premises. A solicitor’s fee should be allowed at $1,500; and, the complainant’s solicitors having agreed among themselves as to the division, the amount will be allowed in gross.
    “ It was stated in open court that the compensation for the services of the trustee had been agreed upon, and therefore no determination in that matter is necessary.”
    A decree was entered in accordance with the above opinion, with costs to complainant. Complainant has appealed from that portion of the decree which limits the recovery upon the bonds owned by Mr. Mills to an amount less than their face value and interest; and also from that portion of the decree which impounds a part of the $7,000 note, in the hands of Mr. Robson, to pay the labor claims contracted by Mr. Smith. The defendant railway company has appealed from that part of the decree allowing to complainant $1,500 for compensation to its solicitors, and also from that part allowing interest on the $12,770.

      Frank E. Robson and Russel & Campbell, for complainant.

      Gray & Gray, for defendant railway company.

      Alfred Lucking, for Merrill B. Mills, bondholder.

       Head-notes by Grant, J.

   Grant, J.

(after stating the facts). 1. We think the facts found by tho learned circuit judge are fully sustained by the evidence. It is apparent that the decree is eminently just and equitable in so protecting the rights of all parties that each loses nothing, and obtains full compensation for all labor performed, materials furnished, and moneys invested in the construction of this road. Manifestly, such a decree ought to be sustained, unless it' is in conflict with inflexible rules which control courts of equity as well as of law.

The entire trouble has arisen from the fact that the promoters, the original stockholders, of this railway company, attempted its construction upon nothing more substantial than wind. They paid nothing upon their stock, and did not intend to. Some of the promoters and stockholders formed the construction company, — a company with limited liabilities. What those liabilities were does not appear. It was understood, both by the stockholders of the railway company and by the construction company, that those who should construct and equip the railway should be paid in nothing but stock and bonds. Smith, a man financially irresponsible, was awarded a contract to construct the roadbed, lay the iron, tie and ballast the road. ■ All this was to be done within less than three months. The work was in reality worth about half of the face value of the bonds. Smith expended and incurred liabilities amounting to about $12,770. The bonds he had received were'worth nothing. They had no market value. No one would buy them, or loan money upon them. The construction company failed to pay. The railway company had agreed to pay nothing but its certificates of stock and bonds. In a sentence, the whole enterprise collapsed, with no assets but a right of way over part of the line, and a roadbed which was being washed away by the rains. Affairs continued in this shape for about two years. Meanwhile Smith, in writing, represented the amount he had invested at $12,770. The receiver found no tangible assets; and, unless some way could be devised to provide for the construction of the road, the bonds which had been issued, including those of Smith, were without value. Under the direction and authority of the court, Mr. Stevenson, attorney for the receiver, was allowed to proceed to construct the road by the use of receiver’s certificates. This action alone has made the Smith bonds of any value whatever. That he represented his interest to be $12,770, and that he permitted Mr. Stevenson and the receiver to proceed with that understanding, is established beyond controversy. I think it equally well established that Mr. Mills, when he purchased these bonds, was fully cognizant of the situation, and of Mr. Smith’s claims and representations. This being so, both are estopped to claim the face value of the bonds.

It is, however, urged that the estbppel is not pleaded in the answer, and therefore cannot now be made available as a defense. All the other bonds which were issued were collateral for loans to, and material furnished for, the construction company. There is testimony from which it' might be properly inferred that Mr. Stevenson understood that Smith held these bonds as collateral to his claim. However that may be, we think the amended answer sufficiently sets forth tho claim of the defendant to admit this defense. While it does not aver in words that Smith, and Mills are estopped, it does set forth the facts upon which the defense is based. If, however, it were necessary, under the circumstances of this case, to amend the answer in order to make this defense available, we should not hesitate to allow it, even on appeal in this court.

2. When the taking of testimony had been nearly concluded, the court, in the commendable desire to secure to the laborers the amounts due them for work performed upon the roadbed for Smith, made the following order:

“ In this cause it appears that there are claims for labor, material, etc., aggregating about $5,000, against John A. Smith, same being for labor performed and material furnished in connection with the construction of the railway of the defendant company before the institution of the proceedings herein; and it appearing further that said Smith received on account of the work he performed as contractor fifty-two bonds, of the par value of $26,000, which are a part of the bonds secured by the mortgage being foreclosed herein, and that he has sold such bonds to Merrill B. Mills, and received $5,000 in cash and $7,000 in a note dated Match 16, 1899, payable six months after date, which note is under the control of Frank E. Robson,one of complainant’s solicitors; and it further appearing that, since the appointment of the receiver herein, it became necessary to procure a renewal of certain franchises under which the railway company operates and maintains its road, and it was mado a condition in one or more of such ordinances that certain or all of such claims for labor and material should be said, or such ordinances be subject to forfeiture; and the court conceiving that, under the facts recited, such claims for labor and material owing by said Smith, which the ordinances referred to required the .payment of, may be chargeable against said Smith, and be deducted from the amount remaining unpaid on said $7,000 note; and it being necessary, before a final decree can be made in this cause covering the subjects referred to, that all parties in interest be brought into this cause:

“It is ordered that Monday, July 17, A. D. 1899, at 10 o’clock a. m., be fixed as the time, and the circuit court room in the city of Port Huron the place, for any and all persons who have claims, or are interested in the presentation-of claims, for such labor and material, to appear, present, and prove their claims, under the provisions of such ordinances; and, further, in order that all parties interested in the final determination of matters in controversy in this cause may be formally before the court, it is ordered that Merrill B. Mills, John A. Smith, Elliott Gf. Stevenson, and the River St. Clair Construction Company, Limited, appear in this cause, and file any petition or answer deemed necessary or proper to frame a proper issue for the final disposition and settlement of all matters involved herein, within ten days from this day, and -that any of such parties be permitted to offer any additional proofs relating to the matters in controversy at the hearing above fixed for July 17,1899; and that until such hearing all matters involved in this litigation remain in statu quo; and that the further hearing of the above-entitled cause be continued until July 17, 1899, at 10 o’clock a. m.

“ It is further ordered that notice of such hearing be published once in each week for the two weeks preceding such hearing in each of the following newspapers published in the counties of St. Clair and Macomb: The Port Huron Weekly Times, the Marine City Globe, the Algonac Courier, and the Era of New Baltimore; and that a copy of this order be served on the River St. Clair Construction Company, Limited, eight days before such hearing, and also upon the Detroit National Bank, Abram Smith, Angus Smith, Samuel L. Smith, Jefferson T. Wing, Frank E. Robson; and that leave be and is hereby granted them and each of them to intervene and assert any claim they may have in or to said $7,000 note, or the proceeds thereof; and that any party or parties above named who desire to intervene and assert any claim or present any matter for consideration of the court in connection with any of the matters referred to, file their answers and serve copies on solicitors for complainant and defendant railway company.

“This order is made on the application of the Detroit & River St. Clair Railway Company, and is opposed by Frank E. Robson, one of complainant’s solicitors, and Alfred Lucking, of counsel for Merrill B. Mills.”

This order was made against the protest of complainant. . The most of these claims were held at that time by Swift, Reilly, and Tucker, for the benefit of Stevenson. They were the personal obligations of Mr. Smith. Stevenson, under his contract of sale to Swift and Reilly, had agreed to take care of all debts, claims, and liens against the railway company. It is now urged that the proceeding taken to bring - in these claims is unknown to chancery practice, and that complainant could not be compelled, against its will, to bring in as defendants strangers to the suit. Counsel cite and rely upon 1 Daniell, Ch. Prac. 287; Renfro v. Goetter, 78 Ala. 311; Harper v. Manufacturing Co., 100 Ill. 225; Shields v. Barrow, 17 How. 137; Coleman v. Martin, 6 Blatchf. 119 (Fed. Cas. No. 2,985).

There is much force in this contention. Ordinarily, a complainant is entitled to his choice as to parties defendant. If he fails to bring in a necessary party, so that the rights of all may be litigated, he will suffer the penalty by having his bill dismissed. The responsibility usually rests upon him. To this general -rule there may be two exceptions: (1) Where there are relations of trust, or a trust fund to be administered; (2) where a fund is before the court, in which a person not a party is entitled to share. Ex parte Printup; 87 Ala. 148 (6 South. 418); Story, Eq. Pl. § 208. In such cases the parties claiming an interest in the fund usually are allowed to intervene by petition. This note is neither a trust fund, nor one in which the creditors of the defendant company, or of the construction company, or of Smith have any interest. They have no more interest in it than they have in any other credit or property of Smith which might be garnislied in the hands of third parties. Smith owned the bonds, sold them, and took a note in part payment. In a foreclosure suit by Mills, or his trustee for Mills’ benefit, a court of equity has no power to order Smith’s or Mills’ creditors to be made parties to the suit, and to impound the note for their benefit. There was no agreement between Smith and the defendant company, or between him and Stevenson, that these labor claims should be paid out of the proceeds of the money received from Mills on the sale of the bonds.

3. The learned circuit judge was familiar with the services rendered by the complainant and its solicitors, and we see no occasion to disturb the allowance made for their services. We also think that complainant was entitied to interest upon the amount found due upon the bonds.

The decree will be modified in accordance with this opinion, with costs to the complainant

The other Justices concurred.


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    WALKER v. GILLMAN.

    Vendor and Purchaser — Specific Performance — Defective Title—Advice of Counsel.
    Where defendant contracted to purchase land on delivery of an abstract showing a good title clear of all incumbrances, and it appeared that complainant’s title was obtained under a chancery foreclosure sale which took place more than 10 years after the entry of decree, on which state of facts defendant’s counsel advised that, in view of 3 Comp. Laws, § 9751, the title was defective, there was such doubt as to the validity of the title that complainant was not entitled to enforce specific performance.

      Appeal from Wayne; Hosmer, J.
    Submitted January 30, 1901.
    Decided July 2, 1901.
    Bill by Bryant Walker against Annie V. Gillman for the specific performance of a land contract. From a decree for complainant, defendant appeals.
    Reversed.

      H. E. Spalding, for complainant.

      Walter E. Oxtoby (Keena & Lightner, of counsel), for defendant.

       Rehearing denied December 21, 1901.

   Long, J.

On April 4, 1900, the complainant entered into a written contract with the defendant, as follows:

“ Received of Mrs. A. V. Gillman five hundred ($500) dollars, to apply on purchase price of property on the southeast corner of High street and Cass avenue in the city of Detroit, ‘Michigan, known as lot 68 and fractional lot 69 of the subdivision of Park lot 82. The balance of purchase price, forty-six hundred ($4,600) dollars, to be paid on delivery of a Union Trust abstract of title, showing a good title, free and clear of all incumbrances, and a warranty deed. Money to be refunded if title is not shown to be good.

“Dated April 4, 1900.

“Bryant Walker.

‘ ‘ I hereby agree to purchase the above-described property on above terms.

“Mrs. A. V. Gillman.”

A deed having been tendered and refused, the bill in this case is tiled to compel performance of the contract on the part of defendant. _ The proofs were taken in open court, and that court entered a decree finding the defendant liable for the payment in accordance with the terms of the contract. Defendant appeals.

It appe'ars that, at the time this contract was made, the title to the property described was in the Vermont Savings Bank, and was derived by it under a foreclosure in chancery in a case in which the defendants were nonresidents of Michigan. The property was in the hands of Mr. Walker, the complainant, for sale. His authority to dispose of the property was given by a letter written by the treasurer of the Vermont Savings Bank, and by a telegram which he received from the bank. Mrs. Gillman employed Mr. James T. Keena, an attorney of Detroit, to examine the title to the property; and he referred the matter to his partner, Mr. Lightner, who, after some examination, referred the matter back tó Mr. Keena for his opinion. Upon such examination the abstract showed a decree dated June 30, 1884, and a sale taking place thereunder December 1, 1897, or 13-|- years after the date of the decree. There seems to be no dispute about the facts of the case. Mr. Lightner was called as a witness for the defendant, and testified, in substance, that Mrs. Gillman wanted the property, and, at the time the deed was tendered, was reluctant not to take it, but at the same time insisted that she wanted a perfect title, and wanted no question about that. Mr. Keena’s opinion was very decided on the question of the validity of the foreclosure •proceeding,—that it was not good. It appears that for these reasons Mrs. Gillman refused to take the property.

It is the contention of counsel for defendant that the title was not perfect in the Vermont Savings Bank, and that the bank could not convey a good title to' defendant; that under the statute (3 Comp. Laws, § 9751) the decree of foreclosure could be enforced by sale only during the 10 years immediately following the entry of decree; while, on the other hand, counsel for complainant contends that the language and operation of that statute are misconceived by counsel for defendant; that our statutes of limitation are contained in two chapters, to wit, chapter 867, relating to real property, the other, chapter 868, relating to personal actions; that in the chapter relating to real property the only limitation is that no proceeding shall be maintained to foreclose a real-estate mortgage unless commenced within 15 years from the date when due, or from date of last payment; that, there being no other limitation as to the time of enforcement by foreclosure, this sale under the decree was valid to convey a good title.

In view of the further claim made by counsel for defendant, we do not deem it necessary to consider or determine in the present case the questions raised under these statutes. The agreement between the parties was that the defendant was to pay the balance of the money “on delivery of a Union Trust abstract of title, showing a good title, free and clear of all incumbrances, and a warranty deed; money to be refunded if title is not shown to be good.” The proofs show that the defendant left the matter in the hands of Mr. Keena, to determine whether it was a good title. Mr. Keena is a lawyer in good standing in Detroit, a man of large experience, and evidently well qualified to examine and advise upon land titles. The defendant relied upon his judgment and advice. He advised her that the sale could not be made under the decree after the lapse of more than 10 years. It is con' tended by counsel for defendant that if the rejection of the title was based upon the good-faith opinion of her counsel, and if any of the questions involved were doubtful questions of law, defendant was justified in refusing to perform the contract, and was not required to incur the risk involved in a lawsuit. »

We think this is a correct statement of the law. It is said in 1 Warv. Vend. p. 304:

“ Nor will the courts compel the specific performance of a contract by the purchaser where the validity of the vendor’s title depends upon a doubtful question of law, where others having rights dependent upon the same ' question are not parties to the action.”

The question was before us and fully discussed in Ford v. Wright, 114 Mich. 122 (72 N. W. 197), where, after stating the facts connected with the controversy, and quoting from Warv. Vend., it is said:

“It was undoubtedly the intention of Mr. Wright, in requiring a Burton abstract and a perfect title, to insure the getting of a title that would satisfy a prospective purchaser, upon an inspection of the abstract, that the title was good. The title which was presented to him was of such a character as to justify Mr. Post in expressing the opinion that there was a reasonable doubt about it. Under the conditions shown by the record, we do not think Mr. Wright was bound to accept the title offered him.”

We think the above case is decisive of the present. The good faith of Mr. Keena does not seem to be questioned, and it appears that the defendant was anxious and willing to take the land if Mr. Keena determined that the title was good. She was not bound to take it, however, unless the title was “shown to be good.” In the opinion of Mr. Keena, it was not shown to be good, and the defendant was justified in relying upon that opinion.

The decree below must be reversed, and a decree entered here dismissing complainant’s bill, with costs of both courts.

Montgomery, O. J., Hooker and Moore, JJ., concurred. Grant, J., did not sit.


text:
    COLLINS v. REA.
    Tax Deeds—Validity—Removal op Timber—Suit by Mortgagee —Pleading—Waiver of Defects—Authority of Corporation.

       1. Where the board of supervisors voted salaries to the sheriff and other officers, and such salaries were included in the tax levy, tax deeds based thereon are void.
    2. A mortgagee may maintain a suit in equity to enjoin the removal of timber which impairs his security.
    3. A stipulation, bond, and consent order in such suit that the defendants might cut the timber, and that the funds realized therefrom should be divided among the parties to the suit according to their interests, waives all defects in the form of the bill.
    4. A corporation mortgaged the land in controversy to secure the debt of an individual. It was made a party to the suit; a
      pro eonfesso taken against it. Held, that the defendants, being strangers to the title, were not in position to raise the question of the authority of the corporation to execute the mortgage.
    Appeal from Montmorency; Kelley, J.
    Submitted February 1, 1901.
    Decided July 2, 1901.
    Bill by Esther E. Collins, executrix of the last will and testament of Thomas Collins, deceased, against Robert Rea and Herman Besser, impleaded with Alfred J. West and the Atlanta Town & Manufacturing Company, to restrain the removal of timber and for a partition. From a decree for complainant, defendants appeal.
    Affirmed.
    By the record title, one Thomas Collins was the owner of the undivided one-half interest, and the defendants the owners of the other undivided one-half interest, in the land here in controversy. The land was only valuable for its timber. Defendants, claiming to own the entire land, were proceeding to cut the timber, whereupon Mr. Collins filed a bill in chancery to enjoin them from removing the timber, and to secure a partition of the lands. A preliminary injunction was issued. Defendants answered, claiming title' to the entire land by virtue of several tax deeds, and also by title from the government. The parties, through their attorneys, entered into a stipulation by which defendants were permitted to cut the timber upon the filing of a bond to pay Mr. Collins whatever should be recovered by him in the suit, and the injunction was dissolved. By stipulation, Mr. Collins amended his bill by setting forth the invalidity of the tax titles, and that the deed made by the Atlanta Town & Manufacturing Company to him was to secure the payment of'$579.37 due from one West to Collins. Subsequently Mr. Collins died, and Mrs. Collins, the present complainant, as executrix, filed a petition for the revival of the suit in her name, and to make West and the Atlanta Town & Manufacturing Company defendants thereto. The bill was so amended by consent of tbe appealing defendants. That order provided that the amount found due to complainant might be paid out of the moneys collected from said Rea and Besser for the timber cut and removed by them from said land. A pro confesso was entered as to West and the Atlanta Town & Manufacturing Company. The evidence on the part of the complainant also showed that Mr. West was indebted to Mr. Collins upon two promissory notes aggregating $360, and that the deed of the corporation was made to secure this indebtedness. The case was heard in open court, and the court found that there was due from Mr. West to complainant $747.21, and decreed its payment out of the proceeds of the timber which had been cut and sold.

      Joseph H. Cobb, for complainant.

      James Francis, for defendants.

       Head-notes by Grant, J.

   Grant, J.

{after stating the facts). 1. Defendants have no title to the interest conveyed to Collins, unless they can maintain their tax deeds. They concede that the taxes for 1883 and 1884 were void, but they rely upon their tax deeds for the taxes of 1885 and 1886. In both of those years the board of supervisors voted a salary to the sheriff of the county, as well as to certain other officers. This rendered the taxes void. Hewitt v. White, 78 Mich. 117 (43 N. W. 1043).

2. The deed to Collins was in fact a mortgage. Without the timber, the security was comparatively worthless. The mortgagee could therefore maintain a suit in equity to enjoin the removal of the timber. Under the stipulation, bond, and consent order of the court, the funds realized from the sale of the timber were to be divided among the parties according to the interest of each. The defects now urged against the form of the bill were thereby waived.

3. It is also urged by counsel for defendants Rea and Besser that no authority was shown by the corporation to secure the debt of West, and that this act of the corporation is prima facie ultra vires, and therefore casts the burden upon the complainant to show the authority conferred. This question was not raised in the court below. Had it been raised at any time before decree was rendered, the court might have allowed the complainant to introduce testimony upon this point. Howeyer this may be, these defendants, Rea and Besser, are not in position to raise the question. They have no interest in this land, their tax titles having been held void. The corporation was made a party, and by its pro confesso confessed the authority in its officers to execute the mortgage deed. Neither the corporation nor its stockholders are here complaining. We are not, therefore, called upon to decide the question.

Decree is affirmed, with costs.

The other Justices concurred.


author: Moore, J.

text:
    SCHULTZ v. HUFFMAN.
    1. Statute of Frauds—Interest in Lands—Right of Drainage..
    A right of drainage through the lands of another is such an interest in lands as cannot he created by parol.
    2. Same—Part Performanoe—Action for Purchase Price.
    Part performance of a parol contract for the sale of an interest in land will not enable the vendor to maintain an. action for the purchase price.
    Error to Calhoun; Smith,/J.
    Submitted February 12,. 1901.
    Decided July 2, 1901.

      Assumpsit by William H. Schultz against Julius Huffman to recover the consideration for an alleged right of drainage. From a judgment for plaintiff, defendant brings error.
    Reversed.

      M. D. Weeks and Potuers & Stine, for appellant.

      Loud & Stewart, for appellee.
   Moore, J.

This case was commenced in justice’s court. Defendant appeared on the return day, but not until a judgment had been rendered against him. He appealed the case to the circuit court, where a verdict of $15.30 was rendered against him by a jury.' He has brought the case here by writ of error.

The declaration in justice’s court was oral. It is stated in the return of the justice as follows:

‘ ‘ The plaintiff declared verbally on common counts in assumpsit, especially on a certain (verbal) contract, according to which the said defendant promised and agreed to pay said plaintiff fifteen dollars for the privilege of draining certain lands of said defendant into and through a drain owned and constructed by said plaintiff.”

The record discloses that Mr. Huffman was the owner of 80 acres of land, some of which needed to be drained. Mr. Muffley owned a farm south of Mr. Huffman. Mr. Schultz’s farm was south of Muffley’s; and south or south and west of Mr. Schultz were the farms of Andrews, Hammond, Brownell, and Woodky. The drainage of the farms of Huffman, Muffley, and Schultz would naturally be to the south or southwest, across the farms of the other gentlemen named. It is claimed by Mr. Schultz that he made an arrangement with Mr. Huffman by which the latter became indebted to him in the sum of $15. The material portions of his testimony are that about the 8th of April, 1896,—

“I went to Mr. Huffman, and asked if he wanted to go in with me and help buy a right of way, so as to connect with the parties south of me. I mean by the ‘ right of way5 to have a right to drain in their ditch, as they claimed it was their ditch. I mean the right of way from Andrews’ farm, and clear across, clear to the timber back. I went to Mr. Huffman, and told him that I was about thinking of trying o’Ur ditch, to see if we could compromise the matter with the boys south of us, and get an outlet for our water. I asked Mr. Huffman how much he would give me to get an outlet for his, and Mr. Hu ff man says, ‘Well,’ he says, ‘ I give $10.’ ‘ Well,’ I says, ‘Mr. Huffman, that ain’t hardly enough.’ I says: ‘ These parties south of us wants quite a little. I think you ought to give me $15.’ I says: ‘There' is quite a little expense. I don’t know how much it will be; but,’ I says, ‘ it is quite a little. I think it wouldn’t be more than right if you gave us $15.’ He talked. He said $10 was enough; but we talked a little while longer. Finally I says, ‘ Then you don’t want to come in with us, and help us out, and come in with our ditch?’ Well, yes, he said he should; and finally he says, ‘ I won’t stand out for $5.’ Then I says, ‘ Do I understand you, then, you will help me out with $15, providing I get an outlet with the boys south of us?’ He says, ‘Yes;’ and that was all the talk he and I had. ”

Mr. Huffman says he had two cat-holes on his farm, and that he agreed with Mr. Schultz, if he would cause the ditch to be brought to the south line of his farm, he would pay $5 for each cat-hole drained into it,—$10 in all; and that the ditch was never dug to his south line. The plaintiff also claimed that, after the conversation had with Huffman, he did sufficient digging to give the defendant an outlet.

The record discloses that on the 13th of June the following article of agreement was made:

“Articles of agreement made and entered into this 13th day of June, A. D. 1896, by and between Fred Woodky, .Job Brownell, Thomas Hammond, and Alan S. Andrews, of the township of Sheridan, in the county of Calhoun, and State of Michigan, parties of the first part, and William Schultz, William Muffley, and Joseph Grison, of the same place of residence, parties of the second part.

“ Whereas, a ditch is now constructed and established from a point known as ‘ Beaver Dam,’ and running from thence across the lands of said Fred Woodky and Job Brownell, and onto and ending on the lands of the said Alan Andrews; and Whereas, the parties of the second part are desirous of forming a connection with said established ditch for the purpose of draining over first parties’ lands:

“Now, therefore, this indenture witnesseth: The said parties of the first part, for and in consideration of the sum of forty dollars, do hereby grant and give unto said parties of the second part, their heirs, representatives, and assigns, the right and privilege to dig and construct a proper ditch from the northern terminal of the present ditch hereinbefore first mentioned, and connecting therewith, and continuing on in a northerly direction, across the lands of the said Alan S. Andrews and William Schultz, to the north side of the section-line road running east and west between sections numbered 3 and 10 of said township of Sheridan, so as to make, when completed as herein set forth, one continuous ditch from said north line of said section-line road through to said so-called ‘ Beaver Dam.’ And all the parties to this said contract to have the privilege of tiling said ditch through the land or lands owned by the parties so desiring with a suitable tile of suitable size for the purpose required.

“Said parties of the second part hereby agree to dig, construct, and complete said ditch from said northern terminal of said first-mentioned ditch to the north side of said section-line road at the expiration of ninety days from the date of these presents, and, in event of the failure so to do, to forfeit the said sum of forty dollars as stipulated damages for the nonfulfillment of contract.”

No writing was ever given to the defendant by the plaintiff, or by any of the others, giving him the right to drain across their lands.

There are nearly 30 assignments of error, but, as one of them is decisive, the others will not be referred to further. The defendant asked the court to direct a verdict in his favor, because the contract, as sworn to by the plaintiff, was within the statute of frauds. The court declined to do this. Section 9509, 3 Comp. Laws, provides the manner in which estates or interests in lands may be acquired. In 6 Am. & Eng. Enc. Law, p. 18, it is said: “ The right of drainage through the lands of another is an easement, requiring for its enjoyment an interest in such lands, and cannot be conferred except by deed or conveyance in writing;” and we understand that to be the rule. See Hewlins v. Shippam, 5 Barn. & C. 221; Wilson v. Railway Co., 41 Minn. 56 (42 N. W. 600, 4 L. R. A. 378); Wiseman v. Lucksinger, 84 N. Y. 31 (38 Am. Rep. 479). It is said by counsel for plaintiff:

“However, if defendant’s position that the agreement was for an interest in lands, contrary to section 9509 of the Compiled Laws of 1897, is sustained by all the testimony in the case, that would not entitle the defendant to a reversal, as it is now well settled that the performance or part performance of an oral agreement for such interest in lands as is described in said section will operate to take such agreement out of the operation of the statute of frauds; ” citing a number of cases.

The trouble with this claim is that the wrong party is seóking the benefit of the rule of part performance. In this case Mr. Schultz cannot perform his agreement, so that it confers any legal right upon the defendant, without reducing the agreement to writing. He has not done that, and cannot claim any liability against Mr. Huffman because of the agreement. The court should have directed a verdict in favor of defendant.

Judgment is reversed.

The other Justices concurred.


text:
    CLINTSMAN v. ALFRED J. BROWN SEED CO
    Contracts—Brokers—Verbal Guaranty—Question por Jury.
    Whether a commission merchant verbally guaranteed a minimum price for a quantity of fruit consigned to him, or merely expressed an opinion as to the amount it would bring, held, on conflicting evidence, to be a question for the jury.
    Error to Kent; Adsit, J.
    Submitted February 12, 1901.
    Decided July 2, 1901.

      Assumpsit by Lewis E. Clintsman against the Alfred J. Brown Seed Company to recover a balance due on a consignment of produce. From a judgment for plaintiff, •defendant brings error.
    Affirmed.

      Wylie & Glapperton, for appellant.

      M. L. Dunham, for appellee.
   Moore, J.

This case was commenced in justice’s court, where plaintiff obtained a judgment. Defendant appealed the case to the circuit court, where it was tried by a jury, who rendered a verdict in favor of the plaintiff. The case is brought here by writ of error.

It was the claim of plaintiff that he sold to defendant five car loads of potatoes at 25 cents a bushel, and consigned over 1,800 baskets of grapes, a quantity of pears, and 4 bushels of apples, under a guaranty of price; and that, after crediting defendant with payments amounting to $950, there was due him $177.48. It was the claim of defendant that it did not buy any of this produce, but handled it as a broker, for a commission; and that, to •enable plaintiff to make purchases, it made advances to him, as is usual for brokers; and that, after accounting to the plaintiff fully for all sales, there is due defendant $291.94. The testimony was as conflicting as it well could be. The assignments of error all relate to the refusal of the court to give defendant’s requests to charge or to the charge of the court as given.

While the court did not read to the jury the first and second of defendant’s requests, the judge covered them fully and completely in his general charge, omitting nothing that was essential.

The important question in the case is whether defendant was entitled to have its third request given. It reads as follows:

“According to the testimony, there was no direct sale of the fruit in controversy,' consisting of the grapes, pears, and apples, which were shipped to the defendant on consignment. Plaintiff claims that, in the telephone talk about the grapes, Mr. Brown assured him that they could make him some money if he consigned them, and would guarantee that they would make him a profit; all of which is denied by Mr. Brown. There being no sale, and defendant never having seen the fruit, these statements, if actually made, would be regarded only as an expression of confidence, and would not constitute a legal contract of guaranty upon which the plaintiff could recover, and he would be entitled only to the proceeds of sale, less commissions. ”

The substance of the oral testimony in relation to the fruit was as follows:

Q. What was your agreement with them as to grapes and pears ? How did you come to sell them grapes and pears ?

“A. Why, I had them sold to other parties, and, during the process of the sale to' the other parties, I was working for Mr. Brown, and I had some talk with him about those grapes; and he said, ‘ If those parties don’t take them, let me know, and perhaps I can make you some money on them.’ The parties that I had them sold to didn’t take them, and another party represented in our town—in Casnovia—offered me eight cents a basket for the grapes. I stepped to the telephone, and telephoned to Mr. Alfred Brown; told him what I had been offered, and what he thought I had better do; and he says, ‘ While you have got a fair offer, I can make you some money on those grapes if you will consign them to us.’ And I consigned them to him.

“Q. How many baskets of grapes were there ?

“A. 1,846 baskets; and there were 17 barrels of pears in the same car. They said they could use the pears just as well as anybody else, and I told them what I had been offered for them, and he said, Let them go in, and we will guarantee to make you some money on that car load of fruit.’ And about that time I shipped them 44 bushels of pears in bushel baskets. There was no agreement as to the price of these pears in bushel baskets. I telephoned Mr. Brown, and told him what I could buy those pears for, and he says, ‘ If the pears are all right, buy them; there is money in them.’ And I bought them, and sorted them carefully, and shipped them to him. There were 25 bushels of No. l’s and 19 bushels of No. 2’s. The No. 1’s cost me 75 cents a bushel, and they were worth at that time, or soon after*, a dollar and a dollar and a quarter. The No. 2’s were worth 30 cents a bushel. And there were 4 bushels of choice apples that were worth 50 cents a bushel.”

Upon cross-examination the same witness, the plaintiff, testified as follows:

“Q. State the conversation you had with Mr. Brown. When did it occur ?

“A. It occurred about the 1st day of November last year. I had this car load of fruit loaded for St. Louis parties, and sold, as I supposed, and some of their money placed on the car. I had a talk with Mr. Alfred Brown about this same sale, and he 'said it was a good one. It was for nine cents a basket. I could not state, from recollection, the exact date of this talk. The car was billed out the 3d or áth of November to Mr. Brown. I stated the facts in regard to the sale to the St. Louis parties to Mr. Brown. During the process of the loading of the car of fruit, the man backed out, and I teléphoned Mr. Brown the facts in regard to the other man’s backing out, and I said, ‘ I have an offer from the S. T. Fish & Co., and the representative of that firm offered me eight cents a basket for the grapes there, and $3.00 a barrel for the pears for No. l’s and $2.00 for 2’s;’ and I telephoned to Mr. Brown, and asked him what he thought I had better do with them; if he could make me any money out of them above that price. ‘ Why,’ he says, ‘ I have got some parties in St. Louis that are hustlers; ’ and he says, ‘ They can make you some money out of your grapes, and, if you will consign them to us, I will guarantee they will make you some money above that price.’ ‘Well,’ I said, ‘Mr. Brown, I need the money for this car load of fruit. I have just paid over a hundred dollars for the fruit that is in this car, of my own money, and I need it; ’ and I said, ‘ If I sell them here, I can get my pay for them in full, and, if I consign them to you, I will have to lay out of the use of my money, unless you will advance me some on this car of fruit.’ He wanted to know how much I wanted. I said I wanted at least a hundred dollars on the car; that would cover what I paid out on the car. I said, ‘ If I can draw out of the car load of fruit the amount I have paid out, I can get along.’ ‘ Well,’ he says, ‘I will advance you a hundred dollars on this car of fruit,’ and did so.

“Q. Then you did not have any agreement to sell those grapes and pears to Mr. Brown for any stated price ?

“A. Nothing more than he guaranteed to make me some money above eight cents, for which I could sell them to S. T. Fish.’’

Alfred J. Brown, president of tbe defendant corporation, testified in reference to tbe car load of fruit as follows:

“I told plaintiff the only thing we could do with the fruit would be to ship it for his account, but it was very awkward, on account of it only being a part of a car; that we would refill the car here,'—put in some grapes that we had, and also some apples, enough to make up the minimum of 24,000 pounds, in order to get the freight rates. We consigned our grapes and fruit the same as we consigned his, and took what we could get for it, as the account of sales will show. I never told him what he could get out of these grapes, or what I could get out of them, or guaranteed any price. There was no guaranty. Simply took these grapes and shipped them for him.”

Upon this branch of the case the court charged the jury as follows:

“Now, the claim of the defendant as to the fruit is that Mr. Brown simply gave the plaintiff his opinion that, if he shipped it to defendant, to be sold on plaintiff’s account, he would realize more than the price named, by way of advice. That is the defendant’s claim on that point. If defendant’s contention on this point is sustained by the evidence, such an expression of opinion would not constitute a contract of guaranty, and plaintiff would only be entitled to the net proceeds of the sale as reported, which are not contradicted; that is, if they are contradicted in any way, it is for you to determine what the fact is. I say they are not contradicted, because I do not remember any evidence that goes to a contradiction of the correctness of the report of the sales made.”

The third request was not a complete statement of what was claimed by the plaintiff. We do not think the court erred in refusing to give it. While we may think we should have reached a different conclusion from the one reached by the jury, the questions submitted to them were within their province, and were submitted with much care by the trial judge.'

Judgment is affirmed.

The other Justices concurred.


text:
    CASTOR v. BATES.
    Res Judicata—Habeas Corpus—False Imprisonment
    "Wltere plaintiff, having been arrested on a ca. sa. at the instance of defendant, sued out a writ of habeas corpus, and, on a hearing after notice to defendant under 3 Comp. Laws, § 9885, was discharged on the ground that the judgment on , which the execution issued was void, such adjudication is conclusive in a subsequent action against defendant for false imprisonment.
    Error to superior court of Grand Rapids Newnham, J.
    Submitted February 12, 1901.
    Decided July 2, 1901.
    Case by Theodore Castor against Schuyler N. Bates for false imprisonment. From a judgment for plaintiff, defendant brings error.
    Affirmed.

      Walker & Fitz Gerald (Myron H. Walker, of counsel), for appellant.

      James A. Lombard, for appellee.
   Montgomery, C. J.

This is an action for false imprisonment. The defendant recovered a judgment against the plaintiff in an action of replevin, and subsequently sued out two successive body executions, upon which plaintiff was arrested. Plaintiff, after a brief detention upon each of these arrests, sued out a writ of habeas corpus, of which the defense in the case was given notice. On each of these applications the present defendant appeared and contested the plaintiff’s right to discharge, and on each occasion the court decided against defendant’s contention, holding the arrest to be unlawful in each cáse, and on the last hearing holding the justice’s judgment void.

The question which is first suggested by the plaintiff’s counsel is whether these adjudications in the habeas cor pus proceedings are binding on the defendant and res judicata in this proceeding. The statute (3 Comp. Laws, § 9885) provides that a party having the relation to the habeas corpus proceedings borne by this defendant has a right to notice and opportunity to be heard. This defendant in fact appeared and was heard. The questions involved in this case were there decided adversely to him. It is difficult to see on principle why the decision of the question there determined should not be held res judicata. It is true the ruling is commonly stated to be that res judicata has no application to habeas corpus proceedings, and that a refusal to discharge on one writ is no bar to the issuance of a new writ; but it is said that the discharge of a prisoner stands on a different footing, and that a person once discharged cannot be rearrested for the same cause.' 15 Am. & Eng. Enc. Law (2d Ed.), p. 212. On principle, when a question of law or fact has been adjudicated in such proceedings, after full hearing by the parties concerned, we think that as to such questions the proceeding is res judicata in any subsequent proceeding involving the same question. See In re Sneden, 105 Mich. 61 (62 N. W. 1009, 55 Am. St. Rep. 435).

The other errors assigned have been considered in so far as they are not controlled by the above discussion. We think the rulings complained of did not damage the defendant, in so much as the court excluded all exemplary damages.

Judgment is affirmed.

The other Justices concurred.


text:
    BOLLIN v. HOOPER.
    1. Mechanics’ Liens—Right to Sue on Contract—Service op Statement on Owner—Waiver.
    The failure of a building contractor to serve on the owner a sworn statement as to the amounts due for labor and material, required by 3 Comp. Laws, § 10713, as a prerequisite to. the right to sue on the contract, is not fatal to the maintenance of an action, where it appears that the objection was not raised on a trial of the case in justice’s court, that the statement was never, demanded by the owner, and that all bills have in fact been paid.
    2. Sunday Contract—Liability for Benefits.
    Where one party to a Sunday contract performs his part of it on week days, and the other accepts what is done, he must pay for what he receives.
    Error to Wayne; Hosmer, J.
    Submitted February 13, 1901.
    Decided July 2, 1901.

      Assumpsit by John Bollin against Frederick B. Hooper for labor performed and material furnished in the construction of a building. From a judgment for plaintiff, defendant brings error.
    Affirmed.

      Barbour & Bexford, for appellant.

      Oscar M. Springer, for appellee.
   Moore, J.

This suit was brought in justice’s court, where plaintiff recovered a judgment. The case was appealed to the circuit court, where, after a trial by jury, plaintiff again recovered judgment. The case is brought here by writ of error.

In the spring of 1899 Mr. Hooper contracted with one Schneider to build him a two-story, brick-veneer dwelling-house upon a lot he owned in Detroit. Mr. Schneider contracted with the plaintiff to do the brick and mason work for $885. On the 21st of April the plaintiff, in a letter addressed to the defendant, waived any claim to a lien on the building for his work. Mr. Bollin was paid by Mr. Schneider at one time $800, and the other time $100. The last payment is said by some of the witnesses to have been made on the 6th of May, and by the defendant on the 8th of May. It is the claim of plaintiff that differences arose between Mr. Schneider and Mr. Hooper, so that, the same day or the day after he was paid the $100, Mr. Schneider old him he was not going on with the contract, and that, if he did more work on the building, he must look to some one else for his pay. Mr. Grenier was the architect of the building. The plaintiff testified:

“I did not understand the effect of giving that release or waiving the lien at that time, but I was'afterwards told that I could not assert any lien upon the job or upon the building. I afterwards had a talk with Mr. Grenier and Mr. Hooper. I was telling them, when they told me to go ahead on the job on Mr. Hooper’s account, why I was asking for that release back; and I was told by Mr. Hooper, in the presence of Mr. Grenier, that that release would not be interfering with the further work. On May 10th (Thursday night) I had taken off my men, and told them not to come the next morning; and Mr. Hooper and myself had a talk. Mr. Hooper said I should go ahead with the job and finish it up, and he would see that I had— ‘I will see that youn get paid on that work. ’ And I told the men then— I says— Here are those two men that were there. The other one is not here as a witness. I told him to leave the tools right there, and come , the next morning to work. That was Thursday. So that Thursday there was that man, two laborers, and myself, only, and the other ones came back on Friday again. On Friday there was about twelve men to work.”

He also claims that substantially the same statement was made in the office of the architect on one Sunday.

One Meier was furnishing the stone to Mr. Bollin which was to go into the house. Mr. Bollin testified:

“Before Mr. Meier would furnish more stone to finish the work, he wanted to hear Mr. Hooper say that he would pay for the job,—before he would deliver the stone. Mr. Meier then went with me to Mr. Hooper’s office, and Mr. Hooper said that we should finish the job, and he would pay us for it; that he would see that we got paid for it.”

It is his claim: That, relying upon these statements, he continued to work until he had substantially completed the job, when, on the 7th of June, Mr. Hooper served him with a writing containing, among other language, the following :

“You are hereby notified and informed that if you continue doing the brick and mason work on the dwelling-house now being erected for me on lot 61, north side of Delaware avenue, in this city, you will have to look to Emanuel Schneider, with whom you made the contract for said work, for your pay.”

That he afterwards presented his bill to Mr. Hooper, who refused to pay it.

This suit was commenced June 20, 1899. Mr. Bollin produced several witnesses whose testimony tended to corroborate his about the agreement between him and the defendant.

The defendant denied that he ever promised to pay Bollin for his work, but says he assured him he would do what he could to see that he got his pay from Mr. Schneider. He also claims plaintiff was at work for Schneider, and that the claim that defendant was liable to him was an afterthought.

The testimony was very conflicting. The defendant presented 10 requests to charge. These requests were taken up seriatim by the circuit judge. Some of them were given literally, some of them were modified, and some were refused. There are a good many assignments of error, all of which have been considered, but we shall refer to only those which we deem to be important.

The court was asked to direct a verdict in favor of de-., fendant “because, even if there were a valid contract between the parties, the plaintiff never served upon the defendant a statement under oath, as required by the mechanic’s lien law; ” counsel basing this claim upon section 4, Act No. 179, Pub. Acts 1891, and the case of Barnard v. McLeod, 114 Mich. 73 (72 N. W. 24).

The record discloses that defendant appeared in justice’s court and pleaded the genex-al issue, without giving any notice thereunder. The trial judge charged the jury in relation to this request as follows:

“ The first thing we nieet, gentlemen of the jury, on the threshold of this case, is the failure of the plaintiff to file, or before commencing the suit to give Mr. Hooper, an affidavit stating that all the material bills have been paid, and the wages of the masons and laborers who worked under him have been paid. Now, gentlemen of the jury, that, under the laws of our State, is a thing that might be demanded; but, in a comparatively recent case before our Supreme Court, the Supreme Court said it is not absolutely jurisdictional, and that, where it is obvious that all material and labor has been paid for, then and under those circumstances a suit may be maintained. Now, I cannot put myself exactly in the position of Justice Lemkie, but there is evidence here that it was obvious to him that these several bills had been paid, and therefore the affidavit was not jurisdictional; and, if there was evidence, it was a matter for him to determine, and not for you and me. Now, when we come here, gentlemen of the jury, there is evidence before us that I think, at the present stage, at least, is conclusive— They have brought before you at the present time the evidence of the register of deeds’ office, which shows that no liens have been filed upon the property, although the work has been completed, and more, I think, than the statutory time for the filing of liens has passed; and they have introduced the testimony of Mr. Bollin and others, tending to show that all have been paid; and so, so far as that purely technical point is concerned, gentlemen of the'jury, I think that they are properly in court, and that I can submit the case to vou freed from any technicality of that description.”

The record discloses that the bills had all been paid. Defendant never made a demand for the statement. He did not question the jurisdiction of the court below. Under the facts disclosed by the record, we think the trial judge properly disposed of the question. See Barnard v. McLeod, 114 Mich. 73 (72 N. W. 24).

It is said the court erred in refusing to direct the jury, in effect, that if they found a contract was made on Sunday, May 21st, it is void; counsel citing Aspell v. Hosbein, 98 Mich. 117 (57 N. W. 27). The court gave the request as prepared by counsel, but he also explained to them, if one party to a Sunday contract performed his part of it upon week days, and the other party accepted what was done, the other party could not accept the benefit of what was done without paying for it; giving a number of illustrations. What the learned judge said upon the subject was not prejudicial to the defendant. The case was carefully tried. The different theories of the parties were properly submitted to the jury.

Judgment is affirmed.

The other Justices concurred.