author: Bird, J.

text:
    PEOPLE v. WHITE.
    1. Criminal Law — Taking Indecent Liberties — Evidence—Res Gestas.
    In a prosecution for taking indecent liberties with the person of a girl under 14 years of age, evidence of a playmate as to what the complaining witness told her a week after the occurrence of the alleged offense as to respondent’s conduct was not admissible as part of the res gestee, because made too long after the event.
    2. Same — Evidence— Hearsay,— Corroborative Testimony — Admissibility.
    Evidence of the fact that she complained was admissible to corroborate the testimony of the complaining witness, but the details of her complaint were inadmissible.
    3. Same — Complaint—Hearsay.
    Where the alleged disclosure to her playmate was made during an argument between them as to whose grand- . father respondent was, and not in the nature of a complaint, it was hearsay and inadmissible.
    4. Same — Trial—Instructions—Credibility oe Witness.
    It was error for the trial court to instruct the jury that “if you do not believe respondent’s testimony you should not return a verdict in accordance with it; that as you believe or disbelieve the respondent you are to return a verdict”; since they might have disbelieved respondent’s version of the affair, but if not convinced by the people’s case that respondent was guilty, it would have been their duty to return a verdict of “not guilty.”
    Exceptions before sentence from Grand Traverse; Mayne, J.
    Submitted October 16, 1916.
    (Docket No. 172.)
    Decided December 21, 1916.
    James S. White was convicted of having taken indecent liberties with the person of a girl under the age of fourteen years.
    Reversed.

      Ward B. Connine, Prosecuting Attorney, for the people.

      J. J. Tweddle, for respondent.
   Bird, J.

Respondent was informed against and convicted in the circuit court for Grand Traverse county for having taken indecent and improper liberties with the person of Mildred Skiver, a girl 11 years of age. We are asked to review the proceedings on exceptions before sentence.

The offense was charged to have been committed on July 12, 1915. At this time respondent was 55 years of age, and was a retail grocery dealer in the city of Grand Traverse. Mildred lived a block from his store.. About noon on the day in question Mildred went to the store to obtain some groceries. Her story is, in substance, that respondent invited her into the storage room in the rear of the sales room to be weighed, and while there he took indecent liberties with her person. Defendant admits that Mildred was in his store at about that hour of the day in question, and that he weighed her, but at her request. He denies that he took indecent and improper liberties with her person, and denies any intent of doing so.

Ruby Wightman, a playmate of Mildred’s, was allowed to testify that Mildred told her what she claimed respondent had done to her. This is assigned as error on the ground that it was hearsay. It appears that Mildred, following the occurrence, made no disclosure of respondent’s conduct to her parents or to any one else for upwards of a week thereafter. Mildred then told Ruby, Ruby told her mother, and in this way the story reached Mildred’s mother. Upon being questioned Mildred disclosed to her mother for the first time what she claimed had taken place.

These statements of the complaining witness were not admissible as part of the res gestss, because made too long after the event. Lambert v. People, 29 Mich. 71. If they were admissible at all, it was upon the theory that they tended to corroborate the testimony of the complaining witness. Greenleaf on Evidence, § 213. Upon this theory the fact that she complained of respondent’s conduct was admissible, but the details of her complaint were not admissible. People v. Hicks, 98 Mich. 86 (56 N. W. 1102). The witness Ruby Wightman testified:

“I remember of Mildred speaking to me about what she claims Mr. White done to her.”

So far as the effect upon the jury was concerned, she might as well have detailed what Mildred told her, as Mildred preceded her on the witness stand and informed the jury what her claims were. Speaking of this class of evidence, Greenleaf says:

“Though the prosecutrix may be asked whether she made complaint of the injury, and when and to whom, and the person to whom - she complained is usually called to prove that fact; yet the particular facts which she stated are not admissible in evidence, except when elicited in cross-examination, or by way of confirming her testimony after it has been impeached. On the direct examination, the practice has been merely to ask whether she made complaint that such an outrage had been perpetrated upon her, and to receive only a simple ‘Yes’ or ‘No.’ Indeed, the complaint constitutes no part of the res gestse: it is only a fact corroborative of the testimony of the complainant; and, where she is not a witness in the case, it is wholly inadmissible.” 3 Greenleaf on Evidence, § 213.

Another serious objection to the admission of the testimony is that the statements of Mildred to her playmate, Ruby, were not made as a complaint. The disclosure was made as the result of a dispute between her and Ruby as to which girl’s grandpa respondent was. Each girl claimed respondent was her grandpa, and not the other’s. The testimony was hearsay, and should have been rejected or stricken out.

The trial court, in referring to the testimony of the respondent, instructed the jury, as follows:

“If, however, you do not believe his testimony, then you would not return a verdict in accordance with his testimony. It is as you believe or disbelieve the witness you are to return a verdict.”

Exception is taken to this part of the charjge. Considering this part of the charge by itself, we do not think it was quite fair to the respondent, because, even though the jury did not believe his version of the affair, still, if they were not convinced by the people’s case that respondent was guilty, it would have been their duty to have returned a verdict of “not guilty.”

For the errors pointed out, the judgment of conviction must be set aside, and a new trial granted.

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


source: Caselaw Access Project

author: Bird, J. Ostrander, J.

license: Public Domain

text:
    NAPPER v. FITZPATRICK.
    1. Mortgages — Covenants of Warranty — Tax Title — Redemption.
    Where defendant gave to complainant a mortgage containing a warranty of title and also a warranty against previous incumbrances, and there was at the time the mortgage was given an outstanding tax on the premises which was a lien thereon, and which afterwards ripened into a title in the hands of the holders, defendant’s subsequent repurchase of the premises from the holders of the tax title operated, in law, as a redemption which should inure to complainant’s benefit, notwithstanding defendant’s title had been cut off by mortgage foreclosure.

      2. Same — Equity—Redemption.
    But where the evidence shows that complainant had collected usurious interest from defendant in excess of the amount of the original tax; that he learned of the existence of the tax title at least a year before the writ of ’ assistance was asked for, and had ample opportunity to adjust it, but voluntarily chose to risk the tax being declared invalid, the equity court will not relieve him from the consequences of his choice. Ostbandek, J., dissenting.
    Appeal from Alpena; Emerick, J.
    Submitted June 12, 1916.
    (Docket No. 45.)
    Decided December 21, 1916.
    Bill by Robert Napper against John E. Fitzpatrick for a decree declaring a repurchase to be a redemption of certain premises, and other relief. From a decree for defendant, complainant appeals.
    Affirmed.

      O’Brien & Francis (Charles D’Aigle, of counsel), for complainant.

      I. S. Canfield, for defendant.
   Bird, J.

Defendant was the owner of the north half of the northwest quarter of section 33, in township 32 north, range 6 east. He mortgaged it to plaintiff on the 7th day of March, 1894, to secure the repayment of a loan of $1,200 running two years at 8 per cent. The mortgage was afterwards foreclosed, and the premises were bid in by the mortgagee for the amount due upon the mortgage, together with the expenses of sale. Defendant did not redeem the premises, and the equity of redemption expired on April 9, 1899. Following this plaintiff leased the premises to defendant for one year with the privilege of two, from April 13, 1899, at a yearly rental of $125. Defendant paid the first year’s rent, but refused to pay further rent, because in August, 1899, Brown and Cullen, of Flint, made claim to the premises by force of a deed from the State for the taxes of 1893. It was then learned that the premises had been sold in December, 1895, and bid off to the State, and afterward sold by the auditor general to Brown and Cullen in August, 1897. Plaintiff refused to purchase or recognize the tax deed, and a writ of assistance was applied for and granted to Brown and Cullen in the Alpena circuit court, and afterwards affirmed by this court. Brown v. Napper, 125 Mich. 117 (83 N. W. 999). In March, 1901, after his lease with plaintiff had expired, the defendant .accepted a lease from Brown and Cullen. He had possession of the premises under this lease until December, 1901, when he purchased them upon contract for $1,200. While occupying the premises under this land contract plaintiff commenced a suit in ejectment against defendant and Brown and Cullen. This suit was decided adversely to plaintiff. It was afterwards appealed to this court and affirmed. Napper v. Fitzpatrick, 139 Mich. 139 (102 N. W. 642). Afterward, and on November 26, 1912, Brown and Cullen deeded the premises to defendant, and he gave them a purchase price mortgage thereon for $881, the balance due upon his contract. In July, 1913, these proceedings were brought to have defendant’s repurchase of the premises declared a redemption of the premises and to have plaintiff’s lien reinstated thereon.

The chancellor who heard the case refused plaintiff relief on the ground that the equities of the case were not with him. Plaintiff appeals from the decree.

The contention of plaintiff in brief is that defendant gave him a mortgage on his premises containing a warranty of title, and also a warranty against previous incumbrances; that when the mortgage was given the taxes for 1893 were a lien thereon; that by reason of defendant’s ownership and possession of the premises the law raised a duty upon his part to pay to the State the taxes, and his mortgage contract raised a like duty to plaintiff; that defendant’s failure to discharge this duty which he owed to the State and to plaintiff resulted in a sale of the title to a stranger, and that a repurchase of that title by defendant should in equity be construed as a redemption rather than a repurchase, and thereby inure to plaintiff’s benefit. This position is based upon the general rule of law:

“That a purchase made by one whose duty it was to pay the taxes shall operate as payment only.” Cooley on Taxation (2d Ed.), 501, and cases cited.

Both counsel recognize this rule and both concede that the principle has been applied to the relation of mortgagor and mortgagee, but defendant insists that the rule does not apply in the present case, because defendant’s title was cut off by the mortgage foreclosure, and because the tax title was bought and held by a stranger, and afterwards reconveyed to defendant. There is reason in this distinction, and it is supported by the weight of authority (37 Cyc. p. 1350), but the courts of Michigan, Iowa, and West Virginia appear to have extended the inhibition to a repurchase from a stranger in whom the title matured. Dubois v. Campau, 24 Mich. 360; Sorenson v. Davis, 83 Iowa, 405 (49 N. W. 1004); Battin v. Woods, 27 W. Va. 58. And this appears to be the rule even though the mortgagor’s title has been in the meantime divested by foreclosure proceedings. Magner v. Insurance Co., 30 La. Ann. 1357.

We must conclude that, if the case were to be determined solely upon the legal question, plaintiff’s contention would have to prevail.

The opinion of the chancellor indicates that he reached the same conclusion on the legal question, but he refused to grant plaintiff relief because he found the merits against him and in favor of the defendant. In his opinion he does not specify the particular facts upon which he based his refusal, but an examination of the record discloses a state of facts which obviously .influenced his conclusion. The record discloses that the mortgage in question provided on its face for a usurious rate of interest. It stipulated for the payment of 8 per cent, annual interest, and placed an obligation upon the mortgagor to pay all taxes assessed on the mortgage. Furthermore, plaintiff’s own testimony tends to show that, after providing for a usurious rate of interest in the mortgage, he received defendant’s promissory note for 2 per cent, additional interest, amounting to $24, and that this note was afterwards paid. It is also shown that in April, 1896, defendant gave plaintiff another mortgage on another piece of land for two years’ interest on the principal mortgage, and included therein $33.60 in excess of the two years’ interest at 8 per cent. When plaintiff was asked about this excess he was unable to account for it.

The testimony of the parties is in conflict as to when plaintiff first learned of this tax title. We think the record fairly shows, however, that plaintiff learned of it at least a year before the writ of assistance was applied for; that he had ample opportunity to adjust it, and defendant, who was in straitened circumstances, urged him to do so, and promised him that he would repay it if he would extend the time for redemption, but plaintiff refused to pay or recognize the tax title, although at that time he had collected from defendant usurious interest in a sum larger than the amount of the original tax. Considering this manner of dealing with the defendant, together with the great lapse of time since the mortgage was given, we think complainant is not in a very good position to invoke the aid of a court of equity to reinstate his interest in the premises — an interest which he himself refused to redeem by the payment of a small sum of money which he could have paid and added to his mortgage. He was willing to gamble on the chance of the tax being declared invalid, but when he loses he invokes the aid of the court to reinstate his interest in the premises. Courts of equity will not ordinarily relieve a party from the consequences of a risk which he voluntarily assumes. McCredie v. Buxton, 31 Mich. 383. We agree with the chancellor that plaintiff’s equities are not such as to call for equitable relief.

The decree of the trial court is affirmed, with costs to the defendant.

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

Ostrander, J.

In my opinion, the complainant is entitled to relief upon the ground that equity follows the law.


text:
    CLARK v. BERRIEN CIRCUIT JUDGE.
    1. Probate Appeals — Dilatory Appeal — Discretion oe Court— Abuse.
    Where, through, a misunderstanding of plaintiff’s attorneys, she failed to contest a claim before commissioners and take an appeal, and on motion to allow an appeal under section 674, 1 Comp. Laws (3 Comp. Laws 1915, § 14156), providing for an appeal, in the discretion of the trial court, if the applicant is without default, and “if it shall appear that justice requires a revision of the case,” such a showing was made as would have justified the trial court in allowing the appeal, yet, the statute having vested the lower court with a discretionary power, this court will not reverse the determination of such court denying an appeal, unless it appeared that there had been a clear abuse of discretion.

      %. Same.
    Even if it be granted that plaintiff was without default, the question whether it appeared that justice required a revision of the case was still within the discretion of the court.
    Mandamus by Catherine Clark and others to compel George W. Bridgman, circuit judge of Berrien county, to vacate a certain order and to enter an order granting petitioners leave to appeal from the findings of the commissioners on claims in a certain estate.
    Submitted October 3, 1916.
    (Calendar No. 27,424.)
    Writ denied December 21, 1916.

      Gore & Harvey, for relators.

      O’Hara & O’Hara, for respondent.
   Bird, J.

This is an application for a writ of mandamus to compel the Berrien circuit judge to allow a dilatory appeal from the allowance by the commissioners of the claim of Mary J. Keefer against the estate of Thomas Griffin, deceased.

From the plaintiffs’ petition it appears that on the 16th day of July, 1914, administration was granted upon the estate by the probate court of Berrien county, and an administrator appointed. Afterward commissioners to hear claims against the estate were appointed, and the claim of Mary J. Keefer was allowed without contest, on the 30th day of April, 1915, at the sum of $1,760, and the commissioners’ report thereof was filed on May 12, 1915. December 16, 1915, this application was made to the circuit court for an order allowing an appeal under the authority of 1 Comp. Laws, § 674 et seq. '(3 Comp. Laws 1915, § 14156). The matter was held for a time, but finally, on February 17, 1916, a written opinion was filed by the court denying the prayer of the petition. On May 24, 1916, plaintiffs filed a motion to renew their petition and for leave to appeal. This motion was soon after denied by the court on the ground that it was not satisfied that the plaintiffs, were without default, or that justice required a revision of the claim, and for the further reason that the last motion was not filed within the year of grace allowed by the statute.

The failure to oppose the claim before the commissioners and to take an appeal within the 60 days thereafter is excused as. follows; The plaintiffs live in the vicinity of Laporte, Ind., and they employed Mr. E. E. Weir, an attorney residing at Laporte, to protect their interests in the estate. He in turn retained Messrs. Gore & Harvey, at Benton Harbor, to assist him. Gore & Harvey on September 2, 1914, filed a notice of their appearance in probate court. When the date was fixed for the hearing of the claims, against the estate, Gore & Harvey wrote to Mr. Weir, advising him when and where the claims would be heard, and indicating that they assumed he would take care of the matter at the hearing, but if he desired them to assist to advise them; but the letter evidently went astray. Each counsel understood that the other would be present at the hearing, but it resulted in neither one being there, and neither counsel learned that the claim had been allowed and the report filed until about December 1, 1915. A few days thereafter this application was made for an allowance of an appeal to the circuit court, which included an affidavit of merits and a showing that the defense to the Keefer claim was one of payment.

The failure to oppose the claim and take an appeal appears to have occurred through a misunderstanding between plaintiffs’ counsel as to which one was to give the matter his personal attention. Such occurrences are not infrequent with busy attorneys. This showing would reasonably account for the delay up to December 1st, but after that the matter does not appear to have been pressed with the vigor which ordinarily follows the discovery of such omissions. Without discussing the respective claims in detail, it is sufficient to say that we are of the opinion that the petition presents such facts as would have justified the trial court in allowing the appeal, but we think it is equally true that the facts before him justify his refusal to grant it. The matter standing in this wise, and the circuit court having exercised its discretion, we do not see how we can direct other or different action on its part. The statute in express language vests the circuit court with a discretionary power to allow appeals in such cases, if the applicant is without default, and “if it shall appear that justice requires a revision of the case.” We have held many times that we would not reverse the determination of the circuit court under this statute unless it appeared that there had been a clear abuse of discretion. Smith v. Circuit Judge, 82 Mich. 93 (45 N. W. 1122); Sanborn v. Circuit Judge, 94 Mich. 519, 526 (54 N. W. 295); Small v. Olds, 151 Mich. 111 (114 N. W. 872).

But it is said that the plaintiffs are without default in the matter. Grant this to be so, and that the court should have so held; the question whether it appeared that justice required a revision of the case was still within its discretion.

We are not persuaded that the circuit court has abused its discretion, and therefore the writ must be denied.

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


author: Bird, J. Bird, J.

text:
    PARKYN v. FORD.
    1. Cancellation of Instruments — Fraud—Affirmance—Waiver.
    In proceedings for the cancellation of a deed to a farm on the ground of fraud, where complainant and defendant exchanged farms, complainant also purchasing defendant’s personalty, and the evidence shows that the complainant, who was much above the average in intelligence, had lived on the farm for ZVz months, and had ample opportunity to discover the fraud, if any, when he signed a receipt purporting to be “a full, complete compromise settlement of any and all differences on land and other trades,” held, an affirmance of the trade and waiver of the right to complain of fraud.
    On Application for Rehearing.
    2. Principal and Agent — Authority of Agent — Equities.
    Where complainant A. was represented by her brother-in-law, another complainant, throughout the transactions, in which their interests were closely allied, and she acquiesced in his acts, held, unnecessary to separate her equities from his, and that he had authority to bind her.
    Appeal from Hillsdale; Knowlen, J., presiding.
    Submitted April 18, 1916.
    (Docket No. 29.)
    Decided December 21, 1916.
    Rehearing denied May 31, 1917.
    Bill by Joseph O. Parkyn and others against Julius C. Ford for the rescission of an exchange of real estate on the ground of fraud. From a decree for complainants, defendant appeals.
    Reversed, and bill dismissed.

      F. A. Lyon, for complainants.

      W. H. Frankhauser (Shields & Silsbee, of counsel), for defendant.
   Bird, J.

Plaintiffs were the owners of 93 acres of farm lands lying near the city of Hillsdale. Defendant, at the same time, was the owner of a farm of 288 acres, situate near Summit, in the State of Mississippi. Defendant advertised his farm for sale, and the advertisement came to the attention of plaintiff Joseph O. Parkyn, and he wrote to defendant, making numerous inquiries concerning the farm. These inquiries were replied to by defendant, and further correspondence was had, but nothing came of it. A few months later the correspondence was renewed by Parkyn, and several letters passed between them, looking toward an exchange of farms. In his letters defendant invited plaintiff to come to Mississippi and inspect the farm for himself. He did so. He remained in Summit two days, and after looking the farm over and talking with some of the near neighbors, he left Summit, with the understanding that he would return home and talk the matter over with his family and advise him what conclusion they reached. A few days later he made the following proposition by letter for an exchange of the properties:

“Hillsdale, Mich., 2/24/1913.
“J. C. Ford,
“Summit, Miss.
“Kind Friend: I arrived safe in Hillsdale last evening and have spent the morning in attempting to tell my family of the advantages and disadvantages of your section of Mississippi and of those specially applicable to the Ford farm, and having reached the conclusion that we can venture to make the change I submit the inclosed proposition for your consideration, which is the best offer I can make.
“Proposition for Exchange of Farms.
“Mr. J. C. Ford,
“Summit, Miss.
“I will exchange my two farms lying within the city limits of Hillsdale, Mich., containing about 93 acres for your farm in Pike county, Miss., containing 288 acres, more or less, already visited and inspected by me Feb. 20-21, 1913. You are to assume the mortgages now on these farms amounting, accrued interest included, to $3,544, and I am to give you a mortgage on the farm taken of you in exchange for my farm to the same amount, viz., $3,544, said mortgage to draw 6 per cent, annual interest, I should like the note this mortgage secures made payable five years after date with the privilege of paying $100.00 or any multiple at any annual interest payment, or have the note drawn payable on or before five years after date.
“If we can agree upon the amount to be paid for them, I will purchase your sows, pigs, mules, wagon, drill, other farm implements, hay and grain. As regards the exchange proposition you will readily understand this amounts to an even exchange, as I neither increase nor diminish my indebtedness, simply have it transferred.”

Upon receipt of this proposal defendant came to Hillsdale and inspected plaintiff’s premises. He appeared to be well pleased with them and accepted plaintiff’s proposition, save in this respect: He retained a half interest in certain gravel pits on the Mississippi farm. The value of the personal property mentioned in plaintiff’s, proposal was agreed upon, and plaintiff purchased it, agreeing to pay therefor $1,500. Conveyances of the real estate were exchanged on the 11th day of March, 1913. Following this defendant went into possession of the Hillsdale lands, and plaintiff and his family went to Mississippi and took possession of the Mississippi farm. Plaintiff and his family lived there from April until September, 1913, when Parkyn came north and commenced these proceedings in the Hillsdale circuit court, praying for a rescission of the entire transaction relative to the exchange of real estate, upon the ground that defendant had made false and fraudulent statements concerning the Mississippi farm. The misrepresentations referred to, and which were relied upon at the hearing, were five: First, that said farm was worth in the open or general market, $47.50 per acre; second, that there were no insects of any kind in the locality, except the cotton boll weevil that were worrying the farmer in that section; third, that the gravel pits on said farm held the only available gravel in that locality.; fourth, that defendant had raised on the field south of the barn the preceding year of 1912, 60 bushels of shelled corn per acre, without fertilization; fifth, that there was no overflow from the river, except a small overflow now and then in the timber. The defendant denied that he was guilty of any fraud in connection with the trade. Much testimony was taken bearing upon the charges made by complainant, and at the conclusion thereof the chancellor was of the opinion that complainant was entitled to relief upon the third, fourth, and fifth allegations, but denied relief as to the first and second. Defendant, appeals from the decree.

Counsel have discussed, in oral argument and in briefs, each one of the five propositions involved, and their presentation of them has been very helpful to the court in reaching a conclusion. Our view of the case, however, will make it necessary to discuss only one phase of the case.

The record shows that both Parkyn and Ford were men abundantly able to take care of themselves in a business deal. Each took the precaution before trading to examine the other’s premises. After exchanging, plaintiff went to Mississippi in April with his family, and remained on the farm until September. On July 12th of that year plaintiff and defendant had a settlement, in which defendant allowed plaintiff $160 on his note for a shortage in the personal property which he had sold him. At that time the following receipt was signed by plaintiff:

“Received of J. C. Ford, $160 credit on a note, dated March 11,1913, for $400, due March 11, 1914, as itemized above, which is a full, complete compromise settlement of any and all differences on land and other trades, as per contract between us.”

At the time plaintiff signed this receipt he made no complains that he had been overreached in the deal, although he had then been in possession of the farm for nearly 3% months. No such complaint had been made by him prior to July 12th, and no complaint was made by him after that date, and before he came north in September, notwithstanding defendant lived at Summit, only a few miles distant from him. In fact, plaintiff never complained to defendant about the falsity of his representations until he filed his bill in this case, although they appeared to be on friendly terms during all that time.

While it does not appear at what precise time plaintiff discovéred that he had been defrauded, we assume that a man of his mental caliber had ample opportunity, in the three months he lived on the farm before signing the receipt in question, to learn the selling value of the farm; to learn of the insects which infested the locality; to inform himself as to the value of the gravel pits; and to discover the fertility and productiveness of the soil. The extent to which the farm was overflowed by high water was known to him because of a freshet which occurred in June. If he knew, or had ample opportunity to know (Lee v. McClelland, 120 Cal. 147 [52 Pac. 300]; State Bank of Iowa Falls v. Brown, 142 Iowa, 190 [119 N. W. 81, 134 Am. St. Rep. 412]), that defendant’s representations were untrue when he signed the receipt on July 12th and made no complaint nor protest, we think by so doing he affirmed the trade and waived his right to complain of the fraud (39 Cyc. p. 1292, and cases cited).

The plaintiff was, at the time of the deal, about 60 years of age, much above the average in intelligence, with a varied experience, and thoroughly familiar with the business of farming. His letter to defendant, making inquiry about the farm, shows much better than ,we can state the quality of his mind. It follows:

“Dear Sir: Your favor of the 22d inst. received and in reply will say that your brief description of your farm in Miss, interests me and arouses my curiosity to a degree which induces me to write for further particulars. Kindly inform me in what county it is located, its distance from the Gulf, amount in acreage, and variety of timber, if any, growing upon the portion not under cultivation. I desire to know also if the farm is suitable for dairy purposes, of the grasses for hay and pasturage growing upon the same. A more complete description of the house with its location and surroundings would interest me, by this, I mean number of rooms on first and second floors, dimensions of the rooms as well as the ground space occupied by it, its distance from the road and frontage on same, also if water for house use is convenient, and if obtained from well or spring, and if water is hard or soft, whether there are porches, etc. How about shade trees, fruit trees and varieties? Any small fruits? How much (in acres) is suitable for the production of alfalfa? Is the land free from stone or rock, if you have well or wells of water kindly state depth of same, is your soil what is called Orangeburg sand or sandy loam? Are fish plentiful in the river .and stream given as partial boundaries of the farm? Is your farm tract fenced and with what, have you any paper shell pecan trees, what game in the woods and is it abundant, are neighbors near, state if labor is to be easily had or hard to find, whether white or colored? Of what denomination is the church which is nearby? Kindly tell me if the house faces a north and south or an east and west road and on which side of the road, also if house is of one, two or more stories in height, any cellar under house? How large a barn on farm and is farm divided into fenced fields? *^ * * A few more questions and I will cease imposing on your good nature, believing that in such a serious matter as changing locations, forming new associations and entering upon entirely different conditions you,will readily pardon me for seeking advance information. What kind of public roads have you, what is the rate of taxation per $1,000? Can you quote me lumber prices, coal prices, transportation facilities, cost of farm labor, of cows, horses, mules and poultry? Is much .attention given to truck and fruit growing, dairying," stock raising/and to the growing of poultry, any stone for building purposes, cost of cement and building materials? What are your staple crops and what special crops are well adapted to the soil of your farm, are commercial fertilizers needed upon it? Assuring you in advance that I shall appreciate any information you may be able to supply me and hoping soon to form your acquaintance, I am,
“Very truly yours,
“J. O. Parkyn.
“P. S. — As a woman usually writes a postscript, I represent my wife in asking about climatic conditions. Kindly give me extremes of heat and cold for the seasons, if available, for your neighborhood, annual rainfall and how distributed, whether subject to violent or sudden storms or not, how about prevailing winds and sudden changes in temperature. Any mosquitos or poisonous insects or reptiles, any fleas, cockroaches, or insect pests? Is any portion of your farm subject to or liable to overflow from the river or creek, can you give me name of river on boundary, also of the. city near farm. J. O. P.
“P. S. — Can you give size of the tenant houses and. condition of same, are houses and barn new or old,, in good condition or not? — J. O. P.”

It is asking rather too much of this court to believe that plaintiff, with the inquisitive mind that this letter shows him to be possessed of, could live on a farm which he had acquired for more than three months, without verifying the truth of the representations of which he now complains, because investigation and research are the natural accompaniments of the inquisitive mind.

But it is said that the receipt has to do with the personal property which plaintiff purchased, and that he is asking no relief from that contract, and, further, that his accepting credit on his note would not affect the contract relating to the real estate. Upon the question of plaintiff’s, right to a rescission of the contract it would doubtless become important whether the contract for the personal property was severable from the real estate agreement, inasmuch as he did not tender back the personal property before bringing suit, but upon the question of the affirmation of the entire transaction it is not controlling in view of the wording of the receipt. It is evident that the parties had something else in mind beside the personal property, as it referred to “all differences on land and other trades.”

The fact that plaintiff made no complaint of the misrepresentations from April to September, considered in connection with certain testimony given by plaintiff and members of his family, is very suggestive that there were other reasons for desiring a rescission of the conveyances. The plaintiff testified that the climate had an enervating effect on him; that he lost flesh rapidly as the hot weather came on, and that he found he was unable to stand much labor in the sun; that as a result of this his health failed rapidly, and that he grew weaker as the summer wore on; that he finally reached a point where he could do no manual labor. Plaintiff’s son testified in his deposition that his father was pleased with the looks of the place. In fact he was well pleased until he went back to Hills-dale and saw the town improving. The daughter, being interrogated along the same lines, testified that she did not want to come down here, that she wanted to go back now, and that the whole family was in that temper, and had been for a couple of months or longer. But whatever may have been the reason for desiring a rescission of the deeds, we are of the opinion that plaintiff’s conduct in signing the receipt after he had ample opportunity to discover the falsity of the representations, if there were any, without making any protest, precludes any relief in his behalf.

The decree of the trial court is reversed, and plaintiff’s bill dismissed, with costs of both courts to defendant.

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

On Application for Rehearing.

Bird, J.

Application has been made for a rehearing in this cause, and the principal point raised in support thereof is the failure of the court to pass upon the equities of plaintiff Anna M. Adams. No separate mention was made of her equities in the opinion because it appeared that her interest was so closely allied with the interest of the other plaintiffs that it would be unnecessary. Miss Adams is a sister of Mrs. Parkyn, is a member of the Parkyn family, and went with them to the Mississippi farm to reside. A fair inference from the testimony shows that her brother-in-law, Parkyn, acted for her throughout the negotiations, and represented her interest, whatever it was, when the trade was made, and continued to represent her interest while on the Mississippi farm. So far as. the record shows, she appears, to have acquiesced in her brother-in-law’s acts as fully as Mrs. Parkyn did. Our conclusion is that plaintiff Parkyn had authority to bind her in the transactions.

Rehearing is denied.

Kuhn, C. J.,. and Stone, Ostrander, Moore, Steere, and Brooke, JJ., concurred. Fellows, J.-. did not sit.


author: Moore, J. Ostrander, J.

text:
    PEOPLE v. MACZULSKI.
    1. Indictment and Information — Physicians and Surgeons — Statutes.
    An. information charging respondent, in the language of the statute (Act No. 237, Pub. Acts 1899, as amended by Act No. 368, Pub. Acts 1913, 2 Comp. Laws 1915, § 6726), with having unlawfully procured himself to be registered as a physician was sufficient.
    2. Criminal Law — Jurisdiction—Venue.
    In such prosecution, the court in the county in which the application was filed and the license issued had jurisdiction to try the case, although respondent passed an examination in another county.
    3. Same — Appeal and Error — Evidence—Cross-Examination.
    The court below was not in error in refusing to strike out testimony that respondent’s counsel drew out on the cross-examination of the witness.
    4. Same — Argument of Counsel — Constitutional Privilege — Saving Question for Review.
    Improper argument of the prosecuting attorney, made in response to the reason given by respondent’s counsel for not calling him, was not saved for review in this court by merely noting an exception; a ruling thereon by the court should have been asked for. Stone, C. J., and Ostrander, J., dissenting.
    Exceptions before sentence from recorder’s court of the city of Detroit; Connolly, J.
    Submitted April 13, 1916.
    (Docket No. 127.)
    Decided December 22, 1916.
    Vladimirus Maczulski was convicted of unlawfully* procuring himself to be registered as a physician.
    Affirmed.

      Grant Fellows, Attorney General, Charles H. Jds

      nowski, Prosecuting Attorney, and Paul W. Voorhies, Assistant Prosecuting Attorney, for the people.

      August Cyrowski, for respondent.
   Moore, J.

The respondent is convicted of having unlawfully procured himself to be registered as a physician under the provisions of Act No. 237, Pub. Acts 1899, as amended by Act No. 368, Pub. Acts 1913 (2 Comp. Laws 1915, § 6726). The case is here on exceptions before sentence.

The first group of assignments relates to the sufficiency of the information, the jurisdiction of the court to try the case, and the sufficiency of the proof. The information charged the offense in the language of the statute and was sufficient. After the respondent filled out his application for a license, he passed an examination at Lansing, and for that reason it is claimed the case should have been tried in Ingham county instead of in Wayne county. The record shows the application was filled out and filed in Wayne county, and that the license was issued in that county. We think the court in Wayne county had jurisdiction to try the case.

It is said the court erred in not striking out certain testimony. It is a sufficient answer to this that counsel for the respondent drew out the testimony on the cross-examination of the witness. In his closing argument the prosecuting attorney said, in part:

“1 would have no right to say why he (the defendant) was not put on the stand, but they having mentioned it, why he was not put on the stand, because, if he got on the stand, it would be brought out from the defendant himself, to the register of the board as all the facts necessary in the Albany case. They did not put him on the stand. * * * Then we could go into his whole life, his whole history from the year 1910.”

This is said to be error. The people seek to excuse this argument because counsel for the respondent had given a reason for not calling him. If the question was properly before us, the case nearest in point is People v. Hammond, 132 Mich. 422 (93 N. W. 1084). In the instant case the misconduct complained of is not shown to have been called to the attention of the trial court nor any ruling asked or obtained. The record only discloses that an “exception” by defendant’s counsel was noted to the portions complained of during the.progress of the argument.

The well-settled rule is that the mere noting of an exception to objectionable argument without calling it to the attention of the trial court does not save the question for review. This has been emphatically and repeatedly held by this court in both criminal and civil cases. In People v. Sartori, 168 Mich. 308 (134 N. W. 200), where a conviction of murder was sustained, the court said:

“Except in one_ instance, counsel for respondent contented himself with taking an exception to particular portions of the argument of the prosecuting attorney without asking for, or obtaining, a ruling thereon by the court. Under repeated rulings of this court, such, exceptions cannot be considered”

—citing numerous preceding cases.

The rule is reiterated with repetition of citations (including the criminal case of People v. Danenberg, 176 Mich. 337 [142 N. W. 347]), in the recent case of Spencer v. Johnson, 185 Mich. 85 (151 N. W. 684).

“Improper remarks of counsel must be promptly-objected and excepted to, and the court requested to instruct the jury to disregard them in order that they may be reviewed on appeal. And exception should be; taken to the refusal or the omission of the court to so instruct the jury.” 12 Cyc. p. 819.
“The office of exceptions should be to apprise the court of alleged errors, with a view to their correction, when possible; and, with the exception of cases where errors are alleged upon the charge, exceptions must be brought to the attention of court and counsel at the time the alleged error is committed.” People v. Roat, 117 Mich. 578 (76 N. W. 91), and People v. Sartori, 168 Mich. 308 (134 N. W. 200).

The importance and applicability of this rule to the present case is manifest, for had the objection been called to the attention of the court, or a request made for instruction to the jury to disregard the prosecutor’s reply to defendant’s counsel, the court could, and with the path pointed out by precedent presumptively would, have given such instruction and eliminated any possible claim of error. •

The conviction is affirmed. The case is remanded to the court below for further proceedings.

Kuhn, Bird, Steere, Brooke, and Person, JJ., concurred with Moore, J.

Ostrander, J.

(dissenting). It is a provision of the declaration of rights- (Constitution, art. 2, •§ 16) that no person shall be compelled in any criminal case to be a witness against himself. The statute (3 Comp. Laws, § 10211; 5 How. Stat. [2d Ed.] § 12855 [3 Comp. Laws 1915, § 12552]) pointing out who may be witnesses ends, with the proviso, in harmony with the-constitutional provision:

“A defendant in any criminal case or proceeding shall only at his own request be deemed a competent witness, and his neglect to testify shall not create any presumption' against him, nor shall the court permit any reference or comment to be made to or upon such neglect.”

The court has nothing to do with the wisdom of these provisions of the law. Its duty is to enforce them.

Laying aside all other matters, Mr. Justice Moore concludes that, if reference or comment is made by a prosecuting officer in argument to or upon the failure of a respondent to testify, the breach of duty must be brought to the attention of the court by respondent’s counsel, or by respondent, and a ruling requested, as in a case where intemperate, or other improper, argument is indulged in. I do not agree with him. The statutory injunction is addressed to the court. A ruling implies decision, one way or the other, as the right may seem to be. There can be but one ruling when the prosecuting officer has referred to, or commented upon, the fact that a respondent has not become a witness. Indeed, there can be no ruling, but at the most — and the least — a reprimand and instruction to the jury in conformity with the law. To require respondent to object to an invasion of his rights, which the court is bound to protect, is to add to his embarrassment and to increase whatever.prejudice his failure to testify and the comment made thereon may create.

Upon the point that the reference to and comment upon the fact that the respondent has not testified may be excused because respondent’s counsel has directly or indirectly referred to it, I think there should be a rule, rigorously enforced by this court, to the effect that such supposed openings as this shall not be taken advantage of by the prosecuting officer. The privilege and right of the Constitution and statute is not one which a respondent holds at the mercy of his counsel. It is the privilege of respondent to be sworn and testify as a witness or to refuse to do so. When he neglects to testify, not only is no presumption created against him, but the court shall not permit any reference to, or comment on, such neglect.

I am further impressed with the idea that infractions, of the law cannot be cured by anything the court may say, and that the attempts, to do so, instead of enforcing the law, have been and must continue to be failures. It would have been better, and it is now better, that the rule should be imperative that this violation of the respondent’s rights should always result in a new trial. Once the door is opened, the right is, in one way and another, frittered away, under the guise of preserving it.

In People v. Hammond, 132 Mich. 422 (93 N. W. 1084), the prosecuting officer made an indirect reference to the fact that the respondent had not been sworn, in reply to a statement by the respondent’s counsel. A majority of this court said:

“We are not therefore prepared to hold that it was error, particularly in view of the fact that the jury were instructed that the fact that the respondent did not take the stand in his own behalf should not weigh against him in any manner.”

In People v. Payne, 131 Mich. 474 (91 N. W. 739), where there had been an indirect reference to the fact that respondent had not testified, it was held to be error. In People v. Provost, 144 Mich. 17 (107 N. W. 716, 8 Am. & Eng. Ann. Cas. 277), upon a review of authorities it is held error for the trial court to refuse, upon request, to charge in conformity with the statute provision. People v. Hammond is. not controlling here, because the court did not here, as in that case, attempt to protect the right of respondent. Further than this, I think People v. Hammond wrongly decided upon this point, and I see no limitation to the reference which may be made to the fact, no limitation to the comment which may be made thereon by prosecuting officers if a charge, in conformity with the statute, will cure it.

Upon other questions presented, I agree with Mr. Justice Moore, but am of opinion that the exception referred to-must be sustained, the conviction set aside, and a new trial granted.

Stone, C. J., concurred with Ostrander, J.


author: Moore, J.

text:
    BACKUS v. TRUMBULL MOTOR CAR CO.
    Appeal and Error — Dismissal—Judgment.
    There being no final judgment in the case, tbe writ of error must be dismissed.
    Error to Wayne; Hally, J.
    Submitted June 14,1916.
    (Docket No. 89.)
    Decided December 22, 1916.
    Assumpsit by Henry N. Backus and others against the Trumbull Motor Car Company for breach of contract. A plea in abatement was ordered stricken from the files. Defendent brings error.
    Dismissed.

      Moore & Moore, for appellant.

      Albert McClatchey, for appellees.
   Moore, J.

This case has been in this court before. It is reported in Trumbull Motor Car Co. v. Circuit Judge, 189 Mich. 554 (155 N. W. 532). A reference to the opinion there rendered will make a long statement of facts unnecessary. After the opinion referred to was handed down, a plea in abatement was filed, and later upon motion was stricken from the files. No final judgment was ever entered. The case is brought here by writ of error.

We think, there being no final judgment in the case, the writ of error must be dismissed. See Brady v. Railroad Co., 73 Mich. 457 (41 N. W. 503), and Steel v. Circuit Judge, 133 Mich. 695 (95 N. W. 993).

The writ of error is dismissed, with costs to appellee.

Stone, C. J., and Kuhn, Ostrander, Bird, Steere, Brooke, and Person, JJ., concurred.


author: Steere, J.

text:
      In re FARMERS’ & MERCHANTS’ BANK OF LAWRENCE. SMITH v. MOSIER.
    1. Receivers — Property Rights — Set-Off and Counterclaim:.
    It is well settled in this State that a receiver succeeds only to the title and right to property which the person, firm, or corporation he represents had at the time of his appointment, subject to all existing liens and equities, including the equitable right of set-off.
    2. Same — Set-Off—Burden of Proof.
    In proceedings to establish a claimed set-offi against a note in the hands of the receiver of a banking copartnership for services rendered in securing subscriptions to the stock of a banking corporation to be organized for the purpose of taking over the business of the copartnership, the burden of proof rested upon claimant. ,
    3. Pleading — Amendments—Discretion.
    There was no abuse of discretion by the court below in allowing the receiver to amend his answer so as to render admissible testimony that claimant falsely represented to those he solicited that the bank was paying well, and that he was to receive no pay for selling the stock.
    4. Evidence — Fraud—Credibility.
    Evidence of such representations would be material if they were inducing false representations rendering void the subscriptions for stock, and, being contradictory to his testimony in support of his claim at the hearing, was admissible as to his credibility.
    5. Contracts — Construction—Compensation—Equity.
    Where said claim is based upon a contract made with one member of the copartnership, providing that claimant is not “bound further than to procure ’the subscriptions in their entirety” before a certain date, and said copartnership is bound no further than “to pay said second party five per cent, commission on the sale of all stock sold,” yet, where the organization of the contemplated corporation was never completed, and the copartnership never received any benefit from the efforts of claimant, in the light of what the contracting parties then had in mind, it was equitable and legally permissible for the court below to construe the contract as meaning that his compensation was contingent on the bank’s being incorporated.
    6. Same1 — Partnership—Consent oe Partners — Scope oe Business.
    In the absence of evidence tending to show that the other members of the partnership knew of, or gave their consent to, the contract as claimed by claimant, the contracting partner had no authority to bind his copartners; such contract not being within the immediate scope of, the partnership business.
    Appeal from Van Burén; Des Voignes, J.
    Submitted June 14, 1916.
    (Docket No. 110.)
    Decided December 22, 1916.
    Petition by W. B. Smith against William C. Mosier, receiver of J. L. Welch & Company, for an accounting, the cancellation of certain notes, and other relief. From a decree for defendant, petitioner appeals.
    Affirmed.

      David Anderson, for petitioner.

      Thos. J. Cavanaugh, for defendant.
   Steere, J.

On March 30, 1914, the private banking firm of James L. Welch & Co., a copartnership doing business, at Lawrence, Mich., under the name “Farmers’ & Merchants’ Bank,” being insolvent, closed its doors and w;ent into the hands of a receiver for liquidation. It was hopelessly insolvent as early as December 1, 1913, and later ascertained that its assets would not pay to exceed 35 per cent, of its liabilities. Defendant Mosier was appointed receiver and was yet serving as such when these proceedings were begun and heard.

Among the assets of the bank taken into possession by him as receiver were these two promissory notes r

“$4,000.00. Lawrence, Mich., June 5, 1918.
“30 days after date, for value received, we jointly and severally promise to pay to the order of J. L. Welch & Company, Bankers, four thousand dollars at their bank, with interest at seven per cent., per annum payable annually from date. Further secured by 100 shares of Detroit Underwriters’ Company.-
[Signed] “W. B. Smith.”
Indorsement:
“Interest paid to November 26th, 1913.
“Paid 11-26-13, $1,000.
“Paid 11-26-13, $1,000.”
Across the end is written: “84 East Pelmer Street, Detroit, Michigan.”
“$1,600. Dowagiac, Mich., Jan. 2, 1914.
“Six months after date I promise to pay to the order of myself sixteen hundred and no-100 dollars at Farmers’ & Merchants’ Bank, Lawrence, Michigan, value received, 6 per cent, interest from date. Further secured by stock of Detroit Underwriters’ Co., Detroit, Mich. G. R. Herkimer.”
Also indorsed: “G. R. Herkimer.”

5

On June 6, 1914, an order for hearing claims on June 25, 1914, was made by the circuit court of Van Burén county, and the same was continued by subsequent orders to November 18, 1914. The receiver collected $88 of interest on the Herkimer note, but nothing on the Smith note.

On March 13, 1915, W. B. Smith filed his petition herein against the receiver, asserting ownership of the Herkimer note and a claim against the insolvent bank for services rendered under an alleged contract amounting to over $2,400; praying for an accounting, the surrender to him of the Herkimer note, cancellation of his own note, by set-off of sufficient from his claim for that purpose, and allowance of the balance in his favor as a creditor of the bank to be paid by the receiver “in due course of administration.” An answer and amended answer were subsequently filed, a hearing had, and decree rendered by the court, on October 21, 1915, denying petitioner’s prayer that his claim for services be allowed and set off against his note and the alleged balance allowed in his favor, but finding him to be owner of the Herkimer note and directing that the same be surrendered to him with the $88 collected thereon.

The services sought to be interposed in liquidation of petitioner’s note are claimed to have been rendered the then insolvent bank under the following contract which he testified he drafted and fulfilled on his part, it taking him “about a week very nearly” to procure the subscriptions:

“Lawrence, Mich., Dec. 1, 1913.
“This contract made and entered into this the above date, by and between J. L. Welch & Co., Bankers, of Lawrence, Michigan, parties of the first part; and W. B. Smith, of Toledo, Ohio, party of the second part, witnesseth:
“That the said second party agrees to assist the first parties in securing the subscription to a State bank, which is proposed to be organized at Lawrence, Michigan, by J. L. Welch & Co., having a capital stock of thirty-five thousand ($35,000.00) dollars, divided into shares of the par value of one hundred ($100.00) dollars each; said stock to be sold at the price of one hundred and fifty ($150.00) dollars per share, and to be sold to such people as first parties suggest. Said subscription is to be obtained and completed by the said second party on or before February 15, 1914.
“Said first parties are to pay said second party five per cent. (5 per cent.) commission on the sale price of all stock sold by said Smith, excepting that stock which is taken by the first parties.
“Said second party is not to be bound further than to procure the subscriptions in their entirety before February 15, 1914, and to interest in the proposed bank only such people as first parties might select.
“Witness our hands this the above date.
“J. L. Welch & Co., per J. L. Welch, Cash.
“W. B. Smith.”

This private banking firm of James L. Welch & Co. was composed of four partners, but Welch was cashier in charge of and running the business; none of the others participating actively, if at all.

Petitioner, Smith, outlines his business experience and career as follows:

“I have been in the insurance business, and have sold quite a little stock, and have been in real estate business, and for 11 years was in the banking business. I was in five or six different banks in different parts of Kentucky, and I have quite a good general knowledge of the business world.”

He was for a time engaged in selling stock in Michigan, through that section of the State and elsewhere, and states that when he borrowed the $4,000 from Welch, on June 5, 1913, he had known him three or four years, had carried a checking account with him, and had done $30,000 or $40,000 worth of business with his institution. Welch makes earliest mention of their relations as follows:

“Four years ago Smith sold me some stock in the Detroit National Fire Insurance Company, and at Mr. Smith’s request I took over some W. B. Taylor stock and loaned some money on it. I don’t remember as Smith said anything about the stock. I knew quite a little about stock at that time. It was considered worth 100 cents on the dollar at that time.”

When Smith borrowed the $4,000' represented by the note in question, he received four $1,000 certificates of deposit. He testified he could use these as well as cash, and Mr. Welch did not have all the money to spare at that time, and said, “These certificates I believe were for 12 months each.” He cashed two of them in Detroit, and on November 26, 1913, received credit on the note for two of them, which he stated he “took up,” paying the interest then due. He and Welch had previously discussed the reorganization of the bank, and shortly after November 26th the contract under which his claim against the insolvent bank is made was signed by Welch, at his home, where Smith, who prepared it, took it to him. Asked as to his knowledge of the financial condition of the bank, he replied that he knew in a general way, not “any more than just hearsay,- * * . * knew they had lost some money on notes, but didn’t think it would aggregate more than about ten or twelve thousand dollars.” Pressed upon that inquiry, and asked, “The purpose in changing it over was to save the institution, wasn’t it?” he replied: “Well — ” “Q. Wasn’t that talked over?” “A. I don’t know that that was the primary reason.” And without further direct answer witness then proceeded to explain that there was a possibility of a demand that private banks be chartered, and it was sought to forestall the possibility rather than to be coerced.

Smith and Welch both testified that the Herkimer note was turned in to the bank to be discounted and sufficient applied to pay Smith’s subscription for stock. As before stated, the court ordered that note returned to him by the receiver, with the $88 interest which had been collected upon it.

Included in the list of subscribers for securing which this claim is made appears the names of James L. Welch for 50 shares and W. B. Smith for 10 shares. When soliciting subscribers for stock, Smith represented to them that he was doing it without compensation, which he repeated to the banking commissioner when application was made for approval of the new organization. Certain subscribers, who testified that he so stated to them, asserted that they would not have subscribed had they known that he was to receive a commission of 5 per cent, on the capital stock subscribed for. A witness named Chapman, who was at that time enlisted in the enterprise, and says he signed for his stock “before Smith ever showed up,” testified:

“I think I was with Mr. Smith on all his trips during the time he was there. * * * In all the talk that I heard Mr. Smith have with different people that h.e visited he said he was doing it free gratis.”

And that he told the bank commissioner:

“I am doing it for nothing. * * * I don’t need a license to sell bank stock, from the fact that I am not receiving any fee for it.”

Welch testified that he wrote Smith immediately after the bank was closed. Smith stated that he learned of the bank going into the hands of a receiver about 30 days after it occurred. He made no demand for his note of Welch, nor of the receiver, nor filed any claim with the court as a creditor until after March 11, 1915, when counsel for the receiver pressed him for payment. Asked why he did not demand his note when he had secured the subscribers and thereby paid it by earning his commission, as he claimed, he answered, “T should have done it. * * * I plead carelessness literally.”

The plan for reorganization fell through owing, as is claimed,' to the unwarranted refusal of the State bank commissioner to approve it. Welch testified that the commissioner refused to sign a charter “because we sold our business at too great a figure,” and the commissioner told Smith in Welch’s presence something to the effect, that, if he was “the Mr. Smith that has been selling this other stock around the country, I don’t want anything to do with any bank that you are connected with.” Whatever the merits of this refusal, the attempted reorganization failed, no stock was ever issued or sold, and no benefits resulted to the then insolvent bank from what was done.

It is urged and argued for appellant that the trial court was bound by the undisputed testimony to allow his claim in full for the commission earned under his contract before the receiver was appointed, it being proved as a debt then due and a proper matter of offset against any claim in the hands of the receiver who “occupies exactly the same position that J. L. Welch & Co., Bankers, would occupy if no receiver had been appointed and if J. L. Welch & Co. had brought suit on this note and Smith sought to set off his claim for commission against the note in such suit.”

Unquestionably, the rule is well settled here and elsewhere that a receiver succeeds only to the title and right to property taken over by him in that capacity which the person, firm, or corporation he is selected to represent had at the time of his appointment, and he takes such property cum onere, subject to all existing liens and equities. Wisconsin, etc., Ins. Co. v. Salt & Lumber Co., 77 Mich. 76 (43 N. W. 907); Rickman v. Rickman, 180 Mich. 224, 250 (146 N. W. 609, Am. & Eng. Ann. Cas. 1915C, 1237). Appellant has no lien upon any property in the receiver’s hands, but claims to have an equitable right of set-off against the debt evidenced by his note. It has been said in an action by a receiver on notes of a defendant that the latter could not set off a judgment against the receiver on a note of the debtor the receiver represents and thereby obtain preference over other creditors (High on Receivers [4th Ed.], § 464), and cases may be found which are not harmonious in all particulars upon that subject; but the great weight of authority supports the rule that choses in action pass to the receiver subject to any existing right of set-off where the counterclaims are then due from and to the same persons in the same capacity. Rothschild v. Mack, 115 N. Y. 1, 9 (21 N. E. 726); 34 Cyc. p. 194.

But conceding those general principles urged for appellant, we are impressed that the more serious subject of inquiry in the instant case lies back of them. The burden of proof rests upon appellant to establish his claimed set-off by a preponderance of evidence, and the facts involved are to be passed upon and decided by the chancery court before which the proceeding is brought. Although Smith and Welch, who negotiated this contract and are the only direct witnesses to the transaction, unite in testimony tending to sustain its validity, sufficient sidelights appear in connection with their testimony to raise misgivings as to its candor and accuracy in various particulars. This bank, which it was proposed to unload upon innocent subscribers as such a sound and safe investment that a premium of 50 per cent, was charged for stock in the new corporation, was in fact tottering and insolvent. Both denied knowledge of this. Welch was its cashier in charge of and running it. Smith himself had been in the banking business, in five or six different banks; his experience in the business world was broad and varied. While selling stock over the State, he had formed Welch’s acquaintance, sold him stock, opened an account in his bank, and ingratiated himself into his confidence so that Welch lent him money when he did not have it to spare. Smith represented that they were personal friends who took their outings together.

The tone of this case may be said to indicate that in business experience, tact, and dominant force Welch was not in Smith’s class, and in his extremity conceived the idea, or was persuáded, that with Smith’s aid he could escape the consequences of his own mismanagement of this bank and profitably dispose of it by a plan of reorganization. Smith testified:

# “I had discussed the reorganization of the bank with him for probably a year and a half or two years.”

He assumed to know the condition of the bank when soliciting subscribers for stock and asserted it was in a sound and flourishing condition. A subscriber named Christey testified:

“He told me lie was working this up for Mr. Welch free gratis, that Mr. Welch was a very warm friend of his, that they had been acquainted some time, and he had camped at the lake with Mr. Welch and he was doing the work and boarding himself. He told me the bank was paying well, that Mr. Welch was making $10,000 a year out of that bank, and that the property was all right. I didn’t know the new bank was going to pay $15,000 for the good will. Thpre was nothing said about the good will.”

If Smith was telling the truth to the banking commissioner and in his repeated assertions when soliciting subscribers, that he was doing it without compensation and only to help out his friend Welch, he was not doing it to earn a commission under a contract with the Farmers’ & Merchants’ Bank.

This line of testimony was objected to as immaterial and not admissible under the answer. Permission to amend the answer was granted, the testimony allowed, and an amended answer subsequently filed to cover the objection. It is insisted that this was error and such testimony is incompetent even under the amendment. This is a hearing upon petition before the chancery court upon which testimony was in open court, no claim is made that petitioner was denied opportunity to be fully heard and introduce any testimony desired before the matter was finally disposed of, and we do not discover any abuse of discretion on the part of the trial court which demands correction. City Bank, etc., Co. v. Hurd, 179 Mich. 454 (146 N. W. 299). The representations made by Smith to subscribers in obtaining their signatures would become material if they were inducing false representations which rendered their signatures of no binding force, and statements he then made contradictory to his testimony in support of the claim at the hearing are clearly competent as bearing on his credibility.

The subscription paper circulated by Smith, in connection with which the contract should be construed, proposed to organize and- incorporate a State bank of $35,000 capitalization, its shares of a par value of $100 each to be sold at $150, the corporation to purchase the business and assets of the private bank of J. L. Welch & Co., including $12,500 for its real estate and fixtures) and $15,000 for its good’ will, or established business, each subscriber to pay “said J. L. Welch & Co., an amount equal to one-half the par value of the stock subscribed by him, or her, such payment to be made on or before January 15, 1915.” The paper contains various other provisions relative to payment of balance, perfecting organization, transfer of property from Welch & Co., taking possession, etc.

J. L. Welch & Co. was a banking firm, engaged in that business, and so advertised to the public. Its depositors and creditors did business with and trusted it as such. This contract which, construed as appellant claims, operated to deplete the assets of the partnership over $2,400 without any resulting benefits, was an agreement outside the usual and contemplated scope of its business. In Barnard v. Plank Road Co., 6 Mich. 274, 277, it was said:

“No rule is better settled than that one partner cannot bind his copartner by any contract not within the immediate scope of the partnership, unless with such partner’s knowledge and consent. Each partner is an agent for all the members of the firm, in the transaction of all business of such firm; but, as to matters foreign to such business, he is regarded as a stranger. The general business of the firm being that of manufacturing lumber, and the ownership of land as incident thereto, the subscription to. stock in a corporation, or to articles of association for the creation of one, was not an incident of such partnership. Incidental benefits would not authorize one partner to bind his fellow, and no authority so to bind him is shown.”

This rule-was sought to be avoided by the testimony of Welch and Smith that other members, of the firm knew about the contract and assented to it. Their testimony is general and does not go so far as to directly show that the others ever read it or knew of, or assented to, any provision in it by which their banking partnership would be required to pay Smith over $2,400 if the plan fell through and no corporation was organized to buy their assets and good will. There is no direct testimony that they authorized Welch to sign such a contract, or of their knowledge as to the details of the one he signed.

The evidence is persuasive that the minds of Smith and Welch, who negotiated the contract, never met on the construction' now contended for, or that they then so intended it. Both testify that the contract was made in reference to, and in certain anticipation of, the incorporation of a new bank which would buy out the old, and declined to admit that any other contingency was thought of. Although Smith testified that he did not understand his contract as providing he would get no commission unless the stock was sold, and said “I was to get my commission,” he stated also, “I knew that stock could not be sold and delivered until after the charter was granted,” and upon that subject also answered as follows:

“Q. You realized, didn’t you, when you were securing those subscriptions, that they would be no good to Welch unless this bank could be organized?
“A. I hadn’t any doubt about it being organized.
“Q. Well, you knew that unless it was organized that the subscription would be worthless?
“A. I could not see a possible reason why it could not be organized.
“Thei Court: Now answer the question.
“A. I would say, no, I didn’t know that.
“Q. Didn’t you take these subscriptions and have this contract made in contemplation of the fact that this bank would be organized?
“A. Without doubt, I contemplated it would be organized.”

The concluding paragraph of the contract, upon which Smith relies, provides that he is not “bound further than to procure the subscriptions in their entirety before February 15, 1914,”- and only to interest in the proposed bank such people as first parties may select; and by the preceding paragraph said first parties are bound no further than “to pay said second party five per cent, commission on the sale of all stock sold by said Smith,” excepting that taken by first parties'. No time or other terms of payment are mentioned.

In the light of what the contracting parties then had in mind, and all surrounding facts and circumstances, it was equitable, and legally permissible under thb language used, for the court to construe this contract as meaning that, while Smith’s active obligations in the enterprise bound him no further than obtaining subscribers, his compensation was contingent, and his services in that particular would be, as he stated, “free gratis,” unless, and until, stock in the prospective bank was not only subscribed for (which was necessarily on a condition precedent that the bank would be incorporated), but sold.

No occasion is found to disturb the conclusions reached by the trial court, and its decree is affirmed, with costs.

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


text:
    COX v. RAILWAY CONDUCTORS’ CO-OPERATIVE PROTECTIVE ASS’N.

      1. Judgment — Foreign Judgment.
    In a suit in this State based upon a foreign judgment, the jurisdiction of the foreign court to render said judgment is open to attack.
    2. Foreign Corporations — Insurance—Doing Business Without Authority.
    If defendant, a Michigan insurance company, voluntarily did business in Missouri, it voluntarily submitted itself and became amenable to the laws of that State, although it had neglected or refused to domesticate there with authority to openly do business on a par with home insurance companies.
    3. Appeal and Error — Disputed Question — Evidence—Directed Verdict.
    In reviewing a directed verdict in the court below in favor of defendant, this court will only be concerned as to whether there was any evidence tending to support plaintiff’s contention.
    4. Principal and Agent — Process—Question for Jury.
    As to whether the person who took plaintiff’s application for insurance in a foreign State and forwarded it to defendant in Michigan was in fact defendant’s agent, as defined and in the particulars specified in the laws of thai State, upon whom process might be served, was, under 'conflicting testimony, a question for the jury.
    Error to Wayne; Van Zile, J.
    Submitted June 16, 1916.
    (Docket No. 80.)
    Decided December 22, 1916.
    Assumpsit by Samuel P. Cox against the Railway Conductors’ Co-operative Protective Association for the amount of a judgment rendered in a Missouri court-judgment for defendant on a directed verdict. Plaintiff brings error.
    Reversed.

      Lewis A. Stoneman, for appellant.

      McNamara & Scallen, for appellee.
   Steere, J.

This action was commenced December 11, 1914, in the circuit court for Wayne county to recover a claim for $680.60, based upon a judgment for that amount rendered in favor of plaintiff and against defendant in the circuit court for Grundy county, Mo., on October 7, 1914. The judgment here appealed from was rendered for defendant upon a directed verdict, on the ground that the Missouri court was without jurisdiction to render the judgment relied upon because no valid service of process from that court was ever made upon defendant; the person upon whom service was attempted not being its authorized agent.

Plaintiff was a resident of Kansas City, State of Missouri, and a conductor on the Chicago, Rock Island & Pacific Railroad. Defendant was, and is, a Michigan corporation organized in 1909, having its office and principal place of business in Detroit, Mich., engaged in insuring, so far as material here, to a specified amount according to age of policy, railway conductors and engineers in various States against loss by reason of discharge from their employment. Defendant had not qualified under the laws of Missouri relative to foreign corporations desiring to operate in that State, had obtained no license from the State commissioner of insurance, filed with him no appointment of any person upon whom process might be served, and was not authorized to .do business in that State. It did, however, issue policies to residents of that State, and in January, 1911, issued to plaintiff the policy over which this litigation arose. Carl A. Guile, a railroad conductor residing at Trenton, Grundy county, Mo., where a “lodge” of the association was located, accepted his application, received from him the fees therefor and dues for the first month, indorsed his approval upon the application, sent it to defendant’s secretary in Detroit, and later delivered the policy to plaintiff at Trenton, Mo. Thereafter plaintiff paid the regular monthly dues to defendant until discharged by his employer, in October, 1913, when he sought an adjustment under the terms of his policy according to the by-laws of the association and subsequently presented his claim for payment to defendant in Detroit through his attorney, which was refused, and he thereafter brought an action in Grundy county to recover the same, service of process being made upon Guile as agent of defendant, which resulted in the judgment upon which this action is based. When process was., served upon Guile, he notified defendant of the fact and received a letter from W. J. Eoss, its. secretary and treasurer. Defendant did not appear in that case, and judgment was taken against it by default, upon testimony introduced by plaintiff. A duly authenticated transcript of said judgment was introduced in evidence in the instant case, and proper proof made of the laws of that State relating to the subject under inquiry. Defendant had given special notice, under its plea claiming the alleged judgment was void for want of jurisdiction, that no valid service of process in that case had ever been made upon it, and that it never had an agent or any other person authorized to receive or accept service for it in the State of Missouri. Testimony was. introduced upon that subject, and the court sustained defendant’s contention, directing a verdict in its favor as before stated.

Plaintiff’s assignments of error relate to rulings of the court in the admission and rejection of testimony and refusal of the court to submit certain claimed issues of fact, and especially the question of Guile’s agency, to the jury.

Defendant’s counsel cite and rely upon Farrow v. Protective Ass’n, 178 Mich. 639 (146 N. W. 147), and assert “that case is entirely on all fours with the present case.” It is true that case is in many aspects very similar to the present one. It is an action brought against this, defendant, in this State, based on a foreign judgment rendered in the State of Washington in favor of a resident policy holder there. The question at issue was the jurisdiction of the foreign court to render the judgment sued upon. The record evidence and defendant’s testimony were closely analogous to that produced here, with the marked exceptions that there no proof was made of the law of the State in which the judgment sued upon was rendered; .the defendant in the Michigan court was not the defendant in the Washington court, did not have the same name, was not charged as the successor nor as having assumed the liability of the association which issued the policy, was not shown to have been engaged in business in that State; and its testimony, that the party upon whom process was served was not its agent nor authorized to accept service for it, and that it never had an agent in the State of Washington, was undisputed. Under such absence of proof essential to show jurisdiction, and undisputed testimony to the negative, the finding of the trial court that the Washington court did not acquire jurisdiction was sustained. Here the laws of Missouri are proven, this defendant is the defendant against whom the judgment was taken there, and not only the findings of the court set out in the transcript of judgment but the oral affirmative testimony introduced by plaintiff contradict defendant’s testimony that it was not doing business in Missouri and that Guile, upon whom process was served, was not defendant’s agent in that State.

The Farrow Case, and also Marshall v. Owen & Co., 171 Mich. 232 (137 N. W. 204), in which it was held error to refuse testimony offered to show that the person served was not defendant’s agent, are however, helpful cases here, as they discuss with citation of authorities the established rules of law relative to actions upon foreign judgments and the permissible proof to sustain or impeach them. Under the well-settled doctrine reaffirmed in those cases, it cannot be doubted that the foreign judgment involved in the instant case was open to attack by the defense, for want of jurisdiction in the Missouri court. The question here is whether, as the trial court held, it was successfully and conclusively impeached as a matter of law, beyond any issue of fact for a jury to decide. The issues raised in that inquiry were whether defendant was doing business in Missouri and Guile was its agent upon whom service of process could be made to give the court of that State jurisdiction.

It is conceded that defendant was a foreign corporation, never domesticated or authorized to do business in that State. That it wrote insurance for and issued policies to residents of that State is undisputed. The laws of Missouri relative to foreign insurance companies transacting business in that State are in their essential features generally analogous to those of this State and need not be dwelt upon.

As bearing upon the question of agency, section 7052, 2 Rev. Stat. Mo. 1909, is in part as follows:

“ ‘Agent,’ Defined — Liabilities.—Any person or persons in this State who shall receipt for any money on account of or for any contract of insurance made by him or them for any insurance company or association not at the time authorized to do business in this State, or who shall receive or receipt for any money from others persons, to be transmitted to * * such insurance company or association, either in or out of this State, for a policy or policies of insurance issued by such company or association, or for any renewal thereof, although the same may not be required by him of (or) them as agents, or who shall make or cause to be made, directly or indirectly, any contract of insurance for such company or association, shall be deemed to all intents and purposes an agent of such company or association, and shall be subject to all the provisions and regulations and liable to all the penalties provided and fixed by this chapter. * * *”

Touching service of process “on persons and foreign corporations,” section 1760, 1 Rev. Stat. Mo. 1909, provides in part as follows:

“A summons shall be executed, except as otherwise provided by law, either: First, * * * Fourth, where defendant is a corporation or joint stock company, organized under the laws of any other State or Country, and having an office or doing business in this State, by delivering a copy of the writ and petition to any officer or agent of such corporation or company in charge of any office or place of business, or if it have no office or place of business, then to any officer, agent or employee in any county where such service may be obtained, and when had in conformity with this subdivision, shall be deemed personal service against such corporation, and authorize the rendition of a general judgment against it. * * *”

Section 7042 provides the manner of serving process upon foreign insurance companies authorized to do business in the State, and section 7044 that:

“Service of summons in any action against an insurance company, not incorporated under and by virtue of the laws of this State, and not authorized to do business in this State by the superintendent of insurance, shall, in addition to the mode prescribed in section 7042, be valid and legal and of the same force and effect as personal service on a private individual, if made by delivering a copy of the summons and complaint to any person within this State who shall solicit insurance on behalf of any such insurance corporation, or make any contract of insurance, or collect or receive any premium for insurance, or who adjusts or settles a loss or pays the same for such insurance corporation, or in any manner aids or assists in doing either.”

This section is number 7992 of the Mo. Rev. Stat. of 1899 and was sustained as valid legislation in Commercial Mut. Accident Co. v. Davis, 213 U. S. 245 (29 Sup. Ct. 445).

If defendant voluntarily did business in Missouri, it voluntarily submitted itself and became amenable to the laws of that State, although it had neglected or refused to domesticate there with authority to openly do business on a par with home insurance companies. State v. Accident Ass’n, 67 Wis. 624 (31 N. W. 229); Hagerman v. Empire Slate Co., 97 Pa. 534; Funk v. Insurance Co., 27 Fed. 336.

The duly authenticated transcript shows that the case was heard and judgment rendered October 7, 1914, on the ninth day of a regular term of the circuit court of Grundy county, Mo., held at the courthouse in the city of Trenton in said county; that, after the case was regularly called on to be heard, the court proceeded to consider “the petition, the copy of the policy of insurance filed therewith, the return of the sheriff, and the evidence introduced by plaintiff and his witnesses.” A full finding of facts is contained in the judgment, preceding the final, formal adjudication, containing a statement of found facts and acts amply adequate to sustain the court’s jurisdiction under Missouri laws.

That these record recitals of jurisdictional facts were nowise conclusive and open to inquiry is not, and was not in the trial court, questioned. Both sides introduced oral testimony as to the existence or nonexistence of those facts. It appeared from plaintiff’s testimony that he became a policy holder of defendant at the solicitation of Guile, paying him $2 at the time application therefor was signed and $3 when the policy was delivered to him by Guile, about 30 days later; that Guile forwarded the application and handled all the business, no communication whatever being received by plaintiff from the home office except the monthly bulletin, sent him after he became a member; that the soliciting by Guile, payments to him and delivery of the policy by him all occurred at Trenton, Mo.; and in discussing the matter Guile stated he received a commission for his services. Plaintiff further testified against objections, which were ultimately sustained and the testimony “refused,” that he had “lots of times” heard Guile solicit other persons, some of whom he named, to become members of this association, and personally knew of him taking applications for policies from various parties named. Guile himself, who was a witness for defendant, admitted taking, approving, and forwarding to defendant’s secretary in Detroit plaintiff’s application and others, receiving from them the first payment thereon, saying in part:

“I don’t know that I ever asked any one to take one out. * * * After these applications were signed and approved by me, I told you I mailed them to W. J. Ross, secretary and treasurer of the defendant. I got $1 for part of them and $3 for part of them. * * * The association, had other blanks beside those attached to the bulletin. I think I had some of them mailed to me once or 'twice. They also sent me other literature and advertising matter. * * * Relative to the payment of other members’ dues on applications that I took, I generally sent it all and left the part that was coming to me go on my dues. The commission that was coming to me was by my direction credited on my dues to the company.”

That testimony of this character is substantive evidence of agency, even in the absence of any such defining statute as obtained in Missouri, is held in the case of Vorheis v. Benefit Society, 86 Mich. 31 (48 N. W. 1087), where defendant by a plea in abatement sought immunity from Michigan courts on substantially the same grounds as urged here. An examination of the testimony in the original record of that case does not disclose that the party served with process, who denied any connection with the defendant and claimed to have been acting at the request of a relative, ever solicited insurance for defendant or received from it compensation for her services. It is said in the opinion:

“We have carefully examined the testimony in the case, and are satisfied that there was evidence tending to show that Donna M. Eldred was, at the time the service was made, acting as the agent of the defendant in receiving pay for assessments, and giving the receipts of the company for such payments. The receipts were not signed by her as agent, but they were sent to her by the company, and she delivered them.”

This is unlike an action against a natural person who can be directly served. It involves no question of substituted service, as distinguished from personal service on an individual. Defendant has but an artificial personality by reason of its corporate existence visible only in its officers and agents, and personal service of process can only be made upon it by serving some natural person who represents it in some agency capacity. The question here upon that point is whether Guile, upon whom process against defendant was personally served as its agent, was in fact an agent of and representing defendant in its business in Missouri, as defined and in the particulars specified, in the laws of that State. Conflicting testimony has been introduced by the respective parties upon that question, and as to it this court is only concerned with whether there is any evidence in the record tending to show' agency. We are satisfied there is, and that plaintiff was entitled to have the case submitted to the jury under proper instructions upon the issues raised, as before indicated.

The judgment is therefore reversed, with costs, and a new trial granted.

Stone, C. J., and Kuhn, Ostrander, Bird, Moore, Brooke, and Person, JJ., concurred.