author: Fellows, J.

text:
    MANN v. DAY.
    1. Trusts — Development Expense — Liability op Trustee — Accounting.
    Where a trust estate has among its assets an indebtedness from a mining company in which the beneficiaries are interested, and all of them consent in advance to the expenditure of money in developing the mine, they cannot hold the trustee liable to an accounting for the money so expended.
    2. Same — Expenses—Liability op Estate.
    A trust estate is chargeable with the expense of administering the trust, where the contract with a trustee does not provide that he shall bear them, and with the pro rata share of expenses in investigating and looking after property held in common with others after creation of the trust.
    3. Same.
    A trustee is entitled, on an accounting, to credit for money paid in satisfaction of a claim of a purchaser of land from the trust estate, due to failure of title.
    4. Same — Accounting—Surcharging Trustee.
    Where the beneficiaries of a trust estate join in a writing authorizing the trustee to sell their interest in land at a certain price, and it is the best price attainable, the trustee cannot be surcharged, on an accounting, with the difference between the price obtained and a price nearly double, because of the mere fact that a single tract of land in a better location sold for the latter price.
    5. Same — General Objection — Appeal and Error.
    A general objection to a trustee’s account will not be considered on appeal.
    6. Same — Accounting—Expenses.
    On an accounting by a trustee, the beneficiaries of the trust estate cannot complain of the purchase by the trustee of claims of squatters to land of the trust estate without litigation where a report as to any money used for such purpose was made to the beneficiaries and with their acquiescence deducted from their share on the distributions that were had.

      7. Same.
    A trustee should not be penalized for settling a claim, which, in the exercise of good business judgment, he deemed it wise to settle, as the law abhors litigation and trust funds may be conserved by judicious settlements.
    8. Same — Counsel Fees.
    The trustee, as such, is entitled to services of counsel in handling the estate, and the reasonable value of such services should be allowed in a suit against him for an accounting.
    9. Same — Accounting—Costs.
    The costs of beneficiaries of a trust fund in procuring a proper handling of the estate and an accounting by the trustee should be paid out of the trust fund, where the method of rendering accounts was irregular but was acquiesced in by all of the beneficiaries.
    Appeal from Genesee; Barton, J., presiding.
    Submitted October 23, 1917.
    (Docket No. 82.)
    Decided December 27, 1917.
    Bill by George H. Mann and others against Homer A. Day for an accounting. From the decree rendered, plaintiffs appeal.
    Modified and affirmed.

      William E. Brown, for plaintiffs.

      George W. Cook, for defendant.
   Fellows, J.

In 1879 a copartnership was formed at Saginaw by John J. Rupp and Moore Kerr, with the firm name of Rupp & Kerr, for the purpose of dealing in timber, timber lands, lumber, real estate, mining stocks, mineral rights, corporate property, and other business transactions in Michigan and elsewhere. The business of the partnership was extensive and profitable. The copartnership continued until the death of Mr. Kerr, March 25, 1901. By Mr. Kerr’s will the residue of his estate was given in equal shares to his nephews and nieces, 15 in number, and his partner was appointed one of the executors. Seven of the nephews and nieces transferred and assigned their interest in the estate to Mr. Rupp for a consideration of $6,000 each. Later they learned, or at least became apprehensive, that they had been defrauded into executing such assignments. The record is not clear whether the present defendant was the source of their information. Be that as it may, they employed him to-investigate and institute proceeding to set aside the assignments and recover their interest in the estate. They entered into a contract whereby he agreed to use all lawful means, to that end, and to pay all expenses incurred in the prosecution of the case, whether successful or not, and to have 50 per cent, of all moneys collected. A power of attorney was also executed appointing him their attorney in fact. A suit was instituted and reached this court. Kerr v. Rupp, 144 Mich. 269 (107 N. W. 1059). At least one more suit was instituted and possibly others. The result of this litigation was that the -assignments of these seven heirs were set aside and Rupp decreed to pay $48,300 in cash to Day as their attorney in fact. No question is made that he did not promptly and faithfully disburse this money. In addition to the cash decreed to be paid by him, Rupp, as surviving partner and as executor, held considerable property, both real and personal, belonging to himself and the Kerr heirs. This consisted of bank stock, plate glass, ■and other stocks, notes, and bills receivable, and a large amount of real estate — mineral rights, timber,' and cutover timber lands — located in Michigan, Minnesota, Louisiana, and elsewhere. In some of this property the interest of Rupp & Kerr was only a fractional one, and it is said that, the interests of some of the nephews and nieces having passed by their death to their children the fractions in some instances were as small as one nine-hundredth. It was deemed advisable by all the parties that the interest of the Kerr heirs should be so placed that it could be more readily handled, and a declaration of trust was prepared and executed by this defendant, making him trustee for himself,, the seven interests he had represented, and three other interests, and a similar instrument was executed by one Jay D. Swartwout as trustee for the other five interests. These instruments were filed and a decree was entered August 7, 1907, in the circuit court for the county of Genesee, confirmatory of these trusts and directing the conveyance and transfer of the Kerr property by Rupp to these trustees.

Instead of rendering his account to and making his disbursements by order of the court, the defendant, whenever he had money to distribute, called the beneficiaries together, writing each a letter, keeping the checks and drafts he had received until the meeting, when he showed them, passed them around for the beneficiaries to see, deposited them, and gave his check to each for the distributive share. Either in the letters written, or at these meetings, the beneficiaries were informed the source from which the money came, and if any taxes or expenses had been paid it was fully explained; at times money was retained by him to meet known immediate expenses. Twelve of these disbursements were made with the acquiescence of all the beneficiaries in this manner of transacting the business and the disbursements made, and nearly $50,000 was thus disbursed. September 2, 1914, this bill was filed for an accounting; plaintiff George H. Mann being a nephew of Kerr,, Minnie M. Maxfield being a niece, and the other plaintiffs being children of Sarah Williams, a deceásed niece. Defendant filed an account to which objections were made. They have been grouped, and we will consider them under their respective heads.

The Rose Gold Mine was indebted to the firm of Rupp & Kerr on note and open account something over $35,000. The firm also owned nearly half of the stock of the company. The mine was located in San Bernardino county, Cal. It was not being operated when defendant became trustee. The engineer’s report shows that over $400,000 of gold had been taken out of it. We infer that this was before the firm of Rupp & Kerr became interested in it, although it was operated until Mr. Kerr’s death. They were keeping a watchman, paying taxes, and doing assessment work. Mr. Rupp offered to put in $5,000 as his proportion of $10,000 to be used to rehabilitate the mine in order to get it in shape to operate or dispose of if Swartwout and defendant would put in their shares. Other stockholders declined to put in any more money, but agreed to turn over their stock, which they did. Swartwout agreed to put in his share. Defendant went out to see the mine, and found that some $66,000 worth of machinery had been installed; they had buildings for a boarding house, a store, and 18 residences, all of which would be of little value, unless the mine became a going concern. Defendant, upon his return, advised putting in their share. One of the present plaintiffs also went out and saw the mine. He testifies:

“They asked my advice as to whether it would pay to develop it or not. I told them that the people around the county had an idea that it would be a good thing to go ahead and develop it. I would have been in favor of investing a little more money there and getting it in operation. I told my father and sisters and Mr. Day so, and I may have told the heirs that were present at that meeting. That was my best judgment.”

A mining engineer was employed to investigate the property. He did so and made his report. While there is some conflict in the testimony, we are satisfied that all parties in interest finally agreed to the use of the money for this purpose. The trial court so found, and we are not inclined to disagree with him on this point. Up to the time of filing defendant’s account he had, from time to time, used money coming into his hands, aggregating $2,480.84 on this mine. This is objected to by the plaintiffs.

We are not called upon to determine the accountability of a trustee who, acting on his own motion, has invested trust funds in mining stock, or loaned them to a mining company. Here the trust fund had among its assets an indebtedness in a large amount from a mining company in which the cestuis que trustent had a large interest. After full consideration by all it was agreed to furnish the mining company with a further sum of money from the trust fund, with the hope of recovering the money already invested, and which was hopelessly lost, unless something was done with the mine. All the beneficiaries having consented in advance to this expenditure, and no fraud being claimed in procuring such consent, these beneficiaries cannot now insist upon an accounting which loses sight of and disregards the fact that all this expenditure was with the acquiescence and consent of the parties now seeking to charge to trustee. The case of Quimby v. Uhl, 130 Mich. 198, 212 (89 N. W. 722, 728), is quite in point. It was there said:

“Even though Mr. Uhl had carried on the business in a way not strictly authorized by the authority conferred upon him, either as assignee or by the Quimbys, yet, having acted in good faith and with their assent, they cannot select those years in which he made a profit, receive the benefit of that, and compel him to pay for the years when there was a loss. They must take the bad with the good; and it is evident that, for 20 years during which this business was carried on, the profits exceeded the losses. In re Small’s Estate, 144 Pa. 293 (22 Atl. 809); Hoyt v. Sprague, 103 U. S. 613. Where beneficiaries either expressly or impliedly assent to the action of their trustee in managing their property not in strict accord with the terms of the trust, they will be held to have acquiesced in such action. See authorities above cited; also 11 Am. & Eng. Enc. Law, p. 841; Heyn v. O’Hagen, 60 Mich. 150 (26 N. W. 861). A party cannot complain when he has consented. Barton v. Gray, 57 Mich. 636 (24 N. W. 638).”

See, also, In re Hoffman’s Estate, 183 Mich. 67 (148 N. W. 268, 152 N. W. 952); Skelding v. Dean, 141 Mich. 143 (104 N. W. 410); Heyn v. O’Hagen, 60 Mich. 150 (26 N. W. 861); Truesdail v. Ward, 24 Mich. 117; In re Shailer’s Estate, 172 Mich. 600 (138 N. W. 205).

Under this objection it is urged that expenses of administering the trust should be borne by defendant. With this contention we cannot agree. The contract does not so provide, nor has it been so construed by the parties. When the property had been recovered from Rupp each had his or her undivided interest therein. For the purpose of minimizing expenses it was deemed advisable to have it handled by a trustee for all. A new arrangement was then made, and new parties brought their interest into the trust arrangement, and defendant undertook to and did act not only for those formerly represented by him, but also for others who had an interest in the estate. No charge has been made by the defendant for his services. He estimates that his traveling expenses have averaged $100 per year. This includes one trip to California, 2 to Minnesota, and 50 to 60 trips to Saginaw. There is no proof assailing this approximation. The court below allowed this item, and .we are not inclined to disturb the allowance. B.ut under this head we' find some items that should be chargeable to the expense of the litigation, and should be paid by defendant. The expenses of E. L. Bray to Duluth, amounting to $130.60, were a part of the expenses of the litigation, as was also the recording of the decrees which was necessary to make record evidence of the result of the litigation. .The pro rata share of expenses of investigating and looking after property held in common with others, after the trust was created, should be borne by the trust estate, and these are a proper charge.

The objection to the item of $191.43 paid the Alger-Smith Company does not appear to be seriously urged. This was paid the company upon the failure of title to land sold it, and should be allowed. The other item objected to under this head involves the pro rata share of expenses in connection with the Louisiana timber lands, and is covered by what we have already said, and was properly allowed,

Among the assets recovered and becoming a part of the trust estate were certain timber lands in Louisiana. The interest of the trust estate was one-ninth. The trust estate represented by Mr. Swartwout was also interested. Acting for his eestuis que trustent and for those represented by Mr. Day, he investigated this property with a competent timber cruiser. We have held that the expenses of such investigation were a proper charge. The holdings were quite extensive; the entire tract being sold for $163,323.60. All the other parties were willing to sell at $40 per acre. After the matter was fully investigated all the beneficiaries of this trust joined in a writing authorizing defendant to sell at this price. His testimony and that of Mr. Swartwout shows that the price received was a fair one, and all that was then attainable. As against this undisputed testimony it is sought to surcharge defendant with the difference between $40 and $75 per acre, solely upon the strength of a telegram sent by Mr. Swartwout soon after he reached Louisiana, that some lands in the neighborhood of these lands were worth $75 per acre, that they were being held .at that figure. But Mr. Swartwout ex~ plains fully that these lands were nearer the railroad and were more heavily timbered; the parties buying the tract in question were buying it for the timber. The plaintiffs offered no proof that the lands in question were actually worth more than $40 per acre. They had agreed to a sale at that figure. The undisputed testimony showed that they were sold at the best attainable price. We cannot in the face of this testimony surcharge defendant. If the lands were then worth more than $40 per acre, plaintiffs could easily have made the proof.

The fifth objection is a general one. Nothing definite is pointed out, and it need not be considered.

After the death of Moore Kerr, and before defendant's appointment as trustee, Mr. Rupp conveyed certain real estate belonging to the firm with covenants of warranty in the deeds. Upon the accounting between him and the heirs he paid over the entire share of the estate received on these sales, but the beneficiaries executed an instrument indemnifying him on his covenants of warranty after he had exhausted his remedies. Certain of the lands so conveyed by him had been acquired from railroad companies who had received them as .grants. Investigation revealed that in several instances they were occupied by squatters claiming rights by adverse possession. These rights were purchased and a settlement made with all of them. It is insisted that instead of settlements there should have been litigation. We are not pointed to any testimony showing that the claims of these squatters were not valid, or wherein litigation would have resulted in any benefit to the trust estate. Whenever any money was used to settle these claims it was reported to the beneficiaries, and with their acquiescence deducted from their share on 'the distributions that were had. It is now too late to charge the trustee with the sums so paid; nor should we penalize the trustee for settling a claim which, in the exercise of good business judgment, he deemed it wise to settle. The law abhors litigation, and trust funds, as well as personal funds may many times be conserved by judicious settlements, rather than protracted and expensive litigation.

The court made an allowance for an attorney fee, not as compensation between the defendant and his counsel, but to be paid from the fund. This allowance is not contested as unreasonable or excessive. It is not compensation to counsel for services performed for Mr. Day individually, that must be adjusted between them, but was allowed as compensation for services performed by counsel for the trust estate. No good reason has been advanced for its disallowance. The trustee, as trustee, was entitled to the services of counsel, and the amount appearing to be reasonable its allowance will not be disturbed.

We think the plaintiffs should have recovered their taxed costs in the court below out of the fund. The method of rendering accounts was an irregular one for trust accounting. It was agreeable to and acquiesced in by all. By plaintiffs’ action the manner of handling the estate, the manner of accounting for the trust funds, was finally put in correct channels. The fund should pay their taxable costs incurred in securing this result. The decree has not been sufficiently modified to justify costs of this court, and no costs will be here allowed. As modified the decree will be affirmed.

All parties agree that the defendant should continue to act as trustee; but he is admonished that the estate should be closed with all reasonable speed. We do not desire to be understood as saying that the assets should be sacrificed, but no good reason appears to us why-such assets as. bank stock in an old established bank, or other investments that may find a ready market, should be longer held undivided and undisposed of. The affairs of the trust estate should be wound up as speedily as may be compatible with good business, judgment under the direction of the circuit court.

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


source: Caselaw Access Project

license: Public Domain

text:
    WEBSTER v. JOSSMAN.
    1. Officers — Bonds—Principal and Surety.
    While," as a general rule, where a public officer is elected or appointed for a definite term and gives a bond in which the liability of the sureties is couched in general terms, the liability of the sureties is coextensive with the term, and ceases upon the beginning of another term by the same person, yet, liability may be extended a reasonable' time after the date fixed for expiration, if the term fixed has connected with it the words “or until his successor shall be elected and qualified” or words of similar import, and in such circumstances the liability on the bond will continue for a reasonable time for the election and qualification of the successor.
    2. Same — Contracts.
    Bonds are contracts between the parties.
    '3. Same — Bonds—Liability for Successive Terms.
    Where sureties on an official bond engage by the language of the bond to become liable for any future term, the principal may be elected or appointed for they may be held liable upon their contract.
    4. Same — Limited Liability.
    Where, by the terms of an official bond, the sureties’ liability is limited to only a portion of the term, such limitation will be recognized.

      5. Same — Construction of Bond — Principal and Surety.
    Where the term of office, whether public or corporate, is for an indefinite period, or during the pleasure of the appointing power, and the obligation of the surety is couched in general language, the surety contracts for the indefinite term or during the pleasure of the appointing power, and he contracts for no less.

    6. Banks and Banking — Cashier—Term of Office.
    Under 3 How. Stat. (2d Ed.) § 6399, 2 Comp. Laws 1915, § 7970, giving bank directors power to appoint a cashier and dismiss him at pleasure, the cashier serves at the pleasure of the board, regardless of the fact that the bank directors are chosen annually.
    7. Same — Ultra Vires — Statutes.
    A by-law of a savings bank fixing the term of the cashier as one year is ultra vires and void under 3 How. Stat. (2d Ed.) § 6399, 2 Comp. Laws 1915, § 7970, making his term of service subject to the pleasure of the board of directors. -
    8. Same — Powers.
    A savings bank is a creature of the statute, and has the powers expressly granted to it, and such as are fairly incidental thereto.
    Error to Oakland; Smith, J.
    Submitted October 11, 1917.
    (Docket No. 83.)
    Decided December 27, 1917.
    Assumpsit by Elmer R. Webster, receiver of the E. Jossman State Bank, against Ralph E. Jossman, principal, and Harrison Walter and Joseph A. Jossman, sureties, on a statutory bond. Judgment for plaintiff on a directed verdict. Defendants bring error.
    Affirmed.

      Patterson & Patterson (H. Geer, of counsel), for appellants.

      Charles P. Webster, for appellee.

      On November 18, 1902, the E. Jossman State Bank was organized under the bahking laws of this State at Clarkston, in Oakland county. On this day its first board of directors held its first meeting, and the following official action was taken:
    “Ralph E. Jossman was elected cashier at a salary of $600 a year. Motion made, supported, and carried that the cashier be required to furnish a bond of $10,-000 to be approved by the directors.”
    The defendant Harrison Walter was elected the bank’s first president, and defendant Joseph A. Jossman was one of its first board of directors. They were both present at this meeting. The attorney having the matter of the organization of the bank in charge was also present. Pursuant to the foregoing action, he prepared the bond, and it was there executed by the three defendants. The bond is as follows:
    “Know all men by these presents that we, Ralph E. Jossman, of Clarkston, Michigan, as principal, and Joseph A. Jossman, of Oxford, Michigan, and H. Walter, of Clarkston, Michigan, as sureties, are holden and bound unto the E. Jossman State Bank, a corporation duly established under the laws of the State of Michigan, in the sum of ten thousand ($10,000.00) dollars, to the payment of which to the said corporation, its successors or assigns, we hereby jointly and severally bind ourselves, our heirs, executors, and administrators.
    “Whereas the above-named corporation has agreed to take the above-bounden Ralph E. Jossman into its employ as cashier, upon the said Ralph E. Jossman and the above-bounden Joseph A. Jossman and H. Walter entering into a bond in the above-mentioned sum of ten thousand dollars ($10,000), with such condition as is hereunder written, for the faithful discharge by the said Ralph E. Jossman of his duties of cashier: Now, the condition of the above-written bond is such that, if the said Ralph E. Jossman shall faithfully discharge his duties as such cashier as aforesaid, or if the said Ralph E. Jossman and Joseph A. Jossman and H. Walter, or either of them, their or either of their heirs, executors, or administrators, shall at all times hereafter keep indemnified the said corporation and its assigns against all losses, costs, damages, and expenses which the said corporation or its assigns may pay, sustain, or be put unto by reason of its taking the said Ralph E. Jossman into its employ or by reason of any act, embezzlement, mismanagement, neglect, or default of or by the said Ralph E. Jossman whilst in the employ of the said corporation or otherwise, then, in either of the said cases, the above-written bond shall be void; otherwise the same shall remain in full force.
    “In witness whereof we, the said Ralph E. Jossman, Joseph A. Jossman, and H. Walter, have hereunto set our hands and seals this 18th day of November, 1902.
    “Ralph E. Jossman. [L. S.]
    “J. A. Jossman. [L. S.]
    “H. Walter. [L. S.]
    “Signed, sealed, and delivered in presence of Leroy N. Brown.”
    At the annual meetings of the board of directors beginning in 1903 and ending in 1913, with the possible exception of 1907, official action was taken by the board which, if the office of cashier is an annual one, re-elected Ralph E. Jossman cashier. The language of the record of these meetings differs in the different years. On occasion it shows that he “was elected cashier for one year”; that he “be cashier for the ensuing year”; that he “was hired for the ensuing year”; that he “be retained for one year”; and similar expressions were used, the effect of which, as we have stated, annually elected him for the ensuing year, if the office be construed to be an annual one. The board proceeded upon the theory that the office is an annual one, and the action taken by it annually was sufficient to effectuate this view. No other bond was ever filed or required of the cashier. In 1903 a set of by-laws was prepared and adopted by the board, section 11 of which, so far as important here, reads as follows:

      “Sec. 11. The cashier shall be appointed by the board of directors and continue his employment in service for the current year (unless he shall resign or for some good cause be removed).” * * *
    From the organization of the bank down to August 27, 1913, Ralph E. Jossman continued as cashier. On this date the bank was closed by the State banking department, and later the plaintiff was appointed receiver. This action was taken by the department due to the insolvency of the bank through the defalcations of the cashier, which commenced in 1905, and are said to amount to over $100,000. That they exceed the amount of this bond is beyond doubt. This action, brought on the bond, resulted in a judgment for the amount of its penalty, and defendants sue out this writ of error.

      On liability of surety under fidelity bond for defalcations subsequent to a reappointment of the officer or employee, made before expiration of the original term, or during an indefinite term, see note in 11 L. R. A. (N. S.) 493.

   Fellows, J.

(after stating the facts). There are many assignments of error, but counsel for the appellants have very properly confined their discussion in the briefs and upon the oral argument to the controlling questions, as the case in the court below resolved itself finally into questions of law, pure and simple.

On behalf of appellants it is insisted that the bond is not a continuing one; that the office of cashier was an annual one, and was so made in the by-laws, and that the enactment of such by-laws was within the power of the corporation; that the cashier was elected annually, and the bond only covered ah annual period, and ended when the cashier was elected for a new term, and, inasmuch as the defalcations of the cashier did not commence until 1905, they may not be held.

On the other hand, counsel for the receiver insists that this is a continuing bond; that the office of cashier is not an annual office, but by the statute his term is at the pleasure of the board; that, his term being so fixed by the statute, it was inadmissible for the board to enact a by-law in conflict with the statute; that when the cashier was first selected it was for an indefinite term, and that his bond is so conditioned as to render the sureties liable for such indefinite term; and that in any event the subsequent adoption of the by-laws did not change the liability of the sureties theretofore undertaken.

The specific questions here involved have not been settled by the former adjudications of this court. Stadler v. City of Detroit, 13 Mich. 346, and Dunphy v. Whipple, 25 Mich. 10, cited to us, are not decisive. In the first of these cases the salary of the city marshal of the city of Detroit was involved, and the question for decision was the length of term of that office. In the second case the action was on the bond of the sheriff of St. Clair county, conditioned for the faithful performance of his duties as such during his continuance in office by virtue of-his election for a term of two years. Under a statute then in force (section 415, 1 Comp. Laws. 1857) he' was required to renew his bond within 20 days after the first of January in each succeeding year. This he failed to do, but continued to act de facto, and his sureties were held liable. The bond was broad enough to cover the entire term.

The case of Lord Arlington v. Merricke, 2 Saunders Rep. 411a, was an action brought by the postmaster general upon the bond of one Thomas Jenkins, who had been appointed a deputy postmaster on April 30, 1667, for a term of six months, and had given the bond upon which the action was brought. The bond contained a recital of the term of the appointment, and its terms of liability were very broad. The breach was alleged to have been committed September 22, 1669, nearly two years after the term had expired, although Jenkins had continued as a deputy postmaster. It was held that the surety was not liable, and that the recitals in the bond of the term of the appointment limited the general language of the bond to that period, and, as the breach did not occur during the term of the appointment, there was no liability. From the time of this decision in 1671, and frequently citing it as authority, ■ the general trend of decision has been that, where a public officer is elected or appointed for a definite term, and gives a bond in which the liability of the sureties is couched in general terms, the liability of the sureties is co-extensive with the term, and ceases upon the beginning of another term by the same person. Among the many cases upon this question see Peppin v. Cooper, 2 Barn. & Ald. 431; Mayor, etc., of Cambridge v. Dennis, El., Bl. & El. 660 (120 Eng. Rep. Full Reprint); Hassell v. Long, 2 M. & S. 363; Thomas v. Summey, 46 N. C. 554; Banner v. McMurray, 12 N. C. 219; Hubert v. Mendheim, 64 Cal. 213 (30 Pac. 633). We have stated the general tendency of decision. We are aware that it is not universal, but are satisfied that the great weight of authority is as stated. This general rule does not prevent liability being extended a reasonable time after the date fixed for expiration, if the term fixed has connected with it the words “or until his successor shall be elected and qualified,” or words of similar purport. Under such circumstances the liability on the bond will continue a reasonable time for the election and qualification of the successor. Chelmsford Co. v. Demarest, 7 Gray (Mass.), 1; Mutual Loan & Building Ass’n v. Price, 16 Fla. 204 (26 Am. Rep. 703); People’s Building & Loan Ass’n v. Wroth, 43 N. J. Law, 70; O’Brien v. Murphy, 175 Mass. 253 (56 N. E. 283, 78 Am. St. Rep. 487).

Nor does this put aside the rule that bonds are contracts between the parties, and that, if sureties engage by the language of the bond to become liable for any future term the principal may be elected or appointed for, they will be held liable upon their contract. People’s Building & Loan Ass’n v. Wroth, supra; Shackamaxon Bank v. Yard, 143 Pa. 129 (22 Atl. 908, 24 Am. St. Rep. 521); Ulster County Savings Inst. v. Young, 161 N. Y. 23 (55 N. E. 483). And where, by the terms of the bond their liability is limited to only a portion of the term, such limitation will be recognized.

With the growth of corporations and the. necessity of electing officers for their management, the question of liability of sureties on the bonds of corporate officers has arisen, and the general trend has been to follow the authorities having to deal with official bonds, and to give the same effect to a term of a corporate officer as is given to a term of a public officer, and to limit liability of sureties correspondingly. South Carolina Society v. Johnson, 1 McCord (S. C.), 41 (10 Am. Dec. 644); Kingston Mutual Ins. Co. v. Clark, 33 Barb. (N. Y.) 196; Citizens’ Loan Ass’n v. Nugent, 40 N. J. Law, 215 (29 Am. Rep. 230); Fresno Enterprise Co. v. Allen, 67 Cal. 505 (8 Pac. 59); Ulster County Savings Inst. v. Ostrander, 163 N. Y. 430 (57 N. E. 627); First Nat. Bank v. Samuelson, 82 Neb. 532 (118 N. W. 81); Welch v. Seymour, 28 Conn. 387.

The result of these cases will be found to be that, where the office, whether public or corporate, is held for a fixed term, and the obligation of the surety is couched in general language, or refers to the term, the surety contracts for such term, and he contracts for no more, excepting only where the term may be extended for the election or qualification of his successor a reasonable time, as we have shown; and, as a necessary corollary, it follows, and the cases so hold, that where the term is for an indefinite period, or during the pleasure of the appointing power, and the obligation of the surety is couched in general language, the surety contracts for such indefinite term or during the pleasure of the appointing power, and he contracts for no less. ,

We now come to the crucial question in the case: “Did Jossman hold the office of cashier for an indefinite term or for an annual one?” This question requires for its answer the splution of two other questions, viz.:

(1) Was the office an annual one under the statute?

(2) Was it within the power of the corporation to make the term an annual one ?

1. It is pointed out that the directors of a bank are elected annually, and it is urged that this fact should have force upon this branch of the case. Section 6407, 3 How. Stat. (2d Ed.), 2 Comp. Laws 1915, § 7979, provides, so far as important here, as follows:

“The affairs of each bank shall be managed by a board of not less than five directors, who shall be elected by the stockholders and hold office for one year, and until their successors are elected and have qualified.” * * *

' The provision of the law in force during the period covered by this transaction is found in section 6399, 3 How. Stat. (2d Ed.), 2 Comp. Laws 1915, § 7970, in the section defining the powers of the corporation. It reads as follows:

“Upon making and filing the articles of incorporation required by this act the bank shall become a body corporate, and as such shall have power: * * *
“Fifth. To elect or appoint directors, who shall choose from their members a president and one or more vice presidents, and shall have power to appoint and employ a cashier or treasurer, and other officers, define their duties, require bonds from such officers and clerks, dismiss such officers so elected or appointed, or any of them, at pleasure, and elect or appoint others to fill their places.” * * *

It will therefore be seen that the cashier serves at the pleasure of the board. The fact that the appointing power was chosen annually does not change the situation. The cashier was chosen to serve the corporation, not the individuals who may, for the time being, hold the office of directors. Louisiana, State Bank v. Le Doux, 3 La. Ann. 674, is directly in point. It was there said:

“The argument presented is mainly deduced from the provisions of the charter with regard to the election of directors. It provides that the directors of the bank shall be annually elected, and forbids the reelection of more than two-thirds of the directors in office at the time of each annual election, permitting no director to hold his office more than three years out of five in succession. But it does not follow from this legislation with regard to the board of directors that the mere clerks and servants of the corporation should hold their appointments by the same tenure. If these clerks and servants were to-be considered the mere clerks and servants of the directors who appoint them, the conclusion might be a reasonable one. But we do not so regard them. They are the clerks and servants of the corporation; and the limited term of service of the directors does not control the duration of such appointments.”

See, also, Merchants’ Bank of Ellis v. Honey, 58 Kan. 603 (50 Pac. 871); Union Bank of Maryland v. Ridgely, 1 Har. & G. (Md.) 431, 432; Anderson v. Longden, 1 Wheat. (U. S.) 85.

2. The authorities directly in point upon this branch of the case are not so numerous as those upon the subjects heretofore discussed, and they are not harmonious. It must be patent to counsel that a résumé of all cases which the industry of counsel on both sides of the case has brought to our attention is out of the question. They have all been examined, those directly in point, and those which are thought by analogy should apply. We shall first consider those urged by appellant’s counsel to be especially in point upon this branch of the case. The supreme court of Iowa must be held to have sustained counsel’s contention without reserve. Ida County Savings Bank v. Seidensticker, 128 Iowa, 54 (102 N. W. 821, 111 Am. St. Rep. 189, 5 Am. & Eng. Ann. Cas. 945), and Wapello State Savings Bank v. Colton, 133 Iowa, 147 (110 N. W. 450, 11 L. R. A. [N. S.] 493), are in point. An examination of the statutes of Iowa, with reference to the organization and management of savings banks (chapter 10, tit. 9, Code of Iowa 1897) does not disclose a wide divergence from the language found in our own act, although the provision in the Iowa act with reference to the election of a cashier is not found in the section defining the power of the corporation as it is in our act.

The facts in First Nat. Bank of Brandon v. Briggs’ Assignees, 69 Vt. 12 (37 Atl. 231), are somewhat dissimilar from those in the instant case. There a bylaw had been adopted providing that the cashier should hold at the pleasure of the board. The cashier, however, was elected “for the year ensuing,” and under such election gave the bond sued upon. Here the cashier was originally elected for an indefinite period before any by-laws had been adopted. His bond was given to qualify him on that election. In that case there was no testimony of infraction of the rules by a long usage, and the court said:

“The case cannot be put on the ground that the corporation had, by long and uniform practice, made the office an annual one, notwithstanding the provision of its by-law. This bond was given at the cashier’s first election, and the case does not show what the previous course of the corporation had been. But, irrespective of any previous action of a similar charactér, we think the liability of the surety is to be determined with reference to the appointment as made.”

Should we follow this expression to its logical sequence, might we not say in the instant case that the liability of the bond sued upon had reference to such original appointment for an indefinite period? But we prefer not to give too narrow a construction. This case cannot be regarded as forceful for appellant’s claim as are the Iowa cases.

When we read the section of the statutes of Missouri having reference to the officers of banks (section 3, p. 330, Wagner Rev. Stat. Mo.), it becomes readily apparent that the case of Savings Bank of Hannibal v. Hunt, 72 Mo. 597 (37 Am. Rep. 449), is clearly distinguishable from the instant case. The section of the Missouri statutes referred to reads as follows:

“3. The affairs and business of any such association shall be managed and controlled by a board of directors, not less than five nor more than thirteen in number, from whom there shall be designated by themselves a president, a cashier and a secretary, who shall hold their office for one year, and until their successors are duly elected and qualified.”

It will therefore be seen that the term of the office of cashier was there fixed by the statute as an annual term, and the case is not authority on the question now under discussion.

The case most strongly relied upon by counsel for the receiver is Westervelt v. Mohrenstecher, 76 Fed. 118 (22 C. C. A. 93, 34 L. R. A. 477). It is urged that this case should control from the fact that the provision under consideration, found in our banking act, was taken literally from the National bank act (Rev. Stat. U. S. § 5136, p. 993 [U. S. Comp. Stat. 1916, § 9661]), and it is urged that we are bound by construction placed upon it by the Federal courts. But counsel overlooks the fact that the case in question was decided after our banking law was enacted and does not come from the court of last resort. The case.therefore is controlling.only so far as its reasoning is persuasive. The case, however, is so like the instant case in its facts, and so cogent in its reasoning, that it is most persuasive. As we have stated, the provisions of the National bank act there under consideration were adopted in the section of our banking law above quoted. In that case, as here, by-laws had been adopted making the term of the cashier an annual one. The cashier there, as here, gave a bond upon his first appointment and gave no further bond. There, as here, the board of directors annually reelected him cashier. It was there held that, the congress having fixed by the National bank act the term of the cashier as an indefinite one, subject to the pleasure of the board, it was beyond the power of the board to pass a by-law in conflict with the act of congress, and that the purported annual elections of the cashier were nullities, and the bond liable for defaults during the occupancy of the office by the principal. It was said:

“The act of congress under which this bank was organized provided that its board of directors might appoint a cashier, require bonds of him, and fix the penalty thereof, and dismiss him at pleasure, and appoint another to fill his place. Its articles of association provided that the board might appoint a cashier, fix his salary, and continue him in office, or dismiss him, as in the opinion of a majority of the board the interests of the association might require. It is plain that, in the absence of any other regulations, a cashier once appointed under this act of congress and these articles of association would hold his office until he resigned, or until the board of directors of the bank dismissed him. A subsequent appointment of the same man to the same office would have no more effect upon him, or upon the term of his office, than a second deed of the same property by one who had already conveyed it to the same grantee would have. The only act of the board of directors that could effect the tenure of his office, under the act of congress, would be his dismissal. It is, however, contended that the by-laws (which provided that the cashier should be elected at the annual meeting in January4 in each year, should give a bond in the sum of $10,000, and should hold his office for one year, and until his successor was elected and qualified) made this an annual office, and limited the term of the office of this cashier to the unexpired portion of the year for which his predecessor, Vieths, was elected. But how could the by-laws of this bank repeal or modify the act of congress and the articles of association under which they were enacted? The act of congress expressly fixed the tenure of office of the cashier of this bank. It expressly provided that the board of directors might dismiss the cashier and certain other officers ‘or any of them at pleasure and appoint others to fill their places.’ It provided that this cashier should always hold his office subject to instantaneous removal at the pleasure of the board of directors. * , * * In our opinion, the provision of the act of congress to which we have referred was inserted ex industria to provide for this very contingency. In any event, it is there, and it clearly provides that the cashier of a National bank may be dismissed at the pleasure of the board of directors, and that it may appoint, not the same man again, but another in his place. National banks are the creatures of the act of congress. Under familiar principles, they have no powers beyond those expressly granted and those fairly incidental thereto. The Omaha Bridge Cases, 10 U. S. App. 98, 174 (2 C. C. A. 174, and 51 Fed. 309); Union Pac. R. Co. v. Railway Co., 2 C. C. A. 174, 230 (51 Fed. 309, 316). It follows from this principle that, since the act of congress expressly provides that the cashiers of National banks should hold their offices subject to the pleasure of the board of directors, neither the bank nor its board can make time contracts or appointments in violation of that provision. Harrington v. National Bank, 1 Thomp. & C. [N. Y.] 361; Boone, Banking, § 353; Ball, National Banks, p. 65. What, then, is the effect of these established rules upon the by-laws of ‘this bank? It is that that part of these by-laws which provides that the cashier shall hold his office for one year, and that he shall be elected annually, must fall, and the cashier of the bank must hold his office under the act of congress, subject to immediate removal at the pleasure of the board of directors, until he resigns or is removed.”

A much-cited Case and one quite in point is Amherst Bank v. Root, 2 Metc. (Mass.) 522. In this case the cashier was elected “for the year ensuing” and gave the bond in suit. He was re-elected the succeeding year, but gave no new bond. The default in the bond occurred after the first year. The act of the legislature under which the bank was organized made the term indefinite. It was held that the act under which the cashier was elected controlled, Chief Justice Shaw saying:

“We think, therefore, that when Luther Root was elected cashier, in October, 1881, even if it was entered in the directors’ minutes as an election for the year ensuing, it not being by law an annual office, he held it by force of the provision of the general law above stated, until another was chosen in his stead.”

After discussing the matter somewhat, he concludes:

“But another and perhaps more satisfactory answer is that the directors are presumed to know the general law; that they consequently know, when they come into office, that the cashier, whom they find there, will by law continue in his office, unless they think fit to remove him. Their act is to be taken in connection with their presumed knowledge of the law in this respect. But it may be satisfactory to them, constituting in theory, and. sometimes in fact, a new board of directors, and also satisfactory to, the cashier, that they should express their will and. intention upon the subject. Under such circumstances the election of the cashier to an office which he already holds, and would hold without election, must be regarded as a manifestation of their will and intent that he should continue to hold the office for another year, unless there should be cause afterwards to remove him. That such an election is considered by the directors themselves as the continuance of an existing office, and not the commencement of a. new one, is manifest from the fact that they require no new bonds.”

Stevens v. Orton, 18 Misc. Rep. 538 (43 N. Y. Supp. 792), is similar to the present case, except that the by-law there involved followed the Federal statute, the bank being a National bank. This is not important, because, if the bank had the power to fix the term by the enactment of a by-law, it would likewise have the power to fix the term by action taken at the time of the election. In that case the cashier was first elected without fixing his term, and he gave his bond upon such first appointment, as did the cashier in the instant case. Thereafter annually he was re-elected. At times the proceedings showed that he was elected for the ensuing year, and at times this was omitted. The same defense was there made as is here insisted upon; but the bond was held to be a continuing one, and the sureties liable for breaches, of the bond occurring after the cashier’s re-election.

The following cases will be found to sustain the plaintiff’s contention, either because in point, or because by analogy they are persuasive: Elam v. Commercial Bank, 86 Va. 92 (9 S. E. 498); Dedham Bank v. Checkering, 3 Pick. (Mass.) 335; Union Bank of Maryland v. Bidgely, supra; Commonwealth v. Reading Savings Bank, 129 Mass. 73; Coplin v. McCalley, 1 Leigh (Va.), 308 (19 Am. Dec. 748); Exeter Bank v. Rogers, 7 N. H. 21; Amicable Mut. Life Ins. Co. v. Sedgwick, 110 Mass. 163; Ulster County Savings Inst. v. Ostrander, supra; Louisiana State Bank v. Le Doux, supra. We are persuaded that the weight of authority, in point and by analogy, is with the plaintiff.

Upon principle the contention of the plaintiff must prevail. A savings bank is a creature of the statute, and has the powers expressly granted to it, and such as are fairly incidental thereto. It has power to elect a cashier, and the term of such officer is fixed in the same section as the grant of power. It cannot be said that it is an incident to such granted power to fix a different term than that fixed by the statute to pass a by-law in conflict with the act granting the power. Such action in conflict with the act granting the power cannot be said to be incidental to the power granted. The position of cashier is a most important one. His standing and reputation in the community is of vital importance to confidence in and success of the bank. A breath of suspicion, founded or unfounded, affects not only him, but the institution with which he is'connected. The legislative wisdom has therefore made his tenure at the pleasure of the board. The legislature, and the legislature alone, can change that tenure. We therefore conclude that the by-law fixing the term of the cashier different than the provisions of the statute was ultra, vires and void. The cashier held at the.pleasure of the board. His bond was a continuing one, and the sureties are liable in this action.

The judgment is affirmed.

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


text:
    PITCHER v. ROGERS’ ESTATE.
    1. Trusts — Evidence—Sufficiency.
    In an action on a claim against an estate for money received by decedent from his wife, the mother of plaintiff, under alleged arrangement whereby deceased was to pay the money to plaintiff on his wife’s- death, evidence held, to sustain a verdict for plaintiff.
    2. Same — Right of Action — Termination of Trust.
    Where money is received by a husband from his wife to be paid to the latter’s son upon her death, a right of action to recover the money after refusal of payment arises at the time of the death of the mother.
    3. Same — Repudiation—Notice—Limitation op Actions.
    As a general rule, the statute of limitations has no application in case of an express trust, and, as against an express and continuing trust, the statute does not run until repudiation by the trustee and knowledge thereof is brought home to the cestui que trust.

    4. Same.
    Although the trustee used the money on his own property, for his own use, as contemplated, instead of making investments in the usual securities for trust funds, there was no such repudiation of the trust by the trustee as to set the statute of limitations in motion.
    5. Same — Enforcement—Claim Against Trustee’s Estate.
    A suit in equity is unnecessary where a fixed sum is due from the estate of a trustee to one to whom he had agreed to make payment at a certain time, and a claim may be' filed against the trustee’s estate.
    6. Same — Evidence—Presumptions.
    The maxim “omnia vrcesumuntur contra spoliatorem” is applicable where a trustee wilfully destroys a written declaration of trust.
    Error to Kent; Brown, J.'
    Submitted October 11, 1917.
    (Docket No. 92.)
    Decided December 27, 1917.
    Roy Pitcher presented a claim against the estate of John Rogers, deceased, for a sum held in trust. The claim was allowed by the commissioners, and the Grand Rapids Trust Company, administrator, appealed to the circuit, court. Judgment for claimant. Contestant brings error.
    Affirmed.

      Clapperton, Owen & Hatten, for appellant.

      Dorr Kuizema and Smedley & Linsey, for appellee.
   Fellows, J.

The administrator of the estate of John Rogers, deceased, brings up for review a judgment for $592.37, rendered in favor of Roy Pitcher on a claim presented by him. Roy Pitcher is the son of Seymour and Ella Pitcher. They were divorced November 27,1885, when plaintiff was 3% years old. In settlement of their property matters Mr. Pitcher gave his wife $500 in cash. It is the claim of the plaintiff that this $500 was given to his mother with the understanding that she should have the use of it during her lifetime, and at her decease it should go to him. The testimony of plaintiff’s grandfather, who was present when the money was paid, tended to support this claim. Plaintiff claims that his mother thereby became trustee of the fund. The estate denies that the $500 was given the mother with this understanding, but insists that it was given outright to her. The testimony of plaintiff’s father tends to support this claim. She invested the money in ten acres of land, called in the record the Lisbon property. Later she married decedent, and in 1904 sold the Lisbon property. It is the claim of plaintiff that she, upon the importunities of her husband, turned over to deceased this $500 with the understanding and agreement that he should pay that sum to plaintiff at her decease, and that Mr. Rogers used this money in part to improve his farm at Allendale and in part for his personal use. It is the claim of plaintiff that, even though this fund was not impressed with a trust when it came to the hands of his mother, it was so impressed when it came to the hands of decedent, and was taken under an express agreement to pay at her death; that at some time, the exact date not appearing, deceased signed a paper evidencing the arrangement. March 2, 1908, deceased traded his Allendale farm for property situated in Grand Rapids, consisting of a lot with two houses, taking the title in himself and wife. .They moved to Grand Rapids, where Mrs. (Pitcher) Rogers died July 3, 1913, and Mr. Rogers January 11, 1916.

It is first urged that the plaintiff failed to make out a case for the jury, and that the court should have directed a verdict for the estate. As we have already stated, plaintiff’s grandfather gave testimony tending to support plaintiff’s theory of the original arrangement between his father and mother, with reference to the $500. The plaintiff also called as a witness a Mrs. Wilmarth, who for six years occupied the small house owned by the parties in Grand Rapids in the rear of their home. She testified that she had frequent conversations with them; that on one occasion when they were cleaning out the attic, about a year before Mrs. Rogers’ death, she showed her some papers in a little basket and informed her that they were valuable. She also testified to what took place on a later occasion. We quote briefly from her testimony;

“*■ * * We all stood close, and she showed me the paper; she came and brought it out of the bedroom. I don’t suppose I can say what remark I made?
“Q. Yes; if her husband was there.
“A. He was right there. I says, T thought that was upstairs.’ She says, ‘No; it is there, paper there, showing’—
“Mr. Owen: I object to the conversation.
“A. ‘That there is $500 that Roy is to have when I die.’ And I says, ‘Well, have you got Mr. Rogers’ signature to it?’ I was always worried about that, for I had trouble. She says, ‘Yes.’ She wanted me to read the paper, but I hadn’t got time, and she held up the paper. I saw it with my own eyes. Mr. Rogers says, ‘We cannot give that to Roy when you died if you die before I die, because we have got to wait until we both die, and then Roy will get this.’
“Q. Did she say when he would get it?
“A. She said not until she was dead, and he said not until they were both dead.
“Q. Did she tell you that in his presence?
“A. Yes, sir.
“Q. Where did she say that money came from?
“A. It came from her first husband.
“Q. For whom?
“A. To be for Roy when she was^ dead.”.

She also testified that she saw the signature of Mr.Rogers on this paper, and that it was his handwriting, the same as he signed to receipts for rent, and that Mr. Rogers admitted signing the paper; that after Mrs. Rogers’ death Mr. Rogers burned up some papers from the attic, and about a week later told her:

“I burned up every one of those papers, and the damned fool won’t get a cent (referring to plaintiff).”
The jury answered affirmatively the'following questions :
“Did John Rogers receive the sum of $500 from Ella Rogers, and agree with her to pay the same to Roy H. Pitcher at Ella Rogers’ death?
“Do you find that a written agreement was made with Mrs. Rogers binding the deceased to pay to Roy Pitcher the sum of $500 after her death?”

When we take the testimony of Mrs. Wilmarth in connection with all that appears in this record, it is clear that not only was a case made for the jury, but that the verdicts, both general and special, are not against the weight of the evidence. The case is not unlike that of Eipper v. Benner, 113 Mich. 75 (71 N. W. 511). In that case the wife of decedent had intrusted to him certain property with the understanding that he should will it to her nephew and niece. It was there said:

“The circuit judge was of the opinion that the admission of an 'understanding’ with his wife was not the admission of a promise, and that, if it can be said to amount to a promise, it was not based upon a consideration, because neither Mr. nor Mrs. Vogel was under any obligation to the claimants which would amount to a valid consideration. It is clear that the judge found that Vogel admitted that he had the sum claimed .of his wife’s property, and that he had promised her to leave it to these children at his death. We are of the opinion that the facts found show that Vogel held this money in trust for these children by arrangement with his wife, and after his death it was the duty of the administrator to pay it over to them, upon allowance by the probate court.”

Defendant invokes the statute of limitations. It is not available. The money was not due until the death of .plaintiff’s mother, which occurred in 1913. Havens v. Church, 104 Mich. 135 (62 N. W. 149). The general rule is well recognized that the statute of limitations has no application in the case of an express trust. As against an express and continuing trust, the statute does not run until repudiation by the trustee and knowledge thereof brought home to the cestui que trust. Shepherd v. Shepherd’s Estate, 108 Mich. 82 (65 N. W. 580). As to repudiation by the trustee it is said by Mr. Perry in his work on Trusts and Trustees, vol. 2 (6th Ed.), § 864:

“It has been held, however, that if a trustee repudiates the trust by clear and unequivocal acts or words, and claims thenceforth to hold the estate as his own, not subject to any trust, and, such repudiation and. claim are brought to the notice or knowledge of the cestui que trust in such manner that he is called upon to assert his equitable rights, the statute will begin to run from the time that such knowledge is brought home to the cestui que trust, and he will be completely barred at the end of 20 years, if he has been sui juris, or under no disability, and is capable of bringing an action to maintain his right. To enable a trustee, without giving up the possession, to turn it into an adverse holding against the cestui que trust,, the evidence must .be clear and unmistakable, and such adverse claim must be brought home to the cestui que trust beyond question or doubt. The attitude of the trustee must be hostile, and continuously so; and there must be no mistake or misapprehension as' to the character of his holding by either party.”

There is no testimony in this record that deceased ever, to the knowledge of the plaintiff, repudiated or denied the arrangements which amounted to a trusteéship. In fact, there is no testimony that he ever expressed a disinclination to carry it out until after his wife’s death and he had destroyed the written evidence of it. The fact that he used the money on his own property, or for his own use, did not amount to such repudiation as to set the statute in motion. It is nowhere claimed that it was contemplated by the parties that he should only invest this fund in such securities as trust funds are usually invested in, but, on the contrary, the testimony shows it was contemplated that he should use it as he did, and account for it at his wife’s death. He cannot now claim the benefit of the statute, because he used it as was contemplated and did not invest it in the usual securities for trust funds.

Nor is there force in defendant’s contention that the proceedings should be instituted in a court of equity. No accounting was necessary. The trust estate consisted solely of money due the cestui que trust; it was a fixed sum, and there was nothing remaining to be done except the payment of that sum. There was no infirmity in the way of presenting his claim for this money to the commissioners on claims. Frank v. Morley’s Estate, 106 Mich. 635 (64 N. W. 577); Eipper v. Benner, supra.

Error is assigned on the following instruction found in the charge of the court:

“If you find that there was a certain instrument in writing executed by the deceased, John Rogers, showing that he was indebted to plaintiff in the sum of $500, as claimed by plaintiff, and if you find that deceased burned and destroyed this written instrument, then you have a right to take the fact of the destruction of this written instrument into consideration in passing upon the liability of the deceased to plaintiff for the said sum of $500.”

In this instruction the court went no farther than the authorities justify if he went as far. One who wilfully destroys documentary evidence of a controversy in which he is interested cannot complain if courts give such act the inferences that naturally follow it, or the unfavorable presumptions that naturally arise. This is but the application of the maxim, “omnia prxsumuntur contra spoliatorem.” In speaking of a trustee who had destroyed the declaration of trust, it was said in Jones v. Knauss, 31 N. J. Eq. 609:

“His position is one where he is liable to the most unfavorable presumptions. He has unquestionably betrayed his trust and the court is bound to apply to him the maxim, ‘In odium spoliatoris omnia prxsumuntur.’ If a person is proved to have destroyed a written instrument, a presumption arises that, if the truth had appeared, it would have been against his interest, and that his conduct is attributable to his knowledge of this circumstance, and accordingly slight evidence of the contents of the instrument will usually in such a case be sufficient.”

The rule is thus stated in Jones on Evidence (2d Ed.), § 18:

“The wilful destruction, suppression, alteration, or fabrication of documentary evidence properly gives rise to the presumption that the documents, if produced, would be injurious to the one who has thus hindered the investigation of the facts.”

See, also, Murray v. Lepper, 99 Mich. 135 (57 N. W. 1097); Sullivan v. Sullivan, 188 Mass. 380 (74 N. E. 608); “Joannes” v. Bennett, 5 Allen (Mass.), 169 (81 Am. Dec. 738).

Finding no error upon this record, the judgment is affirmed.

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


author: Bird, J.

text:
    KERWIN MACHINE CO. v. BAKER.
    1. Evidence — Contracts — Parol Evidence — Vendor and Purchaser.
    In the absence of fraud or mistake, a written contract which is unambiguous, certain in its terms, and full and complete in itself, is the only contract which the court, in a suit for specific performance, can consider, and its terms cannot be varied or changed by parol evidence.

    2. Specific Performance — Remedy—Discretion.
    While the remedy by specific performance is not one of right, and rests in the discretion of the court, such discretion to be exercised is a judicial one and cannot be arbitrarily or captiously exercised, and must be based upon facts proved by competent testimony.
    3. Same — Increase in Value.
    The mere fact that real estate has increased in value is insufficient to defeat the right of specific performance of a contract of sale.

    4. Same — Conditions—Vendor and Purchaser.
    Specific performance of a contract to convey a factory site will not issue upon condition that plaintiff erect a factory on such site, where no such condition was inserted in the contract of sale, and if plaintiff was required to meet such condition it would probably be unable to induce a railroad company to make side-track connections, and would have to make them itself at considerable expense.
    Appeal from Wayne; Mandell, J.
    Submitted October 3, 1917.
    (Docket No. 9.)
    Decided December 27, 1917.

      Bill by the Kerwin Machine Company against Herbert L. Baker for the specific performance of a land contract. From a decree for plaintiff, defendant appeals.
    Affirmed.

      William Henry Gallagher and Charles P. O’Neil, for plaintiff.

      William C. Stuart (John W. Beaumont, of counsel), for defendant.

      On the general rule that parol evidence not admissible to vary, add to, or alter a written contract, see note in 17 L. R. A. 270.

      On refusal of specific performance to contract to convey property because of inadequacy of consideration, see note in 14 L. R. A. (N. S.) 317.

   Bird, J.

On July 20, 1911, plaintiff, a manufacturing company, entered into an agreement to purchase of defendant, an attorney, 4.43 acres of land in North Detroit for the sum of $1,500, with a down payment of $300 and the balance in five years, with interest payable semi-annually. The price, while reasonably cheap, was fair. The agreement, in the usual form, was drawn by the defendant. The premises were part of a 40-acre tract owned and platted by defendant, and adjoined the Grand Trunk railroad. Plaintiff was engaged in manufacturing heavy machinery, and was desirous of erecting and operating its plant where it could have side-track facilities, and defendant was desirous of having a manufacturing plant on his plat to accelerate the sale of lots. Each was made conversant with the other’s desires. No clause requiring the erection of the plant was inserted in the agreement, although it is claimed that defendant wanted such a clause, but plaintiff refused to bind itself by such an agreement. Soon after the execution of the agreement plaintiff entered negotiations with the railroad company for a siding into the premises. Such negotiations continued upwards of a year, but were without results. The premises were beyond the yard limits.

We are satisfied^ as was the trial judge, that plaintiff in good faith intended to erect a factory building on these premises. At that time it was doing a fairly prosperous business, and while it cannot be said that it had safely passed the experimental stage, it had customers in all parts of the country and sufficient cash to insure the erection of its plant. Had it been able to promptly secure the side track, we have no doubt its plant would have been built at once. Later it suffered some financial reverses.

The parties dealt at arm’s length. Plaintiff’s officers were men of affairs, and defendant was a lawyer of many years’ experience. We are satisfied that there was no overreaching or fraud in procuring the contract, and that it was in all regards fairly entered into. The fact that through no fault of plaintiff its hopes and ambitions were not realized does not relieve defendant from his agreement fairly entered into.

In 1914 the value of the premises had materially advanced, and on February 23d of that year defendant wrote plaintiff, insisting that the building and operation of a factory was the sole consideration moving him to enter into the contract; stated that the contract had become forfeited for nonpayment of interest, but expressed a willingness to make an adjustment that would be reasonable and fair to both parties. Conferences and correspondence followed, resulting only in a tender by plaintiff of the full amount due on the contract, and a tender by defendant of the amount already paid; both tenders were refused. This bill was. then filed by plaintiff seeking the specific performance of the contract.

The trial judge who heard and saw the witnesses reached the conclusion that the plaintiff had in all regards acted in good faith, that there was no fraud practiced on the defendant, and decreed specific performance. With his conclusions and the decree entered we agree. It would not profit the parties or the profession to detail the testimony. The parties dealing-were all men of experience. Defendant had sought out the plaintiff’s, officers to induce them to purchase this land. He drew the contract. He knew far better than they did that the preliminary negotiations were merged in the written contract; that by its terms and by its terms alone, they were bound. Not for considerable time, over two years and a half, and. after the property had more than doubled in value, was there any suggestion by defendant that there was any other consideration than that expressed in the contract prepared and signed by him.

In the absence of fraud, and there was no fraud here, or mistake, and mistake was not alleged or proved, .the written contract, being unambiguous, certain in its terms, and full and complete in itself, is the only contract before the court for consideration; its terms cannot be varied or changed by parol proof. Smith v. Mathis, 174 Mich. 262 (140 N. W. 548); Ogooshevitz v. Arnold, 197 Mich. 203 (163 N. W. 946).

But it is urged that remedy by specific performance is not a remedy of right, but one of grace, and rests in the discretion of the court. It is true that the remedy is not one of right. It rests and must rest in the discretion of a court of equity. But the discretion to be exercised is a judicial one. It cannot be arbitrarily or captiously exercised. It must be based on facts proved by competent testimony. We are unable to discover any facts so proven in the instant case which would move the court to deny the plaintiff the benefit of its contract and its enforcement specifically; an increase in the value of the premises alone being insufficient to defeat remedy by specific performance. Cotharin v. Knoch, 99 Mich. 322 (58 N. W. 350).

It is also urged by the defendant that if specific performance is decreed it should be upon condition that plaintiff erect a factory building on the premises. The parties put their engagements in writing without providing any such, condition, and what we have already said might dispose of this question; but in the instant case there are peculiar reasons why this should not be done. Unless plaintiff should be more successful in its negotiations for side-track connections than it has been in the past, a factory building on these premises would not be available to it, and unless occupied and used would be of no benefit to defendant. We do not feel called upon had we the power to insert a provision in the decree that would cause plaintiff considerable expense without any resultant benefit to either of the parties.

It follows from what we have said that the decree of the court below should be affirmed; plaintiff will recover costs. .

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


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    GRAND RAPIDS TRUST CO. v. NICHOLS.
    1. Bankruptcy — Rights of Trustee — Statutes.
    Under section 70, 30 U. S. Stat. 565, providing that the trustee shall he vested hy operation of law with the title of the bankrupt to all property of the latter not exempt, as of the date of adjudication, including property transferred by him in fraud of creditors, and section 47 of the bankruptcy act of 1898, as amended in 1910, 36, U. S. Stat. 838, 840, providing that trustees, as to property coming into custody of the bankruptcy court, “shall be deemed vested with all the rights, remedies and powers of a creditor holding a lien by legal or equitable proceedings thereon; and also, as to all property not in the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied,” a trustee has all the rights of the bankrupt in the bankrupt’s property and also all the rights of a creditor who has taken all the steps preliminary to filing a creditor’s bill.
    2. Corporations — Ownership of Capital Stock — Rights of Creditors.
    The capital stock of a corporation is property of the corporation, and the directors, promoters, and managers of the corporation may not, as against creditors, fraudulently convey it away.
    3. Same — Judgments—Rights of Creditors.
    A creditor of a corporation whose claim has been reduced to judgment upon which execution has been issued and returned nulia tona may file a creditor’s bill where the facts justify it.
    4. Bankruptcy — Rights of Trustee — Statutes.
    A trustee in bankruptcy of a corporation, under section 47 of the bankruptcy act of 1898, as amended in 1910, 36 U. S. Stat. 838, 840, giving him all'the rights of a creditor who has taken all the steps preliminary to filing a creditor’s bill, may file a creditor’s bill to reach assets of the corporation fraudulently conveyed.
    5. Same.
    Although a creditor's suit pending and undisposed of would be suspended by section 11a of the bankruptcy act of 1898, 30 U. S. Stat. 549, and the discharge of the bankrupt would release him from the debt, the right of a trustee to maintain a creditor’s bill to reach property fraudulently conveyed, under section 70 of the act as amended in 1910, 36 U. S. Stat. 838, 840, is not affected.
    6. Same.
    The fact that all the creditors do not participate in a fund does not prevent a trustee in bankruptcy from reducing a fund to his possession, for the benefit of those entitled to share in it, in an equitable suit to reach assets of a corporation fraudulently conveyed, as the court can guard the rights of all parties.

      Appeal from Kent; McDonald, J.
    Submitted October 5, 1917.
    (Docket No. 32.)
    Decided December 27, 1917.
    Bill by the Grand Rapids Trust Company, trustee in bankruptcy of the Grand Rapids Motor Truck Company, against Fred I. Nichols and others for a discovery and an accounting. From an order denying motions to dismiss, defendants appeal.
    Affirmed.

      Thomas P. Bradfield, for plaintiff.

      Butterfield & Keeney and Charles B. Blair, for defendants.
    In March, 1912, the Grand Rapids Motor Truck Company was organized under the laws of this State with $350,000 common stock and $250,000 preferred. It took over the assets of the Decatur Motor Truck Company, an Indiana concern. Its articles of association enumerated, as required by the statute, property paid in and its value. Among the property paid in was a patent valued .in the articles of association at $249,629.02, and for this amount of common stock one M. E. Brackett, trustee, subscribed to the articles. At or about the time of the organization of the company some 21 business men of Grand Rapids underwrote and guaranteed the sale of $100,000 preferred stock. With each share of the preferred stock was given one share of common, which was supplied by the stock subscribed by Brackett, trustee. This was the arrangement with the underwriters and others who subscribed for or purchased preferred stock, and it was carried out. The underwriters in the main complied with their underwriting agreement, paid the amount they had agreed, and took their stock pursuant to the above arrangement. In July, 1913, the Grand .Rapids Motor Truck Company was adjudged a bankrupt, and plaintiff was appointed trustee. This bill was filed by it against the defendants, 64 in number, some being underwriters and some not, some being subscribers to the articles of association, and some not, some having paid the company in full for their preferred stock, and some not. In this bill the foregoing facts appear, and it is alleged that the debts of the company amount to $120,000, and that debts aggregating nearly $116,000 have been proven, to meet which the trustee has but $8,500, which it holds in cash. It is alleged in the bill that the patent turned in to the company for $249,629.02 was of little or no value, “purely imaginary and speculative”; that such value so fixed in the articles of association “was recklessly excessive and extravagant, and was not an actual good faith valuation and was a fraudulent attempt to evade the requirements of the statutes of Michigan.”
    It is alleged that no consideration passed from the said Brackett, trustee, to the company for such common stock; that he was a “man of straw,” through whom the plan of giving a share of bonus common stock with each share of preferred was executed. It is alleged that creditors, not all of them, extended credit to the company, relying on the capital stock of the company, and that the handling of the stock of the company, as above stated, worked a fraud upon such creditors.
    The bill seeks discovery, an accounting by defendants for all stock received by them, and payment by them of the amount found due on such accounting for both preferred and common stock up to the amount that may be necessary to liquidate the claims of those creditors who have extended credit on the faith of the capital stock of the corporation and who have been defrauded. The bill also contains a prayer for general relief.

      Thirteen of the defendants moved to dismiss the bill, which was an amended one. The motion having been overruled, and leave to answer given, we allowed an appeal to bring up this interlocutory order.
   Fellows, J.

(after stating the facts). By this motion to dismiss these defendants assail the right of the trustee under the bankruptcy law to maintain this suit. It is insisted that the bankrupt corporation could not maintain a suit against these defendants on the facts alleged, that the trustee has no greater right than the bankrupt had, and that, all creditors not being affected alike, the trustee may not institute suit for the benefit of a part of them.

We may lay aside that line of authorities which holds that the trustee in right of the bankrupt may not, proceed against stockholders of corporations to recover beyond the agreed price of the stock. These cases, are based upon the doctrine that the corporation, no creditor’s rights intervening, may lawfully sell its stock for less than par, and is bound by its contracts entered into with reference to the sale of its capital stock, as it would-contracts with reference to the sale of other of its property, and that it and the trustee, acting in its rights, will be bound by its contract. Unless the trustee, when creditors’ rights, intervene, has been given by the bankruptcy law other rights than those enjoyed by the bankrupt in its own right and for its own benefit, then the inquiry ceases, and the bill must be dismissed. We therefore address ourselves. directly to the inquiry: What rights did the trustee acquire upon its appointment? This involves an examination of the bankruptcy law. Section 70 of the act of 1898 (30 U. S. Stat. 565), provides:

“The trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or successors, if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as it is to property which is exempt, to all (1) documents relating to his property; (2) interests in patents, patent rights, copyrights, and trademarks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other person; (4) property transferred by him in fraud of his creditors; (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him; * * * (6) rights of action arising upon contracts or from the unlawful taking or detention of, or injury to,, his property.”

But by the amendment of 1910 (36 U. S. Stat. 838, 840) the rights of the trustee were materially enlarged. By this amendment section 47 was made to read, the portion within the brackets being the added matter:

“Trustees shall respectively *• * * collect and reduce to money the property of the estates for which they are trustees, under the direction of the court, and close up the estate as expeditiously as is compatible with the best interests of the parties in interest [and such trustees, as to all property in the custody or coming into the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings thereon; and also, as to all property not in the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a judgment creditor holding an execution duly returned unsatisfied].”

The purpose of this-amendment is apparent, especially to one who follows the trend of judicial decision up to the time of its adoption, or who examines the holdings of the courts as to the fights of the trustee before its enactment. Trustees who were appointed prior to this amendment were hampered and had limited rights in setting aside conveyances or transactions of the bankrupt. This condition grew out of the limited rights conferred upon the trustee by the act of 1898, and was made patent by numerous decisions of the courts in construing such rights. While it is unnecessary to resort to legislative documents to reach a construction of this amendment, it is interesting to note that the judiciary committee of the house of representatives, in its report on the bill making this and other amendments to the bankruptcy law (Report 511; 61st Congress, 2d Session, p. 6), indicated very clearly that it was designed to meet the holding of the court in York Manfg. Co. v. Cassell, 201 U. S. 344 (26 Sup. Ct. 481), a case much relied upon here and kindred cases.

This trustee therefore, when he was appointed in 1913, had the rights which the bankrupt had, he had the right to pursue property transferred by the bankrupt in fraud of his creditors, a right not possessed by the bankrupt, and he also had the rights of a creditor “armed with process” — all the rights of a judgment creditor holding an execution duly returned unsatisfied ; in other words, he had all the rights of a creditor who had taken all the steps preliminary to filing a creditor’s bill. It will therefore be seen that the decisions of this and other courts with reference to the rights of the trustee under the act of 1898 before the amendment of 1910 do not fix the rights of the trustee under that amendment.

It has frequently been remarked that the capital stock and property of a corporation will be regarded as a trust fund for the payment of its debts. Writers and courts have thought that at times this expression was loosely used. It is not necessary to analyze the propriety of the use of this expression to a given state of facts, and it will suffice for the purposes of this case to say that capital stock of a corporation is property of the corporation, and the directors, promoters, and managers of a corporation may not, as against creditors, fraudulently convey it away. That a creditor of a corporation whose claim has been reduced to judgment upon which execution has been issued and returned nulla bona may file a creditors’ bill, if the facts justify it, is beyond question in this State. Turnbull v. Lumber Co., 55 Mich. 387 (21 N. W. 375); 3 Comp. Laws 1915, §§ 12302, 13580 et seq. The trustee in bankruptcy now having the same rights as such a creditor may also file a creditors’ bill in the courts of this State. This is a right given the trustee by the amendment, and it should not be taken from him by the argument pressed upon us that creditors may pursue such remedy. If the argument of counsel is sound and the trustee may not file a creditors’ bill, in a great majority of cases there would be no remedy, because neither could the creditor. Rarely have creditors before adjudication of bankruptcy proceeded to judgments and had executions issued and returned unsatisfied, a necessary preliminary to the filing of a creditors’ bill. Grenell v. Ferry, 110 Mich. 263 (68 N. W. 144); Strelow v. American Color Co., 162 Mich. 709 (127 N. W. 716). If a suit was pending and undisposed of, it would be stayed by operation of the bankruptcy law (section 11a, act 1898, 30 U. S. Stat. 549 [U. S. Comp. Stat. 1916, § 9595]), and after the discharge of the bankrupt he could not be sued for a debt which his discharge released him from. Such a right as appellants insist creditors possess would be but a naked right without a remedy. Such a right which the bankruptcy proceedings prevent the creditor from enforcing does not take from the trustee the rights given him by this amendment. To so hold would permit assets which equitably belong to creditors to remain as a practical matter beyond the reach of both trustee and creditor. The trustee is the representative of all the creditors, and therefore he is the representative of each.

The fact that all creditors do not participate in the fund does not prevent the trustee from reducing the fund to his possession for the benefit of those entitled to share in it. In an equitable proceeding, such as this, the court can carefully guard the interests of each and every party.

Other questions are presented in these motions to dismiss, but we think that under Osborn v. City of Ann Arbor, 189 Mich. 96 (155 N. W. 1102), and Comstock v. Deane, 197 Mich. 388 (163 N. W. 916), we should not dispose of them on this record, and therefore do not pass upon them.

The order denying the motion to dismiss will be affirmed, with costs to the plaintiff, and appellants will have 15 days to answer.

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


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    MEYERS v. MICHIGAN CENTRAL RAILROAD CO.
    1. Master and Servant — Findings of Industrial Accident Board — Appeal and Error.
    The Supreme Court will not review the findings of fact of the industrial accident board except to determine whether there is any evidence to support the award.
    2. Same.
    The evidence to support findings of the industrial accident board need not be direct; it may be circumstantial..

      3. Same — Credibility op Witnesses.
    The industrial accident hoard not only passes on the credibility of the witnesses, but it draws its inferences from the circumstances and the facts which it finds established.
    4. Same — Workmen’s Compensation Act — Death — Course of Employment — Evidence—Sufficiency.
    Where deceased, a railroad passenger fireman, made a run to and from a certain city each day and generally had about 6 hours between the time of arrival and the return' trip at 4:10 in the afternoon, but was subject to call for emergency duty during such period, and was required to leave word where he might be found if he left the premises, and the evidence tended to show that after returning from his noon meal, and while waiting for the return trip, he changed his street clothes for his working clothes at 1 o’clock in the bunk house provided for men waiting to be called on regular or special runs, and went to his engine at once in the roundhouse, and at about 2:30 was found dead on the cement floor of the roundhouse beside his engine with his working clothes on, his face and hands both greasy, and an autopsy disclosed that his death was due to concussion of the brain, and it further appeared that he was expected to be able to take his engine upon the trip one hour before leaving time of the train, and also to see that it had proper firing tools, for the performance of which duty there was no set time, and that occasionally he did some work on his engine while it was in the ■ roundhouse, the evidence was sufficient to sustain a finding of the industrial accident board that deceased met his death while on duty.

    Certiorari to Industrial Accident Board.
    Submitted October 17, 1917.
    (Docket No. 111.)
    Decided December 27, 1917.
    Louise E. Meyers presented her claim for compensation against the Michigan Central Railroad Company for the accidental death of her husband in defendants’ employ. From an order awarding compensation, defendant brings certiorari.
    Affirmed.

      Kleinhans, Knappen & Uhl, for appellant.

      R. M. Shivel and Geddes Van Brunt (John L. Downing, of counsel), for appellee.

      On construction and effect of workmen’s compensation acts, generally, see note in L. R. A. 1916A, 23, L. R. A. 1917D, 80.

   Fellows, J.

Plaintiff and decedent were husband and wife. They lived at Jackson. Deceased was about 30 years old, in good health, and was employed as a passenger fireman by the defendant. His run was on the Grand Rapids branch, leaving Jackson at 6:40 in the morning and arriving at Grand Rapids at 9:40. On the return run he was due to leave Grand Rapids at 4:10 in the afternoon. There was testimony that his pay was on the mileage basis. Upon arriving at Grand Rapids it was the custom and the duty of the crew to detach the engine from the train and take it to the premises upon which was located the roundhouse of defendant on Albany street. Here it was left at the cinder pit, where it was taken in charge by the roundhouse crew and put in the roundhouse. On these premises was what is called the “bunk house,” consisting of an old box car which had been fitted up for the accommodation of the employees, with bunks, chairs, a table, and water and necessary articles to be used in cleaning up after the run. From the arrival of the firemen at the roundhouse premises until leaving time they were subject to call; that is, they were subject to be called out on other runs in cases of emergency, and if they left the premises were expected to leave information as to where they could be reached. Upon the return run they were expected to be ready to take the engine at the cinder pit at 3:10, an hour before leaving time of the train. Article 7, of the schedule of wages for firemen, of the company, contains the following:

“The fireman shall not be relieved of responsibility of knowing that engines for which they are .called are properly equipped for service.”

This rule seems to be understood as applying to the tools used by the fireman and to require him to see that the engine was equipped with such tools. There was some slight testimony, and it is very slight, from which the board might, infer that occasionally the fireman did some small work on the engine while they were in the roundhouse.

On the occasion in question, deceased left his engine at the cinder pit, went to the bunk house, where he washed up, put on his street clothes, and remained until dinner time. He was gone about half an hour for his meal. About 1 o’clock he put bn his working clothes complete, and shortly thereafter went over and got on his engine in its stall in the roundhouse. The floor of the cab of the engine was about five feet above the floor of the roundhouse. Some fellow employees visited with him there a short time and left. Shortly before half past 2 his dead body was found on the cement floor of the roundhouse beside his engine. His left foot was hooked up over the water hose, and his right foot was lying on the floor towards the engine. His hands were greasy, both inside and outside, and his face had-grease upon it. An autopsy was performed by a competent physician, who gave his opinion that death was produced by concussion of the brain. All the organs except the brain were found to be in a healthy condition. In the regular course the case reached the industrial accident board, and an award in favor of plaintiff by that body is here reviewed by certiorari.

It may not be necessary to repeat what we have so frequently said that this court does not review the findings of fact of the board, except to determine whether there is any evidence to support the award. The evidence may not be direct; it may be circumstantial. The board not only passes on the credibility of witnesses, but draws its inferences from the circumstances and the facts which it finds established. We may reverse awards for a failure of evidence to support them, but we are not the triers of the facts. With this view in mind, we approach the consideration of this case.

Upon the argument considerable attention was given to the case of Papinaw v. Railway Co., 189 Mich. 441 (155 N. W. 545), and this is true of the briefs. Counsel for plaintiff insists that that case is controlling, while defendant’s counsel claims that it is distinguishable from the case at bar and that the instant case should be controlled by Hills v. Blair, 182 Mich. 20 (148 N. W. 243), Spooner v. Detroit Saturday Night Co., 187 Mich. 125 (153 N. W. 657, L. R. A. 1916A, 17), and kindred cases.

While the details of the accident in the Papinaw Case differ from those in this case, we think the underlying and controlling principle is the same. There the deceased was a section foreman who lived near the track and was required to be on call at all times. Here the fireman, while in Grand Rapids, was subject to call at all times. In case of emergency he might be sent out at any time, and the emergency was determined by the defendant. The master had provided the bunk house which might be used by those who were waiting their regular or special runs to which they might be called. If the fireman left the premises, he was expected to leave word where he could be found. This is not a case where a workman had completed his day’s labor and had returned to his home and was free from any control or orders of the master. From the time deceased left Jackson in the morning until his return there at night he was constantly subject to the orders of the company and his movements under its control. It was said by Mr. Justice Steere, speaking for the court in the Papinaw Case:

“This case is readily distinguishable from that line of decisions cited by respondent in which the employee by his contract of hiring was engaged to work during certain hours, and was injured away from his place of employment, while going to or returning from work, or was absent during some intermission for meals, or otherwise, not then upon his employer’s business nor subject to his control, at liberty for the time to go where and do what he pleased, free from any claim of the employer upon his services. Here it is shown conclusively that by his contract of hiring deceased was at the time of his death required to be within reach, liable at any time to be called to work upon the track, and in that sense on duty subject to his employer’s orders and control.”

Added applicability to the present case should be given the Papinaw Case from the fact that we there cited with approval and quoted from the case of St. Louis, etc., R. Co. v. Welch, 72 Tex. 298 (10 S. W. 529, 2 L. R. A. 839). This case involved an accidental injury to a workman at the time asleep in a bunk car, the accident occurring about 3 o’clock in the morning. He was subject to call at any time, and therefore was held to be on duty at the time of the injury. We repeat a portion of our quotation from that case, as it is pertinent here:

» “He was liable to be called upon at any moment to go out with his gang upon duty upon the road. We think he must be held to have been upon duty at the time he received the injury. That the accident occurred when he was resting from his labors, we think makes no difference. He was subject to the call of the company at the time, and his case differs from that of other servants who engage for certain hours of employment and who are injured during the intervals in which the master has no claim upon their services.”

In the Papinaw Case, as in this case, the deceased was not a trespasser. Here he had a duty to perform in the cab before the engine started for Jackson, an imperative duty; under the rule quoted, he was bound to see that the engine was equipped with the firing tools. Other firemen called as witnesses inform us that there is no set time for the performance of that duty. We have also adverted to the fact that there was some slight testimony of a custom of firemen making small repairs on the engine. While the probative force of this testimony may have been weakened by cross-examination, we cannot weigh the testimony; that was for the board.

The case of Hills v. Blair, supra, is clearly distinguishable from the instant case. It belongs to that class of cases referred to by Mr. Justice Steere in the Papinaw Case. There the deceased was on his way to dinner, a mission of his own. He was free from the control and relieved of directions by his employer. In the case of Spooner v. Detroit Saturday Night Co., supra, the employee was fatally injured while running an elevator, something in no way connected with his employment, while here deceased was on the engine he was employed to fire.

Nor do we find it so conjectural as to the purpose of deceased in going on the cab as to bring it within the realm of guesswork. If he had gone upon the cab for his own purposes as suggested by defendant, to get a drink of water from a jug kept in the cab, or some tobacco kept in the cab seat, he would scarcely have gone to the trouble of divesting himself of his street clothes and donning his working garments. When he put on his working clothes and went to the cab, it was evident that he had prepared himself for whatever work was necessary and the return part of his day’s work. His greasy hands, when found dead by the side of his engine, were some evidence that he had been performing some labor on the engine; that, he had been discharging some service for the master. We are not persuaded that we should reach a different result from that reached in the Papinaw Case, or that the award is not supported by any competent evidence.

Without attempting a résumé of them, the following cases will be found to be of interest on this question : Mackinnon v. Miller, 2 B. W. C. C. 64; Pomfret v. Railway Co., 5 W. C. C. 22; Munn v. Industrial Board, 274 Ill. 70 (118 N. E. 110).

The award is affirmed.

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