author: Brooke, J. Ostrander, J.

text:
    PELLOW v. ARCTIC IRON CO.
    1. Tenancy in Common — Unity of Interest — Severance -^- Partition — Conveyance by Cotenant.
    One of two tenants in common of minerals underlying land may not, without the consent'or ratification of his cotenant, convey the interest which he owns in a portion of the entire estate, to third parties, so as to create a new and valid tenancy in common.

      Ü. Same — Severance—Joint Action.
    Cotenants, acting in concert, may subdivide a portion of the common estate and thus create separate freeholds, an interest in any of which might be sold.
    3. Same.
    A cotenant may sell and convey the whole or any aliquot part of his undivided interest in the whole property, but he cannot, without the consent of the other, convey an undivided interest in any specific parcel of the common holding, nor can he, without such consent or subsequent ratification by his cotenant, convey by metes and bounds, a specific parcel of the common estate and thus sever it so as to bind the non-granting cotenant.
    4. Same.
    But where one cotenant assumes to convey in fee by metes and bounds a parcel of the common estate, his deed is not void, but it creates equities in his grantee which will be protected and enforced so far as is possible without injury to the non-granting tenant.
    5. Same — Partition.
    Such conveyance is good as between the grantor and grantee, but will not be allowed to injure the rights of the cotenant.
    6. Partition — Estate in Common.
    A deed of a portion of property held in common by one of the joint owners, to third parties, has no effect on the interest of the cotenant, who has not consented, on partition of the premises; but where it may be done without prejudice to the rights of the other tenant, parcels so granted will be set off to the several grantees, in accordance with their equities.
    7. Same — Parties.
    And such grantees are necessary parties to proceedings in partition.
    8. Same.
    Their grantor’s interest in the remainder of the estate in common would, on partition, be chargeable to make good the warranties in his deeds of conveyance.
    9. Tenancy in Common — Partition.
    Nor may the nongranting cotenant disregard the deed of his granting contenant and treat it as a nullity, although it purports to convey a parcel carved out of the estate as an entirety ; it imposes on him an obligation to do no act which would impair the equities created by the conveyance.
    10. Same.
    If dissatisfied with the act of his cotenant, he can at once commence proceedings in partition, making the individual grantees of his cotenant parties thereto; and his rights and the rights of the grantees will be protected as far as possible, without injury to his interests.
    11. Same — Consent.
    Or he may give formal assent to a deed conveying more than the interest of his cotenant in a portion of the estate, which would thereby pass to the grantees in accordance with their deed.
    12. Same — Conveyance—Estoppel and Ratification.
    By a course of dealing with the remainder of the common estate by which he totally disregards equitable rights therein created by his cotenant’s deed, he may be held to have acted in recognition and ratification of it.

      13. Same.
    Whére one of two tenants in common of the mineral rights under land, conveyed the surface, of which he was sole owner by warranty deed, not excepting any mineral rights, and the cotenant, subsequently, with knowledge of the equities of the grantees under his deed, effected a partition of a large and valuable portion of the remaining estate which they held in common, by a lease for a long term of years, in which both tenants joined, and under which enormous quantities of the ore underlying the surface of such remaining estate were removed, their joint action ratified the deeds of the cotenant by so treating the remainder of the tenancy in common as to injure the equities which the deeds created, and which, except for the partition, could have been enforced against the grantor’s share of the estate. Ostrander and Blair, JJ., dissenting.
    14 Same — Equity—Laches.
    Since the cotenant indicated by his acts that the unwarranted deed of the grantor was ratified, no action on the part of the grantees was necessary to perfect their title, until a claim was set up to their interest by the successors in interest to the nongranting cotenant, and they are not chargeable with laches for failure to take action until such claim was made.
    15. Deeds — Quitclaim—Good Faith.
    The grantee in a quitclaim deed is not a bona fide purchaser and takes no more interest than the grantor has to convey.
    16. Real Property — Descent—Good Faith.
    Heirs can receive no greater estate or maintain no greater claim than their ancestor had.
    Appeal from Marquette; Stone, J.
    Submitted May 4, 1909.
    (Docket No. 55.)
    Reargued June 30, 1910.
    Decided December 7, 1910.
    Rehearing denied April 1, 1911.
    Bill to quiet title by Samuel Mitchell and others against the Arctic Iron Company and others. Thomas Pellow and others, as trustees of the will of Samuel Mitchell, deceased, were substituted as parties complainant in the stead of Samuel Mitchell. From a decree for defendants, complainants appeal.
    Reversed.

      Ball & Ball, A. G. Dustin, and Horace Andrews, for appellants.

      8. W. Shaull {A. B. Eldredge and Moses Hooper, of counsel), for appellees.
   Brooke, J.

The decision in the court below contains the following language:

“ There seems to be force in the position of the defendants, that, because of the manner of dealing with the property herein involved by the complainants and their grantors for over 40 years, these lots 1 to 13 should be treated now as separate and independent estates.”

What the grantees of Harvey actually did, was to enter into possession of the specific parcels conveyed to them with full warranties of title by Harvey. They cultivated the lands, paid taxes upon them for upwards of 40 years, conveyed rights of way to railroads crossing them, reserving title in themselves to all the minerals thereunder, and finally conveyed them with the same warranties as to title they had received from Harvey. These acts, so far from indicating an intention on the part of Harvey’s grantees to acquiesce in a new cotenancy with Reynolds in the individual parcels, clearly show that they intended to buy from Harvey the whole title to the lands described, believed they had so purchased, and constantly asserted ownership to the whole thereof. Aside from the record testimony upon this point, the oral testimony of Cgesar Charles, one of the original grantees of Harvey, and the only one whose testimony was taken, places the matter beyond dispute, and I think it is equally clear that neither Reynolds nor his grantees considered that a new cotenancy had been created by Harvey’s deeds, for the record fails to show that during the entire period elapsing since those deeds were made, any effort had been made by any of the owners of the Reynolds interest to pay their just proportion of the taxes. These facts are adverted to, not as in any manner bearing upon the claim of complainants to title by adverse possession, which is untenable, but as indicating the acquiescence of Reynolds in the acts of Harvey. Again the learned trial judge says: .

“ If Harvey had the right to plat the property and sell what he owned, as it seems to me he had, this operated to segregate the property from the mass, without any act on the part of Reynolds.”

This statement of the law is quoted by my Brother Ostrander, and upon it he says decision may be safely rested. No authority is cited either by the learned trial judge nor by my Brother in support of this proposition.

By what right may a tenant in common carve out a parcel of the common estate and convey his interest therein to a stranger, thus creating a separate freehold and a new cotenancy between his grantee and his nongranting cotenant ? I know of none. ■ If Harvey could subdivide a small tract of the common estate into six-acre lots, and by conveying his interest therein to third persons thus create independent cotenancies between each of his grantees and his own cotenant, it is entirely obvious that he might subdivide the entire 1,400-acre tract into lots, not of six acres, but of one acre, or even less, and by conveying each separate lot to a different individual, he could thus create 1,400 or more new cotenancies between his grantees and his cotenant. Simply to state such a proposition is to refute it, and yet, in principle, such a course would in no wise differ from the course he followed. Harvey’s deeds warranted the title, not to his interest, but to the whole estate described therein. Those deeds, as between his grantees and Reynolds, were just as ineffectual to pass his interest in the specific parcels described as they were to pass the entire title. To give them effect as conveyances of Harvey’s interest in the parcels described, Reynolds’ assent would be just as necessary as it would be to give them effect according to their tenor.

Defendants now say they are operative to convey the individual interest of Harvey. How did they become so ? No act of Reynolds is pointed out as recognizing Harvey’s right to convey his interest in these parcels by him carved out of the common estate, which cannot with equal force be urged as a ratification in fact of the entire transaction.

The bill of complaint alleges, and the answer admits, the cotenancy of Harvey and Reynolds in the minerals underlying the entire 1,400-acre tract. The southeast quarter of section 6, from which Harvey sold, by metes and bounds, the three six-acre parcels here in question, lies in the heart of this tract, wholly surrounded by other lands held in common. This situation is wholly at variance with the facts in Butler v. Roys, 25 Mich. 53 (12 Am. Rep. 218), upon which defendant relies, and which was followed in the lower court. There the court said:

“ The lots in question in these actions of ejectment all belong to the Governor and Judges plat of the city of Detroit and are separate freeholds.”

There the subdivision was an ancient one, with the making of which none of the parties had anything to do. It is not to be questioned that cotenants, acting in concert, may subdivide a portion of the common estate, and thus create separate freeholds, an interest in any one of which might be sold. See authorities citied in Butler v. Roys, supra, but this is no authority for saying that one of two cotenants may alone accomplish such a severance.

A cotenant may sell and convey the whole or any aliquot part of his undivided interest in the whole property, but he cannot, without the consent of the other, convey an undivided interest in any specific parcel of the common holding, nor can he, without such consent or subsequent ratification by his cotenant, convey by metes and bounds a specific parcel of the common estate and thus sever it so as to bind the nongranting cotenant. Freeman on Cotenancy, § 199; Tiffany on Real Property, § 170; Porter v. Hill, 9 Mass. 34 (6 Am. Dec. 22); DeWitt v. Harvey, 4 Gray (Mass.), 486; Adam v. Iron Co., 7 Cush. (Mass.) 361; Staniford v. Fullerton, 18 Me. 229; Lessee of White v. Sayre, 2 Ohio, 110. But where one cotenant assumes to convey in fee, by metes and bounds, a parcel of the common estate, as Harvey did in the case at bar, his deed is not void, but it creates equities in his grantee which will be protected and enforced so far as is possible without injury to the nongranting cotenant.

Mr. Justice Montgomery, speaking for the majority of the court in Mee v. Benedict, 98 Mich. 260 (57 N. W. 175, 22 L. R. A. 641, 39 Am. St. Rep. 543), said:

“But it seems the more correct way to state the result of the authorities is that such a conveyance is good as between the parties to it, but that it is not to be permitted to affect injuriously the rights of the cotenants. This results in nothing more than that, on partition, the cotenant should be entitled to partition, precisely as though no conveyance had been made. But it seems to me a manifest perversion of justice to say that, because the law declares that the cotenant may not have his rights injuriously affected by such a conveyance, he may profit by the fact that he is a cotenant, and that circumstance shall enable him to defeat the right yested in the grantees of his cotenant.”

Freeman on Cotenancy, § 199, says:

“Although the deed does not impair the rights of the other cotenants, it by no means follows that they may treat it as void, or entirely disregard it. "While falling short of what it professes to be, it nevertheless operates on the interest of the grantor, by transferring it to the grantee. The latter acquires rights which the cotenants ought to be bound to respect. They ought not to be permitted to ignore his conveyance, and treat him as one having no interest in the property.”

Again, at section 205, the same author says:

“But while no such grantee has an absolute legal right to have the part granted to him set off to him or to his grantor upon partition, yet he has rights which will receive the consideration of the court, and will be respected as far as they can be without prejudice to the rights of the other part owners. The court, wherever the interest of the other owners will not be impaired thereby, will set off to grantees of specified parcels the tracts included within their respective deeds.”

If Reynolds had instituted proceedings for partition of the common estate after Harvey had conveyed the several parcels in dispute, Harvey’s grantees in those conveyances would have been necessary parties, and the equities created by their deeds would have been worked out and protected. See authorities cited in Mee v. Benedict, supra. In such a proceeding, Harvey’s interest in the balance of the cotenancy, or so much thereof as might be necessary, would be charged to make good the warranties contained in his deeds of the several parcels here in dispute.

Mr. Justice Hooker, in his opinion in Mee v. Benedict, supra,, uses the following language:

“But while the conveyance of a portion by one tenant in common may be disregarded by his cotenant, if such cotenant or any other person shall, with notice of the grantee’s interest, choose to unite the different titles by purchasing the remaining interest of the grantor, he may be held to assent thereby to such conveyance by recognizing the right of the grantor to deed in parcels, and he will take the title of the grantor subject to the rights of the prior grantee which equity may compel him to recognize and satisfy. While a tenant in common may insist upon his own, he will not be permitted, in such a case, to collude with his cotenant, or profit by his fraud ” — citing cases.

See, also, Campau v. Godfrey, 18 Mich. 27 (100 Am. Dec. 133), and cases cited, where Mr. Justice Christiancy said:

“ On the other hand, the lands held by the same tenancy may be so situated, or the. amount of them so great, that in many cases the interest of the cotenants would not be prejudiced on partition by giving full effect to such conveyance. And this might sometimés happen in the case of a single tract only, especially of a large one, or so situated as to admit of a perfectly fair partition into such parts as might be required to give effect to the deed. And whenever, upon a fair partition, that part of the property in which an interest had been conveyed should be set off to the party selling or to his grantee, the other cotenants receiving their full share in as advantageous a form as if the conveyance had not been made, the whole ground of objection to the conveyance would seem to fail.”

In Worthington v. Staunton, 16 W. Va. 209, the court says:

“ Such deed will become operative and pass to the purchaser of such lands by metes and bounds, if the other tenants in common before partition confirm and ratify it; and after partition if that portion is allotted to the purchaser ; and in either case said deed will be binding on both the grantor and grantee.”

Particular attention is directed to the case of Young v. Edwards, 33 S. C. 404 (11 S. E. 1066, 10 L. R. A. 55, 26 Am. St. Rep. 689), where, as here, the nongranting cotenant claimed that the deed of his cotenant in fee conveyed, at most, the interest of the grantor in the parcel particularly described. This claim was denied by the court and it was decreed that inasmuch as the parcel deeded in severalty by one of the owners could be set off to the grantee of such owner without prejudice to the other owners, that course should be followed.

In Cook v. Railway Co., 3 Tex. Civ. App. 125 (22 S. W. 1012), one of four cotenants conveyed in fee a right of way across the common estate, to the railroad company. After this deed was made, the four cotenants divided the balance of the estate equally. Thereafter, the three non-granting cotenants brought suit against the railroad to recover their interest in the right of way. Their right to recover was denied by the court which, after adverting to the fact that the cotenants had partitioned the balance of the common estate among themselves without making the railroad a party, said:

“Such proceedings were equivalent to a recognition of the right of the defendant to have the land set apart to it, because all of the rest of the land was appropriated by the plaintiffs, and the defendant could not have a proportional part of the land set apart to it elsewhere in the tract, if it should appear inequitable for it to retain the identical tract conveyed to it by the plaintiffs’ cotenants.”

See, also, Barnes v. Lynch, 151 Mass. 510 (24 N. E. 783, 21 Am. St. Rep. 470), and Soutter v. Porter, 27 Me. 405.

We have seen that the nongranting cotenant may not disregard the deed of his granting cotenant and treat it as a nullity. While such deed cannot be permitted to operate to his prejudice, nevertheless it imposes upon him an obligation to do no act which would impair the equities created by his cotenant by the execution of the deed. If dissatisfied with the act of his cotenant, he can at once commence proceedings in partition, making the individual grantees of his cotenant parties thereto. In such proceeding, his rights will be fully protected and the rights of the individual grantees will not suffer, if they can be preserved without injury to the interest of the nongranting cotenant. This right of the nongranting cotenant is clear, while the right of the grantee of a specific parcel to demand partition of the entire estate is, at least, doubtful. See Campau v. Godfrey and Mee v. Benedict, supra. The nongranting cotenant may, of course, give formal assent to the unwarranted act of his granting cotenant, in which event the individual grantees take exactly what the deed purports to convey. Or he may by a course of dealing with the balance of the common estate, in which he totally disregards the equitable rights created by his co-tenant’s deed, be held to have so acted in recognition and ratification thereof. This ratification, if clearly made out, would and ought to have the same effect as a formal assent.

My Brother Ostrander holds that ratification has not been made out. To this I cannot assent. Harvey’s deeds to complainants’ grantors were made and recorded in 1867 and 1869, and the grantees therein named immediately went into possession thereunder. The title to the balance of the common estate appears to have remained in Harvey and Reynolds until about February 1, 1871. On that day, by separate instruments, Harvey and Reynolds leased the mineral rights in a very large proportion of the balance of the cotenancy to one Edward Breitung for a long term of years, upon royalty. These leases refer to each other and in effect amount to a joint conveyanee. They affect only the mineral estate, title to which was common in the grantors, and under them millions of tons of ore have been removed and the royalty thereon paid to either Harvey or Reynolds, or their respective successors in title. This amounted in fact to a partition of the common (mineral) estate to the extent said estate was reduced by the removal of ore. In joining in this lease, Reynolds acted with constructive notice, and, in my opinion, actual knowledge of Harvey’s deeds of the parcels here in dispute. Harvey’s grantees were in possession, which possession put all parties in interest upon inquiry. Edwards v. McKernan, 55 Mich. 520 (22 N. W. 20). See, also, Fuller v. Swensberg, 106 Mich. 305 (64 N. W. 463, 58 Am. St. Rep. 481); Campau v. Barnard, 25 Mich. 381; Tharp v. Allen, 46 Mich. 389 (9 N. W. 443).

He likewise had knowledge of the infirmity of a conveyance by one of two cotenants, as is indicated by the letter written by his son and attorney in fact, William C. Reynolds, in his interest to Edward Breitung during the negotiations for the lease. Harvey had already executed a lease to Breitung, covering his interest in the minerals underlying the common estate. Reynolds writes:

“Your present lease from Harvey is, of course, not worth anything, standing by itself, because a tenant in common cannot thus dispose of his interest in a specific part of the common property. This rule of law is well settled. But if father and Harvey join, it would make you secure.”

This letter is dated December 13,1870, more than three years after the first of Harvey’s deeds to complainants’ grantors had been recorded.

In 1870 or 1871 Reynolds, desiring to partition the estate held by himself and Harvey, had two courses open to him. He might give his assent to Harvey’s conveyances, or he might resort to the court for a partition, making Harvey’s grantees parties to his proceeding. He chose the former alternative, and there appears to have been every reason why he should do so. In the first place, he had no interest in the surface of the lands conveyed by Harvey. Secondly, the record clearly establishes the fact that the mineral deposit was not supposed to underlie those parcels; and lastly, by ratifying Harvey’s deeds and surrendering his rights (then supposed to be valueless) in the minerals underlying those lands, he placed himself in a position to deal with the remainder of the common estate, known to be of great'value, unhampered by the necessity of determining the nature and extent of the equitable rights created therein by the warranties in Harvey’s deeds.

It is clearly established, upon the record, that if Reynolds had chosen to repudiate Harvey’s deeds and demand partition of the common estate, the interests of Harvey’s grantees would have been fully protected, for his interest in the balance of the cotenancy was many times greater than Reynolds’ interest in the small parcels conveyed by him to complainants’ grantors. There is no doubt that in such a proceeding, taking into consideration the large area of the common holding, the parcels conveyed by Harvey would have been set off to his grantees according to the description contained in his deeds. The mere fact that it was difficult or even impossible to partition the mineral estate by metes and bounds with absolute equity, in no wise changed or lessened the legal obligation resting upon Reynolds to recognize, and, so far as was possible without injury to himself, protect the equities created by the deeds of his cotenant.

The acts of Reynolds and Harvey and their several successors in the title which accomplished the removal of the ore, and the partition pro tanto of the common estate, were matters of record of which Harvey’s individual grantees had constructive notice. They must likewise have had actual notice of the diminution of the estate, for many mines were opened and enormous quantities of ore removed therefrom in their immediate vicinity. Inasmuch as these acts were inconsistent with a repudiation by Reynolds of Harvey’s deeds, complainants’ grantors doubtless believed, and they were justified in believing, that Reynolds had ratified the grants made by Harvey to them and was acting in recognition thereof. This disposes of the question of laches. Reynolds could, by his acts, perfect the title of Harvey’s grantees. If he did so, no action on the part of the complainants or their grantors was necessary until a claim was set up by Reynolds’ grantees to an interest in their lands.

The defendants together hold a very large part of the interest of both Reynolds and Harvey in the common estate, as it stood after Harvey’s deeds to complainants’ grantors, less, of course, the ore removed. The defendant the Arctic Iron Company acquired title to Reynolds’ mineral interest in a part of the lands here in question, by quitclaim deed from Edward Breitung, in 1883. Breitung and one William P. Healy had, in 1882, jointly purchased from Reynolds his interest in a large tract, including the parcels here in dispute. Instead of deeding to Healy his half of the interest so purchased, the defendant the Arctic Iron Company was organized, and the stock divided equally between Breitung and Healy. The grantee in a quitclaim deed is not a bona fide purchaser, and takes no more interest than his grantor has to convey. Messenger v. Peter, 129 Mich. 93 (88 N. W. 209), and cases cited. Healy was sworn and testified that, at the time of the purchase in 1872, he knew, from an examination of the title, of the Harvey deeds and their warranties. At that time, Edward Breitung had, by various conveyances, become the owner of the entire interest of Harvey in a large part of the common estate. This interest he had acquired long after the making and recording of Harvey’s individual deeds, and with constructive notice and probably actual knowledge of the warranties therein contained.

Defendants Mary Kaufman and Edward N. Breitung are respectively widow and sole heir of Edward Breitung, deceased, and are now the owners of his interests by inheritance. They set up a claim to one-half of the minerals underlying that portion of the lands in dispute, not deeded by quitclaim by Edward Breitung to the Arctic Iron Company. The position of these defendants. is no stronger than that of their ancestor, and if he could not assert such a claim, they will not be permitted to do so. Quite aside from the legal considerations involved, which are conclusive against the contention of the defendants, I am of opinion that, inasmuch as by the acts of defendants’ grantors a partition in which the equitable rights of complainants can be protected has now become impossible, it would be grossly inequitable to permit them to take advantage of those acts and maintain the claims now asserted by them.

The decree of the court below should be reversed, and a decree entered in this court in accordance with the prayer of complainants, with costs of both courts.

Bird, C. J., and Hooker, Moore, and McAlvay, JJ., concurred with Brooke, J.

On February 26, 1857, James L. Reynolds, who was owner in fee simple of a large tract of land, sold and conveyed a portion thereof, situated on sections 1, 2, 3, 4, 5, 6, 7, and 8, in township 47 north, of range 26 west, on sections 31 and 32 in township 48 north, of range 26 west, and on section 6, township 47 north, of range 25 west, to Charles T. Harvey. His deed of the said lands recited:

“Which lands are sold with full warranty; subject, however, to the conditions and agreements of the contract marked 'A’ herewith appended between the parties hereto concerning the undiscovered minerals on said lands.”

The contract A referred to reads as follows:

"This memorandum of agreement, made this 26th day of February, by and between James L. Reynolds, of Chicago, State of Illinois, of the first part, and Charles T. Harvey, of Marquette county, State of Michigan, of the second part, witnesseth:
' That the party of the first part has this day conveyed by warranty deed (to which this contract is attached), to the party of the second part certain lands therein described, amounting to four thousand one hundred and sixty-two acres for the consideration of the sum therein named, and also in the further consideration of reserving to himself an undivided half interest in and to all the minerals which have been or may be discovered on the premises referred to as conveyed, together with the right of having or acquiring so much of the surface privileges as may be necessary to mine or develop the same, by paying one-half of the equitable or appraised valuation per acre, for the surface thus used or acquired: Provided not more than twelve dollars per acre shall be adjudged to be the value of unimproved lands taken for such mining purposes, besides which, however, full compensation shall be paid to the party of the second part or his assigns for damages, which may by such mining or occupancy ensue to the business connected with or improvements placed upon such land, by the party of the second part or his.assigns, such payment to be made by the party of the first part on an equitable, agreed value, or upon an appraised valuation made by disinterested referees, one designated by each party (hereto) and they choosing a third, and the decision of the three thus chosen to be final, and when such payment is made he of the first part shall be entitled to enter upon and occupy any portion of said lands for mining purposes as aforesaid solely. Provided, and it is agreed, however, that the party of the second part, or his assigns, shall have the sole right, free of cost or compensation to the party of the first part, to mine for their own use or for manufacturing purposes within the present limits of Marquette county, any mineral ores, or marble found on any of the premises herein referred to, but shall have no right to sell to other parties for exportation as aforesaid without accounting to the party of the first part for his joint half interest therein.
“In witness whereof, the parties hereto have set their hands and seals the day and year first above written.
“ Charles T. Harvey.
“ Jas. L. Reynolds.”

The deed and the contract were duly recorded in the office of the register of deeds for Marquette county in July, 1857. In February, 1871, a further instrument was executed by these parties, in explanation of the contract A, but in no way changing the provisions which are of importance here. It was duly acknowledged and was recorded March 4, 1871.

After receiving his deed, and in April, 1857, Harvey conveyed more than 2,600 acres of this land to one grantee and in the succeeding year conveyed another and smaller portion to the same grantee, subject to the reserved rights of Reynolds in the minerals. He also platted some of the land on section 6, township 47 north, of range 26 west, but without recording any plat, into parcels known as lots 1 to 13, inclusive. They were each 10 rods wide, bounded on the north by the quarter line through center of the section, and were not all of the same length. In April, 1866, he conveyed by warranty deed to Edward Breitung lots 10 and 12 and other lands. Latex’, Breitung and wife by quitclaim deed reconveyed all claim under the warranty as against the reserved rights of Reynolds, "inadvertently omitted to be mentioned ” in the deeds of warranty. In January, 1867, Harvey sold and conveyed, by metes and bounds, for an actual and expressed consideration of $100 each, to three grantees, three of these lots, viz., lots 8, 9, and 11. He executed to the purchasers, respectively, warranty deeds containing no reservations or exceptions. These deeds were duly recorded, the purchasers entered into possession and cleared, improved, and built upon the premises. The parcels contain, respectively, acres, 6-/^ acres, and 6^- acres, and for some 40 years have been assessed for taxation as lots 8, 9, 11. It was not supposed at the time that there were ore deposits in the platted lands. Large bodies of ore have been opened in some of the lands conveyed by Reynolds to Harvey, some of them in the 1,400 acres of which Harvey remained owner in 1858, a number of mines have been and are being worked and large quantities of iron ore have been taken therefrom. The property in question in this suit is the undivided one-half of such minerals as are contained in the three parcels of land (lots 8, 9, 11) conveyed by Harvey by his warranty deeds in 1867. Complainants have acquired the rights of Harvey’s grantees. The defendant Arctic Iron Company has succeeded to such rights as Reynolds had in a portion of said lands and minerals, and the defendants Breitung and Kaufman have acquired like rights in the remainder.

It is charged in the bill of complaint that the lands contain valuable deposits of iron ore which could be profitably mined by complainants but for the asserted right of defendants to an undivided one-half of such ore. The answers of defendants admit complainants’ ownership of an undivided one-half of the mineral deposits. They assert that defendants own the other undivided half thereof, with such rights in the surface of the land as are stated and secured in the said contract A. In each of the answers, also, the source and devolution of the defendants’ title are set out with prayers for affirmative relief. The prayer of the bill and th¿ relief prayed for in the answers is that said mineral rights may be quieted.

In the answer of the complainants to the cross-bill of the defendant Arctic Iron Company, after reciting various dealings with the Reynolds-Harvey tract, the said platting of a portion of the lands, the sale and conveyance of the particular parcels here in question and others, it is alleged:

On large portions of said original tract of land embraced in said sections five (5), six (6), seven (7), and eight (8), other than the lands and lots in controversy in this cause, claimed by complainants, and similar lots sold by said Harvey as aforesaid, and other than the lands so conveyed to the Pioneer Iron Company, as hereinbefore stated, there exist and for a long time have been known to exist, large, extensive, and valuable deposits and mines of iron ore, and such mines have been especially discovered, located, and developed upon the property conveyed by and through said Harvey to said Breitung, and upon the lands claimed and held by said Breitung, his heirs, representatives, and grantees, as well as upon the lands conveyed to the Negaunee Iron Company, as aforesaid; that the deposits and mines of iron ore so existing upon those portions of said lands which were acquired by said Edward Breitung, as aforesaid, and which were acquired by said Negaunee Iron Company (being lands other than those claimed by these complainants and similar lots conveyed by said Harvey, as aforesaid), far exceed in extent and value the value or extent of any minerals or deposits of ore upon the lands claimed by these complainants, and the other lots so sold by said Harvey; and upon any partition of said lands between said Charles T. Harvey and said James L. Reynolds and his heirs and devisees, said Csesar Charles, Máxime Perin, and Jean Blais (grantees of said Charles T. Harvey, as aforesaid), and their grantees, would have been entitled to have said parcels of land so conveyed to them set off to said Charles T. Harvey, so that his title to the lands so set off to him would inure to their benefit under and through said warranty deeds of said Charles T. Harvey to them. Said J ames L. Reynolds, said Edward Breitung, and the said Arctic Iron Company have long acquiesced in and consented to the rights of complainants and their grantors, as owners in fee simple of the property described in the bill of complaint, and by their acts and dealings herein-before set forth, they have recognized the said ownership of these complainants in such lots and lands. By reason of the conveyances aforesaid, and the aforesaid dealing with said lands by Charles T. Harvey and his grantees, and said James L. Reynolds, his devisees and their grantees, a partition of said lands, whereby the equities of said parties could be so adjusted as to protect the rights and interests of complainants otherwise than in the specific lots themselves, has become impossible, and to deprive these complainants of said property or any interest therein would constitute a fraud upon their rights, by reason of which all of said parties, and particularly said Arctic Iron Company, are estopped to deny that said parcels of land and all interests and rights therein belong to these complainants in fee simple.”

At the circuit it was held that the ores were owned in common by complainants and defendants, and a decree was made dismissing the bill. Complainants have appealed.

Ostrander, J.

(after stating the facts). Upon this record and the applicable rules of law, is the contention of complainants, that they are owners of all minerals in the particular parcels of land, viz., lots 8, 9, 11, of Harvey’s plat, sustained ?

It will be convenient to first ascertain and state the relations between Reynolds and Harvey which resulted from the conveyance and the contract which have been referred to. In presenting this case in the court below and in this court the term “estate in fee,” has been applied to the mineral estate, and the terms, “cotenancy” and “tenants in common,” have been employed to denote the manner in which the mineral estate was held and the relations of those interested therein to the said estate and to each other. Indeed, complainants’ case depends upon the application to the facts of rules of law controlling and affecting estates owned by tenants in common.

The deed from Reynolds to Harvey and the accompanying agreement were examined in this court in Negaunee Iron Co. v. Iron Cliffs Co., 134 Mich. 264, 279 (96 N. W. 468), and it was held that the contract was a part of the deed, the two should be construed as one instrument, and that Reynolds did not convey the entire fee to Harvey and then repurchase by the contract an interest in the lands, but that he carved the estate into two parts, conveying one and retaining the other.

Ordinarily a deed of land conveys the soil and all which it contains, within the boundaries of the particular description. The owner of the fee of land may, however, convey the surface rights and reserve a fee in the mineral rights, and, having done so, each estate will be subject to the law of descent, devise, and conveyance. Kincaid v. McGowan, 88 Ky. 91 (4 S. W. 802, 13 L. R. A. 289, and note). Such a severance of estates may be worked, also, by a grant or a reservation of less than a fee estate in the minerals (Armstrong v. Caldwell, 53 Pa. 284), and when such severance, however brought about, takes place, possession of the surface does not, as to the minerals, give rise to the presumptions usually attendant upon such possession. 1 Cyc. 994; Gill v. Fletcher, 74 Ohio St. 295 (78 N. E. 433, 113 Am. St. Rep. 962); Marvin v. Min ing Co., 55 N. Y. 538 (14 Am. Rep. 322); Seaman v. Vawdrey, 16 Vesey, 390. It is said (Freeman on Cotenancy, § 88) that a “tenancy in common may exist in every species of property, real, personal, or mixed,” and undoubtedly this is literally true. It has been held, too (Canfield v. Ford, 16 How. Prac. [N. Y.] 473; Id. 28 Barb. [N. Y.] 336; Hughes v. Devlin, 23 Cal. 505), that an estate in minerals, being an estate in fee, may be partitioned.

It is nevertheless important to keep in mind, in cases where severance of the mineral from the surface estate has been brought about in a large tract of land, not only the terms of the instrument by which the severance is worked, but also the character and extent of the mineral estate. It is manifest that if but two or three deposits of ore existed in 1,400 acres of land, each deposit lying at a considerable distance from the others, while an estate in fee in all the mineral might exist it would be substantially like an estate of inheritance in widely separated parcels of land, and each might be treated as a distinct freehold. The sale by a tenant in common of his undivided interest in one deposit would not necessarily, in such a case, make the purchaser a tenant in common in the whole mineral estate, and partition might proceed as to each deposit of ore. See Butler v. Roys, 25 Mich. 53 (12 Am. Rep. 218). It is not claimed that there is ore in all of the land deeded by Reynolds to Harvey or in all of the 1,400 acres remaining unsold in 1867. It is matter of common knowledge, too, and if it were not it is made apparent by the record in this case, that ores lie at different levels below the surface, are of different qualities and values. The instrument called “A,” to which reference has been made, anticipates and provides for the dealing with the mineral estate by either party. It is apparent that the enjoyment of the estate by mining and removing the ores is contemplated, and, so long as the right of the other to compensation is recognized, either was at liberty to mine and to sell ore. Indeed, for certain uses, Harvey and his assigns were entitled to mine ores without accounting to Reynolds. If Reynolds, his lessees, or grantees, desired use of the surface in conducting mining operations, if might be acquired upon terms. In the size of the tract of land, ignorance of the extent and value of the deposits of ore, the usual methods of enjoying such an estate, and convenience, may be found reasons for the terms of the contract by which, and by' the deed, the severance of the estates, the relations of the parties and their assigns, were established. Therefore, while the estate in the minerals may be considered as an estate in fee for the purposes of conveyance, of devise, and descent, and as an estate of which Harvey and Reynolds owned each an undivided one-half, it was one expressly intended to be divided, from time to time, by either, and the terms, “tenancy in common” and “tenants in common,” are apt terms to denote the character of the estate and the relations existing between Reynolds and Harvey only when their ordinary meaning, in the law, is somewhat modified.

The pleadings and the arguments of counsel proceed upon the theory that the deeds of Harvey which are relied upon conveyed some interest in the minerals. Defendants contend that they conveyed to the grantees no more than an (his) undivided one-half of the ores which are contained in the land described in the deeds. Complainants, as already appears, contend that the earlier deeds made by Harvey, they having been ratified and confirmed by Reynolds, severed from the original tenancy the lands described therein, leaving Reynolds and Harvey tenants in common in such mineral as was contained in the remainder of the land; that as to the purchasers of the lots in question, while they had constructive notice of the existing cotenancy and in law took subject to the rights of Reynolds as shown by the record, yet they received rights as against Harvey and his share in the tenancy in common, “that the title as conveyed by the deeds from Harvey be made good, which rights could not be disregarded by Reynolds. ” It is further claimed (I quote from the brief)—

“ That with such right the grantees openly occupied the premises and claimed the entire title thereto for more than 40 years, and that with notice of these deeds and the rights conveyed thereby, Reynolds and his grantees had recognized and ratified and consented to the conveyances so made; and they had so dealt with the remaining parts of the cotenancy as to preclude them from denying that they had ratified and made good the conveyances by Harvey to his said grantees.”

No one questions the soundness of the rule which accords to the purchaser from a cotenant, in severalty, of a portion of the common estate, the right, in equity, to succeed upon partition to some share in the estate. And the rule that cotenants may, after notice of such a purchase, so deal with the estate as to ratify and confirm the attempted severance and partition by one cotenant is one familiar to the profession. See Freeman on Cotenancy, §§ 305, 307; Campau v. Godfrey, 18 Mich. 38 (100 Am. Dec. 133); Butler v. Roys, supra; Mee v. Benedict, 98 Mich. 260 (57 N. W. 175, 22 L. R. A. 641, 39 Am. St. Rep. 543); Young v. Edwards, 33 S. C. 404 (11 S. E. 1066, 10 L. R. A. 55, 26 Am. St. Rep. 689). These rules cannot properly be applied in this case. One reason for not applying them has been given. It arises out of the original agreement of the parties, which, in substance and effect, provides that each, and the assigns of each, may deal with portions of discovered ore bodies — with the mineral estate. It was contemplated that as mines were opened and worked corresponding partition should take place. They subdivided the estate into separate parcels, not by metes and bounds, or by particular description, or in advance of the use of particular portions thereof, but none the less actually. In this sense partition — division—of the mineral estate has been going on for years, with the knowledge of which fact, as well as of the original recorded agreement, all parties in interest are chargeable. The learned trial judge said:

“ If Harvey had the right to plat the property and sell what he owned, as it seems to me he had, this operated to seggregate the property from the mass, without any act on the part of Reynolds.”

Decision may be safely rested here. There are, however, other considerations which compel me to reach the conclusion that complainants are not entitled to more than the deeds of Harvey gave them.

No obligation rests upon one tenant in common more than upon another to bring about a partition of the common estate. Ratification, in fact, by Reynolds, or by any one representing his interest, of a conveyance by Harvey of a larger estate in the minerals than he owned is not made out. As has been stated, complainants as well as defendants are chargeable with knowledge of the actual course and sequence of events affecting the property. The proposition that the vendees of Harvey may sit by for 30 years before discovering that they have any interest in the mineral estate, and for years thereafter before attempting to enforce such rights as they now allege in the common estate, is not one which appeals to a court of equity. Indeed, it appearing that but $100 was paid for each of the parcels of land in dispute, and that it was supposed by no one that there was mineral in the land conveyed, equity should, after this lapse of time, leave the grantees of Harvey to such remedies as the law affords them.

The decree should be affirmed, with costs.

Blair, J., concurred with Ostrander, J.


source: Caselaw Access Project

author: Brooke, J. Brooke, J.

license: Public Domain

text:
    BROWN & BROWN COAL CO. v. ANTEZAK.
    Justice’s Court — Bankruptcy—Discharge of Appeal Bond.
    A discharge in bankruptcy of the principal, who has executed an appeal bond in attachment proceedings commenced in justice’s court, and who files a petition in bankruptcy, after taking his appeal from the judgment of the inferior court, does not discharge the surety on the bond, where the bond provides that the obligation shall be void if the appellant shall prosecute his appeal with all due diligence, etc., and pay the judgment and costs which may be rendered against him, etc.
    Error to Wayne; Murphy, J.
    Submitted October 19, 1910.
    (Docket No. 85.)
    Decided December 7, 1910.
    Rehearing denied March 20, 1911.
    Assumpsit in justice’s court by the Brown & Brown Coal Company, a corporation, against Stanislaus Antezak. From a judgment for plaintiff, defendant appealed to the circuit court, where plaintiff asked for judgment against the surety upon defendant’s appeal bond; defendant’s liability having been discharged by an adjudication of bankruptcy. A judgment for defendant surety is reviewed by plaintiff on writ of error.
    Reversed.

      E. T. Berger, for appellant.

      Frank W. Atkinson, for appellee.
    This action was commenced by attachment in the justice’s court of Detroit, December 30, 1907. On January 2, 1908, the attached property was released upon the giving of the statutory bond. On February 18, 1908, judgment was rendered in favor of the plaintiff for $405.94 and costs. On March 2, 1908, an appeal was taken to the circuit court for the county of Wayne. In perfecting the appeal the usual statutory bond was given; one John Knuth becoming surety thereon. While said appeal was pending, and 13 months after it was taken, the defendant, on April 7, 1909, filed a voluntary petition in bankruptcy in the United States district court. On July 16, 1909, the appeal not having been prosecuted or determined, plaintiff made a motion to dismiss. On July 26, 1909, defendant secured an order staying proceedings in the Wayne circuit court until the final determination of the bankruptcy proceedings in the United States district court. In the bankruptcy proceeding the judgment here in question. was listed as a liability of the bankrupt, and a final discharge was by him obtained on September 21, 1909. On October á, 1909, defendant filed an amended plea, giving notice of his discharge, and on December 10, 1909, the case came on for trial in the Wayne circuit court. No defense upon the merits was interposed by defendant, but it was urged in his behalf that his discharge in the bankruptcy proceeding operated, not only to cancel his indebtedness to plaintiff, but likewise released the surety upon the appeal bond. It was conceded upon the trial that, unless the discharge of defendant released the surety, plaintiff was entitled to a judgment for the amount of the judgment in the justice’s court, with interest. There being no question of fact involved, by consent of counsel, the case was tried by the court without a jury. A verdict was directed for defendant, upon which judgment was entered. Plaintiff has removed the case to this court by writ of error.
   Brooke, J.

(after stating the facts). From the foregoing statement of facts, it will be seen that the only question to be determined is whether or not the discharge which defendant obtained in the bankruptcy proceedings operates as a bar to the taking of a judgment against his surety upon the appeal bond. The obligation of the bond is as follows:

“ Whereas, judgment was rendered on the 26th day of February, A. D. 1908, by Louis Ott, one of the justices of the peace in and for the county of Wayne, in favor of the above-named Brown & Brown Coal Company, as plaintiff, and against the above-bounden Stanislaus Antezak, as defendant, for the sum of 405.94 dollars, damages, and 3.00 dollars, costs of suit, and whereas the above-bounden Stanislaus Antezak, conceiving himself aggrieved by said judgment, has appealed therefrom to the circuit court for the county of Wayne: Now, therefore, the condition of the above obligation is such, that if the above-bounden Stanislaus Antezak shall prosecute his said appeal with all due diligence to a decision in the said circuit court, and if a judgment be rendered against him in the said circuit court, shall pay the amount of such judgment, including all the costs, with interest thereon, and in case the said appeal shall be discontinued or dismissed, if the said Stanislaus Antezak shall pay the amount of said judgment rendered against him in said justice court, including all costs with interest thereon, then this obligation to be void, otherwise in force.
[Signed] “Stanislaus Antezak. [Seal.]
[Signed] “John Enuth.” [Seal.]

Section 16, National Bankruptcy Law 1898, provides:

“The liability of a person who is a co-debtor with, or guarantor or in any manner a surety for, a bankrupt, shall not be altered by the discharge of such bankrupt.” Act July 1, 1898, chap. 541, 30 U. S. Stat. 550 (U. S. Comp. Stat. 1901, p. 3428).

This identical question was considered in the case of Knapp v. Anderson, 15 N. B. R. 316. The language of the bankrupt act of 1867 is, in effect, the same as that of the act of 1898 above quoted. Act March 2, 1867, chap. 176, § 33, 14 U. S. Stat. 533. The court, after discussing the obligation of an indorser, said:

“So with the surety. He agrees to pay if the event happens which matures his obligation to pay. He assumes to pay, and incurs the obligation to do so, which may become absolute. The design of an undertaking and the effect of it are proper matters of consideration on the question. The undertaking stays all proceedings, and the effect is to prevent the creditor from enforcing his judgment by execution, and in that mode obtaining his debt out of the property of his debtor. The sureties in the undertaking prevent him from availing himself of this right and opportunity, to which he is entitled by the law of the land and by his superior diligence. This right can be destroyed in all cases if the debtor, by appeal, and by subsequent proceedings in bankruptcy before a judgment of affirmance, can release himself and his sureties as well. It was doubtless to prevent such and kindred results that the law declared the discharge should not release or affect any person liable for the same debt for or with the bankrupt, either as partner, contractor, indorser, surety, or otherwise. It was a personal relief given to the applicant, or forced upon him, and not to those equally bound with him to answer his creditor. * * * A surety is rarely primarily liable. His obligation usually depends upon a contingency, which is either an event to occur, or the failure of the principal to pay or to do the act required.”

In Holyoke v. Adams, 10 N. B. R. 370, it was held that a discharge in bankruptcy did not release the sureties upon a bond given in attachment proceedings, commenced more than four months before the bankruptcy proceedings were launched.

The case of In re Albrecht, 17 N. B. R. 287, Fed. Cas. No. 145, arose in Michigan, and the opinion was written by Judge Brown, later Justice of the United States Supreme Court. In that case, the authorities are reviewed, and the conflict between them is noted. The court concludes:

“ I deem it inconsistent with the general purpose of the act to hold that the lien of a creditor, lawfully acquired by his diligence, shall be lost by the debtor giving a bond to satisfy the judgment, an action entirely beyond the control of the creditor, and one which was designed to secure, not to defeat, the ultimate payment of the debt. * * * But under the construction given by the Massachusetts courts, the preference of the attaching creditor is lost, if the debtor is sufficiently responsible to obtain a bond, while it is preserved, if his situation is so desperate as to make the release of the property impossible.”

In Hill v. Harding, 107 U. S. 631 (8 Sup. Ct. 404), Mr. Justice Gray, speaking for the court, said:

“ The stay does not operate as a bar to the action, but only as a suspension of proceedings until the question of the bankrupt’s discharge shall have been determined in the United States court sitting in bankruptcy. After the determination of that question in that court, the court in which the suit is pending may proceed to such judgment as the circumstances of the case may require. If the discharge is ref used, the plaintiff, upon establishing his claim, may obtain a general judgment: If the discharge is granted, the court in which the suit is pending may then determine whether the plaintiff is entitled to a special judgment for the purpose of enforcing an attachment made more than four months before the commencement of the proceedings in bankruptcy, or for the purpose of charging sureties upon a bond given to dissolve such an attachment.”

This case was again before the United States Supreme Court (130 U. S. 699 [9 Sup. Ct. 725]), where it said:

“If the bond was executed before the commencement of proceedings in bankruptcy, the discharge of the bankrupt protects him from liability to the obligees, so that, in an action on the bond against him and his sureties, any judgment recovered by the plaintiffs must be accompanied with a perpetual stay of execution against him; but his discharge does not prevent that judgment from being rendered generally against them ”—citing Wolf v. Stix, 99 U. S. 1.

A very well considered case involving the question in dispute will be found in Fisse v. Einstein, 5 Mo. App. 78. After discussing the Massachusetts decisions and those of some other States to the contrary, the court says:

“ To hold that the surety in this appeal is to be released because there can be no formal entry of judgment against his principal in the appellate court, though there is a solemn admission in that court of the perfect correctness and justice of the judgment from which this appeal is taken, is to denaturalize the transaction, and to give an interpretation to the appeal bond quite foreign to its scope and meaning. It is to say that the surety, whilst engaging to pay the judgment appealed from if the judgment debtor becomes insolvent, is to be released merely because the judgment debtor becomes insolvent. * * * The insolvency of the principal is the very contingency against which the appeal bond was intended to provide.”

See, also, Farrell v. Finch, 40 Ohio St. 337; 5 Cyc. p. 401, and cases cited.

We do not overlook the fact that several States, notably Massachusetts (see Carpenter v. Turrell, 100 Mass. 452, and Hamilton v. Bryant, 114 Mass. 543), have given a different construction to the statute. This' is, however, a Federal statute, and we are of opinion that the construction it has received in the Federal courts should control, if that" construction is not inconsistent with our own decisions and is, as we believe it to be, in accordance with the principles of justice.

It is urged that no Federal question is involved. While in one sense that may be true, yet, under the record as it stands, the only obstacle to the recovery of a judgment by the plaintiff against both principal and surety is the fact that a Federal law says that under a certain contingency (which has arisen) the principal is relieved from the debt. That same law, in terms, and as construed by the Federal courts, says that the release of the principal shall not operate to discharge his surety. Nor is this construction one which is unduly harsh as to the surety. In signing the obligation, he may be presumed to have had in mind the contingency that his principal might become bankrupt, thus making the surety’s liability upon the bond certain.

We have not heretofore discussed the conditions of the bond itself. The first condition is:

“That if the above-bounden Stanislaus Antezak shall prosecute his said appeal with all due diligence to a decision in the said circuit court,” etc.

Now, did the principal comply with this condition of his bond ? Instead of prosecuting his appeal, he voluntarily sought relief through bankruptcy in the Federal court, and interposed that proceeding first for the purpose of securing a stay of proceedings, and finally as an absolute bar to a recovery. These acts are clearly inconsistent with his obligation as expressed in the bond. Whether or not they constitute such a breach thereof as would render the surety liable we do not decide, for, in our view of the decisions, the liability of the surety would remain the same even though the bankruptcy were involuntary.

Our attention is called to the case of Bryant v. Kinyon, 127 Mich. 152 (86 N. W. 531, 53 L. R. A. 801). We there held that a discharge in bankruptcy released the surety upon a capias bond. The condition of that bond is that the principal “shall pay the costs and condemnation of the court or render himself into the custody of the sheriff,” etc.

The right of the surety to surrender his principal extends eight days from the commencement of suit on the recognizance, after the timely and regular issue and return “not found” of a body execution. If the debt for which the original suit was brought is extinguished by the bankruptcy proceeding, no body execution can ever issue, and the contingency which fixes the liability of the surety can never arise. The case at bar does not present this difficulty. Here, as stated by the United States Supreme Court, a judgment may issue against the principal accompanied by a perpetual stay of execution, and the surety may be compelled to answer according to the terms of his obligation.

The judgment is reversed, and a new trial ordered.

Hooker, Moore, McAlvay, and Blair, JJ., concurred.

ON MOTION TO AMEND JUDGMENT.

Brooke, J.

A motion is made in this case to amend the opinion. The case is reported ante, 110 (128 N. W. 774). The conclusion of the opinion is: “The judgment is reversed and a new trial ordered.” It is now urged by plaintiff, in support of its motion to amend, that the case was tried by the court below upon stipulated facts, and that the only question in the case was one of law, which has been determined adversely to the contention of defendant, and that, therefore, it is entitled to a judgment without further trial.

The motion is granted, and the opinion will stand amended to read as follows:

“The judgment is reversed, and the case is remanded to the circuit court, where judgment will be entered for the plaintiff in the amount of the judgment in the justice’s court, with interest.”

Hooker, Moore, Mo Alva v, and Blair, JJ., concurred.


author: Ostrander, J.

text:
    McGRAW v. MUMA.
    Cancellation of Instruments — Deeds—Competency—Mistake.
    Under evidence that deeds were executed by a mother to her daughter, of all her real property, reserving only a life estate, while the mind of the grantor was enfeebled, and while she was in a condition that rendered her, to a certain extent, incompetent to understand business matters, and upon proof tending to show that the grantor had no intention of parting with title to the property, but failed to appreciate the legal effect of the conveyances, which was not fully explained to her, a decree canceling the deeds on the ground of mistake is warranted.
    Appeal from Lapeer; Law, J., presiding.
    Submitted June 13, 1910.
    (Docket No. 46.)
    Decided December 30, 1910.
    Bill by Bridget McGraw, by George I. Lister, her guardian, against Bridget Muma, to set aside two deeds. •From a decree for complainant, defendant appeals.
    Affirmed.

      B. F. Beed, for appellant.
    Geer, Williams & Halpin, for appellee.
   Ostrander, J.

In this case the bill of complaint is filed by a mother, by her guardian, who asks for a decree setting aside and declaring to be void two certain deeds of real estate which she executed and delivered to her daughter and only child, reserving a life interest in herself. No consideration was paid by the daughter, and the reason asserted for cancellation of the instruments is that on the day of their execution, July 16, 1908, complainant, by reason of ill health and mental derangement, was wholly incompetent to transact any business whatever or of knowing or understanding the legal effect of the deeds, and that said deeds were executed and delivered at the earnest solicitation of her daughter, who is not, however, charged with having any knowledge of this alleged condition of her mother. In September, 1908, a reconveyance was asked for by complainant and by her guardian, and was refused. Complainant is more than 70 years of age.

The answer denies that the mother was solicited or influenced to make the conveyances, denies that the mother was incompetent, and that she did not understand the legal effect of the transaction and of the instruments. It is alleged that in making these conveyances the mother was carrying out an intention which she had for a long time had and which she had expressed, and avers generally that, if the life estate reserved is insufficient for the wants of the mother, the daughter is ready and willing to furnish the means for her care and comfort.

Considerable testimony was taken at the hearing, and, when it was concluded, the circuit judge who heard the case considered and filed a written decision concerning two questions. As to the competency of the complainant, he finds that there is no direct testimony tending to show that her actual mental condition on the very day the instruments were drawn was such as to render her incompetent to make them or to understand the nature of the act. The mother was a witness in her own behalf and the daughter gave her testimony, and the circuit judge had, what is usually an advantage in cases of this nature, the opportunity of seeing and hearing the witnesses.

We have read the record with some care, and reach the conclusion which was expressed by the circuit judge, and we also agree with him in saying that:

“ If her mental condition on that day was no different than it was both before and after that time, I should be constrained to find her mentally incompetent to make the deeds in question. There is testimony tending strongly to show it not reasonably probable that her mental condition was any better on July 16, 1908, than it was before that time or than it has been since.”

He did not, however, find as a fact that she was mentally incompetent on July 16, 1908. The other question considered relates to the intention of complainant in making any conveyance of the property; it being found as a matter of fact that she never desired or intended to sign any paper except one which would leave both the title and use of the property in herself so long as she lived, and that she gave her assent to the instruments which were executed under misapprehension of their legal effect. The principle applied to these facts as warranting a decree setting aside the deeds is that—

“If an agreement or written instrument or other transaction expresses the thought and intention which the parties had at the time, and in the act of concluding it, no relief, affirmative or defensive, will be granted with respect to it upon the assumption that their thought and intention would have been different if they had not been mistaken as to the legal meaning and effect of the terms and provisions by which such intention is embodied or expressed, even though it should be incontestably proved that their intention would have been different if they had been correctly informed as to the law. ”
“ If, on the other hand, after making an agreement, in the process of reducing it to a written form, the instrument, by means of a mistake of law, fails to express the contract which the parties actually entered into, equity will interfere with the appropriate relief, either by way of defense to its enforcement, or by cancellation, or by reformation to the same extent as if the failure of the writing to express the real contract was caused by a mistake of fact. In this instance there is no mistake as to the legal import of the contract actually made; but the mistake of law prevents the real contract from being embodied in the written instrument.” 2 Pomeroy’s Equity Jurisprudence, §§ -843, 845.

It is not important to set out the testimony in this opinion. On or about 10 days after the deeds were executed, the complainant manifested unmistakable evidences of mental derangement. Thereafter defendant asserted that her mother was insane, and sought to have her sent to an asylum for the insane. An investigation made by the supervisor of the township convinced him that complainant was not insane, but was not competent to take care of herself or her property. Defendant then instituted proceedings which resulted in the appointment of a guardian. We are satisfied that, while the term insanity may not describe the mental condition of complainant when she executed the conveyances in question, she was nevertheless in a condition which demanded that the significance of her act should be fully explained to her, and that it was not explained. We do not intimate that the notary who prepared the instruments was in fault. He was not a lawyer. We are satisfied that the circuit judge rightly concluded that she did not intend to pass the title to her land during her lifetime, and that the effect of the conveyances, which pass the title, but reserve the life estate, was not understood by her.

The decree is affirmed.

Hooker, Moore, McAlvay, and Brooke, JJ., concurred.


text:
    PEOPLE, ex rel. BIRD, v. GRAND RAPIDS-MUSKEGON POWER CO.
    1. Boundaries — Navigable Waters — Riparian Rights.
    The owner of land bordering on a stream, whether navigable or not, owns the bed of the stream to the thread thereof.
    S. Navigable Waters — Riparian Rights.
    Such public rights as exist in navigable streams are simply easements or privileges, and the adjacent owner may do as he pleases with the land under the water so long as he does not interfere with the public enjoyment.
    3. Same — Navigability.
    A stream is navigable when it is inherently capable of being used for the purposes of commerce, for the floating of vessels, boats, rafts, or logs.
    4. Same — Boards of Supervisors — Dams—Power to Permit.
    By section 4, Art. 18, Const, of 1850, and 1 Comp. Laws, §§ 2494, 2495, the public right of navigation in streams was intended to be protected; and the power given by the statute to supervisors of the several counties, relating to the privilege of damming streams by private parties, is thereby limited to the intended purpose.
    5. Same — Dams—Obstructions to Navigation.
    Under the statute, the boards of supervisors are given merely power to grant or refuse the petition of private parties, to dam navigable streams; and may not impose limitations on the right of the petitioner, except by limiting the time in which the work may be done.
    6. Same — Forfeiture of Franchise.
    And where the petition prayed for the privilege of constructing three dams, in a navigable stream, and the privilege or franchise granted by the board of supervisors required that all three dams be constructed in a specified time, or the rights of the petitioner should be forfeited, the limitation was ineffective to permit a forfeiture of the petitioner’s right in one of the three dams which he constructed within the period allowed.
    7. Same — Petition—Amendment.
    After obtaining the privilege asked, petitioner filed a second petition praying that the original resolution, set out in full, be amended so as to permit a change in the dimensions of the log chutes, in the dams. Without making other changes, the board of supervisors passed the original resolution as so amended. Held, that the action of the board merely constituted an amendment to the privilege already granted, and the fact that the petitioner included the forfeiture clause in the resolution recited in the second petition, did not constitute that clause a part of the petition.
    Quo warranto in the Supreme Court by the people of the State of Michigan on the relation of John E. Bird, attorney general, against the Grand Rapids-Muskegon Power Company, to test the right of respondent to maintain a dam in the Muskegon river.
    Submitted June 22, 1910.
    (Docket No. 129.)
    Decided December 30, 1910.

      Franz G. Kuhn, Attorney General, George 8. Law, Assistant Attorney General, and Joseph Barton, Prosecuting Attorney, for relator.

      Bundy, Travis & Merrick, for respondent.
    In October, in the year 1902, the board of supervisors of Mecosta county had before it, and considered, a request preferred by one David D. Erwin for permission to erect in said county three dams across the Muskegon river, one on the North £ of section 6, in town 13 North, of range 10 West, 25 feet in height, one on the S. E. J of section 20, in town 14 Nbrth, of range 10 West, 25 feet in height, and one on section 11 in the town last described, 35 feet in height. The description of land upon which each end of each dam should rest is stated, the material to be employed in construction is stated, and it is also stated that in each dam there would be constructed fish chutes or ladders and a log chute, of given dimensions, in the middle of the channel of the said river. The purpose of building the dam was stated to be “generating electricity to be used as a motive power for manufacturing purposes and operating electric railways, lighting plants, and for all other purposes to which electricity may be properly applied.” By resolution of the said board the permission asked for was given, the location of each of said dams and the material and method of construction, being set out therein, as in the said application. The resolution contained, also, in the concluding paragraph, the following:
    “ That work shall be commenced on at least one of said dams within two years from April 1st, 1903, on the second dam within four years from April 1st, 1903, and on the third dam within five years from April 1st, 1903, and that all of said dams shall be completed on or before six years from April 1st, 1903, in default thereof the rights and privileges hereby created shall cease and become void and of no further effect, unless the time for such commencement and completion shall be extended by the board of supervisors of this county.”
    Because the dimensions of the log chutes were regarded as too large, an amended application was presented to the board in June, 1904, by Mr. Erwin, in other respects like the one first presented, and containing, further, the words above quoted from the first resolution of the board. This request was granted by resolution of the board in form like the first resolution. One dam only, known as the “Rodgers Bridge Dam,” was constructed. It was begun in 1905, completed in 1906, and cost about 1250,000. About 3,000 horse power, on the average, is developed. The respondent, a foreign corporation regularly admitted to do business in the State, succeeded, by purchase and assignment, to all the rights of said Erwin. The dam which was built, and the appurtenances thereto, are wholly on land owned by respondent, and it also owns all lands flowed by said dam. The water power created is used in connection with that developed by other dams and by steam plants to generate electricity which is sold as power and light to the public. No extension of time to build the other dams, or either of them, was asked for or given. There is evident no purpose to build them, or either of them. In April, 1909, the board of supervisors, by a resolution in which is recited the history of the original action of the board and the alleged default of Erwin and of respondent in not beginning and in not completing two of the dams on or before April 1, 1909, declared all rights under the said original action of the board forfeited. Of this action Erwin and respondent were notified.
    It is charged in the information of the attorney general that respondent is unlawfully exercising the right, franchise, and privilege—
    “Of maintaining a certain stone and concrete dam thirty-eight feet in height in and across the Muskegon river, a navigable stream, in the township of Mecosta, county of Mecosta, in said State, said dam being erected on section eleven, in township fourteen north, range ten west, the west end of said dam being built upon lot eleven and the east end of said dam on lot five of said section eleven; and of operating the said dam for the purpose of producing water power to be used in generating electricity for furnishing electricity and electrical light, heat, and power. ”
    The court is asked to enter a judgment “excluding it from such franchises and privileges.” There is a plea, which was replied to by the attorney general, and pursuant to a stipulation some testimony was taken by a commissioner. The river in its natural state is not in fact navigable except for floating forest products and small boats. The corporate existence of respondent is not attacked, nor its right to exercise its corporate franchises and to* do business within the State. The proper construction of the dam which was built is not disputed. No interference, in fact, with any right of the public in the stream is suggested. It is the contention of the attorney general that Erwin secured by the action of the board of supervisors which has been described a franchise granted by the State through the agency of the board; that it was single and indivisible, and that the failure to construct any of the dams is reason for declaring forfeited all rights based upon the said action of the board. This presents the question to be decided. It is, however, urged by the respondent that the large private and semi-public interests which will be disturbed by a judgment of ouster, interests arising partly out of a wide distribution of bonds having for their security the property in question, requires that the court should decline to enforce the remedy proposed.
   Ostrander, J.

(after stating the facts). It is the rule in this State, sustained by an unbroken line of decisions, that one who owns land bordering a stream, whether navigable or not, owns the bed of the stream to the center or the thread thereof. Such ownership is private ; such public rights as exist are simply easements, or privileges, and, as a general proposition, it is settled that the owner may do what he pleases with the land under the water so long as he does not interfere with the public enjoyment. In the opinion of this court in City of Grand Rapids v. Powers, 89 Mich. 94 (50 N. W. 661, 14 L. R. A. 498, 28 Am. St. Rep. 276), will be found references to most of the decisions of this court upon this subject to that time. It is unnecessary to refer to them here. This rule of the State is the rule of the Federal courts with respect to waters within this State. Grand Rapids, etc., R. Co. v. Butler, 159 U. S. 87 (15 Sup. Ct. 991); United States v. Water Power Co., 209 U. S. 447 (28 Sup. Ct. 579). In Moore v. Sanborne, 2 Mich. 519 (59 Am. Dec. 209), this court follows and approves the rule stated in Brown v. Chadbourne, 31 Me. 9 (50 Am. Dec. 641), that the true test of navigability—

“ To be applied in such cases is, whether a stream is inherently and in its nature, capable of being used for the purposes of commerce, for the floating of vessels, boats, rafts, or logs. When a stream possesses such a character, then the easement exists, leaving to the owners of the bed all other modes of use not inconsistent with it.”

The constitutional provision in force when authority to erect the dams was given reads:

“No navigable stream in this State shall be either bridged or dammed without authority from the board of supervisors of the proper county under the provisions of law. No such law shall prejudice the right of individuals to the free navigation of such streams, or preclude the State from the further improvement of the navigation of such streams.” Const. of 1850 [Sec. 14, Art. 8, Const. of 1909], Art. 18, § 4.

It was said in Shepard v. Gates, 50 Mich. 495, 497 (15 N. W. 878, 879):

“ The clause in the Constitution providing that ‘ no navigable stream in this State shall be either bridged or dammed without authority from the board of supervisors of the proper county, under the provisions of law,’ has been understood as adopted in furtherance of the policy of the Ordinance of 1787, which stipulated that ‘the navigable waters leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways, and forever free.’ ”

The legislation in force when such authority was given is found in 1 Comp. Laws, §§ 2494, 2495. In terms, power is given to boards of supervisors to permit or prohibit the construction of any dam over or across any navigable stream. It is required that a petition for leave to construct a dam across any such stream shall be presented to the supervisors which shall set forth certain matters and the board is empowered to “grant or refuse the prayer of such petition.” If they—

“Allow the said dam to be constructed, the petitioners shall be at liberty to construct the same by complying fully with the terms and conditions set forth in their petition; and after having obtained such right, and constructed such dam, such petitioners, their heirs, successors, or assignees, may, if such dam be destroyed, or decayed, construct a new dam, subject to all the same terms and conditions, on the same site, without again applying to such board.”

The matters which are required to be stated in the petition are the purpose, location, height, and description of such dam, and whether it is proposed to construct a lock, or chute, or apron, and of what description, for the passage of boats, vessels, rafts, or timber. Reading these provisions together, and considering also the rule of private property in the bed of streams, they amount to a legislative construction of the Constitution in harmony with the idea that what was intended to be preserved and conserved was the public right of navigation in the streams of the State. It is therefore apparent that the power of boards of supervisors in the premises is limited both by the purpose for which the power is delegated and by the legislation which the Constitution itself makes necessary. They do not act as agents for the county, but as agents of the general public. And if it is assumed that, in view of the constitutional provision, the legislature has not the power to determine the circumstances and conditions according to which the supervisors shall give or withhold assent to the building of dams, it must still be admitted that the circumstances and conditions to be considered by the supervisors in each case are such as relate to the public easement in the stream which it is desired to dam. In fact, as an examination of the statute will disclose, and as is in keeping with the public interest involved, the powers conferred upon supervisors with respect to bridges are very different from those conferred with respect to dams. It is only with respect to streams actually or strictly navigable that permission to bridge is required at all. As to other streams, although navigable for certain purposes, as for floatage, the power conferred is one to make general rules and regulations as to the kind of bridges and the mode of constructing the same. See Shepard v. Gates, supra; Stofflet v. Estes, 104 Mich. 208 (62 N. W. 347). As to dams, as has been stated, the petition for leave to construct must set out certain facts, and the supervisors, and they are by the act given no other power, “ may grant or refuse the prayer of such petition.”

It is not pretended that each of the structures described in the petition which was presented to the supervisors of Mecosta county was not calculated to preserve and conserve all public rights in the stream. It is not claimed that the single dam which was erected interferes in any way, in fact, with the, public easement, or with such use of the stream by the public, for navigation or otherwise, as the nature of the stream will permit. It is not claimed that with respect to preserving or safeguarding any public interest one of the proposed dams bore to any other of them the relation of a part to a whole; that the scheme or plan considered by the supervisors was a single one consisting of three dams. In this respect the case is unlike the one of People v. Improvement Co., 108 Ill. 491, cited by the attorney general. Without attempting here to set out the facts of the case, it is sufficient to say that the essence of the decision rendered, the theory according to which the court acted in sustaining the demurrer to respondent’s plea, is expressed in the opinion of the court at page 510 of People v. Improvement Co., supra, where it is said:

“Had there been but the omission of some duty of minor importance, the alternative of a fine, might properly be considered; but the nonperformance here is of a thing which is of the essence of the contract — it goes to the object of the incorporation, not doing the very thing the performance of which was the purpose and object for which the company was instituted. It is failure by the corporation to act up to the end of its creation. The demand of public good is nothing less than that there should be a resumption by the State of the corporate franchise of which there has been such misuser — that the company should be made to give way, so as to afford opportunity, through some other instrumentality, for the accomplishment of this work of public advantage, the improvement of the navigation of these two rivers, or at least of the Kankakee, to the Indiana State line.”

There is no reason to believe that authority would not have been given to erect any one of the dams if the petitioner so desired. Forfeiture cannot therefore be justified upon the authority of cases which hold that when a franchise is granted to build a railroad, a waterworks plant, or to make any single, indivisible, public improvement, and there is a failure to complete the work, the franchise may be reclaimed by the State. If we construe the grant, condition, and all as made with reference to the private rights of the petitioner and the public easement in the stream, we must find it to be either a divisible grant, a grant of three distinct privileges in one resolution, or else it must be held that .the condition providing for forfeiture was one which the board had no power to impose. Prom the standpoint of the public right of navigation in the particular stream, at the particular time, the conservation of that right was three times involved. That is to say, three dams would interfere with it, if at all, three times as much as one dam. And when it was determined that they were warranted in permitting such dams at such locations to be constructed, and that they should exercise the power which they held in trust for the public favorably to the petitioner, the supervisors had exhausted their power unless there remained the power to limit the time within which each of the privileges should be exercised. If this is not so, if their authority in the premises is not to be exercised within the limits set by the public interest to be served and the express language of the statute, what limit can be . stated to their power to attach conditions to a grant of authority in such cases ?

The attorney general directs attention to the fact that the second petition of Erwin contains the forfeiture clause which is relied upon, the implication being that the supervisors at last granted the prayer of the petition, which is what the statute indicates they shall do, if favorably inclined. I think the fact is of no significance as affecting the question of right. The second resolution of the board in the preamble states that Erwin has applied to have the former "grant of the right to construct certain dams * * * amended as in said petition specified.” The amended application asks that the grant of the right theretofore made “be so amended as to read as follows,” setting out the resolution of the board already of record with a slight change as to the dimensions of log chutes. And in the second resolution no change is made in the time for beginning work upon the dams, although more than a year of the time had then expired and two years had elapsed since the passing of the first resolution. The action of the board amounted to an amendment merely of a privilege already granted.

It must be admitted that the language employed in the condition supports the construction which is placed upon it by the attorney general. As mere matter of construction, it would be difficult to sustain the contention that a forfeiture of all rights granted by the resolution was not contemplated if any breach of the condition occurred. According to its terms, the privilege or privileges ceased and became void if work was not begun on one dam— not specified — before April 1, 1905, or if it was not begun on another dam — not specified — before April 1, 1907, or if not begun on the third dam before April 1, 1908, and if the three dams were not completed on or before April 1, 1909. Such a penalty bears no reasonable relation to the purpose to be served in requiring the authority of the board, even if it had the power to impose a penalty, and no court ought to impose it unless the public interest clearly demanded its enforcement. If the grantee of the privilege proceeded in exact accordance with the terms of the condition, he increased thereby the disastrous consequences of failure. But, as has been stated, the board of supervisors had no authority to impose the forfeiture, and the grant must stand without the limitations created by the condition attached unless it is held to have the effect only of limiting the time within which each privilege must be exercised.

There are some considerations tending to show that the apparently unconscionable character of the condition is only apparent, and not real. These considerations will be mentioned, although their statement involves repeating to some extent what has already been said. The situation disclosed must not be confused with one where the public, as the United States, owns the land bordering upon and under the stream, having, in the land and the stream, all the rights possessed in this State by the public and by the private owner. Nor is it a case where the- franchise or privilege in question is a corporate franchise. Whether what is granted by a board of supervisors to one who is given authority to build a dam is called “a franchise emanating from the State,” as it was denominated in Valentine v. Water-Power Co., 128 Mich. 280, 290 (87 N. W. 370), or whether it is called a permission or privilege, it is a peculiar thing. The public interest in the matter, so far as any such interest was contemplated by the Constitution of 1850, arose out of the public easement to navigate the stream. With respect to this easement, it could never be matter of public concern that a man should build three dams in a stream instead of one, unless the purpose was to improve instead of to interfere with navigation, which is not the case here. Having the right to build three dams in a stream, and building but one, the grantee offends against no public right if he declines to build two of them. Prom the viewpoint,of the Constitution of 1850 and the statute, the private privilege to dam is against the public privilege to navigate the stream, the preservation of which public privilege gave rise to the necessity for withholding the private right in proper cases. It is therefore difficult to see a reason for attaching to the privilege to build one dam the condition that two other unrelated dams should be built.

Again, the franchise or privilege to build a dam, when •once granted, is exercised when the dam is constructed. There can be neither misuser nor nonuser of the privilege derived from the supervisors if the dam is constructed as contemplated. And in asking for and receiving a grant of such a privilege, or franchise, no duty rests upon the petitioner to exercise the privilege. There were no contract relations created between Mr. Erwin and the supervisors. Nor, as has been pointed out, could the supervisors contract with him to build three or any number of dams. The privilege granted was no doubt a beneficial thing to the grantee, but in the discharge of their duty in the premises the supervisors, in approving the location and construction of each dam, preserved to the public its entire beneficial interest. On the other hand, there is reason for a condition fixing a time within which the grantee of the privilege should proceed to exercise it.

The consequences of a judgment of ouster will be a forfeiture of respondent’s right to defend the lawful', character of its dam, with whatever results may flow from that. Such a judgment must be rested upon the ground that respondent, in accepting the privilege to build the dam, accepted it upon a condition which the granting' power had no authority to impose and which secures in its enforcement no public benefit or advantage. There is-made out neither nonuser nor misuser of any franchise or privilege granted by the public.

The duty of the court to enter a judgment for the respondent is clear. It is so ordered. Respondent will recover costs.

Hooker, McAlvay, and Stone, JJ., concurred with Ostrander, J. Blair, J., concurred in the result.


author: Brooke, J. Moore, J.

text:
    FROHLICH v. ASHTON.
    1. Mechanics’ Liens — Subcontractor—Estoppel—Guaranty.
    By guaranteeing the performance of a building contract, a subcontractor estops himself from claiming a mechanics’ lien upon the building which was abandoned by the contractor and constructed by the owner.

      2. Same — Computation oe Liens — Cost oe Building.
    In computing the percentage to which each of the lienors is-entitled, the unpaid bills for labor and materials for which no liens have been filed or, if filed, abandoned, should not be-

      included in estimating the cost of the building which is abandoned by a contractor and completed by the owner; if they file and prosecute liens their claims must be considered, but if they choose to rely on the contractor for payment, the bills should be disregarded. Opinion in Frohlieh v. Ashton, 159 Mich. 265 (123 N. W. 1130), modified on rehearing.
    Moore, J., dissenting.
    Appeal from Wayne; Donovan, J.
    Submitted October 14, 1909.
    (Docket No. 91.)
    Reargued June 30, 1910.
    Former opinion modified December 30, 1910.
    Bill by Simon Frohlieh against Laura M. Ashton and others to enforce a mechanic’s lien. Defendants Ashton and Sapiro appeal.
    Affirmed.

      Lucking, Emmons & Helfman, for complainant.

      Bernard B. Selling, for defendant Ashton.

      Edwin S. Bartlett, for defendant Sapiro, assignee, etc.

      Lames H. Bayne, for defendant S. J. Guilloz & Co.
    O. E. Angstman, for defendant Weber.

      George M. Bead, for defendant Forster.

      McDonald & Axford, for defendant White & Fisher.
   Brooke, J.

This case is reported in 159 Mich. 965 (193 N. W. 1130), to which reference is made for the facts.

Two questions require consideration.

(1) Is the Michigan Lumber Yard estopped from participation in the fund until the other lienors have been paid ?

(9) What is the proper method of computing the cost of the building ?

While in terms the opinion filed does not dispose of the first question, it is evident that the court considered the matter and intended to affirm the action of the court below in this regard. In any event, we are now of opinion that the circuit court was correct in holding that the Michigan Lumber Yard was estopped, for the reason that it had guaranteed the performance of the contract, and had directed payments to be made to the principal contractors. Fairbairn v. Moody, 116 Mich. 61 (74 N. W. 386, 75 N. W. 469); Wilkinson on Mechanics’ Liens, p. 100.

In our former opinion, we held that in computing the percentage to which each of the lienors was entitled there should be included, not only the sums actually paid by the owner and the enforceable liens, but also the amount of bills for labor and material which had gone into the structure, for which no liens had been filed, or, if filed, had been abandoned. As authority for this view, we cited and quoted from Godfrey Lumber Co. v. Cole, 151 Mich. 280 (114 N. W. 1018). A re-examination of the question convincés us that the case cited does not support this view.

It is a matter of no consequence to either the owner or the lienors, if some of the subcontractors who have furnished labor or material for the building choose to rely for payment upon the principal contractor. If they take advantage of the provisions of the statute and file and prosecute liens, their claims must be considered. If not, and the owner has neither paid nor is liable to pay their claims, they should be disregarded.

It follows that the decree of the circuit court should have been, and it now is, affirmed, with costs.

Bird, C. J., and Ostrander, Hooker, McAlvay, Blair, and Stone, JJ., concurred with Brooke, J.

Moore, J.

I am content with the rule as stated in the opinion in the case as reported in 159 Mich. 265 (123 N. W. 1130).