text:
    DAVISON v. TAYLOR.
    1. Injunction — Deeds—Covenants—Building Restrictions — Enforcement — Rules.
    The enforcement in a court of equity of restrictive covenants in a deed is not a matter of absolute right, and is governed by the same general rules which control equitable relief by specific performance.

      2. Same — Deeds—Building Restrictions — Estoppel.
    Deeds without restrictions executed prior to the date of a deed containing restrictive covenants, would not work an estoppel against the enforcement of the latter covenants.
    3. Sam:e — Evidence—Sufficiency.
    Evidence held, sufficient to show that business had not so far entered a residential street as to deprive it of its residential character or release defendants from a covenant in a deed, relating to the maintenance of the street as a residential street.
    4. Sam:e.
    On a bill to enforce a restrictive covenant in a deed against the keeping, operating or maintaining of any building upon the premises conveyed, except necessary buildings for single-residence purposes, evidence held, insufficient to' show such deviation from the original plan in platting the subdivision and selling other premises therein on the same street as to estop plaintiff from insisting upon compliance with the covenant sued on.
    5. Deeds — Covenants—Building Restrictions — Estoppel.
    A grantee is not entitled to use premises without restrictions of any kind because of the mere fact that the grantor in a deed containing restrictive covenants, by permitting the grantee to expend money in departing in one respect from such restriction by remodeling the house on the premises into a two-family flat and using it as such for a number of years, may be estopped from claiming the grantee cannot continue such use..
    6. Same.
    A single or occasional breach of the original plan of a subdivision in some distant part of the plat or under circumstances such as' not to injuriously affect a party’s property, or where there is no radical or material change in the general conditions or surroundings, will not estop such party from asserting his rights under a restrictive covenant in his deed to an adjacent owner against such owner whose breach of such covenant threatens to materially diminish the value and desirability of such party’s property.
    7. Same.
    In a suit to enforce a restrictive covenant in a deed for the use of a lot for single-residence purposes, held, that the erection of a four-family flat or establishment of a business place on a lot adjoining plaintiff’s premises on which she had erected for her personal use a house worth $12,000, would so materially affect the desirability of her premises as a home and decrease its value that she had peculiarly personal interest in the enforcement of the covenant in her deed to the owner of such adjoining lot designed to maintain such lot for single-residence purposes.
    8. Same.
    Where plaintiff had consented to defendants so remodeling their residence as to make it a two-family flat and had consented to other similar flats on the street, even if plaintiff was estopped by such consent, the estoppel could go no farther than the consent and defendants could claim no further benefit than a continuance of their residence as remodeled.
    Appeal from Wayne; McDonald, J., presiding..
    Submitted April 4, 1917.
    (Docket No. 26.)
    Decided May 31, 1917.
    Bill by Mary A. Davison against John E. S. Taylor and another to restrain the violation of certain building restrictions. From a decree for plaintiff, defendants appeal.
    Affirmed.

      Charles S. Hampton and Lodge & Brown, for plaintiff.

      Munro & Powell, for defendants.
    On April 17, 1906, plaintiff and her husband, being then owners by the entirety, platted a subdivision in Highland Park known as Davison’s subdivision of Park lot 1 of quarter section 5, 10,000-iacre tract. The subdivision comprised 20 acres, and extended from Woodward avenue west to Hamilton boulevard. The principal street, Davison avenue, extended its entire length. The lots fronting on Woodward and on the south side of Davison avenue, according to the original plan, had a frontage of 68% feet on Woodward and 400 feet on Davison, and an alley was laid out at the west end of these lots. This, however, was vacated and one substituted 200 feet west of Woodward. Business places were erected on this 200 feet frontage on Davison, and in some instances the second story was used for flats. This was before defendants contracted to purchase a lot, and when there were only two houses on Davison avenue, and they on the north side. There are nearly 100 lots fronting on this avenue, and it was designed as a residence district. The Davisons selected the property on the south side of this street, and immediately west of -the alley before mentioned, for their home. On July 15, 1908, they entered into a contract with defendants to sell 50 feet adjoining them on the west. This contract contained the following building restrictions:
    “A part of the considerations of this contract is that no building shall be kept, operated or maintained upon said premises except the necessary buildings for one single residence purposes, also that no dwelling house shall be erected thereupon which shall cost less than twenty-five hundred dollars. ($2,500) and two stories and attic in height and to be of brick veneer; permission is given to store plumbers materials in basement and plumbing work no machinery to be used.
    “Also that all buildings to be erected upon said premises shall at all times be situated not less, than twenty-two feet from the front lot line and two feet from the west lot line.
    “And it is further hereby expressly covenanted by the parties of the second part that the foregoing covenants and conditions shall run with said premises and shall be chargeable thereupon and shall bind their heirs, assigns and legal representatives.”
    Soon after entering into this contract defendants moved a two-story building on the premises. They lived up stairs, and for a while the husband had a plumbing shop down stairs. He had no machinery there, and his testimony would indicate that in his business little beyond occasional pipe cutting was done on the premises. It was his headquarters, and he stored his tools and had some pipe there. He was in ill health, and his business, until recently, has been inconsequential. On April 22, 1911, plaintiff and her husband executed a deed of the premises to defendant Daisy L., containing the following building restriction:
    “A part of the consideration of this indenture is that no building shall be kept operated or maintained upon said premises except the necessary buildings for single residence purposes.
    “Also that no dwelling house shall be erected thereupon which shall cost not less than $2,500.00 and 2 stories and attic in height, also that all buildings to be erected upon said premises shall at all times be set not less, than 22 feet from the front lot line 3 feet from the west lot and it is further hereby expressly covenanted by the said second party that the foregoing covenants and conditions shall run with said premises and shall be chargeable thereupon and shall -bind her heirs assigns and legal representatives.”
    It is claimed by the defendants that they did not see the deed until it was produced in court, and did not know of this restriction until the trouble arose which resulted in this litigation.
    In 1910 the Davisons built a house worth $12,000 on the lands selected for their home, and in the spring of 1911 defendants remodeled and improved their building, making an apartment on each floor, and Mrs. Taylor’s mother, with her family, occupied one of these flats and the defendants the other. The record discloses that Mrs. Taylor consulted plaintiff about having her mother occupy one of these flats, and received her consent. Mr. Davison seems to have made vigorous protest to this, but plaintiff persuaded him to say no more about it.
    The restrictions in the deeds for lots on Davison avenue were not absolutely uniform. In the great majority of deeds they were the same as defendants’, limiting to one-family dwelling. In a few instances two-family flats were allowed and in four instances on the entire street, double houses were allowed. Where there was any deviation from the single residence houses, the plans were subject to the approval of plaintiff, and as to the residential character of the street, the restrictions were strictly adhered to, except the few stores just off Woodward, which had been built before any considerable number of lots in the residential part of the plat had been sold. The witnesses testify that Davison avenue is a fine residential street and the houses good, some of them costing upwards of $8,000.
    With the growth of Highland Park, Mr. Taylor’s plumbing business grew, and the year before this bill was filed it amounted to $30,000. He conceived the plan of erecting another two-story flat, adjoining and connected with his present flat, thus making a four-flat apartment house, and using the basement for his plumbing business, and commenced excavation and the assembling of material with this in view. Plaintiff, her husband having died in 1913, instituted these proceedings to restrain defendants from erecting, building, or constructing any building to be used for business purposes, or for any purpose other than a residence for one family, to restrain the maintenance of the house then on the premises as a two-family flat, to restrain the maintaining any business on the premises, and particularly a plumbing shop, and for general relief. The case was heard by Judge McDonald, in the Wayne circuit, and a decree was entered, restraining defendants from erecting the proposed addition to the present building, or from maintaining any building, except such building as is appurtenant to a residence for a single family; but to sate defendants expense of-remodeling the house on the premises they were permitted to- keep it in its present form as a two-family apartment, with a single entrance. Defendant was permitted to store his plumbing goods and material in the basement of the present house, and to have his office in the house and do his office business there, but was restrained from conducting a store, or maintaining a plumbing shop. The decree was without prejudice to move for modification upon changed conditions rendering modification necessary or proper. There was some further detail in the decree not necessary to here relate. From this decree defendants alone appeal.

      On right to enforce restrictive covenants as affected by change in neighborhood, see note in 28 L. R. A. (N. S.) 707.
      As to who may enforce restrictive covenant or agreement as to use of property, see note in 37 L. R. A. (N. S.) 12.
      On multiple residence structures as violative of restrictive covenants in deed, see note in 45 L. R. A. (N. S.) 726.

   Fellows, J.

(after stating the faets). We do not regard the question of whether, under the facts in the case, the provisions of the contract were superseded by those in the deed of importance. The decree went no further than the restrictions in the contract, if it went as far, and it was not seriously controverted upon the argument, but that so far as defendants’ right to do business and store material is concerned, the decree protected him fully under present conditions.

“A person owning-a body of land, and selling a portion thereof, may, for the benefit of his remaining land, impose upon the land granted any restrictions, not against public policy, that he sees fit, and a court of equity will generally enforce them.” 7 R. C. L. p. 1114.

But their enforcement in a court of equity is not a matter of absolute right, and is governed by the same general rules which control equitable relief by specific performance. Moore v. Curry, 176 Mich. 456. Mr. Justice Bigelow, in Whitney v. Railway Co., 11 Gray (Mass.), 359 (71 Am. Dec. 715), (approved by Chief Justice COOLEY in Watrous v. Allen, 57 Mich. 362 [24 N. W. 104, 58 Am. Rep. 363]), speaking of building restrictions, said:

“The purpose of inserting them in the deed is manifest. It was to prevent such a use of the premises by the grantee and those claiming under him as might diminish the value of the residue of the land belonging to the grantor, or impair its eligibility as sites for private residences. That such a purpose is a legitimate one, and may be carried out, consistently with the rules of law, by reasonable and proper covenants, conditions, or restrictions cannot be doubted. Every owner of real property has the right so to deal with it, as to restrain its use by his grantees within such limits as to prevent its appropriation to purposes which will impair the value or diminish the pleasure of the enjoyment of the land which he retains. The only restriction on this right is that it shall be exercised reasonably, with a due regard to public policy, and without creating any unlawful restraint of trade. Nor can there be any doubt that in whatever form such a restraint is placed on real estate by the terms of a grant, whether it is in the technical form of a condition or covenant, or of a reservation or exception in the deed, or by words which give to the acceptance of the deed by the grantee the force and effect of a parol agreement, it is binding as between the grantor and the immediate grantee, and can be enforced against him by suitable process, both in law and equity.”

The defendants do not seriously controvert these elementary principles, but insist that plaintiff has waived her right to the enforcement of these covenants, that the original plan of the subdivision contemplated only single residences and restrictions uniform to those imposed on defendants in the contract, that by failing to adhere to these uniform restrictions, and by permitting other purchasers of lots to build differently than contemplated by these restrictions, she has abandoned the uniform plan and waived her right to the enforcement of the covenants against defendants; that when she contracted with defendants, she obligated herself to similarly restrict the entire street, and, failing so to do, released defendants from their restrictions entirely.

It is pointed out, and considerable space is devoted to the fact, that there are stores on Davison avenue, built on lands acquired from the Davisons without restrictions of any kind. But these stores, were built before defendants entered into their contract. Deeds without restrictions, executed prior to the date of defendants’ contract, would not work an estoppel against the enforcement of the contract with defendants. Reilly v. Otto, 108 Mich. 330 (66 N. W. 228); Sherrard v. Murphy, 193 Mich. 352 (159 N. W. 524); Lambrecht v. Gramlich, 187 Mich. 251 (153 N. W. 834). While the doctrine of estoppel may be invoked by reason of acts subsequent to the date of the contract, it may not be for prior acts thereto.

A careful examination of the record satisfied us that the claim that businesses are conducted on Davison avenue, besides the stores at the east end, is not sustained. It is claimed that there are numerous boarding and rooming houses in the first block, but the proof only shows that some of the people living on the street have a boarder or two at their family table, usually relatives, and that an occasional spare room is rented; this is. the extent to which the proof goes. One lady living on the street does dressmaking, and some of defendants’ witnesses speak of a knitting factory in one of the basements. Inquiry develops the fact that three old ladies live at this place, and have hand machines which they use to knit sweaters and other articles with. Upon these facts we are unable to conclude that business has so far entered this block as to deprive it of its residential character, or release defendants, from the covenants.

It is further contended by defendants that plaintiff has permitted the erection of other than single residence houses to such an extent that defendants are now released from all restrictions. The facts do not justify such conclusion. We are satisfied from the record that there has been no radical change shown in the environment and character of the neighborhood; the general condition of the property and its surroundings is still the condition contemplated when the land was platted and purchasers of lots built their houses; it is strictly a residential district. There is no claim that there are any four-family apartments, such as defendants planned to build on this street. Defendant claims there is one three-family flat on the street, but the proof shows this to be a double house with an attic. There are four double houses, all told, on the entire street, and some few two-family flats similar to defendants’. In the block where plaintiff and defendants live there are 31 lots fronting on Davison avenue. Including defendants’ house, there are four two-family houses in this block. We do not think these facts show such a deviation from the original plan as to estop plaintiff from insisting upon compliance with the restrictions by the owner of land immediately adjoining hers.

By permitting defendants to expend money in remodeling their house into a two-family flat and using it as remodeled for a number of years she may have estopped herself from claiming that they cannot maintain it in its present condition, and the trial court evidently took this view of it, but it does not follow from this that all restrictions are waived, and that defendants may now use this lot without restrictions of any kind, nor does it follow that a single or an occasional breach of the original plan in some distant part of the plat, or under circumstances such as not to injuriously affect a party’s property, or where there is no radical or material change in the general conditions, or surroundings, estop such party from asserting his rights against an adjacent owner whose breach of restrictions threaten to materially diminish the value and desirability of his property.

“The true rule” says Mr. Justice Brooke, speaking for the court in Misch v. Lehman, 178 Mich. 225 (144 N. W. 556), “seems to be that, even after one or more breaches, equity will grant relief if the restriction can be shown to be of value to the complainant, and such breaches have not resulted in a subversion of the original scheme of development resulting in a substantial, if not entire, change in the neighborhood.”

Mr. Justice Montgomery, speaking for the court in Frink v. Hughes, 133 Mich. 63 (94 N. W. 601), said:

“More than this, as to such restrictions as are contained in this deed, it does not necessarily follow that, because the restrictive covenant is not inserted in deeds of all the property on this entire plat, therefore this restrictive clause is of no effect.”

Supporting the rule announced, see Schadt v. Brill, 173 Mich. 647 (139 N. W. 878, 45 L. R. A. [N. S.], 726); Stewart v. Stark, 181 Mich. 408 (148 N. W. 393); Moore v. Curry, supra; Sherrard v. Murphy, supra; Rowland v. Miller, 139 N. Y. 93 (34 N. E. 765, 22 L. R. A. 182); Brigham v. H. G. Mulock Co., 74 N. J. Eq. 287 (70 Atl. 185); Brown v. Huber, 80 Ohio St. 183 (88 N. E. 322, 28 L. R. A. [N. S.] 705); Clark v. Martin, 49 Pa. 289.

In the instant case the plaintiff has erected a house for her personal use, for her home, worth $12,000. It is apparent that the erection of a four-family flat, or the establishment of a business place on the adjoining lot, would materially affect its desirability as a home and decrease its value; one of the witnesses says the value would be decreased one-half. She, therefore, has a peculiarly personal interest in the enforcement of the restrictions against the owner of the adjoining land. From what we have already said it is apparent that she is not estopped from asserting these rights personal to her, and appurtenant to her property.

There is another view of this case which also precludes reversal. Defendants insist upon, and by the decree appealed from were sustained in, their light to maintain a two-flat dwelling; at the same time defendant insists that plaintiff has waived her right to any restrictions by the fact that she has, in a few instances, given other landowners rights equal to, but not in excess of, their rights under the decree. In no instance on the entire street has plaintiff consented to the erection of any house for more than two families, and there are but few instances where she has done this. If she is estopped by this consent, the estoppel can go no farther than the consent, and defendants can claim no further foénefit, from the application of the doctrine of estoppel, than was given them by the trial court.

The decree appealed from amply protects all rights of the defendants and should be and is affirmed. Plaintiff will recover costs of this court.

Kuhn, C. J., and Stone, Osteandee, Bied, Mooee, Steeee, and Beooke, JJ., concurred.


source: Caselaw Access Project

author: Fellows, J.

license: Public Domain

text:
    ICKLER v. MULLEN.
    1. Vendor and Purchaser — Land Contracts — Construction.
    Where a contract for the sale of lands described therein contained a provision that the purpose of the contract -was to sell the same lands as were acquired and held by the seller by virtue of a deed to him, such provision was surplusage, tbe lands described in the contract being those described in the deed.
    2. Same — Land Contracts — Abstracts—Title.
    Where a contract relating to the sale of lands described therein and for a warranty deed provided that the purpose of the contract was to sell the same lands as were acquired and held by the vendor by virtue of a certain deed to him which described the same lands as were described in the contract, and the abstract furnished was accepted by the buyer as showing good title in the seller, such provision as to the purpose of the contract did not constitute a cloud on the title as requiring only a conveyance of such title as the seller had by such deed.
    3. Specific Performance — Evidence—Sufficiency.
    Where a memorandum for the sale to plaintiff of described lands provided for a first payment thereon within a designated time after delivery of an abstract showing merchantable title in defendant and for the execution of a contract providing for further certain payments of the purchase price, within which time defendant furnished such abstract, which plaintiff accepted, and a form of contract in accord with such memorandum, which plaintiff refused to accept, and nothing further was done by the parties for two months or until after defendant had secured another purchaser, while time of performance was not made the essence of the contract, the transaction was closed on plaintiff’s refusal to accept the contract offered, and consequently plaintiff was not entitled to specific performance.

    4. Same — Not Remedy oe Right — Discretion oe Court.
    Remedy by specific performance is not a remedy of right but rests in the sound discretion of the court, and the case must be clear before that discretion is moved.
    Appeal from Oakland; Smith, J.
    Submitted April 5, 1917.
    (Docket No. 53.)
    Decided May 31, 1917.
    Bill by John Ickler against Robert J. Mullen for the specific performance of a land contract. From a decree dismissing the bill, plaintiff appeals.
    Affirmed.

      Douglas, Eaman & Barbour, for plaintiff.

      Albert McClatehey, for defendant.

      Authorities discussing the question of uncertainty as to time, as affecting right to specific performance, are collated in a note in 2 L. R. A. (N. S.) 221.

   Fellows, J.

On November 26, 1915, the defendant signed a paper acknowledging receipt from plaintiff of $25 to apply on the purchase of 10 acres of land situated in Royal Oak township, Oakland county. The purchase price was $3,000, of which sum, it was recited in the paper, $300, including the sum paid, was to be paid within 15 days after the delivery of an abstract, certified to date showing good and merchantable title in defendant; a land contract was to be executed providing for annual payments of $100 or more with interest at 6 per cent. There was no provision for immediate possession. Plaintiff had the right to a deed when $1,000 on the purchase price was paid, and could give back a mortgage, bearing 5 per cent, interest, for the balance, but did not obligate himself to carry out this provision. In fact, there were no express terms in the instrument obligating the plaintiff to the performance of anything and he did not sign it. This instrument is variously called in the record and briefs a “contract,” an “option,” an “option contract,” and an “option upon consideration.” In the view we take of the facts appearing in the record it becomes unnecessary to fix its exact status. Within a few days thereafter, an abstract was furnished and the title pronounced satisfactory to plaintiff, and at his suggestion the parties got together to execute the land contract and close up the deal. At this first conference, there seems to have been more effort made to modify the terms of this writing than to carry out its provisions. Plaintiff wanted to take in on the deal a Mr. Moore, and this was agreed to by defendant. Plaintiff insisted that about $500 worth of lumber went with the land. Defendant denied this, and insisted that there should be a rider attached to the contract, showing that the lumber belonged to him and that he had a right to remove it from the premises. Defendant wanted the right to put a new mortgage on the land in case payment of one then existent was required. Plaintiff did not want to consent to this, but either at this, or a later conference, agreed that he would procure for defendant a loan of $300 in case it became necessary to take up the mortgage, but defendant later withdrew his insistence on the mortgage provision. The contract drawn by defendant’s attorney contained an error in description, and it was agreed that it should be redrafted and another conference held.

At this second conference, plaintiff wanted one-half of the lumber left on the premises, and on defendant’s refusal wanted to buy one-half of it; but defendant, while willing to sell all of it, declined to sell part. The parties did not succeed in getting together at this meeting. It is not clear the number of conferences that took place with reference to the matter. Defendant was not present at all of them, his employer having objected to his taking too much time off, and his attorney represented him. Suffice to say that on December 20th, which seems to have been the fifteenth day after furnishing the abstract, a conference was held at the office of defendant’s attorney. The attorney had prepared a land contract, more favorable to plaintiff than the writing of November 26th called for, in that plaintiff was given immediate possession of the premises. It ran to plaintiff and Moore, as the parties had agreed. There were in this contract none of the clauses or modifications which had caused the previous disagreements. The attorney had, however, prepared a memorandum setting at rest the question as to the ownership of the lumber, and made it a rider on the contract. The contract, we think, fully complied with the terms of the original writing, except that it was more favorable to plaintiff, as stated above. Plaintiff objected to this contract, and about two hours were consumed in its discussion. There was a clerical mistake in the date of a deed given by one Carew, which could have been easily remedied. The other objection plaintiff claims he made was that the contract contained the following words after the description:

“* * * The purpose of this contract being to sell to second parties the same land that the first party acquired and holds by virtue of a deed by Edward Carew, dated February 18,1911, and recorded in Liber 241 on page 186, Oakland County Records.”

This language was undoubtedly surplusage, as the land described in the contract was the same land described in the deed from Carew to the defendant. This deed does not recite that Carew was an unmarried man, and plaintiff claims objection was then made to the title and to this clause of the contract, and it is here urged that he was justified in the objection he made to this clause, that the language above quoted from the contract had reference to and might be construed as agreeing to convey only the title that Carew conveyed by his deed, at least that it would cloud the title. But, as we have already stated, the abstract had been submitted to plaintiff before any negotiations as to the form of the contract was taken up and had been pronounced satisfactory. Defendant’s testimony and that of his attorney denies that plaintiff objected at any time to the title, and no question of title is made in the bill. Beyond that, the language used could not bear the construction claimed. The lands, not the title, contracted to be sold, were the lands acquired by the Carew deed, and the contract expressly required a “warranty deed of said described lands free and clear of and from all liens and incumbrances.”

This last conference consumed some two or three hours, and plaintiff persistently refused to accept the contract prepared by defendant’s attorney. It was not until the conference had been protracted long beyond lunch hour that plaintiff produced from, his pocket a contract and asked defendant’s attorney to read it and see what was the matter with it. We are unable to discover any substantial difference between this contract and the one prepared by defendant’s attorney. Defendant’s attorney declined to read it, as he insisted the contract offered complied with the memorandum of November 26th, and it was beyond his lunch time and he could spend no further time with the matter. The conference then ended. That evening, at the request of his client, defendant’s attorney called up plaintiff and asked him if there was not some way they could get together and close up the deal, but was unable to make any arrangements, or get any satisfaction from him.

We are satisfied from the testimony in the case that the agreed price of the land in question was at the time of the transaction its fair value; it was not a bargain, but defendant was then anxious to close up the deal, as the agreed price was more than he had paid for it. Nothing further was done by plaintiff, except to secure the recording of the memorandum, for nearly two months and until after the land had materially increased in value, and defendant had made a verbal bargain to sell to other parties, when this bill was filed for specific performance.

It will not be necessary to consider the interesting legal questions, discussed in the briefs filed by the parties, as we are satisfied on the facts the plaintiff is not entitled to prevail. While time of performance was not made the essence of the contract, and might be extended by parol (Frazer v. Hovey, 195 Mich. 160 [161 N. W. 887]), there was a time fixed for performance, and within that time, and practically at its close, defendant tendered performance, and it was refused, and the parties made no arrangements for any extension of time, or for further conference, and plaintiff, that evening, when requested, declined to enter further negotiations to close the deal. We think the parties then regarded the transaction at an end. The time of performance expired; for nearly two months thereafter, plaintiff made no effort to comply on his part, or to obtain "any extension of time, or to keep the negotiations alive, but declined so to do; and defendant sought and secured another purchaser for the premises.

Remedy by specific performance is not a remedy of right, but rests in the sound discretion of the court. The case must be clear before that discretion is moved. In the instant case, we are not satisfied that plaintiff has made his right so clear as to entitle him to this relief; but, on the contrary, we are satisfied that the evidence preponderates in favor of the defendant.

The decree of the court below will therefore be affirmed, with costs to defendant.

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


text:
    ALLEN v. POWERS.
    1. Executors and Administrators — Fraudulent Conveyances— Suit by Creditor.
    Where an estate is insolvent and the administrator refuses to institute proceedings to set aside a conveyance by the decedent as in fraud of a certain creditor whose obligation was contracted prior to such conveyance and who obtained judgment against the estate, such creditor may institute the suit.
    2. Pleading — Motion to Dismiss — Demurrer—Equity.
    A motion to dismiss a bill is a substitute for a demurrer under the former practice, and the facts alleged in the bill must be taken as true on such motion.

      Appeal from Calhoun; North, J.
    Submitted April 6, 1917.
    (Docket No. 79.)
    Decided May 31, 1917.
    Bill by O. Le Grand Allen against Walter S. Powers, administrator of the estate of Charles T. Allen, deceased, and others to set aside a fraudulent conveyance. From a decree dismissing the bill, plaintiff appeals.
    Reversed, and remanded.

      J. M. Hatch & Son, for plaintiff.

      Walter S. Powers, in pro. per.

      R. G. Leiteh, for defendant Kopf.
   Fellows, J.

Briefly stated, the material facts alleged in plaintiff’s bill are as follows: That defendant Powers is the administrator of the estate of Charles T. Allen, deceased, a brother of plaintiff and who died October 31,1914, leaving a daughter, defendant Beniti A. Kopf, and a wife, Carrie F. Allen, who is now deceased and of whose estate defendant Beniti A. Kopf is administratrix. Beniti A. Kopf is made defendant individually and in her representative capacity. That plaintiff is a judgment creditor of the estate of Charles T. Allen to the extent of $710.98, said judgment having been rendered in the circuit court in his favor and against said estate. That said estate is insolvent. That, after incurring his obligation to plaintiff, Charles T. Allen conveyed to his wife, Carrie F., real estate described in the bill located in Calhoun county of the value of $15,000. That such conveyances were voluntary, without consideration, and a gift. That defendant Powers neglects and refuses to pay plaintiff’s claim or to file a bill to set aside the deeds by Charles T. to Carrie F. It is also alleged in the bill that Charles T., in his lifetime, was the principal stockholder of the Prims Machinery Company, by which company plaintiff was employed; that said company owed plaintiff $700 or $800; that it became insolvent, and Charles T., to save himself from loss, agreed to pay the company’s indebtedness, including that to plaintiff, and take over its property; and that, to carry out this plan, plaintiff gave a receipt for his. claim against the company, and Charles T. agreed to pay him, took over the real and personal property of the company, and thereafter deeded, without consideration, the real estate so received to his wife Carrie F. It is not stated in the bill whether the judgment above referred to was for this claim, or whether this claim was litigated in the suit in the circuit court. There are some indications in the record that it was. If it was not so litigated, there seems to be no reason alleged for its omission. As the case must be reversed on other grounds, we are not inclined to pass upon the rights of the parties growing out of the claimed indebtedness of the Prims Machinery Company to plaintiff upon so indefinite a record, and will not further discuss this branch of the case, confining ourselves to the branch of the case first stated.

Both defendants moved to dismiss the bill upon the ground, so far as the first branch of the case is concerned, that the bill is without equity, that plaintiff cannot maintain this bill in his own name, that the administrator of Charles T. Allen is the only person who can maintain a bill to set aside conveyances of the decedent, and that the only remedy available is that provided in sections 15, 16, and 17, chap. 54, Act No. 314, Pub. Acts 1915 (3 Comp. Laws 1915, §§ 13859-13861). The motion to dismiss was granted, and plaintiff appeals.

It appears by the bill that plaintiff has an unsatisfied judgment for $710.98 against the estate of Charles T. Allen, deceased, and is the principal creditor; that the estate is insolvent; that Charles T. Allen in his lifetime, and when indebted to plaintiff, voluntarily conveyed his real estate to his wife. This states an equitable cause of action in the nature of a creditor’s bill, and unless the provisions of the judicature act, above cited, preclude its maintenance, the motion to dismiss the bill should have been overruled. The sections of the judicature act under consideration are but the re-enactment of former provisions, which have received the construction of this court.

In the case of McFarlan v. McFarlan, 155 Mich. 652 (119 N. W. 1108), this court had before it a proceeding brought to remove an administratrix. The petitioner was a creditor whose claim had been allowed against the estate which was insolvent; the administratrix was the grantee in the conveyance claimed to have been executed in fraud of creditors. It was there said:

“Whether the statute as it stood prior to 1905 confers the exclusive remedy upon an administrator to sue for real estate alleged by a creditor to have been conveyed in fraud of creditors, we need not determine. The statute was amended in 1905, by Act No. 326, Pub. Acts 1905. The statute expressly confers upon a creditor the right, upon the refusal of an executor or administrator to bring suit, to bring it himself in the name of the administrator or executor. This statute is broad enough to include a case where the administrator or executor claims title to the property. Under the findings of facts, the petitioner is the sole creditor interested. She can file her bill directly as such creditor against the respondent. There is no reason why respondent should be removed for the purpose of securing her rights in any other manner.”

A somewhat similar situation was presented to this court in Re Sloman’s Estate, 186 Mich. 434 (152 N. W. 957), and we there said:

“The court ought not to do an unnecessary thing. In our opinion there is no legal necessity for the removal of the executors in order that the appellees may have a standing in equity. They have such an interest in the estate as will entitle them to file a bill in their own behalf against the surviving members of the firm, the executors, and such legatees as refuse to join them as complainants. The position of the surviving members of the firm, and of the executors, is such that appellees may file the bill themselves, and in their own names. * * * It is elementary, in equity, that if a necessary party will not consent to be made a complainant, though his interest is on the same side as that of the complainant, he may be made a defendant.”

The question was squarely presented in Buck v. Lockwood, 193 Mich. 242 (159 N. W. 509), published after the instant case was decided in the court below. In that case this court adopted the opinion of Judge Davis, except as to the jurisdiction of the Ionia county court to directly decree against title to lands in Ingham county. Upon the question involved in the instant case, Judge Davis said:

“The statutes of this State upon the question of reaching property where the same has been conveyed when there is not sufficient assets to pay the debts of the deceased will be found in sections 11064, 11074, 11075, and 11076, of the Michigan statutes [4 How. Stat. (2d Ed.), 3 Comp. Laws 1915, §§ 13849, 13859-13861]. Under this statute, H. J. Watson could file a bill to set aside those conveyances, and, if he refused to do so, then the creditors could proceed direct. See McFarlan v. McFarlan, 155 Mich. 655 (119 N. W. 1108). In that case it has been held by the Supreme Court of this State that there is no question but what a court of equity in a direct proceeding instituted on behalf of a creditor, upon leave of the court, where the administrator has refused to act, could file a bill for the purpose of reaching the property.”

Holding that the proceedings with reference to real estate must be instituted in the county where the same is situated, but recognizing the right of creditors to institute the proceedings direct, it was said after quoting Judge Davis’ opinion:

“While the administrator, or, in case .of his refusal, creditors, might file a bill in the county where the land lies to set aside those conveyances, if the assets of the estate otherwise proved inadequate to pay its debts, the subject-matter is purely local, and only the county in which the land is located has jurisdiction for that purpose.”

These cases must be regarded as controlling the instant case. The plaintiff, by his bill, has stated a case which entitled him to equitable relief. Upon this motion, which is the substitute for demurrer under the former practice, we must take the facts alleged in the bill to be true. Plaintiff is a judgment creditor. The estate of Charles T. Allen is insolvent. The estate of Carrie F. Allen has several thousand dollars of real estate voluntarily conveyed to her in fraud of plaintiff’s rights. The administrator of the estate of Charles T., for reasons, best known to himself, refuses to pursue this property. This may be from lack of funds to carry on the litigation, or for other good reasons. It rests within his discretion whether he shall institute the proceedings or not. He cannot be removed for refusing to act, and his name cannot be used as plaintiff, except under the provisions of the statute above cited. But this does not prevent plaintiff from pursuing the rights which are individual and personal to him; as a judgment creditor he is entitled to pursue property fraudulently transferred. The estate of Charles T. is in no way harmed; his administrator is but a nominal party. Plaintiff offers to file a bond to protect the defendants, including the administrator, in case he is unsuccessful. This he should do within 30 days.

The order granting the motion to dismiss is reversed, and one here entered overruling the same and remanding the case, with costs to the plaintiff.

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


author: Fellows, J,

text:
    SPRINGER v. FULLER.
    1. Appeal and Error — Jurisdiction—Justices oe the Peace.
    The question of jurisdiction of a justice of the peace over the person of a nonresident is not before the Supreme Court where the defendant appeared before the justice without objection, pleaded the general issue, took a general appeal to the circuit court, where the case was tried, and made no objection to the jurisdiction on the trial, or on motion for new trial, or in an assignment of error, and raises the point for the first time on appeal.
    2. Partnership — Statutes—Registration or Name.
    Innocent persons who deal with a copartnership in ignorance of the fact that it has failed to comply with Act No. 164, Pub. Acts 1913 (2 Comp. Laws 1915, § 6354 et seq.), do not come within the act, and do not lose their rights by reason of such noncompliance.
    3. Sales — Evidence— Contracts — Conditional Sale — Question eor Jury.
    In an action by the seller of a moving picture screen sold under a conditional sale contract against one claiming title to the machine under a purchase from the original buyer, evidence held, to present a jury question whether defendant or another person had possession of the machine.
    4. Appeal and Error — Instructions.
    Defendant cannot complain of the failure of the court to cover fully his theory of the case in the instructions, where when thé court asks his counsel if the court has correctly given his claim, his counsel makes no suggestion as to any omission.
    •5. Same.
    An assignment of error that “the court erred in his charge to the jury and did not leave to the jury to decide, if it was a question for the jury, the vital issues in this case,” was too indefinite.
    Error to Wayne; Mayne, J., presiding.
    Submitted April 5, 1917.
    (Docket No. 42.)
    Decided May 31, 1917.

      Case in justice’s court by William Springer and Elmer E. Stockwell, copartners as the Artcraft Screen Company, against Charles Fuller for the conversion of a screen. There was judgment for plaintiffs, and defendant appealed to the circuit court. Judgment for plaintiffs. Defendant brings error.
    Affirmed.

      Ward N. Choate, for appellant.

      Elmer E. Stoekwell and Robert J. Hall, for appellees.
    Plaintiffs are engaged in manufacturing and selling gold fiber moving picture screens. In the fall of 1915 they entered into a contract with a partnership known as Wheeker & Young, for the sale of one of their screens, at the sum of $90, $10 down, the balance to be paid in monthly installments of $20 per month, the title to remain in plaintiffs until paid for. This screen was installed in the Hamilton Theater. There is testimony in the case, on the part of the plaintiffs, that Wheeker & Young rented this theater of the defendant, and that the rent for a month was paid by a check drawn to his order; that at the end of two weeks defendant came and took the keys to the theater from Wheeker & Young; that the screen was then there; that neither Wheeker & Young, defendants, nor any one else, made further payments on the screen; that defendant made no claim to Wheeker & Young that the Hamilton Theater Company owned the theater; that Wheeker & Young informed plaintiffs- of the situation, and after writing defendant, a representative of plaintiff came to Detroit and saw him with reference to the screen; that defendant then claimed that the screen was his; that he had bought it of Wheeker & Young, and had paid them $100 for it; plaintiffs’ representative then explained that the screen was sold on a contract, and that the title remained in plaintiffs, until it was paid for; defendant then said that plaintiffs could have the screen and to go out and get it; plaintiffs’ representative then went to the theater where the screen was, but was refused the screen, by the man in charge, without a written order. He again saw defendant, who then told him that he knew he could not get the screen; refused to give a written order; again claimed that he had bought it from Wheeker & Young; showed a stub in his check book which he claimed represented the purchase price; said the screen was in his building, that he had bought it and paid for it; and refused to give it up. Shortly after this one of the plaintiffs called on defendant and told him that he had come to either get the screen or the pay for it. He testifies that defendant said he could have' the screen if the court said so, and again claimed that he had bought it of Wheeker & Young, and paid for it, and that if plaintiffs recovered the screen through court, he would sue Wheeker & Young; that he made no claim at this time that the Hamilton Theater Company was in possession of the screen, but claimed it in his own right. Plaintiff says he never heard of the claim made by defendant that the Hamilton Theater Company, and not defendant, had the screen until the claim was made in the circuit court. This suit was brought in justice’s court, resulting in a judgment for the plaintiffs, which was appealed to the circuit court.
    The defendant, upon the trial at the circuit, disclaimed any right to the screen, denied that he had ever made any claim to it, denied that he had ever purchased it of. Wheeker & Young, or that he had ever so stated to plaintiffs, or plaintiffs’ representative, and categorically put in issue every material fact testified to by plaintiff and plaintiffs’ witnesses, except the claim of plaintiff, that he (defendant) had not asserted before the trial at the circuit that the screen was in the possession of the corporation, and upon this question his testimony was not as positive as on the others. He insisted that the screen was in the possession of the Hamilton Theater Company, a corporation of which he was president, but made no claim that the corporation had any rights to it. The case was submitted to the jury. Plaintiffs having recovered, defendant brings the case here.
   Fellows, J,

(after stating the facts). The point is made for the first time in the brief in this court that, inasmuch as defendant is a resident of Detroit, the justice of the peace of Highland Park, before whom these proceedings were instituted, had no jurisdiction; therefore the circuit court on appeal had no jurisdiction, and the judgment should be set aside. The question is one of jurisdiction of the person. The defendant appeared in justice’s court without objection to the jurisdiction, and pleaded the general issue, he took a general appeal to the circuit court, where the case was tried, and no question of jurisdiction was there raised, either upon the trial or in the motion for a new trial. There is no assignment of error raising the question. Obviously the question is not before us.

Objection is made that plaintiffs’ opening statement was exceedingly prejudicial. It is not pointed out in the brief wherein plaintiffs’ opening statement differed from the facts proven upon the trial, and we have been unable to find anything in the opening statement that plaintiffs did not have a right to prove on the trial, or that in any way prejudiced defendant.

Plaintiffs are copartners, doing business under the name of “Artcraft Screen Company”; they have complied with the provisions of Act No. 101, Pub. Acts 1907 (2 Comp. Laws 1915, §§ 6349-6353). Wheeker & Young is a partnership^ and had not complied with the provisions of Act No. 164, Pub. Acts 1913 (2 Comp. Laws 1915, §§ 6354-6359). There is no claim that plaintiffs were aware of this failure to comply with the statute. It is claimed that the original contract of sale from plaintiffs: to Wheeker & Young is void, and should not have been received in evidence. It was said by this court in Cashin v. Pliter, 168 Mich. 386 (134 N. W. 482, Am. & Eng. Ann. Cas. 1913C, 697), in considering the act of 1907:

“As this act involves purely business transactions, and affects only money interests, we think it should be construed as rendering contracts made in violation of it unlawful and unenforceable at the instance of the offending party only, but not as designed to take away the rights of innocent parties who may have dealt with the offenders in ignorance of their having violated the statute.”

In the instant case Wheeker & Young are not parties, and plaintiffs themselves have in all regards complied with the law; they are claiming no rights through Wheeker & Young. They are claiming the right to retake their own property, and, to establish that the screen still belonged to them, had the right to show that they retained title in their agreement with the copartnership. They had no knowledge that Wheeker & Young had not complied with the act of 1913; and, while parties failing to comply with the provisions of this act may be penalized, innocent parties who have dealt with them, in ignorance of their want of compliance, cannot be. The statute has no application to the instant case.

Defendant requested the court to direct a verdict in his favor. This the court refused to do; in this there was no error; not only was there testimony that would justify the jury in finding that defendant personally had possession of the screen, and without any color of title, or right to possession, refused to surrender it and kept it for his own use, but there was also testimony that when plaintiffs and plaintiffs’ representative demanded possession of the screen, and talked with defendant about it, they were led by him to believe that he personally had possession of it and refused to give it up, and that plaintiffs did not know that defendant made any claim that the corporation had possession, until the trial in the circuit, and after they had incurred the expense of the litigation. If the latter was true, the defendant was estopped from setting up possession in the corporation. Cadwell v. Pray, 86 Mich. 266 (49 N. W. 150). Plaintiffs were entitled to have both theories submitted to the jury, and defendant was entitled to have his theory that the action should have been against the corporation, instead of defendant, also submitted to the jury. The testimony being in conflict the court could not say, as matter of law, which party was right; that was exclusively for the jury.

The remaining assignments of error discussed in the brief relate to the requests to charge and the charge as given. It is urged that the court did not fully, state defendant’s theory. The charge was concise, but fairly stated the claims of the parties. After stating their claims, and before proceeding further, the court turned to counsel and asked if he had correctly stated their claims; one suggestion was made by defendant’s counsel, which was accepted by the court, and no further suggestion was made. If the court had not fully covered defendant’s theory, fairness to him required that his attention should then be challenged to any omission, and particularly where • he asked counsel if he had correctly given his claim. Proulx v. Bay City, 143 Mich. 550 (107 N. W. 273); Davis v. McMillan, 142 Mich. 391 (105 N. W. 862, 3 L. R. A. [N. S.] 928, 113 Am. St. Rep. 585, 7 Am. & Eng. Ann. Cas. 854); Wolf v. Holton, 110 Mich. 166 (67 N. W. 1082). Not having taken such course, defendant cannot be heard to complain in this court.

Defendant’s seventh assignment of error is as follows :

“That the court erred in his charge to the jury and did not leave to the jury to decide, if it was a question for the jury, the vital issues in this case.”

This assignment of error is too indefinite. We have, however, examined the charge and discover no error in it. The case was fairly submitted to the jury, the theories of both parties stated, and the law controlling ■the case correctly given. We have carefully considered all the questions discussed in defendant’s brief, and are unable to discover any reversible error on this record. The judgment is affirmed, with costs.

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


text:
    TOWNSHIP OF WEXFORD v. SEELEY.
    1. Principal and Agent — Ratification—Estoppel.
    A principal cannot take the fruits of a contract made by his agent without authority and not he bound by its terms.
    2. Banks and Banking — Partnership — Bonds — Principal and Agent — Ratification—-Evidence—Sufficiency.
    In an action on a township treasurer’s bond, which was signed for a banking partnership as surety, by an émployee, in the absence of the active partner having the management of the business, for the purpose of obtaining a share of township funds to be deposited by the treasurer, where such active partner upon his return knew of such act and deposits were received by the bank during the term of the bond, some of which were received by the active partner personally, and the township board received no notice of any claim that the bond was invalid, evidence held, sufficient to sustain a finding that such active partner ratified the act of the employee in signing the bond.
    S. Partnership — Scope op Authority — Principal and Agent.
    Although each partner of a copartnership is the agent for his copartners in the transaction of the partnership business, one partner cannot bind his copartner by any act without the scope of the partnership.
    4. Banks and Banking — Partnership — Scope of Authority —
    Public Moneys — Surety Bonds — Consideration.
    It is within the scope of the business of a banking partnership to obtain deposits of public money deposited by a township treasurer and to sign the official bond of such treasurer in consideration therefor.
    5. Same — Partnerships—Unauthorized Acts or Partner — Ratification.
    The ratification of the unauthorized act of an employee of a banking partnership in signing the official bond of a township treasurer for the purpose of securing a share of the township funds by the partner having active charge of the business is binding upon his copartner.
    Error to Wexford; Lamb, J.
    Submitted April 9, 1917.
    (Docket No. 108.)
    Decided May 31, 1917.
    Assumpsit by the township of Wexford against John Seeley and others on a statutory bond. Judgment for plaintiff. Defendants bring error.
    Affirmed.

      Coveil & Cross and William H. Yewrnd, for appellants.

      Fred C. Wetmore, for appellee.
    Defendant Seeley was treasurer of plaintiff township, beginning his term in April, 1915. This action is upon his official bond to recover a shortage of $2,-637.61, which he was unable to produce at the time of his settlement with the township board in the spring of 1916, due to the failure of the Wexford Bank. Defendants David W. Walker and Fred R. Walker, who are partners conducting a banking business, under the name of the Buckley Bank, alone dispute liability. David W. Walker is the active member of this partnership and has the entire management of the business. They have in their employ in the bank Mr. J. Warren Brown, who has the title of assistant cashier, and who married the foster daughter of David W. Walker. The bond sued upon was signed in the firm name by Mr. Brown as assistant cashier during David’s absence in California, under an arrangement that the township treasurer should deposit a portion of the township’s funds with the partnership, the funds to be deposited as evenly as possible with the three partnerships operating private banks, and who are sureties on the treasurer’s bond and are defendants here. Mr. Brown wrote David W. Walker of his action in signing the bond and the arrangement made with reference to the deposit of funds and upon David’s return told him again about it. As the point is made that the findings of fact are not supported by the testimony, we quote from the record.
    Defendant Seeley was called as an adverse witness by the plaintiff, and among other things testified :

      “Q. Did you have any talk with Mr. Brown, at that time, in regard to deposits in the Buckley Bank?

      “A. Yes, he said he expected a share of them, and I agreed to give him a portion of the bond, or the money, an equal share as near as I could.

      “Q. Well, what did you do as a matter of fact?

      “A. Well, I deposited the money in his bank and also in Mr. Crimmins’ bank, just as I had agreed to, just as evenly as I could. * * *

      “Q. This, money which you deposited there, I suppose was deposited along from time to time during the year.

      “A. Yes, sir.

      “Q. Did you do any business along that line with Mr. Walker himself?

      “A. Yes, sir.”
    J. Warren Brown was called as an adverse witness by the plaintiff, and testified, in part, as follows:

      “Q. You had some talk with him (Seeley) about the matter of deposits in your bank at that time, didn’t you?

      “A. Yes.

      “Q. At the time you signed the bond?

      “A. Yesl

      “Q. What was the talk?

      “A. Well, that he would deposit a portion of the taxes in our bank.

      “Q. Well, the talk or the understanding was, wasn’t it, that the money of the township was to be deposited in those three banks?

      “A. Yes, sir.

      “Q. As nearly evenly as possible? Was that the talk and understanding?

      “A. I don’t remember about that part.

      “Q. Well, that is the reason you signed the bond, wasn’t it?

      “A. Yes, sir; it was.

      “Q. And your bank did receive deposits?

      “A. Yes, sir.

      “Q. From that time on until the end of the year?

      “A. Yes.

      “Q. That is, till the next April, the expiration of the treasurer’s term of office?

      “A. Yes, sir.

      “Q. When did you report this arrangement to Mr. Walker?

      “A. I think I wrote to him about it soon after I signed it. * * *

      “Q. And you knew, and you told Mr. Walker, didn’t you, that those deposits were to be made there as a part of the arrangement in connection with this bond?

      “A. I never stated it in that way.

      “Q. Well, maybe I haven’t stated it exactly correctly, but that is the effect?

      “A. We received the deposits; yes, sir.

      “Q. Well, now, it is a fact, isn’t it, and you have already sworn it was, that that was the arrangement at the time you signed the bond, and that that was one of the reasons why you signed it?

      “A. Yes, sir.

      “Q. And you told Mr. Walker that, didn’t you?

      “A. Yes, sir.”
    Township money was deposited with the copartnership from time to time during the year, on occasions, the money being accepted for deposit by David W. Walker personally. While he stated to Brown, and might have stated to others, that he did not think he or the partnership was bound on the bond, he made no such claim to any member of the township board and gave them no notice that the arrangement made between Brown and Seeley was not satisfactory to him and the firm.
    The case was tried without a jury before Judge Lamb, who filed findings of fact and conclusions of law. The following appears in the findings of fact:,
    “The bond was executed by the Buckley Bank on condition that a portion of the funds coming into the hands of the township treasurer would be deposited in said Buckley Bank. This was called to the attention of Mr. David W. Walker, on his return from the west. The township treasurer did deposit a portion of the funds coming into his hands as township treasurer in the Buckley Bank, and the said David W. Walker as cashier thereof took in some portion of the said deposit in person. * * *
    “The cashier and active copartner in the Buckley Bank, Mr. David W. Walker, after full knowledge of all the material facts, continued to receive the deposits from the township treasurer and to accept the benefits thereof, took no steps, to disaffirm the contract, gave no notice to the township board of Wexford township nor to any of its members that the Buckley Bank did not consider itself liable on said bond. In view of these conditions and circumstances, the contract must, as a matter of fact, be held to have been impliedly ratified by David W. Walker for the Buckley Bank.”

      Judgment passed against all the defendants, and David W. Walker and Fred R. Walker bring the. case here.
   Fellows, J.

(after stating the facts). The findings of fact are abundantly supported by the testimony. The treasurer, Mr. Seeley, and assistant cashier, Mr. Brown, agree in their testimony as to the making of the arrangement whereby, in consideration of the signing of the bond sued upon, a portion of the township funds were to be deposited with the Buckley Bank. The two other banks had already signed the bond when it was presented to Mr. Brown; his principal was in California; and it was apparent to him, as appears by his testimony, that unless he signed the bond for the partnership the Buckley Bank would get none of the township’s funds. He had been given no authority to sign bonds for the partnership; indeed, the testimony would indicate that his authority to act for the partnership was very limited. Nevertheless, he signed this bond; he did not thereby bind the partnership, unless his acts were subsequently ratified. He was an adverse witness called by the plaintiff, and it was only under pressure that he gave some of the testimony above set forth. Under the circumstances, the trial court was fully justified in finding that the arrangements between Seeley and Brown were made, and that David W. Walker was made cognizant of the facts immediately on his return. Mr. Walker had not authorized the signing of this bond; neither he nor the partnership was then bound by the arrangement made by Brown; he could decline to carry it out, and no action could be maintained against him, or the partnership. But he could not take the fruits of the contract, its benefits, and not be bound by its terms. If he appropriated the contract and ratified it, it was the same as though he had authorized it in the first instance. Did he impliedly ratify this, contract as found by the court? We think he did.

“Ratification takes place when one person adopts a contract made for him, or in his name, which is not binding on him because the one who made it was not duly authorized to do so. Ratification is a question of fact; and, in the great majority of instances, turns on the conduct of the principal in relation to the alleged contract or the subject of it, from which his purpose and intention thereabout may be reasonably inferred.” Story on Agency, .§§ 253-260. “And, generally, deliberate and repeated acts of the principal, with a knowledge of the facts, that are consistent with an intention to adopt the contract, or inconsistent with a contrary intention, are sufficient evidence of ratification.” Oregon B. Co. v. Navigation Co., 28 Fed. 505.

Mr. Walker personally continued to receive deposits with full knowledge of the contract under which they were made, knowing full well that the township relied upon the bond signed in the name of the Buckley Bank. For the period covered by the bond — the term of the treasurer — the Buckley Bank had the funds of the township deposited there pursuant to the contract made with Brown in Walker’s absence, but communicated to him immediately on his. return about May 1st. No claim was ever made by Walker, or any one in his. behalf to the obligee, that the bond was invalid, no claim that he and the copartnership' were not bound by its terms. Every act of Walker’s was consistent .with ratification, no act of his was inconsistent with ratification; every act of his was inconsistent with repudiation of the contract, no act of his was consistent with its repudiation. The court below correctly found that he had impliedly ratified the contract. We must therefore determine the case as if David W. Walker had actually signed the partnership name to the bond in question.

Is the partnership bound? Fred R. Walker took no part in the management of the bank; that was left entirely with David W. There is no testimony that Fred K. authorized or had any knowledge of this transaction. His liability in this action must depend on whether he is responsible for the action of David W. The rule is too well established to need citation of authorities that one partner cannot bind his co-partner by any contract without the scope of the partnership, that each partner is the agent for his co-partners in the transaction of the business of the co-partnership, but not as to matters foreign to such business. Was this transaction within the scope of the partnership business? The business of the co-partnership. was banking; the purpose of this contract, the obtaining of a deposit of public funds with this copartnership. There was nothing illegal about the contract, nothing that contravened the public policy of the State. On the contrary, the public policy of the State contemplates the giving of bonds by banks to secure the deposits of public funds. Section 1408, 1 How. Stat. [2d Ed.'] (1 Comp. Laws 1915, § 2134), which provides for deposit of township funds in banks and the giving of bonds to secure such deposits; section 9912, 4 How. Stat. [2d Ed.] (2 Comp. Laws 1915, § 5693), which makes similar provisions with reference to the deposit of school funds; sections 1049-1057, 1 How. Stat. [2d Ed.] (1 Comp. Laws 1915, §§ 2377-2385), which provides for the deposit of county funds in banks, the giving of bonds to secure such deposits, requires competitive bidding for the deposit, and is made applicable to “any institution doing a banking business, whether incorporated or not”; section 808, 1 How. Stat. [2d Ed.] (1 Comp. Laws 1915, § 289), requiring bonds of banks for State funds deposited with them.

All of this legislation indicates the policy of the State that public funds shall be deposited in banks, and recognizes the giving of bonds by banks to secure such deposits, as a proper incident to the banking business. With what force can it be urged that obtaining the deposit of public money with a banking copartnership and signing a bond to insure its safe return is foreign to the banking business? A deposit of public money is a desirable one for any banking institution; it is usually larger in amount than private deposits and continues through the year. In the instant case, it bore no interest; whatever benefit there was from the deposit was a benefit to the copartnership. The contract was as clearly within the scope of the business as would be a contract to pay interest to secure the deposit, or to pay for advertising in the village paper to secure the same results. The contract was within the scope of the banking business, and the copartnership was bound by it.

We have examined the other assignments of error and find them without force.

The judgment is affirmed, with costs to plaintiff.

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


author: Kuhn, C. J.

text:
    BARTH v. CHRISTIAN PSYCHOPATHIC HOSPITAL ASS’N.
    1. Nuisance — Equity—Injunction.
    Where people establish their homes in the neighborhood of an asylum which is already in existence and constitutes a nuisance, they cannot appeal to a court of equity to require the abandonment of the institution.

      2. Same.
    An injunction lies to restrain the intended establishment of an insane asylum in a residential section of a city as an intended nuisance, where the establishment of such asylum would be destructive of the comfort, well-being and property rights of the residents in such section.

    Ostrander, J., dissenting.
    Appeal from Kent; McDonald, J.
    Submitted June 12, 1916.
    (Docket No. 25.)
    Decided June 1, 1917.
    Bill by George W.- Barth, and others against the Christian Psychopathic Hospital Association to restrain the erection of a hospital adjacent to plaintiffs’ residences. From a decree dismissing the bill, plaintiffs appeal.
    Reversed, and decree entered for plaintiffs.

      Horace T. Barnaby and Ganson Taggart, for plaintiffs.

      Leonard D. Verdier, for defendant.

      For authorities discussing the question as to whether insane asylum or hospital for the insane is a nuisance, see note in 40 L. R. A. (N. S.) 647.

   Kuhn, C. J.

The amended bill seeks to enjoin the defendant from erecting and maintaining a private insane asylum upon property described in the bill and which immediately adjoins the city of Grand Rapids and the property of the several plaintiffs herein. The bill alleges that the defendant is organized under the laws of this State for the care of imbeciles and insane persons, and for some time past has been, and is now, conducting such an institution on a 40-acre farm in the township of Gaines, Kent county. At the time of filing the bill it had recently contracted to purchase a tract of 18 acres of land here in question and intended to erect and maintain thereon an asylum for the care, custody, and treatment of some 250 imbeciles and insane patients. It was made to appear that the plaintiffs are the owners and occupiers of the property adjoining and in the immediate vicinity of the location of the proposed insane asylum; that they purchased their lots for residence purposes, and now occupy their homes, and that the neighborhood’ is a residential district which has no other present value than for such purposes. It is alleged that the property of the plaintiffs would.be depreciated by the establishment and maintenance of such a hospital as the defendant intends to maintain to the amount of at least 50 per cent, of the present value of the property.

It is further claimed and alleged that the establishment of such an institution would make living in the vicinity uncomfortable, unpleasant, and unsafe, as the residents would be in constant fear and danger of violence from escaping inmates, and that they would be in constant danger and fear of infection from disease, and annoyed and inconvenienced by the sight of such an institution. Testimony was offered to prove the facts alleged, but the court, being of the opinion that, even if these facts were proven, it would not change the legal situation, refused to hear any proofs, and denied the injunction and dismissed the bill. -

It seems to be conceded that the single question here involved is whether the establishment and maintenance of an insane asylum in the location in question would constitute a nuisance as to the several parties plaintiff and other residents of the immediate vicinity. Counsel concede in their brief that such an institution as an asylum or hospital is not a nuisance per se, but it is contended by the counsel for plaintiffs that it may be a nuisance by reason of its location. The following quotation from 29 Cyc. p. 1175, states the rule contended for:

“A hospital is not a nuisance per se, or even prima facie, but it may be so located and conducted as to be a nuisance to people living close to it.”

It is argued that it may not be a nuisance located in Gaines township where it is now located, but by being brought in a residential district in close proximity to the homes of the plaintiffs it would become and be a nuisance. Mr. Joyce, in his work on Nuisances (page 52), makes the following comment:

“To live comfortably is the chief and most reasonable object in the acquirement of property by men, so that any material interference with one’s neighbor in the comfortable enjoyment of life is a wrong which should be redressed.”

It is said that the allegations of the bill of complaint are merely speculative, imaginary, or apprehensive of a threatened evil, and that no relief should be granted, and that the equity court should not restrain the erection of a structure because it may in its operation become a nuisance, relying upon Siegel v. Wayne Circuit Judge, 155 Mich. 459 (119 N. W. 645). The suit at bar, however, is not to enjoin the erection of a building, but the relief sought is to enjoin the defendant from maintaining an insane asylum, which is the avowed purpose of defendant. In our opinion, a clear statement of the rule which should govern cases of this kind is stated by Mr. Justice Hooker in McMorran v. Fitzgerald, 106 Mich. 649 (64 N. W. 569, 58 Am. St. Rep. 511):

“Injunctions restraining the use of property in accordance with the owner’s interests should be cautiously granted. As a rule, the owner may make such use of his premises as his business or taste may dictate, and the only limitation upon his right is that he must so use his property as not to cause injury to the property or rights of those owning property in the vicinity. There should not be a technical or fanciful interpretation of this rule. It must always be applied in the light of the circumstances; and uses of property which might be improper in one locality may be proper in another. Thus a slaughterhouse might be protected in a place remote from residences or places of business, though the land of an adjoining proprietor should not be free from noxious odors arising therefrom. But in a populous district, or in case that the adjoining proprietor should choose to erect a residence upon his premises, the slaughterhouse would be or might bpcome a nuisance. Smoke and noise which are common in cities would be intolerable in rural or suburban districts, and, as such, might be excluded by the law. As long as the smoke and tumult are confined to portions of a city which are principally devoted to such business, little difficulty arises, and, though theoretically a resident of such locality may have the same rights to immunity from discomfort, usually his personal interest in the increase of values which results from occupation for business purposes satisfies him. But when one invades a suburban district with an offensive and noisy business, which from its nature is injurious to those having homes in the vicinity, merely because he can purchase land cheap, or because the location has peculiar advantages for his purpose, he takes the risk of being compelled to compensate the injured neighbors, or perhaps desist from the offensive use of the property.”

This is not of that class of cases where the plaintiffs have come to the nuisance, as where they have established their homes in the vicinity of an asylum already established. Asylums are generally located, and properly so, in a locality removed from residences, and if people thereafter seek the vicinity for residential purposes, they do so with a full knowledge of the nuisance already established. They can take advantage of the depreciated value of the property and thus buy home property at less prices than they could elsewhere, and are thus financially compensated for the nuisance which they are thus called upon to endure. Having sought the location with a full knowledge of its existence and having gained the financial advantage of having been able to purchase at a less price, they would be in no position to appeal to the conscience of a court of equity to demand that the institution, located there before their arrival, be abandoned. This distinction is recognized in 29 Cyc. p. 1163:

“There is a very marked distinction to be observed in reason and equity between the case of a business long established in a particular locality which has become a nuisance from the location of buildings near it and that of a new erection or business threatened in such vicinity; and it requires a much clearer case to justify the enjoining of a business well established than to prevent the establishment of a business by one who comes in to establish it for the first time and is met at the threshold of his enterprise by the remonstrance of the inhabitants.”

In the case before us the defendant is met “at the threshold of his enterprise by the remonstrance of the inhabitants.” See, also, Whittemore v. Laundry Co., 181 Mich. 564 (148 N. W. 437, 52 L. R. A. [N. S.] 930, Am. & Eng. Ann. Cas. 1916C, 818).

In our opinion it would be folly to say that they would not be entitled to any relief until the asylum has been established. It must be conceded that the establishment of such an institution in close proximity to the residences of the plaintiffs, which are in a residential section of the city, would destroy the comfort, the well-being, and the property rights of the plaintiffs. We think that the plaintiffs have made out, upon the admitted facts, a case of intended nuisance, and that the defendant should be enjoined as prayed for in the amended bill from erecting and maintaining an asylum at the location in question.

The order of the lower court will be reversed, and a decree here entered in accordance with this opinion, with costs to the plaintiffs.

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

Ostrander, J. I favor the affirmance of the decree.

Person,' J., took no part in the decision.