text:
    SELLERS v. PERRY.
    1. Cancellation of Instruments — Mortgages — Negotiable Instruments — Fraud.
    Evidence tending to show that complainant was the principal beneficiary under the will of a deceased testator and that in order to avoid litigation with defendants, ¡who would have been heirs at law of the testator, complainant executed a mortgage on the devised property in full settlement of any adverse claims of defendants, that certain representations were made to induce complainant to execute the settlement or adjustment, to the effect that no other parties would or could contest the will, considered and held, in the light of contradictory proofs, insufficient to sustain the burden of proof resting on the complainant.
    2. Same — Compromise—Estates of Decedents — Wills.
    Legatees under a will may make valid agreements to forbear a contest and the same are favored by the law when made in good faith. A contract whereby one interested in defeating the probate of a will agrees to interpose no objection thereto is not void unless collusively made in fraud of other parties in interest.

    3. Same — Mortgage—Pleading.
    Lacking a claim of the benefit of a cross-bill, defendant’s answer would not sustain nor complainant’s pleadings warrant the granting of affirmative relief to the mortgagors in the form of a decree enforcing a promise or contract included in the mortgage to pay part of the expense of administering the will, and of litigating the issue of testamentary capacity with other heirs at law: only in the event of the mortgagee attempting to foreclose would the right be enforced against defendants.
    4. Appeal and Error — Brief—Conduct of Counsel.
    No criticism as to the alleged standing of the respective counsel was proper in the briefs of either party and a reference to a legal directory or other source of information relating to the professional standing of the lawyers was unwarranted.

      Appeal from Tuscola; Beach, J.
    Submitted April 18, 1916.
    (Docket No. 93.)
    Decided June 1, 1916.
    Bill by Minnie Hall Sellers against Ella Perry for the cancellation of a mortgage and note. From a decree for defendant, complainant appeals.
    Affirmed.

      H. E. Smith (Seth Q. Pulver, of counsel), for complainant.

      E. E. Anneke, for defendant.

       As to validity of contract between devisees and legatees not to contest probate of will, see note in 13 L, R. A. (N. S.) 484.

   Stone, C. J.

The bill of complaint herein was filed in October, 1914, to set aside for alleged fraud a real estate mortgage and accompanying promissory note made and executed by complainant to the defendant on December 16, 1911, for $5,000. The matters leading up to the making of these instruments are somewhat in dispute, but the following facts appear:

Jacob Woodman, a resident of Akron, Tuscola county, died on November 21, 1911, at the age of 81 years. He left an estate, which, after the payment of his debts, was of the value of upwards of $20,000, which consisted of the farm inventoried at $10,000 and personal property aggregating $10,000 and upwards, tie left a will bearing date June 10,1911. Under the terms of the will the complainant was devised the farm above referred to, and also all live stock and farm tools and implements owned by decedent at the time of his death, and there was bequeathed to two sisters of the complainant $250 each; and it was provided that the residue of the estate should be equally divided between the defendant and her sister, Maud Gilmore.

In case of no will the estate in question would have been divided into four equal portions, one to the defendant, one to Maud Gilmore, her sister, one to the complainant and her two sisters as children of a deceased daughter, and one portion to the children of Cynthia Jubar, another deceased daughter of said Woodman. The last-named children are referred to in the record as “the Jubars.” They were, by the terms of the will, cut off from any share of the estate.

The complainant had lived in the home of Jacob Woodman from the time she was 14 months old to the time of his death, and the death of his wife, which occurred 19 days after his death; and the will provided that complainant should live with and care for testator and his wife upon.the farm during the life of each of them. At the time of the death of said Woodman, complainant was 24 years of age and was married, living with her husband upon the said farm.

The bill of complaint states that the said will was offered for probate to the probate court of said county, and came on for hearing on or about December 15, 1911, and the hearing was adjourned from time to time until January 16, 1912. The bill further states that the defendant and her sister, Maud Gilmore, being dissatisfied with the said will and claiming that it was unjust, and that the testator was mentally incompetent, and that they intended to contest the probate thereof, induced the said complainant to go with them to the office of an attorney at law, at Bay City, and there to execute the real estate mortgage above referred to in settlement of their claim, and that the said Maud Gilmore was to share equally with the said defendant in the division of the proceeds of said mortgage. The bill further states that the sole consideration, if any, for making said promissory note and mortgage was that no contest of said will by any person could possibly be "made, and that no contest of said will would be made, and that said attorney, acting for said defendant, represented to said complainant that in no event would a contest of said will be made by any one if the mortgage was so given, and that relying upon said assurances of said attorney, and because of the threats and false promises of said defendant and Maud Gilmore, complainant did sign said promissory note a,nd mortgage; that when the hearing of the probate of said will came on in the probate court there was a contest made by the sisters of the complainant and the Jubar heirs.

The bill further represents that at said hearing the said attorney who had drafted said note and mortgage assured complainant that, as there was a contest being made of the probate of said will, said promissory note and mortgage had been destroyed by him. The bill alleges that upon the hearing in the probate court, which involved a large expense to complainant, said will was duly allowed for probate; that thereupon the 'contestants appealed to the circuit court for said county, and a trial was had of such appeal at the September term, where said will was again sustained, in which complainant was again involved in a large amount of expense in securing witnesses and counsel which necessitated the expenditure of a large amount of money, exceeding the sum of $1,200; that at the hearing in the circuit court the said attorney, who claimed to have had possession of said note and mortgage for the defendant and her sister, again assured complainant that said mortgage had been destroyed, that said mortgage was recorded in the office of the register of deeds of said county immediately after the trial in the circuit court, to wit, on October 8, 1912, having been, left for record by said attorney of said defendant and Maud Gilmore.

The bill further states that at the time of making said promissory note and mortgage, the said defendant and Maud Gilmore and their said attorney well knew that a contest of said will would be had, and that the assurances of said attorney as to who could contest a will were by him well known to be false, and intended to mislead complainant, he well knowing that complainant would rely upon his statement as to the law, and that he and said defendant and her sister connived together to procure from complainant the said promissory note and mortgage by false, fraudulent, and misleading representations, and without any consideration whatever therefor, and that said mortgage and promissory note were in fact obtained by said cunning devices, and without intending to give, or giving, any consideration therefor.

After praying that the defendant be required to answer the bill of complaint, the bill further prayed that the said defendant might, by order and decree of the court, be required to deliver up for cancellation the promissory note and mortgage mentioned M the bill of complaint, and that she be enjoined by order and injunction of the court from in any manner selling, assigning, or disposing of the said note and mortgage, and, further, that said note and mortgage be declared void and of no effect, and that said defendant be required to discharge the same of record, concluding with a prayer for general relief.

The answer of the defendant denies substantially the averments of the bill, and states that the said note and mortgage were given solely because the defendant and her sister, Maud Gilmore, agreed to make no contest of said will, and agreed to allow said will to be admitted to probate, and specifically denies that any representation whatever was made to the effect that no contest could possibly be made to said will by any person, or that no contest of said will would be made by any one, and denied that said attorney assured complainant that in no event would a contest of said will be made by any one if said mortgage was given, and denied that said mortgage was given because of any threats and assurances, as alleged in said bill. By the answer the defendant also admitted that a contest of said will.was made in the probate court for said county, the contestants appealing to the circuit court, where they were defeated; but defendant denied that it was at all necessary for complainant to employ counsel, or go to any expense whatever in said proceedings, or that she was compelled to do so; that she did the same voluntarily and without consulting defendant, and any sums paid out by her were unnecessary, as defendant employed counsel to assist at the trial in establishing said will, and that counsel so employed had been paid by the estate, and that if complainant had paid out any such sum as claimed by her, the same was unnecessary and unreasonable. Defendant further, by her answer, admitted that she did not attend the hearing on the probate of said will, and averred that she never had been asked to contribute to any expense incurred by complainant.

Upon the hearing of the instant case, it was undisputed that at the time of the execution of the note and mortgage, and as a part of the same transaction, the following agreement was entered into by the parties:

“Whereas, Jacob Woodman departed this life on the 21st day of November, 1911, leaving surving him Minnie Hall Sellers, granddaughter, party of the first part herein, and Maud Gilmore and Ella Perry, daughters, parties of the second part herein, and leaving a last will and testament, which said last will and testament is now on file in the office of the probate court for Tuscola county, Michigan, awaiting probate thereof;
“And whereas, the parties hereto think that the said Jacob Woodman did not in the said will make a fair and equitable distribution of his property as between the parties hereto, and whereas the parties of the second part hereto being dissatisfied with the terms of the said will propose to contest the probate of the same for the reason that the said will does not make a fair and equitable distribution of his property, and also for the reason that they claim that at the time the said will was made the said Jacob Woodman was incompetent to make the same;
“And whereas, the parties hereto are desirous of avoiding a contest of the said will and coming to an amicable and friendly settlement of all property rights;
“Now, therefore, in consideration thereof, it is agreed as follows: The said party of the first part hereby agrees to pay to each of the parties of the second part the sum of two thousand dollars, and to pay to Myrtle Hall Landon and Deborah Hall Hammel, her sisters, each the sum of two hundred and fifty dollars, and as provided for in paragraph three of said will, and also to pay an amount not to exceed five hundred dollars toward funeral expenses, nursing and doctors’ bill incurred in the last sickness of the said Jacob Woodman and Rhoda Woodman, his wife, now deceased. It is further agreed that each of the parties hereto shall each pay one-third of all probate and administration expenses of the will of the said Jacob Woodman. In consideration of the said payments to be made as aforesaid by the said party of the first part, the said parties of the second part hereby agree to make no contest and consent to the admitting to probate of the will of the said Jacob Woodman.
“Witness the hands of the parties hereto this 16th day of December, 1911.
“Minnie Hall Sellers.
“Maud Gilmore.
“Ella Perry.
“In presence of:
“M. L. Courtright.
“James Gilmore.”
“State op Michigan, ) __ . “County of Bay [ss”
“On this 16th day of December, 1911, .before me, a notary public in and for said county, personally appeared Minnie Hall Sellers, Ella Perry and Maud Gilmore, to me known to be the persons who executed f oregoing instrument, and acknowledged that they executed the same as their free aet and deed.
“M. L. Courtright, “Notary Public, Bay County, Michigan.
“My commission expires April 1, 1913.”

Upon the hearing there was a sharp conflict in the testimony as to the representations made by Mr. Courtright, it being claimed by the complainant, as alleged in the bill, that Mr. Courtright (who seems to have been a relative of some of the parties, and upon friendly terms with all of them, he having transacted business for the testator in his lifetime), represented to complainant that if this settlement was made and said note and mortgage given, there could be no contest of the will; that neither the Jubar heirs nor any other persons interested could contest the will in case the mortgage was given, and that he subsequently represented, when a contest was made, that the note and mortgage had been destroyed.

These representations were denied by Mr. Court-right and other witnesses who were present, who testified that what he did say was that, in his opinion, the Jubar heirs and others could not successfully contest the will, and that he never represented or stated to the complainant or her attorney that the note and mortgage had been destroyed.

It appears, we think, from the evidence that the defendant and her sister, in good faith, intended to contest the probate of the will, claiming that it was not only unjust, but that the testator was mentally incompetent to execute it, and that the consideration for the making of the note and mortgage was that they should desist from contesting the will, and consent to its probate. It is undisputed that they not only did not contest the probate of the will, but that they rendered such assistance as was in their power, by way of furnishing documentary evidence and the employment of counsel, in the allowance of said will, an,d the same was- duly allowed in both courts, and the contestants were defeated.

In our opinion the burden of propf upon these contested questions was not sustained by the complainant at the hearing. The consideration for the note and mortgage appears to have been that the defendant and her sister, Maud Gilmore, should make no contest of the will, but should consent to the admitting of the same to probate.

It is, we think, well settled in this State that legatees under a will, and persons having such an interest in the estate as to entitle them to contest the instrument, may make valid agreements to forbear a contest, and such contracts are favored by the law when made in good faith. Conklin v. Conklin, 165 Mich. 571 (131 N. W. 154).

A contract, whereby one interested in defeating the probate of a will agrees to interpose no objection thereto, is not void as against public policy, unless made eollusively and in fraud of other parties interested in the estate. Grochowski v. Grochowski, 77 Neb. 506 (109 N. W. 742, 13 L. R. A. [N. S.] 484 and note, 15 Am. & Eng. Ann. Cas. 300).

Neither by the pleadings, proofs, nor briefs of counsel has the question been raised whether this promissory note and mortgage were void as opposed to public policy, so as to bring the case within the principle announced in Conklin v. Conklin, supra, and we have not considered that question for the reasons stated, and we herein express no opinion upon that question.

Upon the hearing in the court below the bill of complaint was dismissed and complainant has appealed; and it is urged by complainant’s counsel that if this court should find that there was not a total failure of consideration for such note and mortgage, that at least relief should be granted complainant to the extent of allowing her two-thirds of the expense of the litigation in establishing said will under that portion of the agreement, above quoted, which reads as follows:

“It is further agreed that each of the parties hereto shall each pay one-third of all probate and administration expenses of the will of said Jacob Woodman.”

The answer does not claim the benefit of a cross-bill, and does not ask to enforce or foreclose this mortgage. In our opinion the pleadings are not so framed, as to entitle the complainant to this relief in this suit.

The bill is not framed according to any theory of an abatement or reduction of any portion of said mortgage for the reason urged; and, as the record stands, there appears to be no warrant for modifying the decree below, as asked for. Agar v. Streeter, 183 Mich. 600, 609 (150 N. W. 160, L. R. A. 1915D, 196).

Should the mortgagee proceed to enforce or foreclose this mortgage, this defense under the agreement would doubtless be open to complainant. It appears that no part of the mortgage debt has been paid, and that four installments of $500 each, with interest, are now past due.

This record discloses a sharp conflict in the testimony of the attorneys who tried the instant case in the court below. They both testified in the case. Other counsel for the defendant in the brief filed in this court, in commenting upon this conflict of testimony, asks this court to go entirely outside the record and inquire as to the character and standing of the respective attorneys, by consulting Martindale’s American Law Directory, and their respective ratings therein are stated at length in the brief. This is a most unwarranted and improper statement to appear in a brief filed in this court. Such practice is indefensible and cannot have the sanction of the court. Such reference should be eliminated from the brief, and perhaps would justify the court in striking the entire brief from the case.

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

Kuhn, Ostrander, Bird, Moore, Steere, Brooke, and Person, JJ., concurred.


source: Caselaw Access Project

author: Stone, C. J.

license: Public Domain

text:
    COMSTOCK v. POTTER.
    1. Bills and Notes — Equity—Contribution.
    In a suit for contribution the parties were stockholders in' an automobile company and they having become liable to pay some of its notes, got security in the form of a trust agreement, transferring part of the corporate property to complainant as trustee. It was agreed by the written trust arrangement that if the property did not realize enough to pay the debts and expenses, each of the signers should bear his equal proportion of the amount unpaid. The trustee was to receive no compensation, but had an equal interest with the others. By several successive arrangements, money was borrowed on the indorsed notes of the defendants and complainant and each of the debtors indorsing the obligations had an eighth interest in the balance or equity. The trustee, with the consent of defendants, borrowed a considerable sum to protect the joint interests and was finally compelled to pay the notes indorsed by the others jointly interested. Held, that he was not a holder of the notes so as to entitle him to bring a legal action and, in view of the apparent inadequacy of his legal remedy, he could have relief in equity to compel contribution from the others interested.
    2. Same — Parties—Indorsement—Evidence.
    When there are successive indorsers on-a promissory note, which the first one liable has to pay, it is competent for him to prove that all of the indorsers became parties to the agreement under an arrangement to be sureties for , one another, and that therefore a right of contribution from the joint indorsers arose.
    3. Same — Indorsement—Parties Liable.
    The original indorser of a note ordinarily has no claim for contribution against subsequent indorsers.
    4. Same — Joint Undertakings — Surety.
    .The right is not limited to cosureties; it extends to joint contractors one qf whom that has paid more than his share of the joint obligation may compel his co-contractors to contribute.

      5. Same — Adequate Remedy at Law.
    Courts of equity have not Been ousted of their jurisdiction on account of the assumption of jurisdiction By the law, But they retain concurrent jurisdiction if the legal form of action does not furnish adequate relief.
    6. Same.
    Where there are two or more sureties for the same principal debtor, and for the same debt or obligation, whether on the same or on different instruments, and one of them has actually paid or satisfied more than his proportionate share of the debt or obligation, he is entitled to a contribution from each and all of his cosureties, in order to reimburse him for the excess paid over his share, and thus to equalize their common burdens. The same doctrine applies, and the same remedy is given between all those who are jointly, or jointly or severally, liable on contract or obligation in the nature of contract.
    7. Same.
    When two or more persons are jointly liable for the payment of the same debt or obligation and one has paid the entire claim, he may have contribution from his co-debtors or obligees in cases where it would be equitable and just.
    Appeal from Alpena; Widdis, J., presiding.
    Submitted April 12, 1916.
    (Docket No. 135.)
    Decided June 1, 1916.
    Bill by William A. Comstock against Fred N. Potter and others for contribution. From a decree overruling a demurrer to complainant’s bill, defendants appeal.
    Affirmed.

      Henry, Henry & Henry, for complainant. .

      I. S. Canfield, for defendants Corbin, Hill, Collins and Fred N. Potter.

      Frank T. Hinks, for defendants James J. Potter and John D. Potter.
   Stone, C. J.

This is a’ bill for contribution. It states that complainant and all of the defendants were on May 11, 1912, stockholders in the Alpena Motorcar Company, a corporation, whose business was located at Alpena, Mich.; that on and prior to said date all of the parties thereto, because of their interest as stockholders of said company, had become indorsers of the notes of that corporation; that on said date said company owned an equity in certain real estate located in Washington, D. C., known as the “Netherlands property,” the legal title being held in the name of the defendant Roberson, as trustee; that by agreement of all the parties to this suit and said company on said day the equity in said property was transferred to all the parties to the suit, and the legal title was taken and thereafter held by complainant as trustee for the parties ; that on the same date the parties to this suit, with one Patrick Culligan, executed a written agreement known as the “trust agreement,” annexed to the bill as Exhibit A; that defendant John D. Potter did not sign said agreement, but afterwards considered himself a party thereto, and recognized his obligations thereunder.

The “trust agreement," after reciting that complainant, as trustee, held title to the “Netherlands property,” contains the following stipulations and agreements: That complainant, as trustee, had on said date executed two promissory notes of $3,000 each to the Alpena County Savings Bank, due in six months, with 6 per cent, interest, and that defendants John D.,Potter and James J. Potter had indorsed them; that complainant, as trustee, had also executed two other promissory notes to said bank for $8,500 each, payable six months after date, bearing the same rate of interest, and that defendants Roberson, Corbin, Hill, Collins, and Fred N. Potter, with complainant, had indorsed the same; that complainant had, as trustee, also made a promissory note to said Patrick Culligan for $3,000, payable in six months, bearing interest at 6 per cent. per annum; that the moneys procured upon said notes had been used to purchase the equity, right, title, interest, and claim of said Alpena Motorcar Company in said “Netherlands property.” Provision was made for the execution by complainant of notes to the said bank and said Culligan, for the purpose of raising money to reduce the mortgage incumbrance on said property, but the amount of such proposed notes is not stated, and it is not claimed that other notes were in fact ever made.

It was agreed that complainant should handle said real estate; that the rents and incomes thereof should be applied upon the payment of taxes, the expense of taking care of said property, and the mortgage thereof, and the balance be applied on the mortgage thereon; that said property might be sold by complainant, with the written consent of the parties thereto; that out of the proceeds of said sale the mortgages should be paid, the balance of the proceeds, if any, applied to the payment of the notes therein described, and any and all renewals and extensions thereof; the residue, if any, to be divided equally between the parties thereto ; that, if said property did not bring a sufficient sum to pay all of said notes in full, each of the parties of the second part should bear equally his proportion of the unpaid amounts on said notes; that the contract should apply to all renewals and extensions of the notes; and that complainant should receive no compensation for his services as trustee.

The bill further states that on or about July 31, 1912, for the purpose of promoting the interest of all the parties, it was verbally agreed to raise $15,000 by discounting a note signed by complainant as trustee and indorsed by complainant and all of the defendants; that a note for six months, at 6 per cent., for $15,000, in favor of the Alpena County Savings Bank, was executed and indorsed as above stated, and the proceeds paid to said Alpena Motorcar Company for that amount of treasury stock; and that “each of said parties was considered as holding a one-eighth interest in the capital stock upon the purchase of which said sum was credited.”

This $15,000 note was renewed to July 31, 1914, when the amount was divided into eight notes of $1,-875 each. Each party, complainant and defendants, executed one of these notes, and the others indorsed. When this $15,000 note was made all of the parties contemplated that the said note would be kept alive by renewals until the complainant was able to sell the real estate. On April 28, 1913, the parties executed another agreement in writing. The substance of this agreement is as follows:

That for good and valuable consideration, and in further consideration of the advantages to be derived, the complainant, trustee, under an agreement dated May 11, 1912, was authorized to borrow $12,000 from said complainant, and $12,000 from Patrick Culligan for one year at 6 per cent, interest, the proceeds to be applied by said complainant, as trustee under said agreement, to pay off the “third trust” against said “Netherlands property,” with interest, charges, and taxes; that, in case complainant trustee should make sale of the “Netherlands property,” the proceeds of sale, after paying off the “recorded trusts” against said property, should be applied to pay:

(1) The notes of $12,000 to said complainant and Culligan, with interest.
(2) The loan at Alpena County Savings Bank aggregating $26,000 in notes, signed by complainant as trustee, under agreement of May 11, 1912, as follows, with interest, shall be paid: $8,500, indorsed by complainant, Roberson, F. N. Potter, Corbin, Hill, and Collins; $8,500, with same indorsers as above; $3,000, indorsed by J..J. Potter and J. D. Potter; $3,000, indorsed by J. J. Potter and J. D. Potter; $3,000 to P. Culligan.
(3) That there should be paid a note of complainant trustee under agreement of May 11, 1912, at the Alpena County Savings Bank for $15,000, indorsed by Roberson, Comstock, Corbin, Hill, Collins, F. N. Potter, J. J. Potter, and J. D. Potter, and a note of $5,000 to P. Culligan, all with accrued interest.

The bill further states that complainant had held and managed the “Netherlands property” without' compensation, applying the income to payment of interest, charges, taxes, and expenses, but had be'en unable to sell the property^ and so he had not paid any part of the indebtedness scheduled in said last-named agreement; that the situation of the parties, their relations to~ each other, and the real estate were substantially the same as at the date of the last-named agreement; that the parties to this suit were able to carry the notes by renewals in the same form until February 1, 1915; that on the last-named -date said eight notes for $1,875 each, made and indorsed as aforesaid, became due and payable at the Alpena County Savings Bank, where the said notes had been discounted, and were protested for nonpayment, and that complainant, on or about April 20, 1915, paid all of said notes, the amount so paid by him for principal, interest, and protest fees aggregating the sum of $15,658; that by reason of the premises “each of the parties hereto became and is equitably liable to your orator for his equal one-eighth share of the said sum of $15,658” paid by him as aforesaid, with interest thereon at the rate of 6 per cent, per annum from and after the 20th day of April, 1915; that “the equities of your orator and of the other parties hereto arising from the transactions aforesaid cannot be correctly adjusted in an action at law, and your orator has no effective means of adjusting the mutual rights and obligations of the parties hereto, except by the decree of a court of equity.”

Complainant prays the following relief:

(1) That the defendants answer the bill.
(2) That the defendants each respectively be decreed to pay complainant an equal one-eighth of the amount paid by him, with interest and costs of suit, and that complainant have execution therefor.
(3) That all of the mutual rights, liabilities, and obligations of the parties hereto growing out of the facts aforesaid, be fixed, established, and adjusted by the decree of this court.
(4) A prayer for general relief.

The eight separate notes, as well as the $15,000 note, are all set forth in the bill of complaint. Of - the eight notes signed by the several defendants an inspection shows that the complainant was the second indorser on all of the notes save one, where he was the first indorser.

The bill of complaint was taken as confessed by the defendant Roberson. The other defendants have demurred, the substance of the demurrers being:

(1) That the' complainant has not, in and by his bill, stated a case for the interposition of a court of equity.
(2) Because all and every of the matters and things in the bill of complaint mentioned are matters which may be tried and fully determined in a suit at law, and with respect to which the complainant is not entitled to any relief in a court of equity.
(3) Because a court of equity has no jurisdiction to enforce the payment of promissory notes, or notes between indorsers and the maker thereof, as set forth in the bill of complaint.

Upon argument the demurrers were overruled, and the defendants, with exception of defendant Roberson, have appealed.

The argument of the appellants is to the effect that the complainant has a complete and adequate remedy at law. An investigation of the questions involved has satisfied us that the demurrers were properly overruled, and that complainant has a proper standing in a court of equity. It is urged by appellants’ counsel that under sections 10055 and 10057, 3 Comp. Laws (3 Comp. Laws 1915, §§ 12366,12469,12802), the complainant could bring an action at law as the lawful holder of these promissory notes, and recover against all of the defendants in one suit. Section 10055 provides that it shall be lawful for the holder of any bill of exchange or promissory note, instead of bringing separate suits against the drawers, makers, guarantors of the payment thereof, indorsers, and acceptors of such bill or note, to include all or any of the said parties to the bill or note in one action, and to proceed to judgment and execution in the same manner as though all the defendants were joint contractors. In our opinion, the complainant is not such a “holder” of the promissory notes in question as is contemplated by this provision of the statute. The bill alleges" that complainant paid these notes. He cannot bring suit upon them as a holder. By this we do not mean that the notes may not be used by him as evidence of the amount which he has paid, but, if he were to sue at law, he would properly bring his action for money paid for the use and benefit of the defendants, using the notes as evidence of the amount of his damages. Neither do we think that the complainant could sue all of the defendants, makers, and indorsers in one suit in an action at law, because he is not within the terms of the statute above referred to.

In Port Huron, etc., R. Co. v. Potter, 55 Mich. 627 (22 N. W. 70), this court, in referring to the sections of the statute above mentioned, said:

“The only new rule brought in by that statute was the provision which allowed a single suit to be brought against indorsers and other parties as well as makers.”

We are satisfied that in an action at law the defendants would have to be sued severally, and not jointly. At least makers and indorsers could not be joined under the circumstances as they appear in this case. 6 R. C. L. p. 1061, and cases there cited.

It should be noted that in an action at law complainant would not be able to maintain a suit against subsequent indorsers, and this fact, as well as the avoidance of a multiplicity of suits, should give equity jurisdiction, where it is sought, as in this case, to hold all of the defendants jointly in pursuance of not only justice and equity, but of the contractual relations of the parties.

“When there are three successive indorsers on a note which the first indorser has paid, it is competent for him to show that all indorsed the note under an agreement to do so as joint sureties for one another, and that therefore he has a right of contribution from the second and third indorsers; ordinarily, of course, being the first indorser, he could have no claim against any subsequent indorser.” Merwin’s Equity & Equity Pleadings, § 601.

The right of one surety to call upon his cosurety for contribution, like the right of all the sureties to call upon the principal for indemnity, arises from a principle of equity, growing out of the relations which the parties have assumed towards each other. The equity springs up at the time of entering into that relation, and is fully consummated when the surety is compelled to pay the debt. 6 R. C. L. p. 1042.

It may be taken as settled that the right to contribution is not confined to the relation of cosurety, but extends to joint contractors, and one who has paid more than his share of the joint obligation may recover contribution from his cocontractors. 6 R. C. L. p. 1046.

While assumpsit for money paid by a surety is a modern remedy, yet courts of equity have not been ousted of their jurisdiction in matters of this kind on account of the assumption thereof by the law courts, but their jurisdiction is now considered concurrent; and in many cases, as here, assumpsit does not furnish adequate relief. 6 R. C. L. p. 1059.

In 4 Pomeroy’s Equity Jurisprudence (3d Ed.), § 1418, under the title of “Contribution,” that author used the following language:

“Where there are two or more sureties for the same principal debtor, and for the same debt or obligation, whether on the same or on different instruments, and one of them has actually paid or satisfied more than his proportionate share of the debt or obligation, he is entitled to a contribution from each and all of his cosureties, in order to reimburse him for the excess paid over his share, and thus to equalize their common burdens. The same doctrine applies, and the same remedy is given between all those who are jointly, or jointly and severally, liable on contract or obligation in the nature of contract.”

The doctrine of contribution rests upon the maxim, Equality is equity. The equitable jurisdiction still remains and has some important advantages. All the cosureties and the principal debtor being parties to the equity suit, the liabilities of each and their exoneration by the principal debtor can be adjusted and established by a single decree. If one or more of the co-sureties are insolvent, the plaintiff can in equity dbtain a proportionate increase of contribution from the others who are solvent. See the many authorities cited in note 1 to the above-named section.

In Stace’s Michigan Chancery Practice, § 554, it is said:

“When two or more persons are jointly liable for the payment of the same debt or obligation and one has paid the entire claim, he may have contribution from his codebtors or obligees in cases where it would be equitable and just. Courts of law have concurrent jurisdiction with courts of equity to compel contribution, but in cases where the remedy at law would be incomplete, inadequate or doubtful, a bill in equity is the proper remedy” — citing 1 Story, Equity Juris. §§ 483-505; McGunn v. Hanlin, 29 Mich. 476; Smith v. Rumsey, 33 Mich. 183; Edsell v. Briggs, 20 Mich. 429; Rynearson v. Turner, 52 Mich. 7 (17 N. W. 219); Stewart v. Goulden, 52 Mich. 143 (17 N. W. 731).

See, also, Shurlow v. Lewis, 170 Mich. 493 (136 N. W. 484, 41 L. R. A. [N. S.] 975).

The Michigan cases above cited bear more or less strongly upon this question.

We are of the opinion that the court below did not err in overruling the said demurrers, and its order is therefore affirmed, with costs to the complainant, and said cause will be remanded to the court below for further proceedings under the rules of practice.

Kuhn, Ostrander, Bird, Moore, Steere, Brooke, and Person, JJ., concurred.


author: Kuhn, J.

text:
    COMSTOCK v. CORBIN.
    1. Trusts — Contribution—Exoneration—Equity—Relief.
    Plaintiff, in a suit for exoneration, was trustee of certain real estate in which several stockholders of the A. Motorcar Company held equitable rights, arising out of their several indorsements of the notes of that corporation. As trustee plaintiff had executed notes amounting to $6,000, indorsed by two of the defendants. He also owed to the bank a larger amount indorsed by others of the defendants, being a part of the sum borrowed to secure title’ to the real property of the corporation. It was provided by the trust agreement that complainant should control and manage the real estate and apply funds realized on expenses and an incumbrance on the land, which should only be sold with tbe consent of tbe cestuis que trustent, and the balance remaining should be applied first to pay the incumbrances and notes referred to and the remainder equally divided between the parties to the trust. Two notes for $8,500 each were executed by the trustee and the defendants to borrow funds for the purchase of stock in the company, and later divided into eight notes, signed by each of them as maker or indorser. By a later agreement the trustee was authorized to borrow $24,000 to pay off the trust against the realty and in case of a sale of the same the proceeds should be applied to pay off the notes and loans entered into as part of the trust arrangement. No compensation went to the trustee. On the notes maturing defendants failed to liquidate and the holder brought assumpsit against complainant and he in turn filed a bill to compel the others to exonerate him from payment of the claims. It was also charged that two defendants declined to become responsible on some notes issued by complainant. Held, that a demurrer to the bill was rightly sustained and that in the absence of averments that the defendants were insolvent or that they had violated the agreement or that complainant had actually paid any debts on which the defendants were liable, the bill could not be maintained.
    2. Same — Exoneration—Contribution—Joint Obligation.
    The right of contribution arises when one of several parties who are liable to pay a common debt or obligation discharges it for the benefit of all, when the right arises to call upon the co-obligors for contribution. The right of exoneration is recognized where the person secondarily liable, as, e. g., a surety, is required to pay the debt; or in certain instances he may compel the person primarily liable to discharge the indebtedness.
    3. Same — Suretyship.
    No relationship of principal and surety was created, but complainant was'rather in the position of a joint obligor having an equal interest with the others, and was not entitled to the equitable remedy of exoneration.
    Appeal from Alpena; Widdis, J., presiding.
    Submitted April 12, 1916.
    (Docket No. 56.)
    Decided June 1, 1916.

      Bill by William A. Comstock against John A. Corbin and others for exoneration from liability on certain promissory notes made or indorsed by complainant as trustee. From a decree for complainant, defendants appeal.
    Reversed.

      Henry, Henry & Henry, for complainant.

      I. S. Canfield, for defendants Corbin, Hill, Collins, and Fred N. Potter.

      Frank T. Hinks, for defendants James J. Potter and John D. Potter. ■
   Kuhn, J.

This case has many facts in common with the case of Comstock v. Potter, ante, 629 (158 N. W. 102), in which the opinion of the court is written by Mr. Chief Justice Stone. In that case the bill of complaint was a bill for contribution, but in this case it is in the nature of a bill for exoneration. 'A repetition of some of the essential facts is necessary here, so as to present the questions involved.

On May 11,1912, the plaintiff and all the defendants in this suit, with the exception of the Alpena County Savings Bank, were stockholders in the Alpena Motorcar'Company, a Michigan corporation doing business and having its office at Alpena, Mich. Prior to that date all the parties had become indorsers on the commercial paper of the Alpena Motorcar Company. Seventeen thousand dollars had been borrowed from the Alpena County Savings Bank on two promissory notes of $8,500 each executed by the Alpena Motorcar Company as maker and indorsed by the plaintiff and the defendants Roberson, Fred N. Potter, Corbin, Hill, and Collins. Six thousand dollars had been borrowed from the said Alpena County Savings Bank on two promissory notes of $3,000 each, each executed by the said Alpena Motorcar Company as maker and indorsed by the defendants James J. Potter and John D. Potter. Three thousand dollars had been borrowed from the defendant Culligan on a note executed by the plaintiff as trustee. The facts with reference to the taking over by the plaintiff as trustee of the property of the Alpena Motorcar Company in Washington, known, as “the Netherlands property,” and the execution and contents of the written agreement known as the “trust agreement,” and annexed to the bill as Exhibit A, are clearly set forth in the opinion of Mr. Justice Stone in the other case, and likewise the agreement of April 28, 1913, known as Exhibit O.

It further appears from the allegations of the bill that on November 12, 1914, “for the purpose of facilitating the renewal of the promissory notes aforesaid and of more accurately expressing the relations of the parties in respect thereto, it was verbally agreed” that the forms of the notes provided for in the trust agreement should be changed as follows: The two .$8,500 notes should be superseded and renewed as six separate promissory notes of $2,833;33 each, each to be signed by one of the parties, viz., plaintiff and the defendants Roberson, Fred N. Potter, Corbin, Hill, and Collins, and indorsed by each of the other five of the said parties. The two notes of $3,000 each should be superseded, and renewed by two other separate promissory notes of $3,000 each, one to be made by the defendant John D. Potter and indorsed by the defendant James J. Potter, and the other to be made by the defendant James J. Potter and indorsed by the defendant John D. Potter. This oral or so-called verbal agreement was partly performed by the division of the two $8,500 notes into six notes of $2,833.33 each, but the defendants John D. Potter and James J. Potter refused to carry out the agreement as to the two notes of $3,000 each.

On November 12, 1914, two notes, being renewals of the two $3,000 notes provided for in the trust agreement of May 11, 1912, executed by the plaintiff as trustee and indorsed by the defendants James J. Potter and John D. Potter, became due. Said notes were not renewed or paid, were protested by the said Alpena County Savings Bank for nonpayment, and an action of assumpsit against the plaintiff and the defendants James J. Potter and John D. Potter to recover on the two notes was commenced by the bank and is pending.

The theory of the plaintiff’s counsel as to their position in this case and as to the relief sought by the plaintiff may be obtained from the following excerpts from their brief:

“As the situation presents itself, therefore, six notes for $2,833.33 each, discounted at the Alpena County Savings Bank, are held by it. In case of the nonpayment of these notes or for the failure to renew them for any reason, plaintiff will be subject t,o litigation against him on the part of the bank. The two $3,000 notes are at present in suit, with plaintiff, liable to a judgment against him. It is possible that he will be unable to secure in the law action the equitable relief and results-to which he is entitled. * * *
“Plaintiff is financially responsible, and, if judgments are obtained against him, will be compelled to pay same, and will thereby lose the use of the money he would be compelled to pay. All of his capital is actively employed in his business, and to make such payments would seriously damage him in an amount and in a manner that an action at law could not accurately compute or adequately compensate. * * *
“The specific relief prayed for is that the bank may be required to receive payment from the other parties to the suit, and that the other parties be required to pay to the bank the due proportionate share payable by each of the parties, that all of the mutual rights, liabilities, and obligations of the parties be determined. If, by reason of certain facts, later discussed, plaintiff’s relief should at present be confined to a part only of the obligations in question, then such relief as this court shall deem proper.”

The bill was demurred to by the defendants James J. and John D. Potter, John A. Corbin, J. D. Hill, F. N. Potter, and Richard H. Collins. The answer of the defendant Culligan was filed, and the defendant Roberson has consented to the entry of an order that the bill be taken as confessed as to him. The defendants Corbin, Collins, Hill, and Fred N. Potter demurred to the bill for the following reasons: •

“That the complainant has not in and by his said bill made out a case for the interposition of a court of equity.
“Because all and every of the matters and things in the said complainant’s bill of complaint mentioned and set forth in respect whereof relief is prayed are matters which may foe tried and finally determined in a suit at law, and with respect to which the complainant is not entitled to any relief in a court of equity.
“Because a court of equity has no jurisdiction to enforce the payment of promissory note or notes between the maker and indorsers thereof, as set forth in the bill of complaint in this cause.
“Because the bill shows that as to the above-named defendants no cause of action has accrued either at law or in equity; it being shown that all liability of said defendants is evidenced, if at all, by promissory notes which have not yet matured.”

The defendants John D. and James J. Potter also demurred to the bill on the grounds that:

“All and every the matters in the said complainant’s bill of complaint mentioned and set forth in respect whereof relief is prayed are matters which may be tried and determined in a suit at law, and with respect to which the complainant is not entitled to any relief in a court of equity.”

The demurrers having been overruled by the trial judge, these demurring defendants have appealed.

The bill of complaint seems to be barren of any charge that the defendants Fred N. Potter, Corbin, Hill, and Collins have in any way violated the alleged verbal agreement or any written agreement, and does not contain any averment showing that any of the defendants, are now, or are about to become, insolvent. The main charge deducible from the pleadings and the position of counsel, and upon which it is urged that relief should be granted to the plaintiff, is that James J. Potter and John D. Potter refused to become makers, respectively, and indorsers upon the two $3,000 notes, so that the plaintiff would no longer be connected therewith or liable thereon. There does not seem to be any consideration whatever for the oral agreement which completely changed the terms of the written agreement, and it does not seem to be claimed that the oral agreement supersedes the written one, because all the parties, including the plaintiff, are claiming rights under the written agreement. It does not appear that the plaintiff has paid any debt for which the defendants are liable, as was done in the other case, and we are of the opinion that no such a situation has been here created as entitles the plaintiff to the relief asked for, and the bill cannot be maintained as one for his exoneration. That such a bill has been recognized by equity practice is without question, but the principle upon which such an action is founded is thus stated by Mr. Bispham in his Principles of Equity (7th Ed.), § 27:

“The equity of contribution arises when one of several parties who are liable to a common debt or obligation discharges the same for the benefit of all. In such a case he has a right to call upon his codebtors for contribution. This right is most frequently exer•cised in the case of sureties, as is also the equity of exoneration, which is the right of a person secondarily liable to call upon the party primarily liable to discharge the debt, or to reimburse him if he has paid it/’

The doctrine is thus stated in 7 Am. & Eng. Enc. Law (1st Ed.), p. 485:

“Exoneration is a right which exists between those who are successively liable for the same debt, by which, when a party who is secondarily liable has paid or satisfied the principal’s obligation or any part thereof, he is entitled to be reimbursed by the principal debtor, and can bring a bill in equity for that purpose.”

See, alsp, 7 Am. & Eng. Enc. Law (2d Ed.), pp. 326, 330, 32 Cyc. p. 234.

Under the contract or trust agreement the plaintiff has the same rights, and no others, as any of the other signers, any one of whom is just as liable to be required to pay the note as he. It does not seem that the relation of principal and surety was here created, but rather that the plaintiff is in the same position as the other signers, viz., that of principal debtor, and therefore that the principle of exoneration, which might be invoked where the relationship of principal and surety exists, does not apply here.

The trial judge should have sustained the demurrer, and a decree will be entered dismissing the bill of complaint, with costs to the appealing defendants.

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


text:
    NEW ERA ASSOCIATION v. KUYAT.
    1. Insurance — Benefit Policy — Mutual Benefit Association— Change of Beneficiary.
    The insured in a life policy of a mutual association whose constitution contained a provision permitting a change of beneficiary by signing a waiver of the first certificate was authorized to mate the change without the assent of the beneficiary or without notice to him, because under the contract he obtained no vested right in the insurance.
    ■ 2. Same — Estoppel—Mistake.
    Where the beneficiary, who paid the premium on a benefit certificate for $1,000 insuring her husband’s life, wrote to the insurer to ascertain whether or not there had been any change in the beneficiary, and by mistake the local official of the association returned that the original policy remained in force, though $250 had been made payable to a sister of the insured, the plaintiff insurance organization was not estopped to deny that a change had been made where the claimant did not show that she had acted in reliance on the information so received, the change affecting only a part of the fund payable under the certificate.
    3. Same — Change of Beneficiary.
    Where the insured indorsed his name on the new certificate as the by-laws of the company provided he should do on receiving it, he ratified the change as made whether or not he had complied with the regulations for bringing about the transfer or modification.
    Appeal from Wayne; Mandell, J.
    Submitted April 6, 1916.
    (Docket No. 27.)
    Decided June 1, 1916.
    Bill of interpleader by the New Era Association, a mutual benefit insurance association, against Emma R. Kuyat and Sophia Kenzie to determine the right to the proceeds of a policy of insurance. From a decree for defendant Sophia Kenzie, defendant Emma R. Kuyat appeals.
    Affirmed.

      Kleinhans, Knappen & Uhl (Lucking, Helfman, Lucking & Hanlon, of counsel), for complainant.

      James F. Hill, for defendant Sophia Kenzie.

      Moore & Moore, for defendant Emma R. Kuyat.
   Stone, C. J.

Plaintiff: filed its bill of interpleader to determine the ownership of a fund of $250 which appellant Emma R. Kuyat claims under a benefit certificate or policy issued by plaintiff to one Florian A. Kuyat. Appellee Sophia Kenzie claims the same fund under a later benefit certificate issued by plaintiff upon receipt of a purported waiver of the first certificate, and a direction to issue a new certificate written upon a form provided by plaintiff for such purpose, and purporting to be signed by the insured. Florian A. Kuyat and Emma R. Kuyat were married October 5, 1911, at Detroit. On October 19, 1911, the plaintiff issued a benefit certificate or policy to said Florian A. Kuyat, providing that while he was in good standing in the association he was entitled to participate in the benefit fund to an amount not to exceed $1,000, which should be paid at his death to Emma R. Kuyat, related to him as his wife, subject to all the conditions of the constitution and laws of the association, etc. This policy was delivered to Mrs. Kuyat, who retained it in her possession, and no demand had ever been made for its surrender. She paid all the assessments except two, and claimed that she furnished the money with which those two payments were made; but this was a disputed question.

Shortly after their marriage, Mr. and Mrs. Kuyat moved to Moline, Ill., and later they went to Texas. He was an invalid, afflicted with tuberculosis, and he had been “a hard drinking man.” While living in Texas, he seems to have had some trouble with his wife growing out of his habits, and he desired to return to Michigan. To that end he wrote, in February, 1913, to his sister, Sophia Kenzie, for assistance. Mrs. Kenzie and her husband sent him a railroad ticket and some money, which enabled him to go to them at Pontiac, where they then resided. He arrived there in a needy condition. He lived with this sister and family some months, during which time they cared for him and furnished him with medicines, medical attendance, and clothes. In April, 1913, Mr. Kuyat expressed a desire to change his benefit certificate or policy so as to make it payable $750 to his wife, and $250 to his sister, Sophia Kenzie. At his request an application for such change was made out and sent to the association at Grand Rapids, but because of some mistake it was returned. Mr. Kuyat then asked his sister, Mrs. Kenzie, to make out another application. In his presence, and at his request, she made it out and signed his name to it. A new certificate was, on April 7,1918, issued to Mr. Kuyat, who, on receiving it, immediately wrote his name on the bottom of it, as required by the rules (of the association. It contained the provisions as last above indicated, viz., payable $750 to his wife, and $250 to said sister. .There was evidence that Mrs. Kenzie personally paid two assessments upon this new certificate. About May or June, 1913, Mrs. Kuyat came to Michigan and joined her husband. He went to the sanatorium July 7, 1913, and died there February 6, 1914. Upon satisfactory proofs of death being made, and on April 15,1914, plaintiff paid to the wife, Emma R. Kuyat, in accordance with the terms of said new certificate, the sum of $750; but the remaining sum of $250, being claimed by both the wife and sister, has not been paid to either of them, but the bill of interpleader was filed. The certificates bore different numbers, but the receipts issued by the plaintiff to boih Mrs. Kuyat and Mrs. Kenzie contained no number of policy. While Mrs. Kenzie and her husband were continuing to care for Mr. Kuyat, Mrs. Kuyat continued to make payment of the assessments. She testified to having, at Mr. Kuyat’s request, inquired at the local agency of plaintiff whether there was any change or attempted change in the certificate or policy, and that on August 4,1913, she received a postal card from the local treasurer that the assessments she was paying were on the certificate of October, 1911. It appeared that this information was a mistake, and the plaintiff claimed that it had nothing to do with sending the postal card. There was testimony to the effect that Mr. Kuyat stated, both before and after he went to the sanatorium, that he should see that his sister got some of the insurance.

The constitution of the plaintiff association provides a means and method of changing a beneficiary in the following language:

“Lost certificates and new certificates may be issued at any time in place of the lost one, or for change of beneficiary, upon the signing of a waiver of the original certificate, and paying a certificate fee of 50 cents.”

The application bearing the name of Mr. Kuyat, and received by the plaintiff, was as follows:

“Form 72. Waiver of Former Certificate.
“I hereby waive all claims for myself and beneficiaries under New Era certificate No. (do not know) issued to me (do not know 191). Said certificate is in my wife’s possession. I desire a new one issued for one thousand' dollars in favor of Mrs. Emma Kuyat, relationship wife $750. Mrs. Sophie Kenzie, relationship sister $250.
“Date at 22 W. Fort St., Pontiac on the second day of April, 1913.
[Signed] Florian Kuyat, Member.
“Witness:-.”

Upon the hearing at the circuit, the court found that the last certificate was in full force and effect at the date of the death of said Florian A. Kuyat, and awarded and decreed the $250 in controversy to the sister, Sophia Kenzie.

The defendant Emma R. Kuyat has appealed. In this court it was her claim:

(1) That Mr. Kuyat could not secure a new policy in the place of the old one without the consent of his wife, the beneficiary.
(2) That the association is estopped from disputing the validity of the first policy.
(3) That there was no valid request in writing from Mr. Kuyat to issue a new policy.

1. We are of the opinion that it is well settled by the decisions of this court that, under the circumstances appearing in this case, the insured has the right, during his lifetime, without the consent of the beneficiary, to change the beneficiary under his policy; that the first beneficiary has no vested right in such policy; and that the association is not required to notify a beneficiary of such change. Grand Lodge A. O. U. W. v. Child, 70 Mich. 163 (38 N. W. 1); Union Mutual Ass’n v. Montgomery, 70 Mich. 587 (38 N. W. 588, 14 Am. St. Rep. 519) ; Allgemeiner Arbeiter Bund v. Adamson, 132 Mich. 86 (92 N. W. 786); Grand Lodge A. O. U. W. v. Brown, 160 Mich. 437 (125 N. W. 400) ; Ladies of Modern Maccabees v. Daley, 166 Mich. 542 (131 N. W. 1127); Schiller-Bund v. Knack, 184 Mich. 95, 104 (150 N. W. 337). In the last-cited case we said:

“We must recognize the rule which has been frequently announced by this court that the by-law of a society permitting the changing of a beneficiary is a reasonable regulation of the member to exercise the power of appointment whenever and so often as he pleases.”

2. Upon the subject of estoppel, it is sufficient to say that there is no evidence that Mrs. Kuyat was in any way influenced or injured by the representation or statement contained in the postal card, even if it was sent by authority of the plaintiff. There is no estoppel under such circumstances. Sheffield Car Co. v. Hydraulic Co., 171 Mich. 423, 450 (137 N. W. 305, Am. & Eng. Ann. Cas. 1914B, 984).

3. The plaintiff admits its liability to pay the $250 in question. It is not conceded that appellant can raise the question of the validity of the change of beneficiary, but it is claimed that the plaintiff only could raise the question, under the authorities already cited.

However, it is undisputed that, upon receiving the new certificate, Mr. Kuyat personally signed his name on the bottom thereof, thereby agreeing to its terms and ratifying the change. Upon the whole record, we are satisfied that the trial court made a proper disposition of the case, and the decree below is affirmed, with costs to appellee from appellant.

Kuhn, Ostrander, Bird, Moore, Steere, Brooke, and Person, JJ., concurred.


text:
    KERR v. WEEKS.
    1. Mortgages — Foreclosure—Parties—Subpcena.
    In. ejectment for lands claimed by defendants through a foreclosure in chaticery, the objection raised to the jurisdiction of the court that entered the decree that on one of the parties defendant a subprena had been served which named only one of two defendants (having the usual underwriting), was not fatal to the validity of the decree after fifteen years, during which defendants had enjoyed possession without interruption. Cf. former Chancery Rule 4.
    2. Same — Irregularities—Delay or Laches.
    The omission to comply with the rule requiring the names of all parties defendant to be inserted in the subprena amounted to no more than an irregularity subject to amendment by the court, and application to take advantage of such technical defect should be made with expedition or at'the first opportunity.
    3. Same — Statutes.
    The rule has no greater force than a statute, and the power of the court to remedy or correct failure to comply with statute provisions is undoubted.

      Error to Gratiot; Dodds, J., presiding.
    Submitted April 11, 1916.
    (Docket No. 85.)
    Decided June 1, 1916.
    Ejectment by William Kerr against William F. Weeks and another. Judgment for defendants. Plaintiff brings error.
    Affirmed.

      Lyon & Moinet, for appellant.

      O. G. Tuttle, for appellees.
   Stone, C. J.

This is an action of ejectment to recover possession of the south fractional half of the southwest fractional quarter of section 30 in township 10 north, range 1 west, being in Gratiot county. To a declaration in the usual form the defendants pleaded the general issue. The case was heard before the court without a jury. From the amended findings of fact filed by the trial judge we compile the following facts:

The lands were duly pre-empted by the plaintiff- on March 6, 1884. Final certificate issued to him February 21, 1885, and a patent was duly issued to bim by the United States on December 11, 1891. On July 27, 1886, plaintiff mortgaged said lands to one Ambler for $200, and on May 13, 1887, he gave another mortgage thereon to one Wannacot for $100. By assignments which were duly recorded these two mortgages became the property of one Caroline E. Squires, who on July 6, 1891 (both mortgages being due and unpaid), filed her bill of complaint to foreclose the same, naming as defendants the said plaintiff, who gave the mortgages, and one William Norris, who. was made a defendant under the clause in said bill which charged that he “has or claims to have rights and interests in the premises described in said indentures of mortgage, or in some parts thereof, as subsequent purchaser or incumbrancer, or otherwise.”

On July 6, 1891, a subpoena in the usual form was issued, “To Wm. Kerr — Greeting,” which was made returnable August 4, 1891, and was returned August 13, 1891, by the sheriff that he was unable to find the defendant. On that day an alias subpoena in the usual form was issued to said defendant Kerr, and there was a like return made on December 23, 1891, and again on said last-named day a pluries subpoena was issued in due form to said defendant Kerr returnable April 26, 1892, and a like return was made thereto. On April 22, 1892, another subpoena was issued in the same form/ to defendant Kerr alone, and returnable May 24, 1892, and the same was served on said Kerr April 25, 1892, in the county of Emmet, Mich., by the sheriff of said last-named county, and due return was made thereof, and the same was filed in the office of the register in chancery on May 3, 1892. In all of said four subpoenas Caroline E. Squires was named as complainant and William Kerr was named as defendant, and no service of any other subpoena issued in said cause was made on said defendant William Kerr, and he did not appear in said cause. The underwriting attached to this last subpoena, which was in the usual form, was signed by solicitors for the complainant, and read as follows:

“A personal decree is sought against the defendant William Kerr, and the bill is filed to reach interests in property, and not to obtain any further relief against the remainder of the defendants.”

On the 1st day of June, 1892, a subpoena was issued returnable June 13, 1892, directed as follows:

“To William Kerr (who has been served by the sheriff of Emmet county) and William Norris — Greeting.”

And the same was served upon said defendant William Norris by the sheriff of Gratiot county. (The record gives the date of service as June 31, 1892, an impossible date.) On July 1,1892, an affidavit of nonappearance of defendant Kerr was filed, and on the same day an order pro confesso as to him was duly entered. On July 13, 1892, the defendant Norris appeared and filed a lengthy answer. On July 20, 1892, suggestion of the death of said complainant was made upon the record, and proceedings were had which resulted in Lorenzo Squires being appointed administrator of the estate of said complainant by the probate court of Gratiot county, and afterwards, and on December 27, 1892, by an order of the court, the said foreclosure suit was revived, and continued in the name of Lorenzo Squires, administrator. None of these proceedings to revive the foreclosure suit was served upon the defendant William Kerr, nor does it appear that he had knowledge of such proceedings.

After the said foreclosure suit was revived and continued in the name of the administrator a replication was duly made and filed on February 6, 1893, to the answer of said defendant Norris, and on February 13th notice was duly given by the solicitors for the complainant to the solicitors for the defendant Norris that complainant claimed the right, under the statute, to the examination of witnesses in open court, and notice of hearing was given to solicitors for defendant Norris, that the cause would be brought on for hearing on March 13, 1893, at the March term of said court, and that the same would be heard on pleadings and proofs taken in open court. On April 20, 1893, the said defendant William Norris by his solicitors filed a withdrawal of his answer, and waived notice of any further steps to be taken by complainant in the case. On May 15, 1893, an affidavit of regularity was filed by complainant, in which it was stated:

“That the said bill has been taken as confessed by the said defendant William Kerr, and the said William Norris, after appearing and answering, _* * * _ withdrew his said answer before the hearing of said cause and after due notice thereof, and made no defense to said cause and the bill of complaint made and filed as aforesaid, and also by his withdrawal waived all right to any notice of any further proceedings in said cause, * * * and that all the proceedings to take said bill as confessed have been regular and according to the rules and practice of this court.”

On May 15, 1893, a decree of foreclosure was made in the usual form, allowing sale of.said premises at any time after June 20, 1893, and thereafter, on June 22d, a notice of sale was given for the 14th day of August, 1893. On July 31, 1893, proof of posting notices of sale was made in the usual form, and on August 14, 1893, proof of the publication in the usual form of notice in the Gratiot Journal was filed.

On the said 14th day of August the sale was made to Aaron L. Squires and Julia E. Squires for tjie whole amount due upon said mortgages, with interest thereon, and costs and charges amounting to $592.78, and a commissioner’s deed was made and delivered to them, and the same was on the same day duly recorded in the office of the register of deeds of said Gratiot county. By mesne conveyances the defendants in the instant, case became the purchasers of the premises in question. It was conceded at the trial that the plaintiff herein was in possession of the said premises until after August 1, 1893, and that the purchasers at said foreclosure sale went into possession in the ,fall of 1893, and that they and all those who purchased under them, including the defendants herein, had continued in possession, to the time of the trial.

The conclusions of law as found by the trial court were as follows:

(1) “Plaintiff raises but one question as to the legality of the foreclosure proceedings, and that is that the chancery court did not obtain jurisdiction in the foreclosure cause so as to cut off his title to the property in question, for the reason that there were two defendants in that chancery ’cause, and the subpoena which was served on him named him alone as defendant.”
(2) “The only question in the case is whether the mortgagor can, nearly 15 years after the sale and deed by the commissioner under the decree of foreclosure in chancery, and where the purchasers at the sale have been in possession of the premises since shortly after the sale was made, recover in ejectment because the subpoena in chancery served upon said mortgagor in the foreclosure proceeding did not contain the name of another defendant who was made so under the subsequent incumbrancers, etc., clause, and when the underwriting states that a personal decree is sought against said mortgagor, and the bill is filed to reach interests in property, and not to obtain any further relief against the remainder of the defendants.”
(8) “I do not think the omission was fatal to the jurisdiction, or that the foreclosure proceedings were invalidated by reason thereof. Other provisions of Chancery Rule 4 seemingly as important as the one requiring the names of all defendants to be inserted in the subpoena have been held merely irregularities that must be called to the attention of the court early. Creveling v. Moore, 39 Mich. 563.”
(4) “And a defendant who is served with subpoena cannot ignore the same and after decree have the proceeding held for naught. Gould v. Castel, 47 Mich. 604 (11 N. W. 403); Colton v. Rupert, 60 Mich. 318 (27 N. W. 520).”
(5) “The invalidity of the argument that, if Norris’ name had been inserted in the chancery subpoena which was served upon defendant Kerr,- he could, have known what suit was pending, and that the omission was misleading, is well shown here. Norris answered, and the answer shows that he was not in any way connected with either the plaintiff or defendant, or with either of the mortgages'in the chancery foreclosure case. He was a mere interloper, denying the rights of both parties, and, so far as it appears, had_ no connection with the plaintiff.^ If he had any rights, it was not connected with the foreclosure case, and could not have been litigated therein. Puterbaugh’s Mich. Ch. (3d Ed.) pp. 344, 346.”
(6) “I think defendant’s counsel is also correct in his contention that the statute of limitations applies. 2 Comp. Laws, § 9714 (3 Comp. Laws 1915, § 12311); Potter v. Martin, 122 Mich. 542 (81 N. W. 424); Semer v. Auditor General, 133 Mich. 569, 576 (95 N. W. 732); West Michigan Park Ass’n v. Railroad Co., 172 Mich. 179 (137 N. W. 799).”
(7) “The claim made by plaintiff’s counsel when the evidence was being introduced that the proceedings to revive the foreclosure suit in the name of the administrator should have been served upon the defendant Kerr was abandoned at the argument.”
(8) “Let judgment be rendered for the defendants, with costs.”

Judgment having been entered for the defendants, the plaintiff brings error, and by appropriate exceptions and assignments of error raises the question of the validity of the foreclosure proceedings, asserting that the decree in the foreclosure case was void because the names of the defendants in that suit were not inserted in the subpoena served upon the defendant Kerr, the plaintiff here.

We are unable to agree with counsel for appellant in their contention that the circuit court in chancery in the foreclosure case did not obtain jurisdiction over the defendant Kerr, and that the decree was a nullity. In addition to the cases cited by the learned circuit judge, we call attention to the following: Parks v. Goodwin, 1 Doug. 56; Johnson v. Johnson, Walk Ch. 309; Calender v. Olcott, 1 Mich. 344; Johnson v. Shepard, 35 Mich. 115; Gould v. Castle, 47 Mich. 604 (11 N. W. 403); Low v. Mills, 61 Mich. 35 (27 N. W. 877); Hennes v. Chas. Hebard & Sons, 169 Mich. 670 (135 N. W. 1073).

We are of opinion tha^the defect was merely an irregularity which, under our broad statute of amendments, the court could have readily amended. As was said in Johnson v. Johnson, supra:

“When any party wishes to set aside the proceedings of his adversary for a mere technical irregularity, he must make his application at the first opportunity; and a defendant who has not caused his appearance to be entered is entitled to no more indulgence than one who has appeared.”

The chancery rule referred to does not provide that the process shall be void, or be quashed, or set aside, if the rule is not complied with. It cannot reasonably be said that this rule has any greater force than a statute. The power of the court to amend and correct such irregularities of noncompliance with statutory provisions is often exercised. Van Slyke v. Books, 181 Mich. 88 (147 N. W. 579); 3 Comp. Laws, §§ 10268, 10270 et seq. (3 Comp. Laws 1915, §§ 12478, 12480 et seq.).

We think that our own decisions dispose of the question, and that it is not necessary to cite cases from other jurisdictions. The entire argument of .counsel for appellant is based upon the claim of want of jurisdiction in the court to enter the decree in the foreclosure case. We cannot agree with that claim.

We are of opinion that the trial court properly disposed of the case, and the judgment below is affirmed.

Kuhn, Ostrander, Bird, Moore, Steere, Brooke, and PERSON, JJ., concurred.


text:
    ROBERTSON v. SMITH.
    1. Reformation — Mistake—Deeds—Equity—Description.
    Complainant filed her bill for reformation of deeds conveying to tbe defendants a parcel of land and to correct tbe conveyance so as to exclude a narrow strip in tbe rear of tbe property, claimed by ber, and sbe averred that a mutual mistake bad occurred whereby tbe point of commencement in tbe description bad been wrongly determined in tbe deed from ber grantor and in defendant’s title deeds and prior instruments. By their answer defendants denied tbe claim of mistake, and set up tbe contention that part of a barn owned by one of tbe grantors bad for a long time occupied a piece of tbe land claimed by complainant, also that portions of tbe property in controversy bad been. used by tbe owner of tbe barn adversely, to place manure, etc. Tbe defendants in possession claimed to be purchasers in good faith without notice though they were advised of tbe location of tbe barn. Held, that tbe evidence to prove a mutual mistake was not sufficiently convincing and that as to innocent purchasers of tbe parcel complainant could not reform ber deed.
    2. Same — Innocent Purchaser.
    No reformation can be granted in equity after tbe land has passed into tbe bands of a dona fide purchaser for value without notice, whose rights would be prejudiced by tbe correction of tbe alleged error.
    3. Same — Notice—Adverse Occupancy.
    Tbe occupancy by tbe barn and owner thereof was notice of an adverse claim only so far as it extended.
    Appeal from Oakland; Smith., J.
    Submitted April 12, 1916.
    (Docket No. 108.)
    Decided June 1, 1916.
    Bill by Agnes Robertson against Charles Everts Smith and another for the reformation of a deed. From a decree for complainant, defendants appeal.
    Reversed.

      Sylvester J. Pheney, for complainant.

      Clement E. Miner and Clarence Tinker, for defendants.
   Stone, C. J.

The bill of complaint herein was filed to reform and correct the description of a certain parcel of land in the village of Holly contained in a deed to the defendants and in the deeds to other predecessors in title as far back as and including a certain deed executed by John Lacey and wife to Frances A. Rumley, bearing date August 21, 1880.

It is undisputed that James G. Mitchell’s plat of the village of Holly was dedicated on May 10, 1855, and, when dedicated, Oakland street, which runs east and west through said village, was 100 feet wide. Lots 16 and 17 are located on the north side of Oakland street, and are 110 feet in length north and south by 40 feet wide east-and west, and the strip of land in dispute is said to be 16% feet north and south by 25 feet east and west, toward the rear of these lots.

It is also undisputed that on the 27th of September, 1867, by order of the circuit court for the county of Oakland, one rod of both sides of Oakland street was vacated and abandoned by the village for street purposes, and it is claimed thát adjacent lot owners immediately took possession of the abandoned part of the street.

Prior to 1880 one John Lacey was the owner of lots 16 and 17, and other lots lying east thereof, of block 1 of said plat, and had been the owner for a number of years. On August 21, 1880, he and his wife executed a deed to Frances A. Rumley. In said deed the description of land was as follows:

“Commencing on the south line at the center thereof of lot 16 in block 1, James G. Mitchell’s plat of Holly village; thence east 45 feet; thence north 90 feet; thence west 25 feet; thence north to alley; thence west to a point north, of the place of beginning, thence south to the place of beginning, being on section 33, town 5 north, range 7 east, Michigan.”

It is the claim in the complainant’s bill that Mr. Lacey made an error in the starting point of the description of land contained in said deed, that he intended to sell and convey to Mrs. Rumley, and that Mrs. Rumley intended to purchase, and supposed she had purchased, a piece of land which would be properly described by starting at the north boundary of the street, or one rod south of the original lot line, and that the correct description should have been as follows:

“Commencing at a point one rod south of south line, at the center thereof of lot No. 16 in block 1 of James G. Mitchell’s plat of Holly village; thence east 45 feet; thence north 90 feet; thence west 25 feet; thence north to the alley; thence west to a^ point north of the place of beginning, thence south to the place of beginning, being on section 33, town 5 north of range 7 east, Michigan.”

The bill in its stating part seems to have been filed on the theory that there was a mutual mistake of both parties in the description of the premises conveyed, not only in this deed, but also in the deed of Mrs. Rumley to one James H. Cummings, by James H.' Cummings to James R. Winglemire, and by James R. Winglemire to the defendants, and that a similar mistake occurred in the deed to the complainant of the property lying east of that, which has been above described, contained in a deed by the heir and legatee of said John Lacey to the complainant, which deed bears date July 5, 1910, in that the starting point in all these deeds should have been one rod further south than that given in the several descriptions.

These claims and allegations of the complainant are all denied by the answer of the defendants; and, among other things, it is the claim of the defendants that they and their immediate grantor, Winglemire, had been in the possession of the disputed strip of land for many years, cultivating it and claiming to own it, and that the defendants were bona fide purchasers under a warranty deed from said Winglemire bearing date November 13, 1909, the consideration of which deed was $1,000; that they purchased and went into possession of said property without any notice or claim that the complainant or her predecessors had or made any claim to the strip of land in dispute.

It will be noted that the vital question in the case was whether there was a mutual mistake in the point ending at 90 feet north of the starting point, at which the boundary or description runs west 25 feet. Whether that point was correctly located there, or should have been 161^ feet further south, is the important question in the case.

It is undisputed that at the time John Lacey and wife executed the deed to Mrs. Rumley he had a large barn located next to the alley in the northwest portion of his remaining property, which was built upon a stone foundation, and that there was a shed some 10 or 11 feet wide upon the south side of the barn extending the whole width of the same east and west. That shed seems to have disappeared some years ago, and long before the defendants made their purchase. If the defendants’ claim is correct, the southwest corner of this barn encroached upon the disputed parcel for a distance of about 5 feet north and south and 2 feet east and west in the northeast corner of the disputed parcel. At the hearing the facts were a good deal in dispute.

After reading the entire record, we are impressed with the wisdom of the rule frequently announced by this court and distinctly stated in Kinyon v. Cunningham, 146 Mich. 430 (109 N. W. 675), viz.:

“To justify the reformation of a written contract upon the ground of mistake in drafting the same, the alleged mistake must be proved by clear and satisfactory evidence, and the mistake must have been mutual and common to both parties to the contract.”

Mrs. Rumley was examined as a witness for the complainant at the hearing. Much of her testimony is vague, indefinite, and unsatisfactory. We think it does appear that it was her understanding at the time that the south line of the property which she was purchasing was the street where the sidewalk was, but how far north she was to go from there before turning west in her description she was entirely “at sea.” She was also quite positive that she did not purchase any part of the land occupied by Lacey’s barn; and, while she testified as to the intention of Mr. Lacey, it is very evident that such testimony was a mere conclusion of hers. On cross-examination she testified as follows:

“I just bought the Lacey land described in my deed. I did not buy any other- land. I simply bought what was described in the deed. In the deed we have referred to I bought all of the land described in the deed and took possession.
“Q. And occupied it up to the time you sold it to Mr. Cummings? (Objection by complainant’s counsel.)
“The Court: Your description in the deed does not cover, apparently at least, the claims of 16% feet said to be vacated for a street-while you say you bought just what is described. You ought to know what the description is before you answer the question.
“A. Yes; but I suppose the description in my deed, would show.
“The Court: That is disputed. It is clear the deed does not show.
“A. Well, I bought from what I call the lot line. I meant that I bought from the lot line.”

Whereupon the description in the deed was read to her, and the question was then asked:

“Q. That is the land you purchased from Mr. Lacey, is it not?
“The Court: Now, if you answer that question as it is, it'conflicts with your direct testimony in this case, if you don’t know what the description means.
“A. I don’t know. I couldn’t tell the number of feet or anything about it.
“The Court: Did you ever study that description to know what it is?
“A. No; I never did know anything about it. I suppose I deeded this same property to Cummings that I received from Lacey.”

We have referred to this testimony of this principal witness in the case upon the question of mistake to show its unsatisfactory character. Even if we were to hold that the evidence was sufficient to show a mutual mistake made by Mr. Lacey and Mrs. Rumley, we are then confronted with the question whether these defendants, having purchased and paid for this property and entered into possession of it, as we think the evidence fairly shows they did, under their deed above alluded to, should be disturbed in such possession. It has been held as a general rule that a deed will not be reformed against a bona fide purchaser for value without notice, assuming the grantor to be lawfully entitled to convey the very quantity denoted by the description in his deed.

We gather from the evidence that there was nothing in the whole transaction even to put these defendants upon inquiry as to any right or claim of the complainant or her grantors in this small parcel of land. It is too well settled to need citation of. authority that no reformation of a deed can be made affecting the property after it has gone into the hands of a bona fide purchaser for value without notice. Dart v. Barbour, 32 Mich. 267; Toll v. Davenport, 74 Mich. 386, 397 (42 N. W. 63); Culbertson v. Witbeck Co., 92 Mich. 469 (52 N. W. 993). A bona fide innocent purchaser for value and without notice is the peculiar favorite of a court of equity, and the authorities unite on the proposition that a mistake in a written instrument will not be corrected against such a party. 34 Cyc. pp. 956, 957, and' cases cited.

The most that can be said against the defense in this case is that, when the defendants purchased the property, they were informed by their grantor that the Lacey barn projected upon the northeast portion of their premises to the extent of 2 feet in width east and west and about 5 feet in length north and south, and some manure had been from time to time thrown out from the southwest corner of said barn upon their premises. This would be notice to them of any claim which the complainant or her grantor had in that part of the premises so occupied and used. This, however, constituted but a very small portion of the piece of land in dispute, and no resort to equity was necessary' to adjust those rights.

It is a significant fact that in the deed to the complainant, after following the metes and bounds contained in the other deeds, there is a specific description of the vacated property as follows:

“Also the land adjacent to above grant on south, released from Oakland street, by an order of the circuit court in [equity] chancery on the north side of said street; all of said lands are in block 1, James G. Mitchell’s plat of Holly, on section 33 town 5 north, range 7 east”

—thus making a specific conveyance of the rod in question.

There are many objections raised by defendants’ counsel to the right of complainant to any relief in the case, which we do not discuss or rule upon, because we are convinced that, taking the entire record, the complainant has not sustained the burden cast upon her to show that a mutual mistake was made in the deeds referred to, and especially that no such case has been made out against these defendants which should disturb their rights in this property.

In our opinion, the bill of complaint should be dismissed, without prejudice to the rights of the parties to resort to a court of law to adjust their rights, and the decree of the court below is reversed, with costs to said defendants.

Kuhn, Ostrander, Bird, Moore, Steere, Brooke, and Person, JJ., concurred.