author: Grant, J. Hooker, J. Grant, J. Long, C. J.

text:
    MOSHER v. LANSING LUMBER CO.
    1. Trusts and Trustees—Contracts—Consideration.
    Complainants sold certain standing timber to a lumber company under a contract which provided that the title to all logs, timber, and lumber should remain in the vendors until full payment of the purchase price. While a large amount remained due, the purchaser became financially embarrassed, and executed a trust deed of all of its assets for the benefit of creditors. By the terms of the deed, the trustee was authorized to pay up the land contract, and to advance or borrow moneys for this purpose. Complainants wrote several letters to the trustee, urging payment of their claim, stating that the same was secured by land contracts covering, not only the standing timber, but the logs and lumber as well, and declaring that, unless the matter should be taken up at once, they would be obliged to protect themselves by due process of law. In reply the trustee assured them that he had their claim in mind, and hoped, in a reasonable time, to pay them something thereon, urged them to let the matter rest quietly, and suggested that, their security being perfectly good, it would be unjustifiable for them to take the measures threatened. Held, that this amounted to a promise to pay complainants’ claim if they would forbear taking possession of the property, for which promise the forbearance of the complainants constituted a sufficient consideration.
    3. Same—Insurance—Equitable Liens.
    The property having been destroyed by fire, payment of the claim was compelled from the proceeds of insurance effected in the name of the trustee.
    Hooker and Grant, JJ., dissenting.
    3. Conditional Sale—Insurance—Rights of Vendor.
    Under a contract of sale reserving title in the vendor until payment of the purchase price, and authorizing him to insure the property, and charge the cost to the vendee, the vendor has no equitable claim upon the proceeds of insurance procured by the vendee to protect his own interest, even though the vendee had upon several occasions, at the request of the vendor, obtained insurance for the latter’s benefit, and forwarded the policies to him. Per Hooker and Grant, JJ.

      Appeal from Clare; Dodds, J.
    Submitted November 19, 1895.
    Original opinion December 30, 1895.
    Rehearing granted July 21, 1896.
    Reargued November 18, 1896.
    Final opinions May 11, 1897.
    Bill by Alfred Mosher and Spencer O. Fisher against the Lansing Lumber Company and the Michigan Trust Company, to compel the latter company, as trustee, to apply the proceeds of certain insurance policies to the payment of an amount due complainants from the Lansing Lumber Company under certain land contracts, and to foreclose said contracts. From a decree for complainants, defendant the Michigan Trust Company appeals.
    Affirmed.
    The complainants in this case owned in fee the descriptions of land set forth in the bill of complaint. On the 21st day of November, 1887, complainants entered into a contract with O. M. Barnes and W. H. Dodge to sell to the latter parties certain lands in the county of Clare. On the 2d day of July, 1888, this contract was assigned by Barnes and Dodge to the Lansing Lumber Company, a corporation, one of the defendants. On the 5th of December, 1888, complainants entered into another contract with the Lansing Lumber Company to sell it other lands in the said county. By the terms of each of the said contracts, the second parties were not permitted “to cut or carry away from the lands any timber, wood, or other material, without the consent, in writing, of complainants being first had and obtained therefor; and, in case of any such wrongful cutting, second parties shall be considered as trespassers.”
    The Lansing Lumber Company, being unable to cut timber off the land under these contracts, about the 24th day of September, 1890, entered into a third written contract with the complainants, whereby it was provided that the Lansing Lumber Company might cut and manufacture the timber from these lauds into lumber, and mark the logs and lumber with complainants’ mark, and that—
    “The entire title, ownership, and right of possession in and to all logs, timber, and lumber manufactured from the said lands shall be and remain in complainants until the full payment of all moneys due or to become due on either or both contracts, and the notes executed in connection therewith, or any notes executed in renewal of such notes, are paid.”
    “Said first parties may insure same in their own names, or otherwise, as they may deem advisable, and said second parties shall pay the expense thereof; and in case second party shall fail to pay for such insurance, and first party shall pay the same, second parties shall pay to first parties such cost and expense of insurance, together with interest thereon at the rate of 7 per cent, per annum, which amount shall be added to the sums to become due and payable under this contract, and be considered as a part thereof.”
    All the logs and lumber then cut were marked with the marking iron of the complainants, as provided, and all logs and lumber thereafter cut were so marked. After the making of this contract, insurance held by the Lansing Lumber Company on the lumber cut and piled at the mill, to the amount of $60,000, was indorsed, “Loss, if any, payable to the complainants,” which insurance was kept renewed; but such renewals, after the second year, were not made payable to the complainants. In May, 1893, the Lansing Lumber Company executed to defendant the Michigan Trust Company a deed of trust for the benefit of the creditors of the Lansing Lumber Company, dated May 1st, but executed later. The trustee was authorized “to advance or borrow money to pay up these and other land contracts, and perfect the title to the land so held.” The trust deed also contained a further provision for the payment of these land contracts out of moneys received by the trustee, “before applying any to the payment of the bonds issued with the trust deed.” After giving the trust deed, the Lansing Lumber Company continued to carry on the business under the provisions of the trust deed, and effected insurance on all the logs and lumber of the Lansing Lumber Company, payable to the Michigan Trust Company as trustee. There was due complainants, at the time of giving the said trust deed, about $12,000 upon said contracts, which, with the interest, is the indebtedness upon said contracts for which this suit is brought. On or about the 10th of March, 1894, the mill in which the lumber was manufactured, together with the lumber in the yard", including the lumber the title of which was in complainants, was consumed by fire, and the Michigan Trust Company was paid by the insurance companies insurance thereon to the amount of $60,000. This suit is to foreclose the said contracts, and to have the amount due thereon paid by the trustee out of the moneys received on the insurance policies that cover complainants’ lumber. Decree was rendered for complainants.

      T. F. Shepard and M. V. Montgomery, for complainants.

      Fletcher & Wanty, for appellant.
   Grant, J.

(after stating the facts). This case is ruled by First Nat. Bank of Ionia v. Michigan Trust Co., 105 Mich. 107, unless the provisions of contract No. 3 bring the complainants without it. Neither the trust company nor any of the creditors of the Lansing Lumber Company had knowledge of the existence of this contract at the time the compromise was effected between that company and its creditors which resulted in the execution of the trust deed, nor did either know of its existence until after the fire. A committee of creditors was appointed to examine into the affairs, and report upon the assets and liabilities, of the company. They went to Dodge, the place where the mill plant and the lumber and logs were situated, and reported to the creditors. Among the assets so reported was an item of lumber amounting to $43,533, and logs amounting to $71,864.55, in which were included the lumber and logs in controversy. The committee for the creditors, as well as the creditors themselves, made this settlement upon the basis that the lumber and logs in the mill yard and boom at Dodge were the property of the lumber company. The complainants stood by, knowing the situation, and made no claim to it, and did not inform the committee or any of the creditors of the existence of contract No. 3. The trust company obtained insurance upon this property as its own, and without any knowledge of that contract. After the property was destroyed, Mr. Fisher said to Mr. Withey, the president of the trust company:

“I sat by, and let the Lansing Lumber Company make this mortgage, and never said a word about my claim, because I always had a high regard for Mr. O. M. Barnes, and did not want to do anything that would stand in his way.”

Mr. Barnes was largely interested in that company. Complainants cannot therefore be now permitted to set up this contract as creating a lien upon the insurance money, as against other creditors. This is not the case of the ordinary assignee, who acquires no greater rights than his assignor. The trust deed was a compromise between the company and the creditors, made by the latter without knowledge of the complainants’ claim, and in reliance upon this property as constituting a part of the assets, and for a good consideration.

Decree reversed and bill dismissed, with costs of both courts.

The other Justices concurred.

ON REHEARING.

Hooker, J.

The Lansing Lumber Company, a corporation engaged in the manufacture of lumber, being unable to meet its obligations, in May, 1893, made a trust deed of its property to the Michigan Trust Company for the benefit of its creditors, the provisions of which need not be stated. See First Nat. Bank of Ionia v. Michigan Trust Co., 105 Mich. 107. A part of the property included in the trust deed was logs and lumber at the sawmill of the grantor, at. Dodge, Mich., a portion of which was cut from lands held by the Lansing Lumber Company under two land contracts in which the complainants were vendors, and which forbade the cutting of timber. Much cutting was done without authority, and further cutting was permitted under a subsequent contract between the complainants and the Lansing Lumber Company, which provided that the title to all logs which had been or might thereafter be cut, and to lumber made or to be made from logs taken from said lands, should remain the property of complainants until the land should be fully paid for, and which also contained the provision that—

“The first parties \i. e., the complainants] may insure same in their own names, or otherwise, as they may deem advisable, and second parties shall pay the expense thereof; and in case second party shall fail to pay for such insurance, and first party shall pay the same, second parties shall pay to first parties such cost and expense of insurance, together with interest thereon at the rate of 7 per cent, per annum, which amount shall be added to the sums to become due and payable under this contract, and be considered as a part thereof.”

This contract was executed on September 24,1890. The Lansing Lumber Company manufactured the logs into lumber, which was destroyed by fire, with other lumber and the sawmill, on the 10th day of March, 1894, after it had come into possession of the Michigan Trust Company. At this time there was insurance upon the mills and lumber to the amount of nearly $70,000, of which about $62,000 was collected by the Michigan Trust Company. Of the amount collected about $52,000 or $53,000 was paid for loss upon the lumber. At the time of the fire there was due to the complainants upon these contracts about $12,000, and they asked the Michigan Trust Company that they be paid from the amount received for insurance, and the decree of the circuit court practically so ordered, from which the defendants have appealed.

The record shows that after the contract of September 24,1890, was made, the complainants requested the Lansing Lumber Company to send the insurance policies. At that time the Lansing Lumber Company had insurance, procured in June previous, and, after obtaining an indorsement that the loss, if any, should be made payable to the complainants as their interest should appear, it forwarded policies to the amount of $65,000 to the complainants. In June, 1891, this insurance was renewed, but the policies were held by the Lansing Lumber Company until December 11, 1891, when complainants wrote that, in looking over the matter, they found their insurance had expired, and asked that it be renewed. Mr. Eenyx, the secretary of the lumber company, wrote that they were properly made out and filed in the office of the lumber company, and Mr. Fisher, one of the complainants, wrote back, asking that the policies be sent to him, which was done to the amount of $37,250. From that time until after the fire no further request for or inquiry about insurance was made by complainants. These policies expired in June, 1892, and at a later time policies were issued to O. F. Barnes, as trustee, and subsequently to the Michigan Trust Company, no mention of complainants being made in either instance. The testimony shows that the fire destroyed about 1,000,000 feet of pine, worth $14 per M. feet, and 7,000,000 feet of other lumber, worth from $9 to* $10 per M. feet, about half of which came from the lands bought of the complainants. The Michigan Trust Company claims that it was not aware that complainants had title to any of this lumber, but, however that may have been, it seems clear that it had never seen the contract providing for insurance, or had any information that complainants ever had insurance, or claimed that they were entitled to any; and apparently it procured insurance to protect itself and the creditors whose bonds were secured by the property, in the usual and prudent course of business.

Where a mortgage contains a covenant that the mortgagor will keep the premises insured for the benefit of the mortgagee, and does not, equity will compel the former to pay over moneys collected upon policies payable to himself. And this court has held that—

“Where C. agreed to give M. a mortgage upon a dwelling, and to insure it for the benefit of the mortgagee, in consideration that M. should become C.’s surety on a note, which arrangement was carried out by the execution of the papers, and the procurement of the insurance as promised, a surrender of the policy by C., without M.’s knowledge or consent, and the issue of a new policy to A., who took with notice upon his purchase of the property, was collusive and fraudulent, and relief was afforded upon the ground that, while C. may have had a legal right to surrender the policy taken out for M.’s protection, he had no equitable right to do so; and, as A. knew all the facts, and took his new policy on a wrongful surrender of one which protected M., and for a sum which precluded M. from insuring in his own behalf, M. had an equitable interest in the new policy to the extent of his lien, whether A. did or did not expressly agree with C. that such should be the case, as C. testified that he did.” Miller v. Aldrich, 31 Mich. 412, and cases cited in note on page 408.

But, as there said:

‘ ‘ If there is no covenant or agreement in the mortgage that the premises shall be insured for the benefit of the mortgagee, and no verbal agreement to that effect, which has once been acted upon as in the principal case, the mere fact that the mortgage covers the property insured, and that the insured is personally liable for the debt, gives the mortgagee no claim upon the policy, or upon the proceeds thereof in case of loss.” Id.

The letter of the contract did not require the Lansing Lumber Company to keep the property insured, nor did it fix the amount of insurance to be carried. It merely gave the complainants the right to insure at the expense of the Lansing Lumber Company. Under this provision they might insure or not, and the cost of procuring an amount reasonably adequate for their protection might be charged to the Lansing Lumber Company. If there were nothing in the nature of a contract with regard to insurance between the parties, the complainants would have no standing here, unless upon the broad proposition that, as owners of the title to the property, they should have a right to such insurance as the vendee might effect and collect upon it, or sufficient to pay their claim, or at least make it good after the application of the land thereto. We know of no authority that would support the proposition that mere ownership of the legal title gives the exclusive right to insure, or the right to collect insurance procured upon the property by others, especially where such others have equitable interests which they may find underwriters willing to insure.

It is a common practice for music dealers and others to sell instruments and machines upon installments, reserving title in the vendor until full payment. In such cases we have supposed that the vendor has no concern with, or claim upon, any insurance that the purchaser may procure to protect himself upon his interest arising out of the payments made. The vendor would have to be satisfied with the security afforded by his contract, viz.: First, the obligation of the purchaser to pay the price; second, the retention of title as security for payment ; and, if the contract should provide that the vendor might procure insurance at the expense of the purchaser, in the name of one or the other, the fact that upon request the purchaser procured and sent him policies on two occasions would hardly relieve the vendor from looking after the insurance and requesting policies thereafter, if he desired them, and make it incumbent upon the purchaser to provide insurance, and see that it was kept up, at the peril of having the insurance procured for his own protection appropriated to the payment of the claim, through the establishment of an equitable lien. We see no equity in holding in such a case that the vendor of the piano should be relieved, and the loss allowed to fall upon the vendee, when due to the neglect or disinclination of the vendor to avail himself of his right under the contract. We have seen no case that has gone to that extent. It is not the province of courts to make or enlarge contracts. Such case would seem to be upon all fours with this in all substantial particulars involved in the discussion of this question. We are therefore of the opinion that, had this question arisen between the original parties, the complainants could not sustain their claims to the insurance on the basis of a covenant. But force is added to this by the fact that the Michigan Trust Company is the assignee of the Lansing Lumber Company’s interest, not as an assignee for the benefit of creditors in the ordinary sense, but as the representative of the creditors who have taken Lansing Lumber Company bonds, as collateral security for- which it holds this title. It and the creditors took the title in ignorance of this contract to pay for insurance, giving, as consideration for the same, an extension of time, and release of an indorser upon the lumber company paper held by such creditors respectively; and, if it be said that they took it subject to the contract obligations, it was under circumstances which do not justify anything in the nature of an enlargement of such obligations. If the Michigan Trust Company had not insured the lumber, and the entire stock was therefore a total loss, could the complainants ask that its loss be made good? If the trust company was under obligation to see that insurance was provided for complainants’ benefit, it would seem to follow that an action would lie for the failure, and that the amount of the claim would be the measure of damages. If, on the other hand, it could escape such liability on the ground that the contract did not require it to do more than to pay for such insurance as the complainants saw fit to procure, how is the situation changed by the fact that it had insured the property for its own benefit ? But there is nothing in the trust deed that imposes the burden upon the Michigan Trust Company to see that the property was insured.

It has been suggested herein that the terms of the trust deed need not be referred to, but in one view it may be well to look at the situation of the parties. The trustee took this deed by way of security, and it has been treated and adjudicated upon as a mortgage. See Michigan Trust Co. v. Lansing Lumber Co., 103 Mich. 392. By its express terms it contemplated that the Lansing Lumber Company should retain possession until default. The trust deed contemplated that the lumber company might, by continuing business with the mortgaged property, he able to pay its debts, in which case the trust deed would be satisfied, and it is apparent that until default the trust company had no right to interfere with the property, or to take it into possession; and, after the fire had destroyed the property, this court held that the lumber company had not defaulted, and that the trust company was not entitled to the possession. But said trust deed did empower the trust company to make payment upon property held under land contracts from funds in its hands, and it was authorized to borrow money for the purpose, with a view to preserving its security, if necessary, which power was construed in First Nat. Bank of Ionia v. Michigan Trust Co., 105 Mich. 107; and it may be contended that said company agreed to pay this claim of Mosher and Fisher in consideration of forbearance. If this is true, it is not because of the fact that the trust company insured its interest, and the agreement must have been such that, if it had not insured the property,', it would still have created an obligation upon the trustee to pay the claim, to the exclusion of all other creditors, and whether it ever realized a dollar from the Lansing Lumber Company’s property or not; and the remedy would have been at law. The bill seems not to have been framed on such a theory; but, if it be conceded that such a contract would have been within the authority given by the deed, it must still appear that it has made such a contract. If such contract has been made, it was by virtue of the correspondence between Mosher and Fisher and Mr. Withey. The first letter of the series was one which was written to Mr. O. M. Barnes, by Mosher and Fisher, and which is not before us. We may suppose it urged payment, and threatened seizure of the lumber, as subsequent letters did. The first letter written by the trustee was in answer to this, and it said that it did not understand that the land contracts covered not only standing timber, but the logs and lumber on hand. It stated further that it had been busy, and had not gone into the details in relation to the various claims, but would give the matter immediate attention. ' It con-' eluded as follows:

“The condition of the money market at the present time is such that no one is warranted in being very impatient over delays in collections, and so long' as parties have ample security we do not think there would be any justification in taking so severe measures as you suggest, and we trust that you will treat the Lansing Lumber Company with such leniency as the times will seem to warrant.”

The next letter was addressed to the Michigan Trust Company, and insisted on payment, to which the following reply was made:

Gentlemen: Replying to yours of the 3d inst., would say that we have not the slightest doubt but that the Lansing Lumber Company would have been able to have made good their assurances to you had not the general panic and hard times overtaken the country, but all promises which were made in those days are declared off now by every one, and they are no exception to the rule. At that time they were doing a fine business, but at the present time they are not able to collect money enough to meet their pay rolls, and have been seriously considering the proposition of closing down the mill at Dodge City; hence you will see that it is utterly impossible for them to comply with your request; and, as they cannot borrow any money, we see no other way than that you will have to be patient until the present stringency eases off. Your security is perfectly good, and that is a good deal more than most creditors have in these days; so we shall expect that you will be patient, and not press payment of the matter at the present time.”

In another letter, written September 38th, Mr. Withey uses this language:

“Gentlemen: In reply to your favor of the 35th inst., would say that we do not see how the Lansing Lumber Company are going to be able to make you any considerable payment on your claim right away, as during the months of July ánd August they were not able to sell anything, and consequently two months of the very' best of the season were dropped out of their business, and the money which they otherwise would have had at this time is invested in lumber. It is unnecessary for us to explain to you the reasons, because every business man can understand just how the panic has affected us all. We think that the affairs of the Lansing Lumber Company are brightening up very much, and hope, in a reasonable time, to be able to pay you something on your claim. We will call the attention of the people at Lansing to your matter, and ask them to do something for you as soon as they can.”

And again he wrote December 3d:

‘Dear Sir: Replying to your esteemed favor of the 39th ult., would say that, since, money matters eased up, the Lansing Lumber Company have been doing considerably better. They have been able to meet the interest on their bonds which matured on November 1st, and now propose to take care of such matters as yours just as rapidly as possible. They have considerable amounts due them from two parties who have been unable up to the present time to pay them, but they are expecting to get it in almost any time, and when they do these funds can be applied on your matter.”

This correspondence showed a willingness that this claim should be paid from funds expected to come into the hands of the lumber company. Mosher and Fisher, and possibly Barnes, seem to have labored under the impression that by bringing a pressure upon the trustee the payment of the claim could be hurried, and Mr. Withey apparently excused the delay of the lumber company, and expressed his opinion as to its ability to pay, and sources from which it might receive money which it could apply to the purpose. The letters do not indicate an intention to assume such payment. On the contrary, that of August 5th expressly alludes to the impossibility of payment by the lumber company; that of September 28th says he will ask the lumber company to pay; and the last —that of December 2d—says that the lumber company (not the Michigan Trust Company) “is expecting money, which, when received, can be applied upon the matter.” This is the extent of anything in the nature of a promise by the Michigan Trust Company, and, in our opinion, was not such a promise to pay as fastened a liability upon it.

Again, what was the consideration for such promise? There is nothing to show that Mosher and Fisher agreed to extend the time for payment. They did not surrender any security on the strength of a promise. They merely waited, and did not at once enforce their lien. It was like any other case of clemency. It seems clear that, if the property were not destroyed, Mosher and Fisher could not sue and recover against the Michigan Trust Company upon this contract, but would be compelled to look to their security; and, if so, it is not different because of the destruction of the lumber. We think it patent that neither party understood that such a contract was made, and the contention, if made, would be likely to find its chief support in a real or imaginary equity, arising out of the fact that through clemency, and accident which they could not foresee, Mosher and Fisher were placed in a position where loss must fall upon them unless the trust company, which may be said to have desired to have the co ntract performed, can be made to bear the burden. The Lansing Lumber Company, too, has suffered a loss, and is still under obligation to pay the claim. The lands are still holden for this debt, and it is not clear to us that the creditors, who have not received this property, or (as we have shown) sufficient insurance to cover it, should be equitably chargeable with the loss.

It is suggested on behalf of the complainants that they have lost their security, and that the Michigan Trust Company has the value—practically the proceeds—thereof, but is this so? As stated, the lumber is shown to have been worth from $77,000 to $84,000. The sum of $53,000 in round numbers has been received from it, leaving from $24,000 to $31,000 loss. On the basis of $77,000, the cotnplainants had, equitably, an interest of $12,000, and the defendants $65,000. It will therefore be seen that the defendants, having received only $53,000 of the $65,-000 interest, must, in any event, lose at least $12,000, and as much more as complainants shall be able to collect from the lands covered by the contracts, and from their distributive share of the property covered by the trust deed, if they are secured thereby,—a question not before us, and upon which we have no knowledge or opinion. It seems to us, therefore, that it cannot be said that the defendants have the proceeds of the complainants’ property in an equitable- sense. We are driven to the conclusion that the complainants’ security has been destroyed and lost to them through unavoidable accident, and that -they have not superior equities in the fund arising from the insurance by the trustee of its interest.

The decree of the circuit court determined the amount due to the complainants from the Lansing Lumber Company to be $13,709.60, with interest at 7 per cent, from the 5th day of June, 1895, and awarded execution against the Michigan Trust Company therefor. We understand that the amount of the obligation is not disputed, and we are of the opinion that the amount found by the circuit •court to be due from the Lansing Lumber Company was correct, and the decree should be so far affirmed, but that in so far as it declares the Michigan Trust Company to be liable therefor it was erroneous, and should be reversed; any intention to determine complainants’ rights to a distributive share under the trust deed being hereby disavowed. The complainants are entitled to a decree authorizing, in default of payment of the amount herein decreed within 30 days after notice of the decree, the sale, as in case óf foreclosure, of the lands described in said bill, or so much thereof as may be necessary to the payment of the amount of said debt and interest, and costs of the circuit court, less the costs of the defendants in this court to be taxed; and that, in the event of the payment of said sum by the defendants, or either of them, the complainants should forthwith execute and deliver to the Michigan Trust Company a proper and sufficient deed or deeds of said lands, in accordance with the terms of said contracts. As the complainants did not appeal, the decree of foreclosure would not be made in the absence of the consent of the defendants, inasmuch as it formed no part of the decree of the circuit court. We think that the complainants were entitled to it, and it should be included upon the understanding that it is consented to.

Grant, J.

I concur in the opinion of my Brother Hooker. I see no occasion, however, to withdraw from my former opinion. It was not the intention of that opinion to eharge Mr. Fisher with deception or fraud. That he acted in good faith, I do not doubt. He failed to record his third contract, or to notify the creditors or the trustee at the time the trust deed was executed of the existence of the contract. He had failed to keep hiá interest insured. The creditors, at the time of the compromise with the Lansing Lumber Company, understood that all the logs at the mill and in the booms belonged to, and were the property of, the. lumber company. They made their compromise upon that basis. I see no reason why he should not now be estopped to set up his claim to any interest in the insurance money. It was not insured as his property.

Long, C. J.

I am unable to agree with my Brother Hooker in this case. It now seems to be well established that the Michigan Trust Company had full knowledge of the claim of complainants under their contracts with the Lansing Lnniber Company, and recognized the fact that under these contracts the title.to the logs and lumber remained in the complainants. If we were able to find in the record any showing that the complainants or Mr. Fisher understood that this property , was to be included in the trust deed, and that the creditors were being deceived or misled as to its ownership, and that the complainants, so understanding, sat by, and permitted the deed to be executed and the creditors to be deceived, making no objection, and allowing the creditors to surrender substantial rights which they had and might have asserted had they not been so deceived and induced to surrender their former evidences of debt and accept the bonds secured by the deed, then the complainants might be held estopped; but such facts do not appear. The complainants were notified of the meeting of the creditors of the Lansing Lumber Company. Mr. Barnes, on May 19, 1893, wrote Mr. Fisher substantially that the proposition of the- creditors was to fund the indebtedness, and the contract to contain a provision that the trustee might borrow money to pay all indebtedness which constituted a lien upon the property, and added:

“As soon, therefore, as the papers can be prepared, and the consent of the creditors can be obtained, the trustee will at once take up and pay your claim, because you are one of the individuals, and your debt one,of the debts, that is to be paid by the trustee by borrowing money at once, if necessary, for the purpose of payment.”

A few days later Mr. Barnes wrote Mr. Fisher again saying:

‘ ‘ As soon as the mortgage is ready, I will send you a copy, so that you can see that your debt is to be paid first of all.”

On May 26th Mr. Barnes sent Fisher a copy of the mortgage, calling attention to the seventh clause, advising him that it amply' protected him as a preferred creditor. This mortgage or trust deed' contained -a • clause stating substantially that certain of the lands of the Lansing Lumber Company were held by it under contract, and that a portion of the purchase money thereon remained unpaid, and empowering the trustee to advance or borrow money to pay off such indebtedness, in order that the title to the property might be fully vested in the trustee. The title to the lands of the complainants from which the logs and lumber were taken remained in the complainants until payments were fully made. A few days after the mortgage was executed, and on June 19th, Mr. Barnes again wrote, saying that it was expected that the indebtedness to special creditors, “ of which you are one,” would be taken up and paid; and, on July 3d following, again wrote that the notes which had been given complainants on this purchase had been reported to the trustee as secured property, and they had decided not to issue bonds for secured debts unless the parties preferred them; that the mortgage provided that “they will pay all claims covered by liens upon land before paying any other to other parties; ” and in the same letter said, “This gives you your full pay before any holders of bonds receive theirs.” On July 26th, Mr. Barnes again wrote:

“I will now refer your letter to the trustee. You will remember that you are one of two of the very first men to be paid out of the income of the lumber company.”

On July 24th Mr. Fisher had written Mr. Barnes a letter, which he had forwarded to Mr. Withey, the president of the Michigan Trust Company, the trustee named in the mortgage; and on July 28th Mr. Withey wrote Mr. Fisher, acknowledging the receipt of the letter, and saying:

‘ ‘As you are perfectly secure, as we understand it, we hope you will let the matter rest quietly as it is until such time as they [the lumber company] are able to shape themselves around to meet it; and we can assure you that your claim will not be out of our minds.”

On July 31, 1893, Mr. Fisher replied to Mr. Withey, advising him that the Lansing Lumber Company owed them (the complainants) “over $12,000, the same being secured by land contracts, and covers not only the standing timber, but the logs and lumber, * * * the title to which has never passed to them.” He also added:

“As I understand, * * * these claims of ours were preferred claims. * * * I must now insist that this matter be taken up, or we will be obliged to protect ourselves by due process of law, ■ against the lumber, logs,” etc.

On August 2d Mr. Withey replied, saying that he did not understand that the land contracts covered, not only the standing timber, but the logs and lumber now on hand, and added:

“So long as parties have'ample security, we do not think there would be any justification in taking so severe measures as you suggest, and we trust that you will treat the Lansing Lumber Company with such leniency as the times will seem to warrant.”

Mr. Fisher replied to this that he had been assured by the Lansing Lumber Company that, “as soon as this trust was formed,” their claim should be paid, and urging that it be attended to promptly. Two days later, Mr. Withey writes, excusing delay on the part of the Lansing Lumber Company, and says:

“Your security is perfectly good, and that is a good deal more than most creditors have in these days; so we shall expect that you will be patient, and not press payment of the matter at the present time.”

On September 28th Mr. Withey again wrote, saying:

“We hope, in a reasonable time, to pay you something on your claim.”

On December 2d he wrote again, saying that the Lansing Lumber Company was doing better, that it had been able to meet the interest on its bonds which matured November 1st, and then proposed to take care of such matters as the complainants’ just as speedily as possible.

We think it will be readily seen that the defendants are not in a position to interpose the defense of estoppel to complainants’ claim. Here the trustee had been fully advised of the claim of complainants -that they held the title, not only to the lands, but to all the logs and lumber taken from the land, until their claim should be fully paid and satisfied. The trustee, by the very terms of the trust deed, was fully authorized and empowered to advance or borrow money to pay complainants’ claim. In addition to this, when Mr. Fisher threatened to pursue a remedy open to him, and which would have secured his claim beyond question,—that is, by seizure of the logs and lumber,—the trustee, by its president, asks that the matter be delayed, promising, from time to time, that the claim would be paid. During all this time Mr. Withey treated the claim as secured under these contracts by reason of the title remaining in the complainants. It is certain that he must have known that the complainants’ claim was a secured claim, though he may not have seen Exhibit C—the last contract with the Lansing Lumber Company —until after the trust deed was made. He knew on July 31st that the claim amounted to over $12,000, and that it was secured by these land contracts, covering all the logs and lumber, the title to which remained in complainants. We cannot find upon this record that a fraud was practiced by the complainants upon the creditors of the Lansing Lumber Company, or that they sat by and permitted the other creditors to part with something of value. The complainants were well secured by the retention of title in themselves to all this property. They could, and undoubtedly would, have taken possession of it, but for the interposition of the trustee. So that, upon the first proposition, I am of the opinion that the defense sought to be made has no foundation.

But it is held by my Brother Hooker that the complainants are in no position to 'assert rights in the moneys arising from the loss of the property by the fire. There is great force in his- suggestion that, the trustee having an insurable interest in the property, such interest could be insured, and that the moneys arising from the loss could not be held by the complainants. The circumstances surrounding this case are, however, very peculiar, and the conduct of the Lansing Lumber Company and the trustee quite remarkable in many respects. Three contracts were made between these'parties. Under the first,—made November 21, 1887,—the Lansing Lumber Company could not cut or take any of the timber from the land without the written assent of the complainants. This was also true of the second contract, made December 5, 1888. On September 24, 1890, however, a new contract was made, containing this provision:

“Now, therefore, it is hereby agreed between the parties hereto that the entire title, ownership, and right of possession in and to all logs, timber, and lumber heretofore cut and removed from or remaining on said lands, and now under the control of or in the possession of said second party, shall be and remain in first parties, and the title and ownership of all logs, timber, and lumber hereafter cut or manufactured from said lands shall be and remain in first parties, until the full payment of all moneys due or to become due on either or both of said contracts, and the notes executed in connection therewith, or any notes executed in renewal of any such notes. It is further agreed that the second party shall mark plainly, as directed by first parties, all logs, timber, and lumber already cut or manufactured from said lands, and now in second party’s possession or control, and also, in like manner, shall mark all logs, timber, and lumber that shall hereafter be cut or manufactured from said lands, with the mark of first parties, which is TAT; marking irons for such mark being furnished to second party by first parties. It is further agreed that the logs and timber shall be manufactured into lumber, and piled at second party’s mill in Clare county, Michigan, in a good and workmanlike manner; and said first parties may insure same in their own names or otherwise, as they may deem advisable, and said second party shall pay the expense thereof; and, in case second party shall fail to pay for such insurance, and first parties' shall pay the same, second party shall pay to first parties such cost and expense of insurance, together with interest thereon,” etc.

Under these contracts most of the timber has been removed, so that the lands are comparatively worthless. Upon the execution of the last contract, the lumber was insured by the Lansing Lumber Company, in its name, for 165,000, and thereafter, at the request of complainants, the loss, if any, was made payable to them. These policies expired in June, 1891. On December 11, 1891, complainants wrote to have the policies forwarded to them. This was done, and it was found that the policies amounted to $37,250, and losses made payable to complainants. These policies expired in 1892. It appears that complainants never caused any policies to'be issued, apparently relying upon the Lansing Lumber Company to do so. No further policies were taken out by that company; but, upon the execution and delivery of the trust deed, the trustee caused the property to be insured in its name. The insurance stood in this way when the letters were written by the complainants to Mr. Withey in July, 1893. Mr. Withey knew then that the complainants held the title to all the lumber cut from the logs taken off the lands described in the contracts. The fire occurred on March 10, 1894. At that time, according to the testimony of Mr. Wheeler, the foreman at the mill of the Lansing Lumber Company, about one-half of the lumber on hand, and which was destroyed by the fire, was cut from logs taken from complainants’ lands, and the title of this lumber was in complainants. This lumber had been marked with the complainants’ mark after it had been piled. There was about 8,000,000 feet in the yard in all. The insurance on the mill was paid, amounting to six or seven thousand dollars; the rest of the insurance was paid for the loss of the lumber. It can hardly be contended that the insurance money received was not for the loss of complainants’ as well as the other lumber in the yard. It is true that the insurance did not run to the complainants, but to the Michigan Trust Company. But that company collected and appropriated the whole moneys arising from such insurance, and refuses to account to the complainants for it, asserting that it has gone into the general fund for the benefit of the general creditors of the Lansing Lumber Company. This claim is most unjust and inequitable, and should not be sustained, unless by the strict rules this court is powerless to do what right and justice demand. The prayer of the bill is that the complainants’ claim be paid out of the moneys obtained from this insurance, but there is also a general prayer for relief.

I shall now consider the position of the general creditors. It appears from the record that, at the meeting of those creditors when the trust deed was agreed upon, such creditors were informed that complainants’ claim was a preferred one, and should be paid, before any of the bondholders were paid. The committee appointed by the creditors was advised of this fact, and it is evident that the clause was inserted in the trust deed above referred to, which authorized the trustee to borrow money to pay such preferred or secured claims, in view of this fact; that it was well understood by the creditors that this was one of the claims necessary to be paid, so that the title to the property would pass to the trustee. At that time the complainants, upon the neglect or refusal of the Lansing Lumber Company or the trustee to pay such claim, could have taken possession of the property, and sold it in payment of their claim. To avoid this, and to place the title in the trustee, the clause in the deed was evidently inserted. How much Mr. Withey understood of this at the time it is now unnecessary to determine. He found that clause in the deed, and in July following was notified by complainants that they held this title. He wrote them on August 2, August 5, September 28, and again on December 2, 1893, recognizing the fact that such claim was one of those preferred, and asking them not to press payment, as their claim was perfectly good, that they had ample security ; • and thus put them off from commencing, any proceeding to collect from the property itself the amount of this claim, then amouning to over $12,000. All this time the trustee was holding the insurance policies covering the entire lumber, and after the fire collected for the loss, and then for the first time insisted that the complainants, not having the property insured in their name or for their own benefit, had no right to any portion of the money arising from the loss, and that the whole of it should be applied to the payment of the general creditors. Not only this, but it is claimed here that the trustee should not be decreed to pay the claims which not only the general creditors recognized as preferred, but one which the trustee also recognized as preferred, and which it could, under the trust deed, borrow the money to pay, and which would have been collected by the complainants had not the trustee begged for time, and which the complainants generously extended. The claim should be paid for the reasons:

1. That the general creditors authorized the trustee to make the payment.

2. That the trust deed authorized its payment.

3. That the trustee was advised of all the facts before the fire, and promised payment, and asked an extension of time in which to meet the demand, which extension was granted.

4. That the complainants, at the request of the trustee, withheld action in taking possession of the logs and lumber in reliance upon the promise of the trustee that they would be paid.

5. That the trustee had the power to pay conferred upon it by the trust deed. Having this power, it was a preliminary that it was to determine; and we think Mosher and Fisher had the right to rely upon its assurance that the trust funds in its hands would be devoted to that purpose.

6. That the trustee should be estopped from now claiming that the complainants are not entitled to be. first paid; for, whatever may be the actual intent of a party-to a transaction, if he so acts as to lead a reasonable person to believe that he understands and assents to its terms, and the other party, so believing, acts accordingly, the former is estopped from asserting that he did not so understand and assent. Peake v. Thomas, 39 Mich. 585; Vanneter v. Crossman, 42 Mich. 465. Here the complainants had it in their power to make their claim good. They did not do so in reliance upon the payment of their claim. The trustee ought not now to be permitted to assert title, collect the insurance, and then deny liability upon the demand.

But my Brother Hooker contends: (1) That the letters do not indicate any intent on the part of the trustee to pay the claim, but rather a willingness that the Lansing Lumber Company should pay from funds coming into its possession. (2) That there is no consideration shown for the promise. (3) That the trustee received from the insurance companies only what was equitably due the trustee. In these contentions I cannot agree. The trustee, under the trust deed, took every dollar’s worth of property, both real and personal, which the Lansing Lumber Company had or controlled. After describing certain real and personal property which was to pass under the trust deed, it is provided:

“ And also all other personal property of the said Lansing Lumber Company, of every nature and kind, including bills and accounts receivable, wheresoever the same may be situated, and all other personal property which may be hereafter acquired by the said Lansing Lumber Company during the lifetime of this security, including any revenue derived by the party of the first part from whatsoever source, and also all deeds, mortgages, contracts, assignments of contracts, and all muniments of title to real and personal estate; it being the intention to embrace in this security all the real and personal property of said party of the first part and the income from its business.”

The trust deed then provides that the trustee may pay the class of claims held by the complainants, and for this purpose he is expressly empowered—

“To borrow money to pay off the money remaining unpaid on said land contracts, * * * in order that the title to all said property may be fully vested in said trustee, free of all incumbrances, for the uses and purposes of this trust, and for the better security of the holders of bonds hereunder issued. And the said party of the second part is hereby authorized and empowered to pay off the money so advanced or borrowed, with interest thereon, to perfect the title to said lands, or release the same from existing liens, out of any money that may come into its hands as trustee, before applying any to the payment of bonds hereunder issued, and these presents shall inure as a security for the same.”

The trust deed further provides that—

“ All moneys received by said company during the continuance of said trust shall be deposited in some bank or banks to be selected by said trustee, the deposit to be to the credit of said trustee. For the purpose of providing for the disbursements, including the interest, taxes, insurance, and expenses of said company in the regular course of its business, said trustee shall turn over to said company such amounts as shall from time to time be necessary for that purpose, provided that the amount so in the hands of the company for current expenditures shall at no time exceed the sum of $10,000.”

In Michigan Trust Co. v. Lansing Lumber Co., 103 Mich. 392, this trust deed was held to be a mortgage; but that holding in no manner affects the question here.

Can it be possible that the. letters can have the construction placed upon them by my Brother Hooker? The Lansing Lumber Company did. not have a dollar with which to pay any debt. All the property went to the trustee, and even the income from the business was to go into the bank in the name of the trustee. Undoubtedly, the trustee intended that the moneys to pay the complainants should come from the funds realized from the Lansing Lumber Company; but the letters, in my opinion, meant no more than this. The circumstances surrounding the transaction and the situation of the parties were such that no other interpretation can plausibly be given. It was, therefore, the promise of the trustee to pay if the complainants would forbear prosecution of their claim. But was there any consideration for such promise? The general rule is that an agreement to forbear to prosecute a suit is a sufficient consideration for a promise. In Parsons v. Frost, 55 Mich. 230, the note in suit was within a few days of being barred by the statute of limitations, when the plaintiff, upon the understanding that one of the defendants should indorse the note, was induced to forbear suit until the other defendant, who was the maker, should return from Europe. It was held that this forbearance was a sufficient consideration for the indorsement, and the indorser and maker were held liable. The present case is much stronger. Here the proposition came from the trustee. He promised, if complainants would forbear bringing suit and taking the property into possession, that the Lansing Lumber Company would very soon have funds for the payment of the debt. The complainants rested upon this promise of payment, and did not bring suit. Can it be said that this was not a sufficient consideration ? I think not. Neither do I think that it was the promise that the Lansing Lumber Company would pay, when we take the situation of the parties into consideration.

From this view of the case it cannot matter whether the trustee received only what was equitably due it or not. The lumber burned was situated at the mill yard. There was about 8,000,000 feet of it. But the uncontradicted testimony shows that 4,000,000 feet of this lumber came off the lands of the complainants. When the fire occurred, the title to all that part of the lumber remained in the complainants. They had not taken possession of it because of the promise of the trustee that it would soon be paid for. They evidently relied upon this promise, and permitted the lumber to be treated as the property of the trustee. When the insurance moneys were paid, then for the first time they were told that they must look to the lands for the payment of the balance of their claim. These lands appear to be worthless. One-half of the insurance money came from the loss of the complainants’ lumber. . The trustee has it. It would be most inequitable to permit the trustee to now pay it over to other creditors- It had power to make the arrangement by which complainants forbore to commence suit. It should now keep the promise good. The other creditors would not suffer. The insurance money coming from the loss of complainants’ lumber was so much clear gain to them. If the lumber had not burned, the trustee could not have taken it without the payment of the claim. Equity and justice require that it should now pay.

The decree will be affirmed.

Montgomery and Moore, JJ., concurred with Long, C. J.


source: Caselaw Access Project

author: Long, C. J.

license: Public Domain

text:
    BOYCE v. WILLIAMS.
    Appeal—Vendor and Purchaser—Fraud.
    A decree dismissing, as not sustained by the proofs, a bill to correct the descriptions in a land contract, based upon the alleged fraud of the defendant in omitting therefrom certain lands agreed to be included in the sale, was affirmed.
    Appeal from Bay; Maxwell, J.
    Submitted January 8, 1897.
    Decided May 11, 1897.
    Bill by Jonathan Boyce against Edward Y. Williams to correct the descriptions in a land contract. From the decree rendered, complainant appeals.
    Affirmed.

      J. L. Stoddard, for complainant.

      E. A. Cooley, for defendant.
   Long, C. J.

This bill is filed to correct the descriptions of property contained in a contract of sale. The .property is situate in and adjoining to the village of Essexville, township of Hampton, Bay county. The contract was executed by defendant, Williams, and John Heath, who were the owners of certain property situate in the township of Hampton. The complainant became the purchaser, and it is claimed by him that he had negotiated with those parties for the purchase of all the property owned by Heath & Williams in the township of Hampton; that, the purchase price having been agreed upon, the parties met at the office of Mr. H. M. Gillett for the purpose of reducing their agreement to writing; that neither the complainant, who acted for himself, nor Mr. Gillett, who represented John Heath, had any knowledge of the description and particular boundaries of the property ; that Mr. Williams was the only person present who had such knowledge, and that, for that reason, all the parties relied absolutely upon him for the descriptions of the property, and upon his honesty that those descriptions should be accurate. It is claimed that Mr. Williams, in pursuance of a fraudulent and dishonest purpose, in giving the descriptions to be put in the contract, deliberately and intentionally kept out certain of them, representing that those he gave embraced all the property which Heath & Williams owned in the township of Hampton.

The whole question in controversy is one of fact, and the parties do not agree as to what the arrahgement was as to the amount of land to be conveyed, or the particular descriptions thereof, under this contract. At the time the contract was drawn up, maps and plats were produced, from which descriptions were taken, and, after the contract was completed, it was read over by Mr. Gillett in the hearing of all the parties, was signed, and the parties then separated. Afterwards Gillett prepared a deed from Heath and wife to Mr. Boyce, conveying their interest to him, and in that deed the property was described exactly as in the contract. Mr. Gillett also prepared a deed for Mr. Williams and his wife to sign, following exactly the language of the contract, except that he inserted therein a clause stating that the sale covered all the property owned by Williams & Co. in the township of Hampton. This deed Williams refused to sign, claiming that he had not agreed to sell all land owned by the company in the township of Hampton. Thereafter, upon Boyce’s claim that he had been deceived, Mr. Heath and his wife made a deed to him of his (Heath’s) interest in the balance of the property which Boyce claimed. Boyce thereafter requested the conveyance from Williams of his undivided one-third interest in the balance of the property, which Williams refused to execute. It was thereafter discovered that a mistake had been made as to the relative portions which Heath and Williams owned. In the contract and in the deed it was stated that Heath was the owner of two-thirds and Williams of one-third. Ás a fact, Mr. Heath owned five-eighths and Williams three-eighths. Williams thereupon offered to convey an additional one-twenty-fourth interest, and a tender was made of this in the answer' of Mr. Williams. On the hearing, the court made a decree directing that Williams convey the one-twenty-fourth interest, and, upon such conveyance, that complainant’s bill be dismissed, giving costs of the proceedings to complainant up to the time the answer was filed, and giving defendant costs for all subsequent proceedings in the cause.

It seems that considerable time was taken up by both parties in the negotiations which led to the making of the contract.. Mr. Boyce and his agent had visited the property. Williams had offered it for $40,000, again at $35,-000, and, on the day the contract was made, the proposition was made at $30,000, and was accepted by Mr. Boyce.

We have carefully examined the testimony, and we are not able to reach the conclusion that Mr. Williams fraudulently withheld any descriptions of land which it was understood between the parties should be covered by the contract, or that the contract was that Boyce should have all the land owned by Heath & Williams in the township of Hampton. It would not profit the parties or the bar to set out the testimony given upon this record. The court below reached that conclusion, and we are satisfied that the complainant has made no such showing upon this record as entitles him to have a reversal of that decree.

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

The other Justices concurred.


author: Montgomery, J.

text:
    HEDDLE v. CITY ELECTRIC RAILWAY CO.
    1. Trial—Evidence—Form of Objection—Damages.
    An objection that plaintiff’s testimony in an action for personal injuries, to the effect that since being hurt she had received three calls to go out nursing, was inadmissible for the reason that her calling was not set out in the declaration, cannot be urged upon appeal, where the only objection offered at the trial was that the testimony was immaterial.
    2. Personal Injuries—Evidence—Testimony of Physician.
    A question requiring a physician who attended a plaintiff suing for personal injuries to state whether he knew at the time that plaintiff contemplated a lawsuit against defendant was properly excluded, where he had given no testimony as to exclamations of pain, or testimony of any other character which would be affected or impaired by the fact that plaintiff contemplated bringing an action.
    3. Same—Conclusions of Witness.
    Under such circumstances, it was within the discretion of the court not to permit such physician to be cross-examined as to whether or not plaintiff had made pretenses, during the last of his visits, that her injuries were more severe than they really were, there having been no preliminary inquiry as to the nature of the claims upon which the conclusion would be based.

      4. Same—Exclamations op Pain.
    A physician may testify in an action for personal injuries as to plaintiff’s exclamations of pain on an occasion when an examination was being made by him with a view to treatment.
    5. Trial—Witnesses—Credibility—Instructions.
    Defendant is not entitled, as an absolute right, to an instruction that, if the jury find that plaintiff has knowingly misrepresented and exaggerated the extent of the injuries for which she sues, they may disregard her testimony on the manner of ' the accident; especially where such testimony is fully corroborated.
    Error to St. Clair; Eldredge, J., presiding.
    Submitted January 8, 1897.
    Decided May 11, 1897.
    Case by Mary Ann Heddle against the City Electric Railway Company for personal injuries. From a judgment for plaintiff, defendant brings error.
    Affirmed.

      Phillips & Jenks and Brennan, Donnelly & Van De Mark, for appellant.

      Thomas W. Butler (William T. Mitchell and Chadwick & McIlwain, of counsel), for appellee.
   Montgomery, J.

Plaintiff recovered' a verdict for $800 for injuries received by being thrown from a car of defendant while attempting to alight. The questions of the defendant’s negligence and the plaintiff’s care were properly submitted to the jury, and, while an ingenious argument on the facts is presented by defendant’s counsel,, it is sufficient to say that, while there is no certificate that all the testimony is here, there is sufficient evidence appearing in the record to show that there was a conflict which it was the province of the jury to pass upon, and that such appears to have been the view of defendant’s counsel on the trial, as appears by the requests. The assignments of error which are discussed in the brief of counsel relate to rulings admitting certain testimony and rejecting testimony offered by defendant, and the refusal to give one of defendant’s requests.

1. It appeared that plaintiff had, prior to the injury, been accustomed to go out nursing, and she was asked whether, after being hurt, she had had any call to go nursing, and replied that she had had three. Defendant’s counsel insist that this testimony was not admissible, for the reason that plaintiff’s' calling was not set out in the declaration. The record does not show that this specific objection was stated. The objection stated was that it was immaterial. It was not immaterial as preliminary to a showing of the loss of earnings, and was only objectionable, if at all, because of the state of the pleadings, to which the attention of the circuit judge should have been directed.

2. When the plaintiff first received her injury, she called Dr. Lohrstorfer to attend her. He testified that he was called on the 30th of May, and that he made an examination, and found a contusion of the left leg and knee,—a bruise on the outer side; that it was partially discolored, and that she complained of pain in her leg and knee; that he prescribed rest and cooling applications; that he called again June 6th, June 8th, June 9th, June 13th, June 15th, and June 19th, at which last date his visits ceased; that he made an examination every time he called; that about the 13th plaintiff told him that Dr. Yollmar and Dr. MacLaren had called and made an examination; that they sent for him, and he could not go. On cross-examination, he testified that he was quite busy at the time, and did not care to have much to do with the case. He was asked if he knew at that time that plaintiff was contemplating a lawsuit against defendant. This was excliided, and we think no error was committed in the ruling. The question plainly referred to the occasion of his last visit, or when he was last called to attend plaintiff. He had given no testimony as to any exclamations of pain at that time, or testimony of any other character which would be in the slightest degree affected or impaired by the fact that plaintiff may have contemplated bringing an action.

On further cross-examination witness was asked: “Is it not a fact that during the latter part of the times you called there she made pretense of her injuries being larger than they really were?” This question was, in effect, repeated in different forms, and ruled out, as calling for a conclusion of the witness. We think the óourt might properly require, as a preliminary to the question, some statement of what she claimed as to her injuries on the occasions in question, before permitting the witness to draw this conclusion; and, while it might not have been error to admit this testimony, we think it was a proper exercise of discretion to direct the course of examination to this preliminary inquiry, and that, if defendant’s counsel desired to pursue the inquiry, they should have called for a statement for the jury, first, as to what the claims of the plaintiff in fact were. It is to be noted that the witness had not testified to any statements or exclamations of pain on the occasions referred to in these questions. It was opening a new field of inquiry. The case would be quite different had it appeared that on these occasions statements of the plaintiff or exclamations of pain had been offered in evidence. Undoubtedly, in such case, it would be competent to take the opinion of a medical .man as to whether, from his examination, the patient was feigning.

3. Error is assigned on rulings permitting Dr. MacLaren to testify to exclamations of pain on an occasion when he was called to treat plaintiff. It is stated in the brief of counsel that it appears conclusively from the record that Dr. MacLaren was called simply to examine Mrs. Heddle, and not to prescribe for or treat her. If the record bore out this statement, and the objection had been, put upon that ground, it should have been sustained, within the rule laid down in Grand Rapids, etc., R. Co. v. Huntley, 38 Mich. 544 (31 Am. Rep. 321), and Jones v. Village of Portland, 88 Mich. 598. But, unfortunately for defendant’s contention, the record shows, not only that the objection was not put upon that specific ground, but that there was'testimony that Dr. MacLaren was called to treat plaintiff, and that the exclamations of pain were made on an occasion when an examination was being made with a view to such treatment, which brings the case within the rule laid down in Mayo v. Wright, 63 Mich. 44, Lacas v. Railway Co., 92 Mich. 412, and Strudgeon v. Village of Sand Beach, 107 Mich. 496.

4. Error is assigned on the refusal of the court to give the defendant’s first request, which reads as follows:

“The plaintiff in this case brings this action to recover damages for a claimed injury, which she alleges resulted from the negligence of defendant, and she has testified fully regarding the manner of the accident, and the extent and character of her injuries; and, if the jury find that she has knowingly misrepresented and exaggerated the extent and amount of her injuries, they may disregard her testimony upon the manner of the accident.”

We think it was not the absolute right of defendant to have the request given in the exact language employed. It is the province of the jury to determine ultimately the credit to be given to a witness who has knowingly falsified or exaggerated as to certain facts. Whether the entire testimony of the witness is to be excluded depends upon the consideration of other questions, among which is that of whether the testimony is or is not corroborated by other witnesses. Knowles v. People, 15 Mich. 408; O’Rourke v. O’Rourke, 43 Mich. 61; Cole v. Railway Co., 95 Mich. 80. The request omits any reference to the question of corroboration by other witnesses, although the testimony of the plaintiff as to the manner of the accident was fully corroborated. Furthermore, the better practice is for the court to frame instructions in such manner as not to imply a fixed opinion of his own, upon the question either of the truthfulness of the challenged statements or of the credit to be given to other portions of the testimony. Fraser v. Haggerty, 86 Mich. 530; Argabright v. State, (Neb.) 69 N. W. 102; 2 Thomp. Trials, § 2423. And although we do not hold that it is error to call attention to the testimony of a particular witness, and to give cautionary instructions framed in sucb language as to be in all other respects unobjectionable, we do not think that it is the right of either party to insist that this course be taken. In the present case, the court laid down general rules for the guidance of the jury in weighing testimony, which we think were sufficiently clear not to be misapprehended.

The other questions raised do not require discussion.

The judgment will be affirmed.

The other Justices concurred.


text:
    ELLA v. BOYCE.
    1. Pleading—Sufficiency of Declaration—Demurrer.
    Where defendant’s duty and the breach thereof are clearly to be implied from the facts alleged in a declaration for personal injuries, the failure of specific averments in that regard can be taken advantage of only by demurrer.
    3. Torts—Obstructing Tramway—Negligence.
    The owner of a vessel who knows of the existence of a tramway, over which cars are run day and night, owes a duty to one who is rightfully making use thereof, so to moor his vessel to the dock as not to obstruct such way; and the stretching of a hawser across the track for the purpose of attaching it to a spile on the opposite side, whereby the driver of a tramcar is injured, constitutes actionable negligence.
    3. Same—Contract Relations.
    The fact that the person injured was the servant of the dock owner, having himself no contract relations with the vessel-man, does not affect the latter’s liability.
    4. Same—Defenses—Reasonable Care.
    That one who obstructed a tramway at night, and thereby caused the injury of the driver of a tramcar, believed that the track was used only in the daytime, will not relieve him from liability for his negligence, it being his duty, before obstructing the way, to take proper precautions to ascertain whether or not it was in use.

      Error to Kent; Adsit, J.
    Submitted February 2, 1897.
    Decided May 11, 1897.
    Case by James Ella against Jonathan Boyce for personal injuries. From a judgment for plaintiff, defendant brings error.
    Affirmed.

      Simonson, Gillett & Courtright (Fletcher & Wanty, of counsel), for appellant.

      Charles A. Withey (Dunham & Preston, of counsel), for appellee.
   Long, C. J.

This is an action on the case for personal injury. The case was tried before a jury, who returned a verdict in favor of plaintiff for $4,000. No testimony was offered on behalf of the defendant. The defendant’s first contention is that no actionable negligence is alleged in the declaration, and that none was proved upon the trial, and that, therefore, the court should have directed a verdict for the defendant. The first count, of the declaration charges substantially that on May 3, 1893 (the date of the injury), defendant was the .owner of the schooner G. J. Boyce, and the plaintiff was an employé of the Michigan Trust Company, which was at that time in charge of the mill and salt block of R. G. Peters, at Manistee. Connected with the sawmill and salt block was a long pier or dock, extending 30 rods out into East. Lake, and terminating in a warehouse. The plaintiff was engaged in hauling barrels of salt from the block to the warehouse. ' The salt was hauled upon a flat car, which had a capacity of 30 barrels, and was drawn by a horse. The car was like an ordinary flat car, only smaller. The tramway was built with iron rails, the track being four feet wide. Above this tramway was another, which was used for piling lumber, so that, when the dock was well filled, the lower tramway was inclosed by lumber piles. There were certain down grades in the tramway, where the horse would have to trot to keep out of the way of the car. .The salt block was in operation both day and night, and the car passed over the road every 15 minutes, day and night. The tram, when inclosed by lumber, was very dark at night, so that the driver of the flat car could not see without a light. It was only five feet from the top of the oar to the timbers of the tramway overhead, so that a man could not stand safely upon the car. The car was loaded by standing the barrels of salt on end Until the car was full, leaving one vacant place at the front for the driver to occupy. The defendant sent his schooner into East Lake for the purpose of loading with lumber at that dock. The declaration further alleges:

“Whereupon said defendant, on said 3d day of May, 1893, * * * by his captain, mate, and other officers and employés, * * * brought said schooner to said dock or pier at 2 o’clock a. m., * * * and there moored her, * * * and, in order to more, securely moor * * * said schooner to said dock, carelessly and negligently caused a. large line, hawser, or rope, which was attached to said schooner at a considerable height from the surface of said dock, to be carried or extended * * * to said spile, where it was also * * * fastened directly at the surface of said dock. And the plaintiff, being * * * wholly ignorant of the fact that said vesssel had entered the harbor for the purpose of mooring at said dock, * * * got upon the said flat car at the front thereof, with his feet and legs, from the knees downward, hanging over the end of the car, * * * proceeded * * * along said tramway, * * * and was passing down one of the down grades, * * * when he observed the horse ahead of him. jump some obstruction, and caught sight of said line, hawser, or rope (that being the first intimation said plaintiff had of said obstruction), whereupon he instantly drew up his legs as quickly and as far as possible, but was instantly, without fault on his part, caught between the end and framework of said salt car and said line, hawser, or rope, with terrible force, so that both legs were broken and greatly lacerated, torn, and mangled, between the ankle and knee joints, and the said plaintiff instantly hurled forward from said car to the surface of said dock, upon his hands and face, and otherwise greatly shocked, bruised, wounded, and injured, to his damage $10,000.”

It was shown that there was a row of spiles on each side of the tramway from the shore to the warehouse, so that boats could tie up on either side of the pier, and fasten to these spiles, or to the bent timbers or lumber piles, or all of them, from either side of the pier, without carrying their lines across the tramway; that, at the exact point where the “Boyce” moored, there was no spile on her side of the tramway,' but there were spiles on that side a few feet either way above or below, and there was an abundance of opportunity to fasten the mooring line to the bent timbers, lumber piles, etc., at the exact point where she lay, without crossing the tramway; that those in charge of the “Boyce” knew of the tramway and its use, and the only excuse offered at the time of the injury for taking the line that way was that “he [the man in charge] said he did not think they were using the track at night.”

The second count alleges that, in consequence of the injury, the plaintiff became, shattered in health, and more liable to disease, and has been rendered from thence hitherto unable to earn a livelihood, and that his earning capacity has greatly decreased, and he has been put to great annoyance, suffering, and expense.

Upon the trial the plaintiff testified to the circumstances of the injury as alleged in the declaration. It appears that there were no brakes upon the car at that time; that the track of the tramway was about four feet wide, made of small rails, and built with planking both inside and outside, so that the planking was flush with the rails on both sides. The space for the car wheels was from an inch to an inch and a half wide. The plaintiff’s feet were hanging over the car, within a few inches of the planking. It appeared, further, that the schooner was brought to that part of the dock by a local tug; that the spile to which she was fastened was worn and indented on the north side, as if other vessels had been fastened to it before in the same way.

It is first contended by defendant that the declaration does not allege the existence or breach of any duty owing from the defendant to the plaintiff, or allege that the captain of the schooner knew or should have known of the existence of the tramway, or that it was in use at the time; that it does not specify particularly in what respect the crew was negligent, or in what the want of care consisted, but merely makes the general allegation that defendant, by his officers and employés, carelessly and negligently fastened his hawser to a spile; that, in making out negligence, the first requisite is to show the existence of the duty-which has been neglected; that such duty is necessarily set forth in the declaration, and the neglect averred; and that a failure to prove it is a failure to make out the plaintiff’s case; and, further, that the evidence does not show the existence of any duty owing from the defendant to the plaintiff. Counsel cite, in support of this contention, Flint, etc., R. Co. v. Stark, 38 Mich. 714. On the other hand, it is contended by the plaintiff that the point that the declaration does not formally set forth a duty and the neglect thereof is raised for the first time; that, if this point be available at all, it must be .raised by demurrer. We think the facts set out in the declaration clearly imply a duty upon the part of the defendant not to have so carried his hawser across the track of the tramway as to cause injury to. persons using it; and if the defendant sought to take advantage of such defect in the declaration, as not specifically averring the duty and the breach, he should have done so by demurrer. That question cannot be raised for the first time in this court. Geveke v. Railroad Co., 57 Mich. 589; Young v. Railway Co., 56 Mich. 430; Norton v. Colgrove, 41 Mich. 544. In the last case it was held that defects in a declaration are not noticed, if, being amendable, they have not been demurred to. We think that there was some testimony showing that there was a duty owing from the defendant to the plaintiff, under the circumstances here stated. It is shown that those in charge of the “Boyce” knew of the tramway and its use, and the only excuse was that offered by the man in charge,—that he did not think they were using the tramway at night.

It is next contended that no liability exists, because there were no contract relations between the plaintiff and the defendant; in other words, that, in the absence of a contract, liability exists only when there is a public or imposed duty resting upon the defendant, and that no such duty is shown in this case. We cannot agree with the learned counsel upon this proposition. It was the duty of the owner of the salt block to furnish the. plaintiff with a safe place to work; and if the Michigan Trust Company, in whose employ the plaintiff was, had carelessly and negligently obstructed the way, and the plaintiff had been injured by such negligence, the employer would be held liable. The defendant here cannot escape liability upon the claim that no contract relation existed between him and the plaintiff to furnish a safe place. The right to recover does not depend upon that condition. If the defendant strung this hawser across the tramway under authority from the Michigan Trust Company, his duties and responsibilities were coextensive with the Michigan Trust Company. If the defendant placed the hawser there without the consent of the Michigan Trust Company, his responsibility to the plaintiff for his injury would assuredly be no less than if he had obtained such consent.

In Corby v. Hill, 4 C. B. (N. S.) 556, the owner of land, having a private road for the use of persons coming to his house, gave permission to A., who was engaged in building on the land, to place materials upon the road. A. placed a quantity of slate there in such a way that the plaintiff, in using the road, sustained damages. It was held that A. was liable to an action. Cockburn, C. J., in that case, speaking of the owners of the soil, said:

“Could they have justified the placing an obstruction across the way whereby an injury was occasioned to one using the way by their invitation? Clearly, they could not. * * * If that be so, a third person could not acquire the right to do so under their license or permis- . sion.” o

This case was cited with approval and followed in Crane Elevator Co. v. Lippert, 63 Fed. 942, in which it was held that one who negligently places obstructions in the hall of a building is liable to an employé of a tenant of the building who is injured thereby, since such obstruction constitutes a breach of the duty of the owner to keep such hallway open to the use of the tenants. The same case was also cited and approved in Bennett v. Railroad Co., 102 U. S. 577. See, also, Schubert v. J. R. Clark Co., 49 Minn. 331 (32 Am. St. Rep. 559); Beauchamp v. Mining Co., 50 Mich. 168. As well stated by counsel for plaintiff here: “The case is the same as though the defendant, for the convenience of his vessel, had torn away a portion of the tramroad in the darkness, and let the plaintiff plunge into the lake.” It appears from the testimony that the servants, of the defendant knew that the tramway was there, but claimed they did not know it was used in the night. The questions relating to this part of the case were fully and fairly submitted to the jury.

Complaint is made that certain of defendant’s requests to charge were not given to the jury. We think the general charge covered them so far as they were proper to be given.

Complaint is also made of a specific portion of the charge. The court said:

“Here was a railroad on a small scale, called a ‘tramway,’ which was in constant use, at least every 15 minutes, night and day. I think that, of itself, was a sign of danger.”

It .is of this last sentence that complaint is made. The court, however, in its further charge, said:

“If it was, then the inquiry would necessarily arise whether or not a person or persons stretching that line across that track knew it was there, or were the surroundings such as to apprise them of that fact. If they did know, then it was the duty of such person or persons to exercise reasonable and ordinary diligence in ascertaining whether or not it was in use before obstructing it with a line.”

We think there was no error in this part of the charge. As we have said, the defendant’s servants knew the tramway was there. They knew the salt block was in operation. The court left the question to the jury whether the situation and surroundings would indicate that, by stretching the hawser there, it was liable to cause an injury. If the parties did know the situation, and that the tramway was there, it was their duty to ascertain whether or not it was in use before obstructing it with a line.

The question of the plaintiff’s contributory negligence was fairly submitted to the jury, and need not be discussed. The question of the ownership of the vessel was also left to the jury, and we think there was some evidence from which the jury might well find that the defendant was the owner of it, and in control of it. We find no other question in the case which warrants discussion. The case was fairly tried and fairly submitted.

The judgment must be affirmed.

The other Justices concurred.


author: Hooker, J.

text:
    AFFELD v. CITY OF DETROIT.
    Municipal Corporations—Public Work—Contracts—Implied Assumpsit.
    One who has constructed a sewer for a city under a contract providing, in accordance with a charter provision, that he will depend entirely on special assessments for his compensation, cannot recover a judgment against the city upon an implied. assumpsit for the amount of his claim, although a temporary injunction has been issued restraining the city from collecting the assessment, and it has delayed taking steps either to establish the validity of such assessment or to make a new one.
    Error to Wayne; Aldrich, J., presiding.
    Submitted February 3, 1897.
    Decided May 11, 1897.

      Assumpsit by John Afield against the city of Detroit to recover for the construction of a sewer. From a judgment for plaintiff on verdict directed by the court, defendant brings error.
    Reversed.

      Arthur Webster (Charles Flowers, of counsel), for appellant.

      James H. Pound, for appellee.
   Hooker, J.

The plaintiff constructed a sewer under a contract between himself and the city of Detroit. The charter of the city in force when the contract was made provided:

“No contract shall be let or entered into for the construction of any public work, or for any work to be done, * * * until a tax or assessment has been levied to defray the cost and expense of the same, and no such work * * * shall be paid for, or contracted to be paid for, except out of the proceeds of the tax or the assessment thus levied.”

And the contract included the following provision:

‘ ‘ And it is expressly agreed by and between the parties hereto that the said city of Detroit, the party of the second part, shall in no event be liable to the party of the first part for any part or portion of the cost of the labor and materials, and that the said party of the first part shall never ask for or receive, from the city any part or portion thereof, but shall depend entirely upon such special assessments for their compensation.”

An assessment was made upon adjoining premises, and, after the collection of a portion of the sum assessed, an injunction bill was filed, and an injunction issued, to restrain further steps to collect the remainder, and apparently the city authorities have no confidence in their authority to collect the same; and, although no decree has been taken, the restraining order is in force, and no attempt has been made to bring the litigation to a close, or to make another assessment. The ground of the suit to enjoin the collection appears to be that the city authorities constructed a new sewer under a resolution to reconstruct an old one. Whether or not the assessment was void has not been decided, and we cannot, upon this record, determine that question, or whether, if so, a new assessment might be lawfully made. As already seen, the charter expressly forbids that work shall be paid for except out of the proceeds of the assessment. A special agreement to do otherwise would be null and void, yet we are asked to say that the law will imply a promise which will be binding. In other words, the city shall not have power to contract to pay for this sewer except from the proceeds of a special assessment, yet if, for any reason, it does not pay for it from such assessment, then it shall be liable generally for the work done. This would enable the council to evade the organic law, and accomplish by indirection what it cannot do directly. All contracting with the city are bound to know that there is this limitation upon its power. Whatever other remedy such persons may have, they cannot compel the city to do an act expressly prohibited by its charter. In the case of Goodrich v. City of Detroit, 12 Mich. 279, this court intimated that the city has not the power to make itself responsible for the price of any public work. See, also, Second Nat. Bank v. City of Lansing, 25 Mich. 207; City of Detroit v. Michigan Pav. Co., 36 Mich. 335; George v. Electric Light Co., 105 Mich. 1; Craycraft v. Selvage, 10 Bush, 696. This seems decisive of the only question which counsel discuss. Apparently, the city has had the benefit of the plaintiff’s labor, under circumstances which made it inequitable that he should not be paid for it. As before stated, whether the law will now permit an asessment to raise the money to pay him, we have no means of knowing; but we feel constrained to hold that, whether it will or not, the work cannot be paid for from any other fund than that raised for the purpose according to law.

The judgment must be reversed, and a new trial ordered.

The other Justices concurred.


text:
    NEWBAUER v. NEWBAUER.
    Justices op the Peace—Log-Lien Proceedings—Notice
    A justice’s judgment against the owner of logs in an attachment under the log-lien law is invalid where it was rendered the day after the writ was served on the owner, and it does not appear that the officer made any search or inquiry to find him earlier.
    Error to Menominee; Stone, J.
    Submitted February 3, 1897.
    Decided May 11, 1897.
    Proceedings under the log-lien law by Robert Newbauer against Albert Newbauer and Charles A. Spies. From a judgment for defendant Spies, plaintiff brings error.
    Affirmed.

      Norwood Bowers, for appellant.

      J. M. Opsahl, for defendant Spies.
   Long, C. J.

This, action was commenced in justice’s court in Menominee county, and judgment was rendered in favor of the plaintiff for $22.50 damages, and $10 costs of suit. The action was commenced by writ of attachment under the log-lien law. After judgment, defendant Spies, log owner, took a general and special appeal to the circuit court, where the judgment was reversed, and the case comes to this court by writ of error. It appears by the officer’s return to the writ of attachment that he served the writ upon the defendant log owner on April 1, 1896, and the judgment was rendered before the justice on the next day. Only a part of the property described in the writ was taken in custody by the officer. There is no showing that the officer made any search or inquiry to find the owner of the property, although the writ states that Mr. Spies was the owner. The log owner did not appear before the justice, and now contends that he had no sufficient notice, and that, therefore, the justice had no jurisdiction to render judgment against him. This was undoubtedly the view taken by the court below in reversing the judgment. The case is governed by Noyes v. Hillier, 65 Mich. 636, and White v. Prior, 88 Mich. 647.

The court below was not in error in reversing the judgment, and the case will stand affirmed.

The other Justices concurred.