Kennedy v. Lynch Timber Co.

198 N.W. 985, 227 Mich. 269, 1924 Mich. LEXIS 632

• Court: Michigan Supreme Court
• Decided: June 2, 1924
• Docket: Docket No. 36.
• Status: Published

Opinion

Fellows, J.

(after stating the facts). It was permissible for plaintiff and Chandler to make further agreements and stipulations deemed necessary by them as a result of Chandler’s failure to get out the full number of ties agreed upon, and his failure to deliver as a result of a dry spring season. Testimony of their agreement or agreements made after the execution of the contract does not infringe the rule excluding parol proof varying the terms of a written agreement. As between Chandler and the plaintiff it was competent for them to make such agreement or agreements as they saw fit with reference to the ties. It was competent for them to add to, take from and modify the terms of the written agreement. The ties did not carry with them the, properties of negotiable paper. Defendants can not be protected in their conversion of the ties upon the theory that they were a bona fide purchaser. They placed no reliance on the original contract between plaintiff and Chandler. Mr. Lynch admits that he knew Chandler was getting out ties for plaintiff but he claims no knowledge of the contents of the contract. The- court committed no error in permitting plaintiff to show arrangements made by him with Chandler subsequent to the making of the original contract.

It will be noted that by the terms of the written contract the title to the ties passed to plaintiff upon inspection and payment of the stipulated advance. Defendants point out that but 11,000 out of between 16,000 and 17,000 ties were inspected and that the amount of the advance was less than the amount due under the terms of the contract. They also point out that 2,500 of the ties were gotten out the second year and were not inspected, that many of the ties got away and that there was no showing and no way of showing whether the ties taken by defendants had been inspected. They, therefore, insist that plaintiff has not established that title had passed to him at the time of the conversion and for this reason he was not entitled to recover. But there was testimony in the case that the inspection of the 11,000 ties showed 5 per cent, rejects, 38 per cent, number twos, and 57 per cent, number ones; that Chandler complained that the inspection was strong and he and plaintiff agreed without further inspection on a percentage of 60 per cent, number ones and 40 per cent, number twos, and that they also agreed that the advance was sufficient. We have already pointed out that it was competent for plaintiff and Chandler to make subsequent arrangements after the contract was signed. A waiver of inspection and a percentage agreed upon by the parties served all the purposes of an actual inspection and took the place of one. Likewise the agreement that the advance was sufficient took the place of the actual payment of the advance. If the jury believed the testimony they were justified in finding that the title to the ties passed- to the plaintiff.

Defendants’ counsel asked the court to submit the question of estoppel to the iury. This the court declined to do. Counsel here discuss the question of estoppel, waiver and acquiescence under separate heads. They all belong to the same family, and defendants’ contention upon this record is really that there is an estoppel in pais, an estoppel by acquiescence and an estoppel by waiver. We shall, therefore, consider the contention under the one head of estoppel. Upon the record before us the court properly refused to submit the question of estoppel to the jury. Thfere is no testimony in the record having any tendency to show any act of defendants in reliance upon the acts of plaintiff which are claimed to operate as an estoppel; they have not changed their position in any way or been prejudiced in any degree by reason of any act of the plaintiff. Indeed, it is difficult to understand how defendants could have placed themselves in any better position. They took plaintiff’s ties, under an agreement with Chandler to return tie for tie; they have returned not a one, have sold the ties and now have the money for them. How they could have improved their position but for the a,cts of plaintiff does not quite clearly appear. If this was all there was to the contention it could be dismissed without further comment, but defendants’ counsel were precluded from introducing proof and from cross-examination by the view of the court that the defense of estoppel was not available under the plea of the general issue alone, and it, therefore, becomes necessary to determine that question.

In considering this question it is not necessary to go back of Dean v. Crall, 98 Mich. 591 (39 Am. St. Rep. 571), where it was held that estoppel need not be pleaded on the law side of the court, expressly overruling Gooding v. Underwood, 89 Mich. 187, and Pearson v. Hardin, 95 Mich. 360. Again in Rogers v. Robinson, 104 Mich. 329, it was expressly held that the defense of estoppel was available under a plea of the general issue. These cases were decided before the adoption of subdivision (b) of former Circuit Court Rule No. 7, having reference to affirmative defenses but which did not specifically mention the defense of estoppel. Williams v. Brown, 137 Mich. 569, was decided after the rule took effect and is the case most strongly relied upon by defendants’ counsel. It is pointed out that here as in that case plaintiff did not set up the source of his title and it is insisted that under such circumstances a plea of the general issue is sufficient. But it should be noted that in that case the defense was that plaintiff did not have title because of fraud in the transaction. In an action for conversion plaintiff must establish his title. If he does not establish title he must fail; and it makes no difference whether title is in defendant or someone else. Hence, evidence showing title in defendant or someone else goes directly to defeat plaintiff’s right of recovery and is admissible «under the plea of the general issue. We are not persuaded that this case goes quite as far as defendants’ counsel contend although a later case to which we shall presently refer does sustain them. In Heilwig v. Nybeck, 179 Mich. 292 (Ann. Cas. 1915D, 356), where the action was trover for the conversion of a crop of potatoes, it was held that evidence to defeat the plaintiff’s title was admissible under a plea of the general issue. In Crowley Bros. v. Railway Co., 185 Mich. 482, it was held that defendant could not under a plea of the general issue show a special contract limiting its liability, but in Lang v. Lundy, 185 Mich. 390, it was held in a replevin case that the defense of estoppel was available under the general issue and Dean v. Crall, supra, was cited. This case doubtless sustains defendants’ contention. The cases we have, considered were all decided before the adoption of the present rules, and we think it must be accepted as the settled case law of the State at the time they were adopted that in actions of replevin or trover where the plaintiff did not in his declaration allege the source of his title, the defense of estoppel was available under the general issue.

This case law was before the court when the present rules were adopted, and with it before the court specific defenses (which we shall italicize) were added to those in the former rules of which notice must be given under the plea of the general issue. Section 2 of Circuit Court Rule No. 23 provides:

“An affirmative defense, such as payment, release, satisfaction, discharge; license, fraud, duress, estoppel, statute of frauds, illegality, that an instrument or transaction is either void or voidable in point of lato, want ,or failure of consideration in whole or in part, and any defense which by other affirmative matter seeks to avoid the legal effect of or defeat the cause of action set forth in the plaintiff’s declaration, and any ground which, if not raised on the pleadings, would he likely to take the opposite party hy surprise, must be plainly set forth in a notice added to the defendant’s plea. The signature of the defendant’s attorney following such a notice shall be a sufficient signing of both the plea and the notice.”

Adding the defense of estoppel was not inadvertently done, nor was the defense in any way qualified by the nature of the action or the contents of plaintiff’s declaration. So far as the language of the rule is concerned it is equally applicable to actions for conversion as to actions in assumpsit. In an action for conversion the defense of estoppel does not assail the plaintiff’s title in fact, but the effect of the defense is to say to the plaintiff: “You can not assert your title by reason of certain acts of yours upon which I have relied to my injury.” It was deemed advisable to require notice of such defense and it was added to the list of defenses found in the former rule. The ruling of the trial judge but sustained the rule and was not erroneous.

We are persuaded that there was some evidence, sufficient to take the question to the jury, that the 606 ties belonged to plaintiff. But we think the testimony is overwhelming that they were the property of defendant company and that they were purchased by it from John Gotez. They were not shipped by defendant until October while the ties received from Chandler were shipped in July. The testimony is convincing that they bore the mark “J. G.” Defendants moved for a new trial on the ground that the verdict was against the weight of the evidence. Upon the main case we think the plaintiff’s testimony preponderates. As to the 606 ties the testimony is overwhelming that they belonged to the defendants. The record fairly discloses their value to be $303.10. If plaintiff will within 30 days remit this amount the judgment as so reduced will be affirmed. If not, a new trial will be granted. In either event defendants will recover costs of this court.

Clark, C. J., and McDonald, Bird, Sharpe, Moore, Steere, and Wiest, JJ., concurred.