not persuaded Mr. Camburn's will was made as a consideration for the making of Mrs. Camburn's will, nor to evidence, nor in acknowledgment of an indebtedness owing by him to Mrs. Camburn. I think his will just such a will as any husband might well make, to be carried out in case his wife outlives him, but, if she does not, then he can do with his life's earnings as he sees fit." After a careful reading of the very remarkable testimony offered after the case was reopened, we are not surprised that the trial judge refused to change his mind about the case. The decree is affirmed, with costs.

PIERSON & HOUGH CO. v. NORET. (Supreme Court of Michigan. Sept. 15, 1908.) 1. FRAUDULENT CONVEYANCES-VALIDITY OF CONTRACT-TRANSFER BY OTHER THAN OWNER-BONA FIDE PURCHASER.

Where a person in good faith obtained a stock of hardware in bulk, from an individual as his own property, for a valuable consideration, while the stock in fact belonged to a corporation of which the individual was a member, the transfer not being by the owner, there was no sale, and the would-be buyer is not a purchaser for a valuable consideration who would be protected against the owner's creditors, under Comp. Laws, § 9537, providing that provisions of the statutes, invalidating conveyances and contracts made with intent to hinder, delay, or defraud other persons of their lawful claims, shall not affect the title of a purchaser for a valuable consideration, unless it appear that he had notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.

[Ed. Note.-For other definitions. see Words and Phrases, vol. 7, p. 5860; vol. 8, p. 7775.] 2. SAME-ACQUIESCENCE BY OWNER.

The discovery of and acquiescence in the attempted sale by the owner would not take away the rights of its creditors.

3. SAME STATUTORY REQUIREMENTS - BULK SALES.

Even if there was, notwithstanding the manner of the sale, an effective transfer of the title of the property to the would-be buyer, it was a sale of a stock of hardware in bulk, and void as to creditors of the real seller, where there was a noncompliance with the Bulk Sales Law, No. 223, p. 322, Acts 1905, providing that the sale in bulk of any part of a stock of merchandise, otherwise than in the ordinary course of trade, shall be void as against the seller's creditors, unless the seller and buyer make an inventory of the merchandise, and the buyer obtain a list of the seller's creditors and notify them, at least five days before taking possession, of the price, terms, and conditions of the proposed

sale.

Case-Made from Circuit Court, Muskegon County; Clarence W. Sessions, Judge.

Garnishment proceedings by the Pierson & Hough Company against Edwin A. Noret, garnishee, after judgment against the A. Alberts Hardware Company. Judgment for plaintiff, and defendant appeals on casemade. Affirmed.

Argued before MONTGOMERY, OSTRANDER, HOOKER, MOORE, and McALVAY, JJ.

C. B. Stevens, for appellant. C. J. Chaddock and Alex Sutherland, for appellee.

OSTRANDER, J. The court below found, as matter of fact, that plaintiff is a judgment creditor of the A. Alberts Hardware Company, a mercantile corporation, and that defendant, Noret, had in his possession, at the time of service of the writ, property be longing to said corporation of the value of $1,000, and cash, arising from the disposition of other property of said corporation by Noret, to the amount of $225. He found that the stockholders and directors of the corporation were Abner Alberts, its secretary and the manager of its business, his wife, Catharine, president of the company, and John Murdock, who was employed in and about the business. Without action of the stockholders or directors, with the knowledge of all of them, without objection from any of them, and without compliance with Act No. 223, p. 322, Pub. Acts 1905, a bargain, entered into in good faith by defendant, Noret, and evidenced by the writings here set out, was made and completed:

"Muskegon, Mich., August 17, 1906. "To A. Alberts Hardware Co., Dr. Dealers in all kinds of Shelf Hardware, Farm Implements and Harness Goods. Citizen's Phone 475. 46 Pine Street. For the consideration of twenty-four hundred and sixty and 30/100 dollars, to me paid on delivery of this instrument of writing, I do hereby sell, and assign and deliver to E. A. Noret my hardware stock, consisting of all merchandise and fixtures, except the iron safe, situated on Pine street, Muskegon, Mich. This stock and fixtures is unincumbered. A. Alberts."

"Muskegon, Mich., August 17, 1906. "To A. Alberts Hardware Co., Dr. Dealers in all kinds of Shelf Hardware, Farm Implements and Harness Goods. Citizen's Phone 475. This is to certify that I have this day bought A. Alberts hardware in Muskegon, on Pine street. Consideration twenty-four hundred and sixty dollars 30/100, of which fourteen hundred and seventy-seven dollars is paid in consideration of one livery stock this day turned over to A. Alberts, and six hundred dollars cash this day paid; the balance, three hundred sixty-one 80/100 A. Alberts agrees to take in town lots situated in Noret's addition in the village of Hart, Michigan, at a fair valuation; A. Alberts to come to Hart and decide on the lots he will take by September 15, 1906. The price of said lots shall be from 60.00 to 400 dollars, owing to location. "[Signed]

E. A. Noret. "A. Alberts."

The eleventh finding of fact, which appellant contends is not supported by any testimony, is: "That the Alberts Hardware Company received none of the consideration given by Edwin A. Noret to A. Alberts for said property of the Alberts Hardware Com

Mich.)

pany." The conclusions of law are that the attempted sale was without authority, was never ratified by the corporation, was illegal and void as to creditors of the corporation; that Noret is liable in garnishment to the plaintiff. It is doubtful if this court can say that the necessary inference from the testimony is not the one stated in the eleventh finding. The corporation never had a meeting. It does not appear that the corporation did not get the money which was paid. It does appear that Abner Alberts acquired title to the real estate, and engaged in the new business for which the corporate property was exchanged. The fact is, in any event, one to be affirmatively shown by defendant if he relies upon it to support his title. If we correctly understand the position of appellant, he is asserting ownership of the property formerly belonging to the corporation, the principal defendant. He bases his title upon the paper writing herein set out, and estoppel of all of the stockholders, and so of the corporation, to dispute his right. It appears to be admitted that he could not acquire title, good in this action, from the corporation itself unless there was a compliance with the provisions of Act No. 223, p. 322, Pub. Acts 1905. Musselman Grocery Co. v. Kidd, Dater & Price Co., 151 Mich. 478, 115 N. W. 409. Comp. Laws, § 10632.

Two propositions are laid down in argument. The first proposition is that, because he is an innocent purchaser for value, defendant is protected in his title as against creditors, both by common-law principles and by the express provisions of Comp. Laws, § 9537. The second proposition is that the act of 1905, already referred to, has no application to such a sale as was made, or attempted. If there was, in fact, no sale of the goods by the corporation (the owner), defendant was not, in fact, a purchaser for a valuable consideration within the meaning of Comp. Laws, § 9537. Property is not sold when one, not its owner, transfers it, as his own, to an innocent party, who pays a consideration. Neither the real owner nor his creditors are affected by such a transfer. And discovery of, and acquiescence in, the attempted sale by the owner will not take away rights of his creditors. In admitting, as he does, that the attempted sale was illegal, defendant admits that as to creditors he obtained no title to the property; admits the right of creditors of the owner of the property to attack and set aside the sale. When and how this right was lost, when and how his title became, as to creditors, a good title, is not made to appear, and is not evident. If there was, notwithstanding the manner of the sale, an effective transfer of the title of the property to defendant (and he contends that there was, affirms it, and asserts title to the property), it was a sale of a stock of hardware in bulk, void, as to cred

645

A federal court having been in possession of an insolvent's estate, in a creditor's suit. charged with the duty of allowing claims, and plaintiff's claim for goods sold and delivered having been passed upon and disallowed as not proved, and having been then treated as a claim for damages for breach of contract, proof being heard thereon, an order disallowing the claim precludes a subsequent action for such damages; any error by the federal court being reviewable in a direct proceeding, and the court in a subsequent action being unable to review the question whether the pleading, if the claim be such, justified the inquiry into the question of damages.⚫

Error to Circuit Court, Wayne County; Morse Rohnert, Judge.

Action by the Forest City Steel & Iron Company against the Detroit & Toledo Shore Line Railroad Company. From a judgment for plaintiff, defendant brings error. Reversed and new trial ordered.

Argued before BLAIR, MONTGOMERY, OSTRANDER, HOOKER, and MOORE, JJ.

Brennan, Donnelly & Van De Mark (Henry F. Lyster, of counsel), for appellant. Bowen, Douglas, Whiting & Murfin, for appellee.

PER CURIAM. The plaintiff brought this action, claiming damages for breach of a written contract to deliver certain iron building material to be paid for on delivery. He proved the contract and the offer to deliver the goods upon payment, the refusal to pay, and the ultimate reshipment of the goods to Cleveland, and a subsequent offer to sell them. By way of defense the defendant showed that at the time of such tender of delivery the defendant's property was in the

hands of a receiver in a creditors' suit pending in the federal court at Detroit, that the plaintiff filed a claim in said court upon an alleged open account stated, or, perhaps, more properly, for the contract price of the iron; that the same was heard, and the petition for allowance was dismissed.

It appeared that the ground of such action was that, as the property was not delivered to defendant, the plaintiff could not recover the contract price, and that "the utmost claim that the petitioner could be allowed under any circumstances would be the damage it had suffered by the nonacceptance of the property, viz., the difference between the cost of doing the work and the contract price, including the freight to Monroe and return, and demurrage, if any, paid or incurred, and that there was no evidence what the difference would be and therefore no basis for a decree in favor of petitioner." He also found that there was evidence that the plaintiff had rescinded the contract by ordering the goods back to Cleveland, and treating them as its own property, and offering them for sale, and that both parties regarded the contract as rescinded. The petition filed in federal court alleged the contract, petitioner's compliance with its terms, the refusal of the defendant, and its receiver to permit petitioner to erect the building contracted, the return by defendant and its receiver of the iron at petitioner's expense, and an admission of its liability for the value of the materials and the freight paid, and prayed that it be allowed to intervene and present its claim and for other relief. Thereupon a general order for the presentation and hearing of claims was made. Plaintiff then filed its claim in an affidavit, stating that it was owner of a certain account, a copy being attached, amounting to $1,457.08, with interest; that there were no set-offs or counterclaims, and that it held no security therefor; that it was a valid claim, and had been admitted to be such by the receiver. The following statement of account was attached:

Cleveland, O., February 3, 1902. Allen F. Edwards, Receiver, Detroit & Toledo Shore Line R. R. Co., Detroit, Mich. Bought of the Forest City Steel and Iron Co. To steel Roof Trusses and Purlins, per contract dated 11/29/01.. To freight on same, Cleveland to Monroe, Mich...

$1,440 00

40 04 40 04 12.00 $1,532 08

75.00 $1,457 08

Under strict rules of pleading, it might be said that plaintiff's account filed in the federal court did not allege a claim for damages

based on refusal to perform a contract, but was more in the nature of a claim for the purchase price of goods sold and delivered. The court declined to sustain the plaintiff's claim upon the ground that it had never delivered the material, and therefore had not become entitled to the contract price. That was a complete answer to such a claim. So far the finding was not inconsistent with plaintiff's present claim. The court further found that the utmost that could be allowed the petitioner would be damages for a breach of contract, and that they could not be allowed for two reasons: (1) It had omitted to make proof of their amount; and (2) the parties by mutual consent had rescinded the contract by reason of the insolvency of the company. This last finding of fact was adverse to the plaintiff's present claim, and, unless we can say that it was unnecessary to a decision of the question before that court, it must be conclusive in this case. So, too, if the question before him involved the allowance of damages for a breach of the contract, plaintiff must be concluded here, for it could not be allowed a second trial of the question merely because of a want of proof upon the first. We have, therefore, to determine what was before the federal court if we can. Plainly there is nothing upon the face of the claim itself filed indicative of a nonacceptance of the goods and damage therefor. But nonacceptance of the goods by defendant and plaintiff's knowledge of defendant's insolvency are indicated by one of plaintiff's three petitions, and the facts stated in the opinion filed indicate that full proof was made of the circumstances, and that the court did consider and decide the question of giving damage for breach of contract and denied such claim for two reasons, viz., those already stated.

Unless the court can be said to have gone beyond his jurisdiction in considering the matter of damages for refusal to accept the goods, we cannot say that the decision of those questions was not essential, for each was conclusive of plaintiff's right to recover damages in the view of that court, and, each being decided against plaintiff, he would be concluded elsewhere. Damages for breach of contract are legitimate claims against an insolvent's estate. Lothrop v. Reed, 13 Allen (Mass.) 294. Under bankruptcy law they may be proved. See Loveland on Bankruptcy, 337, and following eases there cited: In re Hirshman (D. C.) 104 Fed. 69; In re Pettingill (D. C.) 137 Fed. 143. See remarks of Peckham, J., in Dunbar v. Dunbar, 190 U. S. 350, 23 Sup. Ct. 757, 47 L. Ed. 1084. See, also, In re Stern, 116 Fed. 604, 54 C. C. A. 60, when it is held that claims for damages for breach of contract are provable claims. In any event, it is obvious that the court was in possession of defendant's estate, charged with the duty of allowing claims. This plaintiff's claim was filed and heard.

The judge passed upon the claim for goods sold and delivered, and denied it as not proved; there being no delivery. He then dealt with the question of damages for nonperformance, and denied those. The proceeding was in equity, and, having treated the statement of claim as sufficient to admit proof of the refusal to perform and heard proof which supported it, the judge evidently treated that view of the case as a subject for decision. If he erred, the remedy was in a direct proceeding. We cannot say that he was without jurisdiction, and we cannot be asked to inquire whether the pleading, if called such, justified his inquiry. A similar question arose in Kellogg v. Thompson's Estate, 115 Mich. 621, 73 N. W. 893, where it was held that the inadequacy of pleadings in the former suit was not an answer to the claim of "former adjudication." See, also, Reid, Murdoch & Co. v. Parks, 122 Mich. 364, 81 N. W. 252.

Being constrained to hold that the present claim was one provable before the federal court, that proof was made tending to prove it, and, the question considered and decided, we have no alternative but to reverse the judgment. A new trial is ordered.

GASKILL et al. v. WEEKS et al. (Supreme Court of Michigan. Sept. 15, 1908.) 1. EXECUTORS AND ADMINISTRATORS AcCOUNTING INTEREST IN MERCANTILE FIRM. Where testator, at the time of his death, owned an interest in a mercantile firm which continued for some time thereafter, the executors, having accounted for the property which came into their hands, and administered the estate with care and economy, were not chargeable with what they received at the inventory figures.

2. PARTNERSHIP DISSOLUTION OF FIRM DEATH OF PARTNER-RIGHTS OF SURVIVING PARTNER.

On the dissolution of a firm by the death of one of the partners, the survivor is entitled under the law to continue the business and use his best judgment in winding it up.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 38, Partnership, § 511.]

3. EXECUTORS AND ADMINISTRATORS ICES OF EXECUTORS-ALLOWANCE.

SERV

Where a surviving partner was the executor of his deceased partner, and, after dissolution of the firm, continued to use his partner's capital in the business without interest, and such share of the capital paid its share of all the expenses of the business, including a portion of the salary of such executor while managing the business, the executor was not entitled to an additional allowance for his services as executor, which were perfunctory.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 22, Executors and Administrators, §§ 21172124.]

4. WILLS-CONSTRUCTION.

Testator bequeathed the residue of his estate to his executors in trust, to pay the income and so much of the principal as is necessary to his widow for life, and, at her death, to divide the balance between all the children of testator's brothers and sisters and W. then living, share and share alike, and in case any of the children

should die, leaving issue at the time of distribution, such issue should take the share of their deceased parent. Held, that the children of W. were entitled to share equally with the children of the brothers and sisters of deceased on like terms.

Appeal from Circuit Court, Jackson County, in Chancery; James A. Parkinson, Judge. Bill by Mary H. Gaskill and others against Eugene J. Weeks and others for an accounting, and for construction of the will of Chester Warriner, deceased. Decree for defendants, and complainants appeal. Modified and affirmed.

Argued before GRANT, C. J., and BLAIR, MONTGOMERY, CARPENTER, and MCALVAY, JJ.

D. P. Sagendorph, for appellants. Wilson & Cobb, for appellees.

MCALVAY, J. The bill of complaint in this cause was filed for an accounting, and for construction of the will of Chester War

riner, deceased. Complainants are the surviving heirs of deceased, entitled under his I will to share in the distribution of his estate. The principal defendants, Eugene J. Weeks, Chas. C. Bloomfield, and Thomas A. Wilson, were named as executors in the will, and qualified as such. They have administered the estate and are called upon as trustees to account for all assets belonging to said estate which have come into their hands. From an adverse decree of the circuit court of Jackson county, the terms of which will be stated later, complainants have appealed.

The facts necessary to be stated are as follows: Chester Warriner died at Jackson, Mich., October 7, 1886, leaving a widow, but no children. He died testate. His will is as follows:

"I, Chester Warriner of the city of Jackson and state of Michigan, do hereby make and publish this my last will and testament thereby intending to dispose of all my worldly estate of which I shall be possessed at the time of my demise. I direct that all my just debts including funeral expenses and expenses of administration be paid out of my estate. The residue and remainder of my estate, both real and personal, I devise and bequeath to Eugene J. Weeks, Charles C. Bloomfield, and Thomas A. Wilson, my executors, hereinafter named in trust for the following purposes:

"First. To my wife, Lucy Jane Warriner, during her natural life the net income of my estate and in case such income shall not be sufficient to suitably support her to use and appropriate sufficient of the principal of my estate for that purpose.

"Second. After the death of my wife and the payment of her funeral expenses to convert my remaining estate into money and divide the same between all the children of my brothers and sisters and Eugene J. Weeks then living share and share alike, and in case any of said children shall die leaving issue living at the time of the distribution

of my estate such issue shall take the share of their deceased parent.

"I hereby appoint Eugene J. Weeks, Charles C. Bloomfield and Thomas A. Wilson, executors of this my last will and testament and revoke all other wills by me at any time made.

"In witness whereof I have hereto set my hand this first day of July, A. D. 1884.

"Chester Warriner.

"Signed by the testator, Chester Warriner, as and for his last will and testament in the presence of us, who, at his request, in his sight and presence and in the presence of each other, have subscribed our names as attesting witnesses this first day of July, A. D. 1881.

"Eugene J. Weeks, Jackson, Michigan. "Thomas A. Wilson, Jackson, Michigan." The executors made and filed an inventory of the estate, real and personal, and an appraisement of all the property, amounting to $21,155.43. They proceeded under the will to administer the estate. At the time of his death testator among other property owned a one-third interest in the firm of Weeks, Latimer & Co., conducting a drug business, which interest was appraised at $3,383.47. The partner Latimer had a contract with the firm for a term of years, by which he was entitled to manage the business, and, in case of death of a partner, the business was to continue for that period. He continued the business until his death one year later. During this time decedent's interest remained in the business. After Latimer's death, the surviving partner Weeks (one of the executors) continued the business as Weeks & Co., keeping the interest of the estate in the business. A corporation was organized later, which, in fact, continued this business, and of which a certain amount of stock was issued to the Warriner estate. Afterwards a stock dividend was declared when more stock was issued to the estate. The record contains an extended statement of receipts and disbursements made by the executors during the years of administration of this estate, and a large amount of testimony material to the issue. We do not think that an abstract of these accounts and this testimony would be of benefit to the profession. We find that the contentions of complainants are not supported by the proofs that to charge the executor with what they received at the inventory figures would work an injustice. They have accounted for the property which came into their hands, and the record shows that they have administered the estate with care and economy. The partner Latimer was entitled to continue the business under his contract,

and Weeks, the survivor, was also entitled by law to continue the business, and use his best judgment in winding it up. We do not find that continuing this business has defeated the estate. The allowance to the widow during her lifetime was a reasonable one, and there is no dispute in the record but that it was paid as claimed in the account. From our examination of this account, we are satisfied that the court arrived at the correct amount due the estate and in the hands of the executors, using the books kept by defendants as the basis of such accounting. We do not agree with the allowance made to defendant Weeks for services. He drew a salary while managing the business. He was a partner, conducting this business, and had the use of this property without interest. It paid its share of all the expenses of the business, and the services of the executors were perfunctory. Such allowance was not warranted by the facts. Whether the circuit court had authority to make it we need not determine in this case.

Our construction of the second paragraph of the will of Chester Warriner is that the children of Eugene J. Weeks are to share equally with the children of the brothers and sisters of deceased, and on like terms with them. We do not agree with the court that the amount admitted to be in the hands of these defendants is admitted as a matter of grace to this estate and those entitled to it, or that by any proper system of stating this account the estate can be said to be indebted to defendants. Their admissions foreclose any discussion of the matter. Nor do we agree that any heir or person is entitled to a share of this estate because he accepts or rejects the actions of defendants in conducting the business as was done by them. The law determines who is vested with an interest in an estate, and from the facts the courts determine as near as may be the amount of an estate. It is a fact that complainants' solicitor refused to accept the accounting of defendants, although asked to do so by the court. Complainants are entitled to share in this estate according to the terms of the will. The amount to be divided and distributed among these parties in interest is the sum of $10,666.65, with interest at 5 per cent. per annum with annual rests from and after June 30, 1904. This does not include the cemetery lot and improvements thereon. The decree of the circuit court will be modified in accordance with the foregoing opinion. The costs and solicitor's fees as fixed by the circuit court are affirmed to complainant, together with costs of this court to be taxed.