Chambers v. Beckwith

• Decision Date: 03 June 1929
• Docket Number: No. 17.,17.
• Citation: 225 N.W. 605,247 Mich. 255
• Parties: CHAMBERS v. BECKWITH.
• Court: Michigan Supreme Court

247 Mich. 255

225 N.W. 605

CHAMBERS

v.BECKWITH.

No. 17.

Supreme Court of Michigan.

June 3, 1929.

Error to Circuit Court, Genesee County; James S. Parker, Judge.

Action by Ethel G. Chambers against Jesse H. Beckwith. Judgment for plaintiff, and defendant brings error. Affirmed.

Argued before the Entire Bench.Chandler & Friegel, of Owosso, and Roy E. Brownell, of Flint, for appellant.

Paul v. Gadola, of Flint, for appellee.

FELLOWS, J.

The parties to this case were friends of long standing. While there is conflict in the testimony, there is evidence tending to show that, while plaintiff was visiting at defendant's home in Flint, she asked him about his investments, and was informed by him that he was investing in General Motors and a company conducting a bakery at Flint known as the Central States Baking Company; that she told him she had money to invest, and he recommended an investment in the baking company; that she there talked with no one else about the company; that she went home and talked with her daughter about it, and her daughter came to Flint and talked further with defendant, who also to her recommended the company as a prosperous one; that the daughter gave to defendant checks for the purchase price of the stock; and that later certificates of stock, which were signed by defendant as president of the company, were forwarded to her. The transaction occurred while Act No. 46, Public Acts 1915 (section 11945 et seq., C. L. 1915) was in force. The stock had not been approved under this act. Some time after the issuance of the stock, it was tendered back, and, on refusal to accept a rescission of the transaction, this action was brought. To review a judgment for plaintiff entered on the verdict of the jury, defendant prosecutes this writ of error.

1. It is claimed by defendant that plaintiff signed a paper, the purport of which was a subscription to the stock of the company not then organized. This is denied by plaintiff. Defendant is unable to produce such paper, but does produce a paper which he claims was the form used for taking subscriptions. But, under the act of 1915, the taking of subscriptions was an offense. Section 11958, C. L. 1915; People v. Hartman, 228 Mich. 171, 176, 199 N. W. 657. If defendant actively participated in the transaction, as we shall presently see, he is not excused from liability because, before the company was organized, a subscription for the stock was signed by plaintiff.

2. There was some testimony in the case tending to show that defendant agreed to make good any defaults of the company. This testimony originally was excluded, but was finally allowed after defendant's counsel had indulged in cross-examination on the subject. But the trial judge sustained defendant's contention that any such promise was void under the statute of frauds, and so definitely charged the jury on several occasions. He also instructed the jury that there was no evidence of fraud, and no recovery could be had on that ground, and submitted the case solely as one involving the violation of the Blue Sky Law. The errors assigned on this branch of the case are overruled.

3. It is here urged that the action is barred by the limitation of the statute found in section 20, Act 220, Public Acts 1923. We need not consider whether this statute of limitation in the act of 1923 is applicable to causes of action arising under the former act, or by the application of common-law rules, as the statute of limitations is not pleaded as a defense in this case. It is an affirmative defense, and is not available, unless pleaded. Circuit court rule 23; Chippewa Supervisors v. Bennett, 185 Mich. 544, 563, 152 N. W. 229,153 N. W. 814;Shank v.Woodworth, 111 Mich. 642, 70 N. W. 140.

4. It is urged that, by the repeal of the act of 1915 by the act of 1923, without therein saving rights of action of this character, such right is lost. This contention is overruled by Coe v. Portland Farmers' Elevator Co., 236 Mich. 34, 209 N. W....