First Nat. Bank v. Steel

• Decision Date: 23 May 1904
• Citation: 99 N.W. 786,136 Mich. 588
• Court: Michigan Supreme Court
• Parties: FIRST NAT. BANK OF OVID v. STEEL et al.

99 N.W. 786

136 Mich. 588

FIRST NAT. BANK OF OVID v. STEEL et al.

Supreme Court of Michigan

May 23, 1904

Error to Circuit Court, Clinton County; George P. Stone, Judge.

Action by the First National Bank of Ovid against George A. Steel and another. Judgment for defendants, and plaintiff brings error. Reversed.

A. G. Shepard (Lyon & Moinet, of counsel), for appellant.

H. E. &amp E. L. Walbridge, for appellee Steel.

William M. Smith, for appellee French.

CARPENTER, J.

Plaintiff's declaration consists of the common counts in assumpsit and two special counts. In each of the special counts plaintiff avers that it was induced by the fraud of defendants, in June, 1896, to loan money upon worthless security, and it seeks by each of these counts, by virtue of section 10,421, Comp. Laws 1897, to recover in an action of assumpsit the loss resulting from said loan. Defendants demurred to the declaration on the ground that the cause of action complained of in the special counts cannot be united with the common counts in assumpsit. They also demur to the special counts. The circuit court sustained the demurrer, and plaintiff seeks to review a judgment entered thereon.

The principal question involved relates to the claim of misjoinder of causes of action. We have held (Hallett v Gordon, 122 Mich. 567, 81 N.W. 556, 82 N.W. 827; Id. 128 Mich. 364, 87 N.W. 261) that the statute in question is a remedial statute, and may be used to recover upon causes of action existing when it took effect. We also held in Loudon v. Carroll, 130 Mich. 79, 89 N.W. 578, that it permits counts based on this statute to be joined with other counts clearly in assumpsit.

Our attention is directed to some of the difficulties which may arise if this form of declaration is approved. If one is permitted to recover at the same time under the common counts in assumpsit and for fraud under the special count, the general verdict will not indicate the amount of defendant's liability on these different counts. If one of several defendants pays an entire judgment thus recovered we are bound to preserve his right to demand contribution against his codefendants, for the cause of action enforceable on the common counts. This we cannot do without giving him the right to enforce contribution on the cause of action for fraud recoverable on the special count. That would given him a right which at common law he did not have, and which, when the cause of action arose before the statute passed, as in this case, he did not have at the time the fraud was perpetrated. Defendants insist that legislation giving such a right is unconstitutional. To this we cannot agree. We see no reason why the Legislature may not, at any time before a wrongdoer has paid a judgment against himself and others, provide that he may have contribution therefor, though he did not have the same when the tort was committed. In our judgment, such a change in the law relates only to the remedy. Cooley, Const. Lim. (7th Ed.) p. 515.

It is also insisted that, if one who pays a judgment obtained for fraud under this statute has a right to contribution from his codefendants, the statute accomplishes two objects, viz. (a) it permits an action for fraud to be enforced by a declaration in assumpsit, and (b) it gives to the judgment thus obtained some of the incidents of a judgment in an action founded on contract, and for that reason the statute violates section 20 of article 4 of the state Constitution. We do not think this point well taken. The statute has only one general object. It relates only to actions for fraud, and...