Joslin v. Noret

• Decision Date: 01 October 1923
• Docket Number: January Term.,No. 1,1
• Citation: 224 Mich. 240,194 N.W. 983
• Parties: JOSLIN et al. v. NORET.
• Court: Michigan Supreme Court

224 Mich. 240

194 N.W. 983

JOSLIN et al.

v.NORET.

No. 1, January Term.

Supreme Court of Michigan.

Oct. 1, 1923.

Error to Circuit Court, Oceana County; John Vanderwerp, Judge.

Action by C. A. Joslin and another against Edwin A. Noret. Judgment for plaintiffs, and defendant brings error. Reversed, and new trial granted

Argued before WIEST, C. J., and FELLOWS, McDONALD, CLARK, BIRD, SHARPE, MOORE, and STEERE, JJ. E. C. Pugsley, of Hart, and A. S. Hinds, of Shelby, for appellant.

F. E. Wetmore, of Hart, for appellees.

FELLOWS, J.

This action is brought to recover money paid to defendant by plaintiffs and their assignors, some 15 in number, for stock in an Oklahoma Oil Company, and which stock was sold in violation of the socalled Blue Sky Law (sections 11945 et seq. C. L. 1915). Plaintiff had judgment on a directed verdict for $6,600. The sales were of stock owned by defendant, numbered at least 17, and were made in the course of continued and successive transactions of a similar nature. The validity of the act was sustained in Merrick v. Halsey & Co., 242 U. S. 568, 37 Sup. Ct. 227, 61 L. Ed. 498, so it will be unnecssary to discuss the constitutional questions advanced by defendant, and in Edward v. Ioor, 205 Mich. 617, 172 N. W. 620, 15 A. L. R. 256, we fully considered the questions here raised by defendant having reference to the Blue Sky Law, and decided them adversely to defendant's contentions. We could not make the position of the court clearer than we did in that case, and will not undertake so to do.

Upon the trial, defendant was called for cross-examination under the statute by plaintiff's counsel, and, over objections and protests of his counsel, was, by the ruling of the court, required to testify to the facts that the stock sold by him had not been approved by the Michigan Securities Commission, that he had no dealer's license, and to give in detail the various sales made by him. Defendant's counsel here insist that this was in violation of defendant's constitutional and statutory rights, and that without some of the testimony so given a case was not made by plaintiffs. Plaintiffs' counsel insists that they supplied proof of the sales later, and that the question is not properly saved for review, and not reviewable in this proceeding, and that in any event they were entitled to the testimony. It is true that plaintiffs did later establish the sales to witnesses called by them, but they did not prove the basic fact necessary to recovery, i. e., that the stock had not been approved, or that defendant was not a licensed dealer, except by such testimony. The statute is a penal one (sections 11958, 11967, C. L. 1915), and as soon as plaintiffs' counsel commenced to ask defendant questions, the answers to which would establish that defendant had violated its provisions, defendant's counsel promptly interposed the proper objection. This objection was repeated several times, and finally it was agreed between counsel and the court that such testimony should be taken subject to the objection without repeating it to each question. Under these circumstances the question is properly saved. This testimony came from a party to the case, and if the verdict is based upon material testimony he was required to give in violation of his constitutional and statutory rights, it cannot stand. It was not necessary for him to place himself in contempt of court in order to be protected in his constitutional and statutory rights.

This necessitates the determination of whether defendant's constitutional or statutory rights were invaded. We think both were violated. Section 16, art. 2, of the state Constitution provides:

‘No person shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty or property, without due process of law.’

This is similar to the Constitutions of the other states of the Union and to the federal Constitution.

Section 12547, C. L. 1915, provides:

‘Any competent witness in a cause shall not be excused from answering a question relevant to the matter in issue, on the ground merely that the answer to such question may establish, or tend to establish, that such witness owes a debt, or is otherwise subject to a civil suit; but this provision shall not be construed to require a witness to give any answer which will have a tendency to accuse himself of any crime or misdemeanor, or to expose him to any penalty or forfeiture, nor in any respect to vary or alter any other rule respecting the examination of witnesses.’

In 40 Cyc. 2539, it is said:

‘A number of authorities adopting a literal construction of the language of the constitutional provisions under discussion have held that the protection against disclosure is available only in a criminal proceeding against the person who claims such protection and not in a proceeding of a civil nature; but there is also authority for the view that the witness is protected against disclosure in any proceeding or investigation whether such disclosure is sought directly to establish his guilt or indirectly and incidentally for the purpose of proving facts involved in an issue between other parties, and is applicable in civil as well as criminal proceedings.’

This state has aligned itself with those states which have given the constitutional provision a liberal construction. In re Moser, 138 Mich. 302, 101 N. W. 588,5 Ann. Cas. 31, it was said by this court, speaking through Mr. Justice Grant:

‘Under the Constitutions of Michigan and the United States, no witness can be compelled to give testimony which might tend to criminate himself or expose him to a criminal prosecution. The provision in each Constitution is the same.’

See, also, In re Mark, 146 Mich. 714, 110 N. W. 61;People v. Maloy, 204 Mich. 524, 170 N. W. 690.

Compelling defendant to give testimony which would clearly establish that he had violated the penal provisions of the Blue Sky Law, and basing a directed verdict on such testimony, constituted reversible error.

The theory upon which plaintiffs may recover is that they and their assignors have rescinded the sale made to them in violation of the Blue Sky Law. They seek to recover what they have paid under a void contract. So to do they must tender or offer to return what they have received. They cannot retain what they have received, and recover what they have parted with. They must...