Second Nat. Bank of Saginaw v. Gamble

• Decision Date: 10 April 1924
• Docket Number: No. 16.,16.
• Citation: 198 N.W. 340,227 Mich. 31
• Parties: SECOND NAT. BANK OF SAGINAW et al. v. GAMBLE et al.
• Court: Michigan Supreme Court

227 Mich. 31

198 N.W. 340

SECOND NAT. BANK OF SAGINAW et al.

v.GAMBLE et al.

No. 16.

Supreme Court of Michigan.

April 10, 1924.

Appeal from Circuit Court, Saginaw County, in Chancery; Clarence R. Browne, Judge.

Action by the Second National Bank of Saginaw, as trustee under the probated will of Wellington R. Burt, deceased, and others, against Henry Gamble and another, in which named defendant filed a cross-bill. From decree dismissing cross-bill, named defendant appeals. Reversed.

Argued before CLARK, C. J., and McDONALD, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ. Moore & Moore, of Detroit, and Fryberger, Fulton, Hoshour & Ziesmer, of Duluth, Minn., for appellant.

Thomas G. Long and William L. Carpenter, both of Detroit, and Humphrey, Grant & Henry, Weadock & Weadock, and James B. Peter, all of Saginaw, for appellees.

McDONALD, J.

Wellington R. Burt, a resident of Saginaw, Mich., died in March, 1919, leaving an estate estimated to be worth $13,000,000. The Second National Bank is executor and trustee under his will. George B. Morley is cotrustee. The other plaintiffs are Mr. Burt's heirs. The defendant Henry Gamble claims an interest in certain lands and leases belonging to the estate, which claim is based on the following contract:

‘This agreement made this fifteenth day of May, eighteen hundred and eighty (1880), by and between Henry Gamble and Wellington R. Burt, as follows:

‘Whereas, said Henry Gamble has spent a good deal of time and money looking up the timber on and mineral in large tracts of land located part in Wisconsin and part in Minnesota and making estimates of their value and desires to interest some one with capital to purchase said lands and give him a share of the profits of the different purchases;

‘And whereas, said Burt is willing to take said minutes and said information and purchase said land and give said Gamble an interest in the profits of said purchase;

‘And now, therefore, it is agreed as follows:

‘Said Gamble shall turn over his minutes and other information in regard to said lands to said Burt.

‘Said Burt agrees to furnish the money needed to purchase and procure said lands, attend to all the details in regard to inspection, selection and purchase of said lands.

‘And it is mutually agreed between the parties hereto that said Gamble shall have a one-fourth interest in the profits arising from the purchase or sale of said lands.

‘In witness whereof, the said parties hereto have set their hands and seals the day and year first above written.

‘________ [L. S.]

‘Wellington R. Burt. [L. S.]

‘Henry Gamble.

‘Signed, sealed, and delivered in presence of Lawson C. Holden.’

It is claimed that, acting under this contract, Mr. Burt acquired the title to large tracts of valuable timber and mineral lands in the state of Minnesota, from which he realized many millions of dollars, one-fourth of which belonged to Gamble; that he fraudulently concealed these profits from Gamble, falsely representing to him that the business had not progressed for enough to enable him to make an accounting; that Gamble believed these representations, and therefore took no action to secure an accounting during Mr. Burt's lifetime. Mr. Burt died in 1919. His estate was duly administered and closed. Shortly thereafter Gamble first learned that Burt had deceived him as to the profits. He demanded an accounting of the heirs. They denied his claim. He then filed a bill in chancery in the district court of Minnesota at Duluth against all of the present plaintiffs, asking for an accounting and for a determination of his rights under the contract. Representatives of the estate appeared with a motion to dismiss on the ground that the Minnesota court was without jurisdiction. Before the motion was determined the plaintiff's here instituted this action in the Saginaw circuit court to have the Minnesota suit enjoined and the contract canceled. Defendant Gamble filed an answer and cross-bill in which he asked for an accounting as to the profits realized by Burt from the lands in question in his lifetime, and by the plaintiffs since his death. To this the plaintiffs answered, challenging the jurisdiction of the court to hear the defendant's claim, and setting forth other matters that would constitute a plea in bar. Basing their action on these defenses they made a motion to dismiss the cross-bill. Included in the motion was a request that the defense in bar should be heard and determined in advance of the trial. After receiving some testimony as to the matters alleged in the plea, the court found that the probate court had exclusive jurisdiction to determine the defendant's claim, and that, as the estate had been closed and no claim presented within the time limited by the statute for that purpose, the defendant was thereafter forever barred from recovering his demand in any action whatever either in the probate court or in a court of equity. Accordingly, a decree was entered dismissing the cross-bill. The defendant Gamble appeals. For convenience in this opinion, Mr. Gamble will be referred to as the defendant and the other parties as the plaintiffs.

The first question presented by the record relates to a question of practice. It is claimed by the defendant that the questions here involved cannot be raised by motion to dismiss.

‘By section 4, c. 14, Act No. 314, Pub. Acts 1915 (3 Comp. Laws 1915, § 12456), demurrers, pleas in abatement, and pleas to the jurisdiction are abolished and a motion to dismiss is substituted.’ Vyse v. Richards, 208 Mich. 383, 175 N. W. 392.

In the instant case the question of jurisdiction was properly raised by motion to dismiss. It was not proper, however, to include in the motion the plea in bar.

‘Defenses which formerly required a plea in bar cannot be made under the summary proceeding of a motion to dismiss.’ Vyse v. Richards, supra.

But the motion in question was more than a motion to dismiss. It was in part a motion to have the issue raised by the defense in bar heard in advance of the trial. This was a proper proceeding under circuit court rule 25, which reads as follows:

‘Pleas in equitable actions, other than pleas is abatement and to the jurisdiction (which are abolished by statute), are abolished, and all defenses which might formerly be raised by such pleas shall be interposed by answer provided that on cause shown by motion an issue so raised may be heard in advance of the trial in the cause.’

This issue was heard and determined in advance of the trial, not on the motion to dismiss under the statute in which only allegations in the cross-bill could be considered, but on the submission of proofs under the order of the court. Thus, while in a sense it might appear that the plea in bar was raised on the motion to dismiss, it was in fact raised and determined under circuit court rule 25, though the court considered it as a ground for dismissing the cross-bill. Motions to dismiss are authorized by the statute as a substitute for demurrers, and may be heard in advance of the trial on four days' notice by either party. Pleas in bar are abolished by court rule. Such a defense is now interposed by answer, and can be heard in advance of the trial only by order of the court on cause shown. The two proceedings are entirely dissimilar, and should not be confused in the same motion. However, in this case, as the plea in bar was interposed by answer and properly heard in advance under the circuit court rule, we will overlook the fact that it was wrongfully included in the motion to dismiss, and here consider it on its merits.

The motion to dismiss raises the question of jurisdiction. It was the opinion...