Zeigler v. Valley Coal Co. , 150 Mich. 82 ( 1907 )

Grant, J.

(after stating the facts). The defendants’ counsel concede that the complainants had a vendor’s lien and are entitled to foreclose it, unless the defendant Brick Company is the bona fide purchaser, or unless the complainants have waived their lien. These are the sole questions presented by the record.

1. There are two complete answers to the defendants’ claim that it is a bona fide purchaser:

(а) None of the conveyances in the chain of title from the Valley Coal Company to the defendant Brick Company contained any covenant of warranty. Covenants cannot be implied in conveying real estate. 3 Comp. Laws, § 8959. The conveyances conveyed only the property and interest which the grantors and vendors had in the property conveyed. The clay and shale were real estate, and were so recognized, as the instrument conveying them to the Coal Company was executed with all the solemnity of a deed. The subsequent conveyances were only in effect quitclaim deeds, and conveyed only the interests which the grantors had. The defendants, therefore, were not bona fide purchasers under the frequent decisions of this court. Peters v. Cartier, 80 Mich. 124; Messenger v. Peter, 129 Mich. 93, and authorities there cited.

(б) There is evidence tending to show that the organizer of the defendant company had knowledge of the complainants’ claim. Mr. Stiver, when he purchased the land, had notice. While the defendant company was not organized in fact until after the conveyance to Stiver, yet, he was the agent or trustee for the incorporators of the company, and was acting for them. 2 Cook on Corporations (5th Ed.), § 727, states the rule to be:

‘ ‘ The corporation has notice of facts which came to the knowledge of its officers or agents while engaged in the business of the corporation, provided those facts pertain to that branch of the corporate business over which the particular officer or agent has some control.”

See, also, Simmons Creek Coal Co. v. Doran, 142 U. S. 417.

People’s Sav. Bank v. Hine, 131 Mich. 181, and State Sav. Bank v. Montgomery, 126 Mich. 327, are not applicable to the facts of this case. In the. Hiñe Case the bank discounted a note for a corporation of which its cashier was president. ' It was held that his knowledge was not the knowledge of the bank. The cashier was acting in a dual capacity.

In the Montgomery Case the notes were discounted by the bank for the benefit of its cashier. It was held that the bank was not chargeable with notice of a fraud practiced upon it by its cashier, the principle of agency being inapplicable where the cashier himself is the party in interest.

2. The defendant did not set up in its answer a waiver of the lien. It is therefore not in position to raise the question. 22 Enc. Pl. & Pr. p. 732. Aside from this, the bringing of suit and obtaining judgment thereon are not of themselves a waiver of the lien.

“ The predominant authority establishes the rule that he (the lienor) may enforce his lien whether he has proceeded at law and exhausted his remedy there, or has exclusively proceeded in equity.” 29 Am. & Eng. Enc. Law (2d Ed.), p. 753.

See, also, Palmer v. Harris, 100 Ill. 276; Nutter v. Fouch, 86 Ind. 451; Dowdy v. Blake, 50 Ark. 205; Waldrom v. Zacharie, 54 Tex. 503.

Clear and convincing proof is required to show a waiver of the lien, and the onus probandi is upon the purchasers. 22 Enc. Pl. & Pr. p. 784; Dunton v. Outhouse, 64 Mich. 419. See, also, Curtis v. Clarke, 113 Mich. 458.

The decree is affirmed, with costs.

McAlvay, C. J., and Blair, and Montgomery, JJ., concurred. Carpenter, J. I concur on grounds 1 (6) and 2.