Court Opinion

ID: 3502060
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:08:55.6819+00
Date Added: 2024-06-11T14:05:21.587325
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 305 
For reasons hereinafter noted I am not in full accord with the opinion and conclusions reached by Mr. Justice BOYLES, particularly that portion wherein plaintiff is granted relief against the defendant savings and loan association.
Prior to June 10, 1929, plaintiff had been appointed administratrix of the estate of her deceased father, John Olitkowski. On the date noted she withdrew funds of the estate from the Michigan State Bank of Detroit in the amount of $2,196.64 and opened an account in that amount as an investor in or member of the defendant savings and loan association. Subsequently and on or before October 10, 1930, she made a like disposition of other funds of the estate to the amount of $1,140. From time to time after the inception of this account and on or before January 1, 1932, interest items were added; and there were also withdrawals from time to time. The withdrawals totalled $1,358.50, being 8 in number, the first on June 14, 1929, in the amount of $517, and the last on October *Page 322 
31, 1931, in the amount of $100. The undisputed evidence is that on January 1, 1932, plaintiff had to her credit in this account $2,295.30.
Plaintiff seeks to recover on the theory that defendant Frank J. Kolodziejski, an attorney, at the time undertook to represent both the plaintiff and the defendant savings and loan association, and advised plaintiff to use the defendant association as the depository of the estate's funds, without revealing to her that such disposition of the funds of the estate was an attempt to invest the same in the stock of the association or advising her that such an attempted use of the estate's funds was unlawful. And as to the defendant savings and loan association, plaintiff's theory is that as a result of the attempted unlawful use of the estate's funds a trust exmaleficio arose and the association, as well as the attorney, should be held guilty of a constructive fraud and a holder of the funds in trust.
In its answer the association pleaded both laches and the statute of limitations.* From the very outset of this account with defendant association, June 10, 1929, plaintiff had reason to know and must be held to have known that she was dealing with a savings and loan association.8224 At that time she was given passbook No. 964 in which was printed the constitution and bylaws of the defendant savings and loan association. Plaintiff, like every other intelligent citizen, was chargeable with knowledge of the law that money is accepted by such associations only as on account of an investment in the stock of the association; and likewise she was chargeable with knowledge of the law that at the time she was carrying *Page 323 
on this account the funds of an estate could not be lawfully so invested. While it cannot affect the outcome of the instant case, in passing it may be noted that this phase of the law in Michigan has been changed by statutory enactment. See Act No. 177, § 1, Pub. Acts 1937, as amended by Act No. 76, Pub. Acts 1939, and Act No. 143, Pub. Acts 1941 (Comp. Laws Supp. 1942, § 12993-11, Stat. Ann. 1941 Cum. Supp. § 26.85). From plaintiff's own testimony it appears that she at least had some knowledge of the nature of her transaction with the defendant savings and loan association. We quote the following:
"Q. When you deposited the money in the association did you know anything about it?
"A. Well I knew it was a savings.
"Q. Savings and loan association?
"A. Yes, sir. * * *
"Q. Did you hear anything bad about the association?
"A. Well, lately there is a lot — * * *
"Q. So you had this money since June 10, 1929, and you knew that you had received shares or interest as it is called?
"A. Yes."
After January 1, 1932, at which time plaintiff's passbook showed $2,295.30 to her credit, there were no transactions between plaintiff and the defendant association which changed the relation between the two or bore upon her rights of recovery except her possible effort to secure return of the funds to her by demands or requests made to defendant Kolodziejski. And it should be noted the undisputed record is that Kolodziejski wholly terminated his relations with the defendant savings and loan association in 1931. But plaintiff did not institute this suit until January 19, 1940. This was more than 10 years after the last of the estate's money was left with *Page 324 
the defendant association and over 8 years after the last entry of the item of accrued interest on plaintiff's account with the association. Regardless of whether plaintiff's cause of action is viewed as one involving a trust ex maleficio or one arising from constructive fraud, it is clearly barred by the statute of limitations pleaded in the answer of the savings and loan association.
I am mindful of the cases, some of which are cited in my brother's opinion, wherein courts of equity have disregarded the bar of the statute of limitations when it would have been violative of the clear equities of the case to have done otherwise. But I cannot view this record as being one of that character. There is credible testimony in the instant case that in 1929 and 1930 the condition of the assets of the defendant association was good. Furthermore, the court should not be blinded to the fact that the real opposite parties in interest in this case are other investors in the stock of the defendant association. It is not clear from the record whether the association is now solvent or insolvent; but plaintiff alleges its affairs were placed in charge of a custodian. In case the association is solvent, plaintiff, even though her bill of complaint herein is dismissed, will be repaid in full, because the association admits its liability to her as a shareholder. On the other hand, if the association is insolvent, plaintiff by prevailing in the present suit would establish herself as a preferred creditor, but at the expense and to the disadvantage of all other shareholders in the association. It is to be presumed that persons interested in the Olitkowski estate are adequately protected by the bond of the administratrix. Under such circumstances a court of equity would not be justified in permitting plaintiff to recover notwithstanding her inexcusable delay in asserting her claim beyond the bar of the statute *Page 325 
of limitations. In this connection it may be noted as bearing upon the disadvantage other shareholders in the association will face, if plaintiff's claim is preferred, such disadvantage is disclosed by the trial court's decree which adds $1,117.70 as interest accrued on plaintiff's claim during the period of her inactivity. This is an increase of nearly 50 per cent. over the original amount of the claim, and much more than would have accrued to plaintiff if she had left the funds in the bank where she had her original deposit.
Abundant authority is cited in support of the context of two headnotes which we quote from Moross v. Oakman, 257 Mich. 464
:
"Courts of equity accept statute of limitations as fixing proper period of repose for rights in equity and apply it unless suit is peculiarly equitable in nature or compelling equities are shown.
"Where one invokes aid of equity after apparently sleeping on his rights for time equaling statutory period of limitations, he must allege facts which excuse delay and show strong equities in his favor."
For the reasons above noted plaintiff's bill of complaint should be dismissed as against defendant savings and loan association, with costs of both courts.
There are abundant reasons why a different result should be reached as to defendant Frank J. Kolodziejski. There is no question but that at the inception of the transactions which have culminated in this lawsuit and subsequent thereto he sought to act and did act as the legal adviser of both plaintiff and defendant savings and loan association. It was largely, if not wholly, through his advice and direction that plaintiff administratrix used the funds of the estate in the manner hereinbefore indicated. Instead of advising or directing plaintiff *Page 326 
to invest the funds of the estate in the stock of the association, defendant Kolodziejski was in duty bound to advise his client that such use of the estate's funds was then contrary to law. This he failed to do; and we think the record justifies the conclusion that his conduct in this particular was prompted by his interest in the defendant association rather than otherwise. And in this aspect the interests and rights of plaintiff clearly conflicted with the interests of the association. In advising plaintiff as his client Kolodziejski not only failed in the proper discharge of his professional duties but in effect he perpetrated at least a constructive fraud upon plaintiff. While the answer of Kolodziejski rather indefinitely charges that plaintiff did not cooperate with him in closing the Olitkowski estate, we do not find that he has sufficiently pleaded the defense of laches, and he has not pleaded the statute of limitations at all. And further, even though such defenses were adequately pleaded, we think as between plaintiff and defendant Kolodziejski the equities of the case are decidedly in her favor, and such defenses if pleaded could not prevail in the instant case in behalf of Kolodziejski. For that reason the decree of the circuit court as affirmed in my brother's opinion, and wherein plaintiff is granted contingent relief against defendant Kolodziejski, should be affirmed.
I am also in accord with my brother's opinion as to defendant Kolodziejski being entitled to an attorney's fee of $350, but in this particular decision should be planted solely on the ground that the probate court so ordered and no appeal has been taken therefrom. Plaintiff will recover costs of both courts against defendant Kolodziejski.
CHANDLER, C.J., and STARR, BUTZEL, BUSHNELL, and SHARPE, JJ., concurred with NORTH, J. WIEST, J., took no part in this decision.
* See 3 Comp. Laws 1929, § 13976, as last amended by Act No. 193, Pub. Acts 1937 (Comp. Laws Supp. 1940, § 13976, Stat. Ann. 1940 Cum. Supp. § 27.605). — REPORTER.
8224 See 3 Comp. Laws 1929, § 12134 et seq. (Stat. Ann. § 23.541 et seq.). — REPORTER. *Page 327