text:
    Mary A. Gillison, By Her Next Friend, v. Isaac F. Cressman, Drain Commissioner, and Joseph M. Cramer.

      Drains — Determination of outlet — Injunction — Irregularities— Decree — Supplemental proceedings.

    1. It is within the discretion of a township drain commissioner to determine what the outlet of a drain shall be.
    2. Where, on the hearing in open court of a suit to restrain the completion of a public drain, the circuit judge, at the request of the parties, visits and inspects the premises, great weight should be given to his finding that no damage will result to the complainant by the completion and use of the drain.
    3. Complainant, a minor, filed a bill to enjoin the further construction of an extension of a public drain which crossed her land, and in which said extension was to have its outlet. The extension did not traverse her land, which was not assessed for any portion of the cost, and the drain was nearly completed at the time the bill was filed. The drain crossing complainant’s land had been deepened and widened under proceedings instituted for that purpose, and the notice of letting contracts and of review of assessments for benefits had embraced both improvements. It appeared that the right of way across complainant’s land had not been obtained in the deepening and widening proceedings, and that no proof had been filed of the publication of the notice above mentioned. The court found that the deepening and widening of the drain was necessary to the proper drainage of the lands for which it was originally constructed, and that no injury would result to complainant’s land from the additional flow of water. A decree was entered remanding the drain proceedings to the drain commissioner', with instructions to proceed to advertise thé letting of contracts for the completing of the extension, to give notice of the review of the assessments for benefits, to take all necessary steps to obtain the right of way through complainant’s land, and to complete the proceedings in accordance with the statute; determining that all orders issued should be sustained, and applied upon the construction where expended by the proceedings already had, the expense of the commissioner already made to follow and beeome a part of the whole expense of the drain; providing that if complainant should within 10 days file a stipulation to discontinue the suit, and»allow the extension to proceed, she might do so, and take a dismissal of her bill without costs; and continuing the bill, and the injunction issued thereon, until the further order of the court. And, upon the appeal of the complainant, it is held that as it does not appear that she will ever be called upon to pay anything, or that her land will ever be assessed,’for the construction of the extension of the drain, and as it does appear-that her land has not been so far injured, or is likely to be, she is not in a position to complain with said decree.
    Appeal from Clinton. (Daboll, J.) Argued April 27,. 1894. Decided June 2, 1894.
    Bill to restrain the construction of a drain. Complainant appeals.
    Decree affirmed.
    The facts are stated in the-opinion.

      J. O. Selden, for complainant.

      John H. Fedewa, for defendants.
   Long, J.

Thomas Gillison died June 9, 1887. At the time of his death he was the owner of the S. E. of the N. E. ^ of section 14, town of Bingham, Clinton county. He left a will, which was duly probated, by which he devised the land to his daughter, Elizabeth Ann Hicks, during h'er natural life, and the remainder in fee to his granddaughter, the complainant in this case. Mrs. Hicks, the life tenant, went into possession after the death of the testator, and has so continued ever since. The .defendant Cramer owns the 40 acres adjoining the land above described, on the west, both 40’s lying north of and along the east and west highway.

Some time before the death of Gillison, a public drain had been laid out and constructed, known as the “Smith & Gillison Drain,” commencing near the south-east corner of Cramer’s land, running thence north about 30 rods through the land of Cramer, and then south-easterly through the south-west corner of the Gillison 40. Previous to the construction of this drain, the county drain commissioner had laid out and constructed a drain known as the “Stubbs Drain,” having its upper terminus in the center of the highway, about 40 rods west of the southeast corner of Cramer’s land, from which point it crosses, north-easterly, Cramer’s land and the Gillison land.

In May, 1892, application was made to defendant Cress-man, as township drain commissioner, for deepening and widening the Smith & Gillison drain. This was done, and Mrs. Hicks, the life tenant, was charged, and is to pay, the expense assessed upon the Gillison 40 for such work. On May 23, 1892, application was also made to Cressman to lay out and construct a drain known as the “ Extension of the Smith & Gillison Drain;” and, on September 28 following, the commissioner made an order determining the necessity for the drain, and thereafter such proceedings were had that contracts were let, and apportionment of costs and expenses made. The Gillison 40 was not assessed for any portion of the cost. The work was at once commenced, and all but about 23 rods constructed, which defendant Cramer had contracted to do. He had completed a part of his contract by digging about 9 rods of open ditch and laying 6 or 8 rods of tile. These several drains are shown upon the following map:

When the work had reached this point of completion, the complainant filed her bill, and obtained an injunction restraining the further construction of this drain. The drain in controversy is shown upon the map by the line extending along the highway eastward, thence north in the highway, and thence east, where it connects with the Smith & Gillison drain.

The complainant’s objections to the extension of this drain are:

1. That the running of the large volume of water proposed into and through the Smith & Gillison drain will be an increasing injury to her land, because the soil in and along said drain on her land is of quicksand and other light soil, so that the banks will not remain as dug, but will cave off, fill the drain, and the waters overflow her land.
2. That for this reason her land will be laid under perpetual tribute for the maintenance of said drain.

The testimony was taken in open court, and, on the hearing, the court below, at the request of the parties, visited the premises. It was claimed on the part of the •complainant that a. natural water-course could have been followed, and this extension turned into it, and thence into the Stubbs drain, while to carry off the water into the Smith & Gillison drain requires the cutting through quite an embankment. The court below on the hearing made a finding, in which he says, substantially, that, from the evidence and from a personal inspection, he finds no water-course in either direction, and that the elevation to be cut through does not vary enough to make any argument in favor of either route; that either outlet is practicable, and will furnish sufficient passage for the water; and that the deepening and widening of the Stubbs drain would cost as much as to reach the Smith & Gillison drain. The court below further found that the deepening and widening of the Smith & Gillison drain was necessary to drain the land properly, and that the water coming into it from this extension through the 12-inch tile will be no damage to the complainant’s land. The court also found that the matter as to the course of the drain is within the discretion of the drain commissioner, and that the court has no authority to interfere with him so long as he keeps within that discretion. It is further found, however, that the complainant has never been notified, and that no proper steps have ever been taken to obtain the right of way through her land, and that there is no proof on file of the publication of the time and place of letting the contracts, and of the review of assessments for benefits. The court says that it is conceded that this was not done, and complainant, being a minor, cannot be held to have waived anything in the matter; that, while there is no damage done, still there is an appropriation of the land, and the resulting tax. The court thereupon remanded the proceedings to the drain commissioner, with instructions to begin at the point where complaint is made, and proceed to readvertise, and to take all necessary steps to obtain the right of way for the contemplated improvement. It was further determined that all orders issued should be sustained, and applied upon the construction where expended by the proceedings already had, the expense of the commissioner already made to follow and become a part of the whole expense of the drain. It was further provided that if the complainant should within 10 days file with the register of the court a stipulation to discontinue the suit, and allow the drain to proceed, she might do so, and take a dismissal of her bill without costs. A decree was duly entered in accordance with these findings, from which complainant appeals. By the decree the injunction is retained until the further order of the court.

The court based its action with reference to ordering further proceedings by the drain commissioner upon Cook v. Covert, 71 Mich. 249.

We think the record fully sustains the finding by the court below that no damage will be done to the land of ■complainant by taking tbe water from this drain through it. G-reat weight should be given to the finding of the •court below in this case, for the reason that he not only saw the witnesses and heard their testimony, but himself visited the premises, and, after such inspection, arrived at this deliberate conclusion. As in the case of Cook v. Covert, supra, no steps were taken by the complainant until the drain was mostly completed and the greater part of the expense made. As said by the court- below, it was within the discretion of the drain commissioner to determine what the outlet of this drain should be, and we find nothing in the proceedings showing any abuse of discretion. It does not appear in the case, as at present presented, that the complainant will ever be called upon to pay anything, or that the land of which she has the title in fee will ever be assessed, for the construction of the drain; and it affirmatively appearing that her lands have not so far been injured, or are likely to be, we do not think she is in a position to complain at present, at least with the order made, even if she- have a right to appeal from the interlocutory order thus made, upon which we express no opinion, being content to let the order made by the court stand. Defendants will recover their costs of this Court.

The other Justices concurred.


source: Caselaw Access Project

author: Grant, J.

license: Public Domain

text:
    Edward A. Grondin v. The Duluth, South Shore & Atlantic Railway Company.

      Railroad companies — Killing stock — Depot grounds.

    1. A railroad company is not required to make a formal separation or dedication of its station grounds, nor to put up notices of their limits, especially in a new and unsettled country.
    2, Station grounds cannot be limited to the territory within the switches, and at least as much of the main line and grounds outside of the switches as is in actual use for reaching the side tracks within the switches is a part of the station grounds, to which the statutory requirement to fence does not apply.

    Error to Schoolcraft. (Steere, J.) Submitted on briefs May 1, 1894. Decided June 2, 1894.
    Case. Defendant brings error.
    Beveled, and no new Jrial ordered.
    The facts are stated in the* opinion.

      J. W. McMahon, for appellant.

      G. W. Dunton, for plaintiff.

       For cases bearing upon the construction of 3 How. Stat. § 3377, which requires railroad companies to fence their tracks, in so far as the question is involved of what portions of said tracks are exempt from the operation of the statute, see:
      1. Railway Co. v. Campbell, 47 Mich. 265, where plaintiff’s cow wandered upon defendant’s track at a point some 160 or 200 yards east of the station house, and was there run over and killed, and it was held:
      a — That the statute has no reference to station grounds; citing Railway Co. v. Lull, 28 Mich. 510.
      ¿ — That, strictly speaking, perhaps, the place where the cow was killed was not within the station grounds, but it constituted the approach to said grounds, and could not have been fenced without incommoding the defendant and the public in the transaction of the freight business of the road, and the case is therefore within the reason of the case above cited.
      2. McGrath v. Railroad Co., 57 Mich. 555, holding:
      a — That the convenience of the public, as well as that of the railroad company, is the reason why the statute should not apply to depot and station grounds, and it would require legislative action to induce courts to hold 'otherwise.
      ¿ — That the existence or extent of such grounds is not to be determined by the continued actual use of any part thereof; that, when station grounds are laid out., their contemplated future use is not unfrequently of more consideration than the actual demands at the time in determining their shape and extent; that, when these grounds have been appropriated and set apart by the company, it would be neither safe nor wise to allow their limits to be curtailed or extended by a jury in a proceeding where they collaterally come in question, as in this case, upon the mere showing that any part of the same was not in actual use at any particular time.
      3. Rinear v. Railroad Co., 70 Mich. 620, holding:
      a — That the criterion ig not whether all of the grounds set apart by a railroad company for depot and station purposes have been actually used, but whether, in view of the present or prospective needs of such grounds for station or depot purposes, the company has used a reasonable discretion in throwing them open for that purpose.
      b — That where the testimony shows, without dispute and beyond question, that the station grounds of a railroad company are not unreasonably extensive for the accommodation of the public, and of the patrons of the road at that place, and that the animal killed entered upon the premises of the company within their limits, the question of their extent should not be submitted to the jury, it being a question of law for the court.

   Grant, J.

The plaintiff's horse was killed by a train of the defendant near a station called Seney, in the county of Schoolcraft. The point where the horse was killed was between 300 and 400 feet east of the east switch at the station. The liability is founded upon the failure to fence its road as required by the statute.

Seney is a place of about 300 inhabitants. Neither the highways, the railroad, nor any land in the vicinity is fenced, except a few gardens. One of the principal highways runs parallel with the railroad, immediately on the-north of it, and occupies a part of the defendant's right, of way. Plaintiff was in the habit of turning his horse-loose at night, about a quarter of a mile south of the station grounds, aad did so on the night before he was. killed. The- court submitted the question to the jury to-•determine whether the place was within the depot or station grounds; saying to them that no specific limits hadi. been designated, and that no depot or station grounds had! been set apart and clearly defined, by the railroad company, except in so far as the siding, switches, sheds, and other buildings, and the use made of them, might indicate.

This case is ruled by McGrath v. Railroad Co., 57 Mich. 555. That case and this differ substantially, in their facts, in only this: In the former case the animal went upon the track inside the limits of the east and west switches, while in the present case the animal entered upon the track outside of the eastern switch. There was no dispute in either case about the facts. In this case, near the eastern switch are located coal sheds, with a side track leading to them. Opposite the coal sheds is another side track. It is conclusively established by the evidence that the use of the main track, where the horse entered, and for some distance beyond, is required for switching purposes. In order to back cars upon either side track, it is necessary to run trains for that distance upon the main track. Station grounds cannot be limited to the territory within the switches. Train men, in side-tracking trains, would be obliged, oftentimes, to pass from their trains several hundred feet, to reach the switch. Cattle-guards within that space would be inconvenient, if not unsafe. It must therefore be held that at least as much of the track and grounds outside of the switches as is required .and is in actual use for reaching these side tracks is a part of the station grounds, to which the statutory requirement to fence does not apply. A railroad company is not required to make a formal separation or dedication of its station grounds, nor to put up notices of their limits, especially in a new and unsettled country. Undoubtedly, if the animal had gone upon the track beyond the yard limits, and from there had entered the yard limits, where it was killed, the company would have been liable.

Judgment reversed, and no new trial ordered.

The other Justices concurred.


author: Hooker, J.

text:
    Catherine Donovan and Elizabeth Duyore v. Mary Ward et al.

      Infants — Deed—Disaffirmance—Statute of limitations.

    1. Two infant heirs joined with their co-heirs in the execution of a quitclaim deed of the common inheritance. The grantee mortgaged the land, the mortgage was foreclosed, and the usual commissioner’s deed executed to the purchaser at the foreclosure sale. He conveyed the land, and his grantee and his successors had had exclusive possession for nearly eight years, when the two heirs, who had attained full age, brought ejectment to recover their interest in the land. The evidence disclosed that the plaintiffs learned of the sale by the mortgage purchaser soon after it was made, at which time the plaintiffs had attained their majority; that no improvements had .been made on the land by said grantee 'or his successors, nor had either of the plaintiffs done anything indicating an affirmance or ratification of their deed. And it is held that the action was seasonably brought, if within the period prescribed by the statute of limitations.

      2. 3 How. Stat. § 8698, subd. 1, which bars an action of ejectment unless commenced within five years after the right to bring the same accrues, where the defendant claims title to the land through a deed made upon a sale thereof by a proper ministerial officer, under the decree of a court of competent jurisdiction within this State, does not apply where the defendants claim title through a commissioner’s deed executed on a sale of the land under a decree in a foreclosure suit, and the plaintiffs attack the validity of the deed through which the mortgagor claimed title because of its execution by plaintiffs during their minority.
    Error to Marquette. (Stone, J.) Argued May 1 and 2, 1894. Decided June 2, 1894.
    Ejectment. Defendants bring error.
    Affirmed.
    The facts are stated in the opinion.

      Clark & Pearl, for appellants.

      Charles R. Brown & Son, for plaintiffs.

      For cases bearing upon the question of the affirmance or disaffirmance by an infant of his deeds and mortgages, see:
      1. Young v. McKee, 13 Mich. 552, holding that where land is conveyed to an infant, who mortgages it back to secure the purchase money, he cannot, on arriving at full age, affirm the deed without also affirming the mortgage.
      2. Carrell v. Potter, 23 Mich. 377, where an infant contracted for the purchase of a piece of land, and before arriving at full age assigned the contract. About five months after the infant had attained his majority, the assignee filed a bill against the vendor and the infant to enforce the specific performance of the contract. And it was held that, if the infant had brought the suit, it would of itself, have been an act of affirmance, but that a suit by the assignee had no such effect; and that the retention of the consideration for the assignment, and the acquiescence of the infant during the five months, standing alone, were insufficient to raise an inference of ratification.
      3. Prout v. Wiley, 28 Mich. 164, holding:
      a — That an actual entry and conveyance, after attaining his majority, and before the right to disaffirm is cut off, operate as a disaffirmance of a minor’s deed.
      b — That upon the question of the affirmance of a minor’s deed by mere lapse of time, or, in other words, by mere silence or acquiescence for any particular period of time after the minor has attained his majority, it is sufficient to say that by the great weight of authority, both English and American, such delay or acquiescence, without any affirmative act indicating an intention to affirm, or tending to mislead the grantee into a belief of such intention, or any circumstances of equitable estoppel, such as standing by and seeing improvements made or money expended, or a sale of the property to another, without asserting his claim, or some such special circumstance, will not operate as an affirmance or confirmation of the deed, nor prevent the minor from disaffirming it and reclaiming the land within the time allowed him by the statute of limitations for bringing an action.
      4. Terry v. McClintock, 41 Mich. 492, where an infant received a deed of lands subject to a mortgage, and, while yet a minor, gave a mortgage on the lands to raise money with which to pay the first mortgage. About a year and a half after the infant'had attained her majority, a bill was filed to foreclose the mortgage, and a pro confesso decree was entered, after personal service of subpoena upon her, for want of an answer. An assignee of the decree filed a bill to revive the suit and enforce the decree, and the mortgagor sought to interpose as a defense her infancy when she gave the mortgage. And it was held that she was estopped from making such defense.
      5. Haynes v. Bennett, 53 Mich. 15, which was an action of ejectment in which the defendant claimed under a deed executed by a minor, and it appeared that six months after the grantor had attained her majority, and over five and a half years after the execution of said deed, she conveyed the land to the plaintiff’s grantor; that, for several years immediately prior to the defendant’s purchase, she had resided out of the county, and had not seen the land for 3 or 4 years; that possession was not demanded, nor notice to quit given, before the suit was brought; that the minor never gave any notice or did anything to revoke her first deed, except the making of the second conveyance;, and that the defendant had peaceably occupied the premises as a part of his farm from the time of his purchase until the commencement of the suit. And it was held that the giving and recording of the second deed was a good revocation of the first deed, and, without other or further act or acts, entitled the plaintiff to bring, his suit; and that the necessity for an infant to make entry before giving a deed of avoidance, or before bringing suit, does not exist in this State.
      6. Corbett v. Spencer, 63 Mich. 731, where an infant about 18 years of age conveyed certain lands in exchange for other land, which she afterwards reconveyed in exchange for certain personal property, and her husband disposed of the same during her minority. Shortly after arriving at full age she deeded the first-mentioned land to a third party. And it was held that this was, under the former decisions of the Court, a sufficient disaffirmance of her first deed.
      7. King v. Merritt, 67 Mich. 194, holding that the deed of a minor, with knowledge of his rights, should be held affirmed by him, unless he makes some claim to the premises conveyed within a period of 40 years after arriving at full age.
      8. Langdon v. Clayson, 75 Mich. 204, holding that an infant cannot ratify the purchase of land, after arriving at full age, by dealing with the title thus acquired as owner, without ratifying a mortgage given during her minority to secure a loan with which to pay off liens on the land which she had agreed to pay as a part of the purchase price.
      9. Putnam v. Tinkler, 83 Mich. 628, where land was purchased by a father for his son, and the title taken in the father’s name, he agreeing to convey to the son as soon as the son paid the purchase price, which he did in his lifetime, and after his death his father conveyed to a third party, with notice that the land was claimed by the son’s widow for herself and infant daughter. The widow filed a bill against her father-in-law and his grantee to enforce the performance of the contract, but, before any proofs were taken, she quitclaimed the land to the grantee for a consideration paid by her father-in-law, and surrendered possession to the grantee. The widow afterwards remarried, and lived near the land with her daughter, who, about 22 months after attaining her majority, filed a bill for the specific performance of the contract. Her right to such relief was opposed on the ground, among others, that she had lived near the land for many years while the defendant (grantee) was occupying and improving it as his own, without ever asserting her claim, which ought not to be considered by a court of equity. And it was held that laches are not to be attributed to an infant; that the law assumes that complainant was ignorant of her rights during her minority; and that the neglect of her mother to act for her could not deprive her of her right to enforce her father’s contract.

   Hooker, J.

The plaintiffs, with others, inherited the lands in controversy from their mother. While yet infants of the ages of 20 and 19 years, respectively, and upon April 16, 1883, they united with the other owners in a quitclaim deed to one Peter O’Hair upon a nominal consideration of one dollar, but in truth to enable O’Hair to secure John Connor and Peter Eassmussen, by mortgage, for signing the bail bond of plaintiffs’ brother. . Such mortgage was given, and upon its foreclosure in chancery Eassmussen became the purchaser, receiving a commissioner’s deed on May 26, 1885. On July 2, 1885, Eassmussen conveyed to William Ward, through whom defendants claim title. Ward and his successors have had exclusive possession of the premises since August, 1885. This action was begun about July 15, 1893. It was tried before the court without a jury, and comes to this Court upon exceptions to the judge’s findings of fact and law, the appeal being taken by the defendants.

But two questions are discussed in the brief of defendants’ counsel: (1) Whether plaintiffs are not estopped from asserting title; (2) the statute of limitations.

The findings of fact show that both plaintiffs learned of Ward’s purchase of the lot very soon after it was made; that there was no evidence that either took any action to disaffirm the deed to Ward, or in any way claimed that it was invalid, until April 6, 1893, when they demanded possession. No improvements were made by Ward or. his representatives, nor did either plaintiff do anything indicating an affirmance or ratification of their deed. Under these findings we must hold, in conformity to the settled rule in this State, that the action was seasonably brought, if within the period prescribed by the statute of limitations. Prout v. Wiley, 28 Mich. 164; Tyler v. Gallop Estate, 68 Id. 187; Sims v. Everhardt, 102 U. S. 300.

It is contended on behalf of the defendants that this action is barred, under How., Stat. § 8698, subd. 1, limiting to five years the bringing of actions against persons claiming under judicial sales. It is asserted that tbe lapse of five years settles such a title against the world. Under this sale and commissioner’s deed the defendants acquired the same title that O’Hair, the mortgagor, had. His mortgage, and that alone, was litigated. The character or validity of such title was not settled. Titles adverse to his were not, and under repeated decisions could not be, litigated in that suit; and, unless we are to put a premium upon the perfection of titles through judicial sales, we cannot hold that such deeds cut off titles sooner than other adverse claims.

It was held in Showers v. Robinson, 43 Mich. 502, that it is only when the validity of the title acquired under one of the- sales mentioned is in controversy in the suit, and is the subject-matter of the issue to be tried, that the five-year limitation applies. Mr. Justice Cooley’s reasoning in that case is so satisfactory that it leaves no excuse for discussing it further. See, also, Millar v. Babcock, 29 Mich. 526; Toll v. Wright, 37 Id. 93.

We think the judgment of the learned circuit judge was right, and it will be affirmed.

The other Justices concurred.


text:
    The Ionia, Eaton & Barry Farmers’ Mutual Fire Insurance Company and J. Warren Peake, Secretary, v. Frank D. M. Davis, Circuit Judge of Ionia County.
    [See 96 Mich. 558; 97 Id. 533.]

      Injunction — Mandamus—Mutual fire insurance companies — Assessments.

    1. Mandamus will lie to review the action.' of a circuit judge in granting a preliminary injunction, and in refusing to dissolve the same, where the return shows the question in dispute to be one of law, merely.

    2. A member of a mutual fire insurance company obligates himself to pay a proportionate share of the losses and expenses for the period during which he is insured; and, if such liability has not been covered by assessment, it continues, although he may have meanwhile ceased to be a member.

      3. Interest on obligations -which it is the duty of the company to pay, and money spent in an attempt to avoid such payment, cannot be charged to subsequent policy-holders, who have no interest in, or liability upon, such obligations.
    4. A void assessment is no impediment to a new assessment, in making which the officers of the company may reassess the amount paid upon the void assessment upon the payors, and-credit on such assessments such amounts.
    5. As a new assessment for a deficiency arising from a failure to collect a former assessment cannot be made upon members whose policies had been canceled previous to the first assessment, it is proper to include a liberal sum for contingencies, and this is usually within the discretion of the directors of the company.

      Mandamus. Argued May 1, 1894. Granted June 2, 1894.
    Eelators applied for mandamus to compel respondent to dissolve an injunction. The facts are stated in the opinion.

      George E. & M. A. Nichols, for relators.

      Vernon H. Smith, for respondent.

      For cases involving the question of the dissolution of injunctions by mandamus, see:
      1. People v. Circuit Judge, 31 Mich. 456, holding that the appointment ex parte of a receiver to manage the business, of a corporation, and the granting of an injunction in like manner on an interlocutory ex parte application, whereby the control of tbe business is taken from the directors, are absolutely void, as beyond the power of the court, and are such an abuse as may be required to be corrected by mandamus.

      2. Railroad Co. v. Circuit Judge, 44 Mich. 479, holding that mandamus will lie to dissolve a preliminary injunction restraining a railroad company from running over so much of its road as was built by the complainants under a contract with a tram railway company, to whose assets the defendant has succeeded by purchase, except on condition of carrying logs and lumber for complainants on the terms agreed upon in said contract.
      3. Van Norman v. Circuit Judge, 45 Mich. 204, holding that an attachment cannot be levied on corporate stock previously assigned by the defendant to his wife, and standing in her name and as her property on the stock book; and, as a bill will not lie to protect the lien of such an attachment by enjoining the payment of dividends to the holder, such an injunction, if granted, can be 'vacated by mandamus.

      4. Maclean v. Circuit Judge, 52 Mich. 257, holding that mandamus will lie to dissolve an injunction restraining proceedings upon a judgment rendered by another court of competent jurisdiction and co-ordinate authority, issued in a suit instituted for the purpose of canceling the judgment.
      5. Iron Works v. Circuit Judge, 59 Mich. 272, where mandamus was granted to dissolve an injunction issued from the Wayne circuit court, restraining the relator from trying an attachment suit pending in the superior court of Detroit in favor of one of relator’s creditors, and commenced prior to relator’s assignment of its property for the benefit of creditors.
      6. Railroad Co. v. Circuit Judge, 61 Mich. 33, where relator applied for mandamus to dissolve an injunction, allowed without notice, on a bill filed by another railroad company to prevent the relator from interfering with the intended execution of a crossing under relator’s track, which the bill averred had been secured by condemnation proceedings, and which would involve an interference with the running of relator’s cars during the construction of a bridge (which injunction was subsequently held illegal in Railway Co. v. Railroad Co., 61 Mich. 9). And it was held that the only end to be reached by the action sought was to remove obstructions to allowing relator to use active measures, outside of legal proceedings, to prevent the further use and occupancy of the disputed territory; and that, so long as the law is open, the Court is not called upon to use its extraordinary powers with a view of assisting private redress of supposed wrongs.
      7. Scott v. Circuit Judge, 62 Mich. 532, where a married man made an assignment for the benefit of creditors, and a bill- was filed by certain creditors against the assignor and his wife and the receiver, appointed on the failure of the assignee to qualify, to subject to the assignment two United States registered bonds issued to the wife, and an injunction was granted restraining the transfer of the bonds. On the petition of the receiver, who had been substituted as complainant in the injunction suit, charging that the assignor and his wife had disposed of the bonds in violation of the injunction, an order was made requiring them to show cause why they should not be punished for contempt for such violation. A general answer was put in, denying the violation of the injunction, and, without taking any further proofs, the assignor and his wife were found guilty of contempt, and ordered to pay into the court a certain sum of money, or give bonds to produce it, or stand committed indefinitely. And it was held that there is nothing in the statute justifying the order; that, apart from the difficulty of requiring a third party to pay her own money into court before a final adjudication on the merits, the statute does not permit such a vague sentence of imprisonment; that the whole proceeding was beyond jurisdiction; and a writ of mandamus was issued to vacate the order.
      8. Mills v. Circuit Judge, 77 Mich. 210, where relator applied for mandamus to vacate an injunction restraining him from interfering with or obstructing the erection of poles and wires, and the construction, completion, application, and use of the system of electric motive power, described in the bill upon which the injunction issued, for the operation of a street railway in front of lands held by him as administrator, and the application was denied, the Court holding that the only effect of granting the writ would be to set aside an injunction which, whether right or wrong, had spent its principal force; that the mischief had been so far done that it would be more satisfactory to have the coütest before the Court on the entire merits, on an appeal after hearing, so that affirmative relief might be granted the defendant if entitled to it, and a complete disposition made of the whole matter.
      9. City of Detroit v. Circuit Judge, 79 Mich. 384, where mandamus was granted to dissolve an injunction restraining relator from making a contract for city lighting under an accepted bid of an electric light company, the Court holding that the lettings of bidding were not absolutely void and illegal, and that the injunction was an invasion of the discretionary power vested in the city in managing its own affairs, and was beyond the power of the circuit court.
      10. Plank-Road Co. v. Circuit Judge, 98 Mich. 141, holding that, where an injunction had been issued restraining the laying of a street-railway track along the line of relator’s gravel road-bed, an order modifying the injunction, so as to admit of the construction of the track along the side of the highway occupied by said roadbed, but not upon the gravel portion, would not be vacated by mandamus, and the original order reinstated, it being within the power of the respondent to determine judicially whether the injunction ought to be granted.
      11. See, also, Buettner v. Circuit Judge, ante, 179.

   Hooker, J.

The Ionia, Eaton & Barry Company, above named, is a mutual fire insurance company, organized and doing business under the laws of this State. In the year 1889 it had losses and expenses, and an assessment was made for the purpose of providing a fund with which to discharge its liabilities. Relators allege that this assessment was insufficient to cover all of said liabilities exist-

ing for that year, and that a large indebtedness existed that they did not attempt to assess. The amount of the indebtedness unprovided for consisted of—

1. Undisputed losses and expenses in excess of the assessment.
2. Two losses, unadjusted, which were subsequently litigated, known as the “Van Alstine and Towle Losses.”
3. Costs and expenses of such litigation.
4. Interest upon the amounts mentioned.

An assessment was made to raise a fund to pay this indebtedness, and upwards of $5,000 was paid upon it. Such assessment being declared void, no further effort was made to collect it, but the money collected had been used in payment of the obligations of the company. Thereupon a new assessment was ordered for an amount sufficient to coyer the sums mentioned, and 30 per cent, additional, to cover expenses of collection, and shrinkage.

One William D. Place, who from January, 1884, until the date of filing his bill, was a member of, and insured in, said company, filed a bill of complaint, stating the facts hereinbefore outlined, and praying an injunction restraining the levy of such assessment, which he asserted would be a cloud upon his title. The bill alleges the following grounds for the claim that such assessment should not be made, viz.:

First. The Towle and Yan Alstine losses did not become a liability during the year 1889, inasmuch as they were not adjusted, but were subsequently litigated, and were therefore not chargeable upon policy-holders for that year.
Second: The costs and expenses incident to that litigation were not chargeable to policy-holders of that year, as they were incurred later.
Third. The amount voluntarily paid upon the void assessment of 1892 could not be lawfully assessed to reimburse those who had paid it, who were to be credited such amounts upon the new assessment.
Fourth. There was no authority to assess 30 per cent, for contingencies.

An injunction pendente lite was issued, a motion to dissolve which was denied, whereupon this proceeding was instituted to compel such dissolution.

Ordinarily, this Court does not review the action of the circuit judge in injunction cases. Where, however, as in this case, the return shows the question in dispute to be one of law, merely, it will consider the case. The points raised by the bill are those which will be discussed.

Questions arising over matters involved in this case were considered in the case of Ionia, etc., Ins. Co. v. Otto, 96 Mich. 558; and it was there held, in substance, that, where an assessment was made to cover certain losses and expenses, subsequent assessments, made necessary by a failure to collect, could not be levied upon those whose policies had been canceled previous to the former assessment. But it was plainly intimated in that case that a member could not avoid his liability upon accrued losses and expenses by cancellation and payment of assessments theretofore made. He who insures obligates himself to pay a proportionate share of the losses and expenses for the period during which he is insured; and, as said in the Otto case, if the liability has not been covered by assessment, it continues, though he may have meanwhile ceased to be a policy-holder. Much can be said against the doctrine that such member should not be liable for deficiencies arising from failure to collect assessments, but we think that question settled by authorities cited in the Otto case. We consider it clear, however, that until the assessment has been once made the liability continues.

The Otto case, page 561, expressly states that the Towle and Van Alstine losses were existing liabilities at the time of their occurrence. We think it cannot be said that the managers of a company of this kind can relieve present policy-holders, and burden future ones, by delay in adjusting, or by litigating, losses. These losses were a part of the legitimate cost of insurance for that year, whenever and however adjusted. The subject was again alluded to, and the validity of these claims recognized, on motion for rehearing of the Otto case. 97 Mich. 525.

In the case of Union Mut. Fire Ins. Co. v. Spaulding, 61 Mich. 80, cited by counsel, the assured had surrendered his policy, and paid an assessment which not only covered all existing losses, but also a large sum for contingencies.

The Court said that—

There can be no doubt, on the findings, that defendant did pay in full all that was his proportion of any existing losses of the company, as well as of any assessment levied. Whatever losses subsequently arose from failures to collect, or from any other cause, were not existing losses.”

No assessment having been made for these losses, or for the amount of liability for 1889 not covered by the first assessment, the directors might legitimately make an assessment to cover them, with interest and expenses incident thereto, including costs of litigation. It was the duty of the company to pay all of this within 60 days. It chose to do otherwise, and interest, and money spent in trying to avoid the payment of a lawful obligation, can hardly be chargeable to subsequent policy-holders, who have no interest in, or liability upon, such obligations.

The assessment of 1892 was void. Being void, it was no impediment to a new assessment, in making which the officers of the company have reassessed the amounts paid upon those who paid them, and propose to credit on such assessments such sums. This is equity, and we see no reason for complaint on the part of those who did not pay their void assessments. Certainly, equity has no injunctions for those who seek to escape honest liabilities by imposing undue burdens on others. May, Ins. § 559; Insurance Co. v. Allen, 10 Gray, 300; Nelson v. Milford, 7 Pick. 18.

The,assessment of a sum for contingencies is not uncommon; and where, as under our decisions, a new assessment for a deficiency arising from a failure to collect cannot be made, it is proper to include a liberal sum. It is usually within the discretion of the directors. Insurance Co. v. Babbitt, 7 Allen, 235; May, Ins. § 559; Bangs v. Gray, 12 N. Y. 477. Thirty-three and one-third per cent, was held reasonable in Re People’s Mut. E. F. Ins. Co., 9 Allen, 319. In view of the probabilities of litigation, we are of the opinion that 30 per cent, was not unreasonable. See Wardle v. Townsend, 75 Mich. 385.

There is another reason why we think that the circuit judge should have dissolved the injunction. The complainant’s bill shows that he has been a member of said company from 1884 until he filed the bill, and therefore liable for his proportion of all these liabilities. We fail to discover any reason why he should complain of an assessment to pay debts which the company is legally bound to pay.

Writ granted.

The other Justices concurred.

       The bill was filed April 20, 1894.


text:
    Charles Austin, Trustee, etc., v. The First National Bank of Kalamazoo, Fred A. Diggins, and Delos F. Diggins, Impleaded with the Union School Furniture Company and Alonzo K. Prentice.

      Assignment for benefit of creditors — Preferences — Validity of mortgages.

    1. Where attaching creditors seek to show that instruments executed by their debtor to secure other creditors legally transfer an absolute title in trust for their benefit, they must build up an assignment valid upon its face to convey the absolute title to the trustee, before they can demolish it for its preference of said particular creditors.

    2. The character of such an instrument cannot depend upon what the trustee does after he takes possession of the property. If he does things which the instrument gives him no authority to do, it will be at his perfil, but the rights of creditors cannot be lost by' his notion of his powers.
    ,3.‘ The law does not require a debtor to make an assignment for the benefit of creditors. He may compel each creditor to collect his debt by process of law. He may use his property in the payment of preferred debts, either by its sale and the application of the proceeds to such payment, or by selling the property directly to the creditor in extinguishment of the debt, in whole or in part. He may mortgage, pledge, or otherwise secure the creditor. But he must not assign to a trustee for the benefit of creditors unless he assigns all of his property, and he must not in such case prefer creditors, and, if he does, his attempt will be a failure, regardless of his intentions.
    4. A school furniture company, having lost its entire plant by fire, conveyed its real estate and mortgaged its personal property and choses in action, including its claims for insurance, in trust, to secure certain of its creditors. The deed contained no defeasance, but required the grantee to take possession of the property and receive the rents; to sell the same, in bulk or in parcels, in such manner and at such times, for cash, as would enable him to realize the most money therefor; to pay the taxes, and keep the property insured; and from the proceeds of such sales, and the proceeds of the mortgaged assets, to pay, first, his expenses as trustee, and a reasonable compensation for his services, and, with the remainder, to pay in full the secured claims,’ if the fund should be sufficient for that purpose, and, if not, to pay the same pro rata, and return the surplus, if any, to the corporation. The trustee accepted the trust, and, after entering upon its performance, the property was attached by certain unsecured creditors, who, in a suit brought by the trustee to foreclose both instruments as mortgages, defended upon the ground that they attempted to transfer the absolute title to all of the corporate property, in trust for the payment of the claims of certain preferred creditors, and were therefore void under the assignment statute. And it is held that, as between the parties, the deed was a mortgage; that the corporation could pay the indebtedness, . and compel a reconveyance, and, if it did not, any attempt by the trustee to sell and convey the land would be futile, without foreclosure, which a court of equity might properly decree in a suit between the parties. And it is further held that the instrument does not convey an absolute title as against creditors, and that there is nothing to prevent creditors from reaching the equity of redemption.
    5, The chattel mortgage was to be void upon the payment by the mortgagor, within 10 days from its date, of the mortgage debts. The mortgagee was authorized to take possession of the property on the execution and delivery of the mortgage, and was given power to collect, settle, or compromise, by suit or otherwise, all of the demands and choses in action, capable of collection, covered by the mortgage; to insure such of the property as he might deem wise; to gather together the property, and realize the most possible out of that portion saved from the fire, and to expend such sums as might be necessary for its care and preservation, including its repair and putting it in condition for sale. And it is held that none of these-things made the title absolute in the mortgagee, which seems-to be involved in an assignment for the benefit of creditors.
    Appeal from Calhoun. (Smith, J.) Argued February 14, 1894. Decided June 16, 1894.
    Bill to foreclose certain mortgages. Defendants appeal..
    Decree affirmed.
    The facts are stated in the opinion.

      'Hulbert & Mechem (B. F. Graves and G. F. Thomas, of counsel), for complainant.

      Osborn & Mills (Howard é Boos, of counsel), for defendant First National Bank.

      Haskins & Giddings (J. B. Judkins, of counsel), for defendants Diggins.

      For cases bearing upon the construction of 3 How. Stat. § 8739, which voids assignments for the benefit of creditors if made with preferences, see National Bank v. First National Bank, ante, 485, and note.

   Hooker, J.

The Union School Furniture Company of Battle Creek, a corporation, lost its plant by fire. It had a large outstanding indebtedness, considerable of which was secured by paper indorsed by some of its directors. A meeting was held, and it was proposed to make an assignment to a trustee, for the benefit of certain creditors;; but, upon information that such an assignment would be void, it was determined to execute mortgages of the real and personal property to such trustee, and instruments-intended as such were executed and delivered.

The first instrument is a deed of a number of parcels of real estate running to Charles Austin, as trustee of certain named creditors, reciting the fact of an existing indebtedness owing to these creditors, and that the party of the first part is desirous of securing the payment of the same, and containing a further recitation as follows:

“And whereas, said first party has contemporaneously herewith executed and delivered to said second party a certain instrument in writing, which is duly filed in the office of the city recorder of the city of Battle Creek, by which instrument it has ‘transferred to said second party, in trust, certain personal property' and personal assets, to which said instrument, for more particular certainty, reference is hereby made.”

The instrument contains no condition or defeasance, but declares a trust as follows:

“ To take possession of all of said property, and receive and collect the rents, issues, and profits thereof; to sell the same, in bulk or by parcels, in such' manner and at such times, for cash, as will enable him to realize the most money therefor; to pay the taxes thereon, and keep the property properly insured. From the proceeds of such sale, and from the proceeds of the personal assets transferred to him by the instrument hereinbefore mentioned, he shall pay and apply the same in the following manner, to wit:
“First. He shall pay all the expenses incurred by him in the execution of this trust, together with a reasonable compensation for his own services.
“ Second. With the residue and remainder he shall pay in full all the claims hereinbefore mentioned, if sufficient there shall be; and, if not in full, he shall prorate the ■same among them in proportion to the amount of their respective claims.
“ Third. The surplus, if any, shall be returned to the first parties.”

The other instrument recites the indebtedness, conveys all the personal property of the company and rights in action, including the insurance, with a condition as follows:

“To have and to hold the same forever: Provided, however, and these presents are upon, the express condition, that if said first party shall pay, or cause to be paid, to said Austin, trustee, the claims and demands aforesaid, and each and all thereof, within 10 days from date hereof, then this obligation shall be void; otherwise to remain in full force. And the said first party agrees to pay the same accordingly.”

The instrument gives immediate possession to the trustee, and contains the following additional'provisions:

“If default be made in the payment of said debts, and the interest thereon, or any portion thereof, within the time or manner herein provided, or in any of the terms and conditions hereof, then the said trustee, his successors or assigns, or his or their authorized agent, is authorized to sell said property, which is capable of direct sale, either by private sale, in bulk, or by parcels, or by public auction to the highest bidder, after giving reasonable notice of such sale; and said trustee is also authorized to collect, settle, or compromise, by suit or otherwise, all of the said demands and choses in action capable of collection, in our name or otherwise; and said trustee is also authorized to insure such goods and chattels as he deems wise, and to pay all taxes assessed against the same, and add the charges for such insurance and taxes to the debt hereby secured, to be payable forthwith, with interest. Said trustee is also authorized to gather together all of the property of said first party covered hereby, and realize the most possible out of the salvage from the late fire, and to expend all such sums of money as may be necessary therefor, and as may be necessary for the cafe and preservation thereof; and he may also repair said property, and put the same in the best possible condition for sale, so that the largest amount can be realized therefor.”

The trustee, who is the complainant, took possession of the property under these instruments, and proceeded to remove machinery and other articles from the burned factory and buildings, and put the same in shape for sale. He made some small repairs upon the shop, and, with materials on hand, finished some work in process of construction, and filled some contracts made by the company previous to the fire.

The complainant filed the bill in the cause for a foreclosure of the instruments, which he calls mortgages,” making parties defendant certain attaching creditors and the officer who levied the attachments. The defendants contend that the instruments are fraudulent and void as against them, and that they do not constitute, at law or in equity, an incumbrance upon the property, or amount to a security thereon, but that they are, at law and in equity, fraudulent and void, absolutely, as constituting and being an assignment of all of the company’s property, assets, and effects to complainant, with fraudulent preferences, in violation of the laws of this -State.” They further claim that they are secondary to their attachment liens.

It appears from the foregoing that there is no claim that these instruments amounted to a valid assignment for the benefit of creditors. It is equally clear from the evidence that the company never intended to make such an assignment as would have been valid under How. Stat. § 8739, for it is plain that it at all times proposed to prefer certain creditors. The contention is not made that these instruments are in effect a valid assignment, so that a court of chancery can take jurisdiction and enforce them as^ such, under section 8744. The question is, therefore, whether the instruments can stand as valid mortgages, or whether thejr must be held void, upon the ground that they attempt to transfer the absolute title to all of the debtor’s property, in trust for the payment of preferred creditors, in contravention of How. Stat. § 8739.

The instrument covering the real estate contains no defeasance. It does, however, recite that the first party is desirous of securing payment of certain debts, and indemnifying” certain parties, and requires the surplus to be returned to the company. There' can be no doubt that this instrument would be held a mortgage, if any question should arise upon it between the parties to it. The mortgagor could pay the indebtedness, and compel a reconveyance; and, if it did not, any attempt by the trustee to sell and convey the lands would be futile, without foreclosure. On the other hand, a court of equity might properly decree foreclosure in a suit between such parties. How, then, can it be said that the instrument itself was effective to convey an absolute title as against creditors, when it did not do so as between the parties, and, if it did not, what is to prevent creditors from reaching the equity of redemption? Manifestly, we cannot say that it is more than a mortgage when other creditors raise the question, and that it is only a mortgage when the secured creditor attempts to sell the property under it.

The other instrument is upon its face a mortgage, unless by reason of its attempting to confer some' inconsistent powers upon the trustee. These are said to be possession given before the mortgage is due; the power to collect, settle, and compromise outstanding debts covered by the mortgage; the power to insure the goods; the power to gather together the property, and to realize the most possible out of the property saved from the fire, and to expend such sums as may be necessary for the care and preservation thereof, including repair of the same and putting in condition for sale. -

A conditional power to take possession of property before the mortgage is due is common in mortgages of chattels. The statute against fraudulent conveyances (How. Stat. § 6193) contemplates change of possession in such cases, providing that every mortgage of goods and chattels, if not accompanied by an immediate change of possession, shall be void unless filed, etc. A change of possession is involved in the pledging of goods by way of security. The power to gather together, to insure, to repair, etc., is much the same as the power to take and safely keep, at the expense of the mortgagor, common in mortgages. The power to collect and settle outstanding accounts may be unusual, for such claims are not commonly mortgaged; but it is not uncommon for such claims to be used as collateral security, when the right to collect goes with the pledge. In the absence of an agreement that he might do so, the creditor would not have the right to compromise such claims, but can there be any reason why the power might not be conferred? And, if it were, can it be said that it would be less a pledge, or that the creditor would have any more than a security? At all events, none of these things make the title absolute, which seems to be involved in an assignment for the benefit of creditors. Warner v. Littlefield, 89 Mich. 337, 338, 340, 341.

The law does not require any man to make an assignment. Warner v. Littlefield, 89 Mich. 349; Sheldon v. Mann, 85 Id. 273. He may compel each creditor to collect his debt by process of law. He may use his property in payment of preferred debts, either by sale and application of the proceeds, or by selling directly to the creditor in extinguishment of or application upon the debt. He may mortgage, pledge, or otherwise secure the creditor. But he must not assign to a trustee for the benefit of creditors unless he assigns all, and he must not in such case prefer creditors. If he does, his attempt is a failure, regardless of his intentions. If, however, the instrument that he makes legally amounts to an assignment for the benefit of creditors, he may find that he has made an assignment contrary to his intention.

In this case no assignment was intended. The instruments, upon their faces, do not purport to be valid assignments, nor do they in fact amount to valid assignments, as defendants themselves claim. “As long as no assignment for the benefit of creditors is made, or the transaction does not amount in law to such an assignment, the debtor is at liberty to pay or secure any of his creditors at the expense of the others.” Sheldon v. Mann, 85 Mich. 273.

The character of the instruments cannot depend upon what the trustee did after taking possession. If he did things which the instruments gave him no authority to do, it was at his peril, but rights of creditors could not be lost by his notions of his powers.

The attempt of defendants is to show that the instruments in question legally transferred an absolute title,-in trust for tbe benefit of preferred -creditors. They must build up an assignment for the benefit of creditors, valid, upon its face, to convey the absolute title to the trustee, before they can demolish it for its preference of particular creditors. We think they have failed, and that the instruments are valid mortgages. The complainant is entitled to the relief sought.

The decree of the circuit court will therefore be affirmed, with costs.

The other Justices concurred.


text:
    Devello W. Anderson v. S. Lee Cook.

      Fraudulent conveyances — Chattel mortgage — Evidence—Instructions to jury.

    1. The failure of a mortgagee of chattels to indorse payments on the mortgage, or a copy thereof, on file in the office of the township or city clerk, or to volunteer a statement of the amount unpaid to a creditor of the mortgagor who refuses to recognize the validity of the mortgage for any sum or to ask the amount due on the mortgage, will not void it as to creditors.

    2. The failure of a mortgagee of a stock of liquors to foreclose the mortgage by advertisement, and his permitting the mortgagor to sell the liquors at private sale, and account to him for the proceeds, will not render the mortgage void as against an attaching creditor, hut the mortgagee will be held liable to account for the surplus, if any, arising from such sales to those holding subsequent liens on the property.
    3. A son mortgaged his stock of liquors to his father to secure an alleged indebtedness due the father, and soon afterwards gave his father a second mortgage to secure him for money which he had agreed to advance for the purpose of paying some of his son’s creditors a percentage of their claims in full settlement of the same. After the father had paid half of the sum secured by the second mortgage, the property was attached at the suit of one of the son’s creditors. The father demanded the property of the sheriff, which demand was refused, and that officer, under instructions from the attaching creditor, refused to recognize the validity of the mortgages. The father replevied the property, and turned it over to his son, who continued to sell the same at private sale, and account to his father for the proceeds. On the trial of the replevin suit the jury found for the plaintiff, and that the value of the property was not equal to the amount secured by the first mortgage.
    The court instructed the jury, among other things:
    a — That their attention was directed entirely to the. first mortgage, because, if it was fraudulent and void, the second mortgage, given and received to secure a compromise based and founded, in part at least, upon the supposed validity of the first mortgage, would also be void, and because, if the first mortgage was valid as to the other creditors, the plaintiff would be entitled to a verdict, even if the second mortgage was fraudulent and void.
    b — That, if the first mortgage was valid when the property was demanded of the sheriff, neither that officer nor the plaintiff in the attachment could have been wronged or injured by coupling the second mortgage, even if fraudulent, with the first mortgage as the basis of such demand, it appearing that the first mortgage alone exceeded the appraised value of the mortgaged property, for the reason that a fraudulent intent which, from the very nature of things, cannot grow into a fraud in fact, injures no man, and affects no man’s legal rights.
    c — That it was not a fraud in and of itself alone, affecting this action, that the father, after the replevin, turned the goods back into the possession of his son; that the sheriff, acting under the direction of the attachment creditor, had exercised his option whether to recognize the mortgage, and levy subject to it, or deny its validity, and he had refused to recognize it at all; that, if he had levied subject to the mortgage, he could have held possession, and sold whatever interest the son had in the property over and above the mortgage, regardless of any intentions which the father might have had as to the further disposition of the property; that in levying regardless of the mortgage, and denying its validity, he became, if it was actually valid as to creditors, a wrong-doer from the beginning, acting under an illegal levy, and without a standing which would permit him to question the plaintiff’s actions or motives.

    And it is held that there was no error in said instructions against the defendant, and that they were as favorable as he was entitled to.
    Error to Ingham. (Person, J.) Argued January 5, 1894. Decided June 16, 1894.
    Replevin. Defendant brings error.
    Affirmed.
    The facts are stated in the opinion.

      R. A. Montgomery and Jason M Nichols (Harmon, Golston, Goldsmith & Hoadley, of counsel), for appellant.

      Mitchel, Hatvley & Nesbitt J for plaintiff.

      For cases involving the attachment of chattel-mortgaged property under How. Stat. § 7682, see:
      1. King v. Hubbell, 42 Mich. 597, 604, holding:
      a — That chattel-mortgaged property is attachable, because the statute makes it so; but that, unless the attaching creditor disputes the validity of the mortgage, the officer is under obligation to surrender possession to the mortgagee on demand, after his inventory apd appraisal are completed.
      b — That, after such attachment, the respective parties must each so assert and exercise their rights as not needlessly to injure the interests of the other, and any authority in the mortgagee to permit the mortgagor to go on and make sales in the usual course of business is terminated.
      2. Wilson v. Montague, 57 Mich. 638, holding that the right to attach chattel-mortgaged property is expressly given by the statute; that it may be exercised at any time before the foreclosure of the mortgage (Nelson v. Ferris, 30 Mich. 497; Cary v. Hewitt, 26 Id. 228), and continues until redemption is cut off (Haynes v. Leppig, 40 Mich. 605); that it is only the right of redemption that can be taken (Bayne v. Patterson, 40 Mich. 659); that this leviable right pertains to the whole property, and is not apportionable (Worthington v. Hanna, 23 Mich. 534); and that the whole interest may be attached for the purpose of making and perfecting the levy thereunder, and may be held at least a sufficient time for that purpose.

        8. Walker v. White, 60 Mich. 428, holding that where a chattel mortgage is a valid security for firm debts, but not for the individual debt of one of the partners sought to be secured thereby, an attaching creditor should levy subject to the mortgage, which he can treat as void in so far as it attempts to secure the payment of the latter debt.
      4. Merrill v. Denton, 73 Mich. 628, holding that replevin lies at once, and without a demand, in favor of a mortgagee against an officer who attaches the mortgaged property in defiance of the mortgage, which he claims to be void as against the attaching creditor.
      5. Hyde v. Shank, 77 Mich. 517, holding that the waiver by the "mortgagor of his right to the possession of the property until the maturity of the mortgage debt, and his consent that the mortgagee may take immediate possession, cannot affect the rights of an attaching creditor, who, if he regards the mortgage as valid, should attach subject to the lights of the mortgagee, and if he denies its validity as to creditors, and succeeds in showing that fact, the agreement as to possession will not affect that question.
      6. Rosenfield v. Case, 87 Mich. 295, holding that the attachment of chattel-mortgaged property in opposition to the mortgage, and the refusal of the officer to admit the mortgagees to a joint possession, justifies them in demanding possession under the insecurity clause in their mortgage, whether the debt secured thereby is due or not due.

   Grant, J.

In 1888 the plaintiff’s son opened a liquor saloon at Grand Ledge, and in 1890 'he opened another in the city of Lansing. Plaintiff had at different times loaned his son various sums of money, aggregating $3,140. He lived at Saranac, and kept a blacksmith, wagon, and carriage shop. About the time of the making of these loans he put the amounts and dates thereof on slips of paper, and kept them in a safe at his residence. These slips were produced on the trial. September 30, 1890, his son executed and delivered to him a chattel mortgage upon his stock of goods in Lansing for $3,4:12.55, which included the several loans, with interest thereon. Subsequently, Alexander Gordon, one of the son’s creditors, proposed to him to settle his claim for 25 cents on the dollar, and told him that his other creditors would settle upon the same basis. Gordon and the son went to Saranac to see the plaintiff, who agreed to pay the 25 cents on the dollar to the creditors, provided he was secured by a mortgage upon the property. The compromise would amount to-about $1,200. On December 11, 1890, the son executed another mortgage for this amount. Plaintiff at that time paid $262, and, before the attachment proceedings hereinafter referred to were commenced, had paid in all about $600. One Leo M. Prank, a creditor of the son, sued out a writ of attachment upon the stock of goods, and gave the defendant, Cook, the depnty-sherifl: of the county, a bond of indemnity. Cook thereupon seized the property covered by the chattel mortgages. Plaintiff, through his attorney, demanded possession of Cook, which was refused; Cook, under instructions from Frank, refusing to recognize the validity of the mortgages. Thereupon plaintiff instituted this action of replevin. The mortgages were duly filed. Prior to commencement of suit, plaintiff had been paid upon the first mortgage $650.

Complaint is made of the instructions of the court, the material parts of which are as follows:

“ I shall direct your attention and consideration entirely to the first and earlier mortgage, — the larger one, — which bears date the 30th day of September, and purports to have been given to secure the payment of $3,413.55, and interest, as therein expressed. I direct your attention entirely to this first and earlier mortgage, because in my judgment, if that is fraudulent and void, then the later $1,300 mortgage, given and received to secure a compromise which was based and founded, in part at least, upon the supposed validity of the first mortgage, would also be void; and, further, because in my judgment, if that first and larger mortgage is valid as to the other creditors, then the plaintiff would be entitled to a verdict in his favor, even if the later mortgage was fraudulent and void.
“The verdict in this as in other actions of replevin depends upon the facts and circumstances as they existed at the commencement of the suit. Up to the commencement of the suit, the plaintiff had done nothing with this first and larger mortgage except to file it in the clerk's office, and to demand the goods by virtue of it. These were legitimate steps under a valid mortgage, and therefore, if it was valid when given, it was yet valid when suit was commenced. If it was voidable by creditors when given, then it is yet voidable, and the plaintiff has no standing in court.
“As I said, if this first and large mortgage was valid when given, then it yet remained valid when the property was demanded of Mr. Cook;' and, if it was then valid, neither Mr. Cook nor Mr. Frank, the plaintiff in the attachment, could have been wronged or injured by coupling a fraudulent mortgage with it as the basis of such demand, even if the second mortgage was fraudulent, because this first-mortgage alone exceeded the appraised value of the goods, and, further, because a fraudulent intent which, from the very nature of things, cannot grow into a fraud in fact, injures no man, and affects no man’s legal rights.
“ Nor is it a fraud in and of itself alone, affecting this actionj that the plaintiff, Anderson, after the ■ replevin, turned the goods back into the possession of his son. The defendant officer, acting under the direction of the attachment creditor, exercised his option whether he recognized the mortgage, and levied subject to it, or denied the validity of the mortgage, and refused to recognize it at all. If he had levied subject to the mortgage, he could have held possession, and sold whatever interest George D. Anderson had in'the property over and above the mortgage, regardless of any intention which the plaintiff may have had as to the further disposition o'f the property. In levying regardless of the mortgage, and denying its validity, he became, if it was actually valid as to creditors, a wrongdoer from the beginning, acting under an illegal levy, and without a standing which would permit him to question the plaintiff’s actions or motives. I admitted evidence that plaintiff, after he had secured possession of the goods upon this writ, turned them over to his son, simply that you might give such fact whatever consideration it was worth in determining whether this first mortgage was or was not valid when it was made and received.
“ Neither was the failure of the plaintiff to indorse upon the mortgage the amount, if any, which had been paid, any fraud in and of itself. It was not his duty to make any such actual indorsement. The amount remaining, if any, exceeded the appraised value of the property, and the dispute itself was not as to the amount remaining unpaid upon the mortgage, but whether the mortgage was valid at all or not. The testimony, however, on this point may be considered by you in determining whether the mortgage was ever valid or not.
“We therefore get down to the single point, — and the only point which you need consider, — was this first mortgage void as to creditors at the start, when ft was given and received? Was this mortgage at that time taken by the plaintiff, Mr. Devello W. Anderson, in good faith, to secure payment of a bona fide indebtedness? When the mortgage was given, George D. Anderson, the son, either owed the father practically the entire amount which plaintiff claims or nothing. There is no middle ground to the testimony on this point. If the son was actually owing the father, as a bona fide debt, all moneys which the father claims were put into this mortgage, then I charge you this mortgage was valid, and your verdict should be in favor of the plaintiff. If the son was not owing the father, as a bona fide debt, substantially the amount put into the mortgage, then the mortgage was fraudulent and void as to creditors, and your verdict should be for the defendant.”

The jury rendered a verdict for the plaintiff.

We find no error in the charge against the defendant. The instructions were as favorable as he was entitled to.

The only evidence as to these loans came from the plaintiff and his son. Plaintiff testified positively as to the amounts and the dates, and from whom some of the money was obtained. The son corroborated his father. The only grounds on which the honesty of the transaction can be attacked are the facts that the father took no notes from his son, and no security at the time, as he was accustomed 'to do when he made loans to strangers, and the facts that the son gambled, kept no books, and was unable to give dates. If these were sufficient to cast doubts upon the bona fides of the transaction, that question was fairly submitted to the jury, and is settled against the defendant. The verdict established the fact also; under the evidence, that the value of the property was not equal to the amount secured by the first mortgage. It is very doubtful if there are any circumstances tending to establish fraud on the part of the plaintiff in taking the second mortgage. There was nothing legally or morally wrong in his advancing money, or agreeing to advance money, to secure a compromise, and in taking a mortgage to secure himself. He actually advanced money at the time, and I fail to find upon the record any evidence that he did not do it in good faith. -

It is argued, however, that because the full face of the mortgage was not due, the payment was not indorsed upon the mortgage on file, and plaintiff's counsel did not state to the defendant at the time of demanding possession the1 amount unpaid, therefore the mortgage was void as to creditors. The obvious reply to this is that a chattél mortgagee is not required to indorse payments upon the mortgage, or a copy thereof, filed in the office of the township or city clerk. He is only required to file at the end of each year an affidavit of the amount unpaid. Nor is he obliged to volunteer such statement • to one who refuses to recognize his mortgage as valid for any sum, or who fails to ask the amount due thereon.

It is not conclusive of fraud that plaintiff did not fore^ close his mortgage by advertisement, but permitted his son to sell at private sale, and account for the proceeds, which it appears was done in this case. The mortgage being valid, plaintiff was entitled to possession, and his security will not be destroyed by his failure to sell in the exact1 manner provided in the mortgage. The result of- such disposition would be that, if the goods were worth more than the amount of his lien, he would be held to account for the surplus to those holding subsequent liens.

This disposal of the case, renders it unnecessary to- discuss the other questions raised.

Judgment affirmed. ■

The other Justices concurred.


author: McGrath, C. J.

text:
    Thomas Ross and Robert W. Anderson v. McElwane Miner et al.
    [See 64 Mich. 204; 67 Id. 410.]

      Sale — Rescission for fraud — Insolvency—Instructions to jury.

    1. It is not the rule that every purchase made by a merchant whose liabilities are equal to, or even in excess of, his assets, is presumptively fraudulent, or that a purchase under such circumstances will even justify an inference that the purchaser had a preconceived purpose not to pay for the goods so purchased.

    2. Where, in replevin for goods sold on credit, the testimony tends to show that the defendant firm had, up to the time of the purchase, paid all of its obligations at maturity; that its assets were equal to, if not in excess of, its liabilities; and that it was expected that one of the partners, who had just been taken into the firm, would contribute an amount in cash equal to one-third of the capital, — the plaintiffs are not entitled to an instruction that a condition of absolute insolvency existed.
    3. The undisputed facts set forth in the opinion are held to rebut the inference, drawn from the records on the former hearings, that the mortgage complained of was given to secure an, indebtedness of the old firm of Miner & Agnew, and not to justify an inference that said mortgage was a part of a preconceived scheme to get credit, buy goods, and then absorb them in payment of an old indebtedness, to the exclusion of the creditors of the new firm.

      .Error to Wayne. (Gartner, J.)
    Argued April 5, 1894.
    Decided June 16, 1894.
    Replevin. Plaintiff brings error.
    Affirmed.
    The facts are stated in the opinion, and in the former reports of the case.

      Albert J. Chapman, for appellants.

      Corliss, Andrus & Leete, for defendants.

       Fraud in obtaining credit, including purchases with intent not to pay for them, is the subject of annotation to Childs v. Merrill (Vt.), 14 L. R. A. 264.

   McGrath, C. J.

This case is here for the third time. 64 Mich. 204; 67 Id. 410. When here upon the first appeal, it was held that, in order'to avoid, the sale as fraudulent, the fraud must have existed at the time of the sale, and that such fraud might be established by proof of subsequent acts throwing light upon what was done before the sale. The court has now permitted plaintiffs to go fully into the general history of the transaction before the sale, ás well as subsequent thereto, and instructed the jury that neither the assignee nor the mortgagee was a bona fide purchaser, and that, if Kirby, Miner & Agnew purchased the goods intending not to pay for them, plaintiffs were entitled to a verdict, and a verdict was found for defendants.

Error is assigned upon the rejection of the testimony of one Smith, plaintiffs’ agent, who sold the goods to defendants, as to his knowledge of the existence of the indebtedness to Nichols. It appears, however, that the witness afterwards testified that he first learned of the existence of that indebtedness at the time of the dissolution of the firm.

It is insisted by appellants that if, at the time the goods were ordered, defendants were actually insolvent, and concealed their condition from plaintiffs, such conduct operated as a fraud upon plaintiffs, which defendants must be presmned to have intended. The requests, however, which were presented by plaintiffs upon that subject, took the question of the insolvency of the firm from the jury. There was testimony tending to show that the firm had, at the time of the purchase, paid all of their obligations at maturity; that their assets were at least equal to, if they did not exceed, their liabilities; and that 'it was expected that Kirby would contribute an'amount in cash equal to one-third share of the capital. Upon this record, plaintiffs were not entitled to an instruction that a condition of absolute insolvency existed. It is not the rule that every purchase made by a merchant whose liabilities are equal to his assets, or even in excess thereof, is presumptively fraudulent, or that a purchase under such circumstances would even justify an inference that the purchaser had a preconceived purpose not to pay for the goods so purchased. The jury must not only find a condition of insolvency, but, from all the facts a,nd circumstances, must also find that there was an intent not to pay for the goods purchased. Shipman v. Seymour, 40 Mich. 274.

Plaintiffs further insist that the creditors 'of the firm of Kirby, Miner & Agnew were entitled to priority over the creditors of Miner & Agnew; that the assignment of Kirby’s interest to Miner & Agnew, and the latter’s assumption of the firm’s indebtedness, made the latter trustees for the. creditors of Kirby, Miner & Agnew; and that the mortgage to Nichols was a violation of the trust, and a fraud upon plaintiffs. That fraud, unless shown to have been a part of the preconceived scheme, cannot be available to plaintiffs in this action, which is replevin, based upon an alleged fraud perpetrated at the time of the purchase of the goods.

The case was last here upon the trial court’s direction of a verdict for defendants. The record, as then presented, cast some doubt upon the validity of the mortgage given to Nichols, and it further appeared that the mortgage was given to secure an old indebtedness of the firm of Miner & Agnew. It now appears, however, that Miner & Agnew had been in business at Corunna; that they were induced to go to Detroit by Kirby; that Kirby was to furnish sufficient capital to equal the investment of each of the other members; that, before leaving Corunna, Miner & Agnew had borrowed $400 from Nichols, the most, if not all, of which was used to buy stock which actually went into the new business; that Miner & Agnew took with them, to Detroit, merchandise of the value of at least $1,600, and they had at that time accounts due them from the old business, amounting to between $700 and $1,000; that after going to Detroit, and before the purchase from plaintiffs, they borrowed from Nichols, on their 'own account, further sums, aggregating $1,300, and put that amount into the new business; that Kirby failed to make good his share of the capital, having advanced but $300, and Miner & Agnew became suspicious of him; that, to secure the parties who had indorsed the notes held by Nichols, Miner & Agnew executed a mortgage, which was dischai’ged after the purchase of Kirby’s interest had been agreed upon; that, as a result of their differences, Miner & Agnew bought out Kirby, and refunded to him the amount of his investment; that, in order to pay Kirby and make further additions to the stock, Miner & Agnew borrowed from Nichols further sums, aggregating $500; that several hundred dollars of the amount borrowed from Nichols went into the store fixtures; that the business at Detroit did not meet expectations; that Nichols went to Detroit, examined into the, condition of the firm, was dissatisfied with the outlook, and demanded security, and the firm, as it then existed, executed to him the chattel mortgage in question. These undisputed facts repel the inference, which was drawn from the former records, that the mortgage was given to secure an indebtedness of the old firm, and they do not justify an inference that the mortgage was a part of an alleged preconceived Scheme to get credit, buy goods, and then absorb the goods in payment of an old indebtedness, to the exclusion of the claims of the creditors of Kirby, Miner & Agnew.

We find no error in the record, and the judgment must be affirmed. e

The other Justices concurred.