Fisher v. Meister
| Decision Date | 10 April 1872 |
| Citation | 24 Mich. 447 |
| Court | Michigan Supreme Court |
| Parties | Maxwell M. Fisher and others v. Bernard L. Meister and another |
Heard April 5, 1872; April 6, 1872.
Appeal in chancery from Bay circuit.
This bill was filed by Maxwell M. Fisher, David G. Preston and Elisha G. Booth against Bernard L. Meister and Rebecca Meister. The defendants answered separately, and proofs were taken. The decree was for complainants, and the defendants appealed.
Decree reversed, and the bill dismissed with costs of both courts.
Green & Scofield, for complainants.
Marston & Hatch, for defendants.
Complainants filed their bill as assignees, to foreclose a mortgage upon the homestead of defendants for one thousand dollars, given to secure a negotiable note. The securities were assigned to complainants, who are bankers, absolutely, but they were to be held as collateral security against any overdrafts or similar liabilities, and no such liabilities have ever existed to their damage. As a matter of fact, we think there is no doubt, from the proofs, that the original mortgagees Simon Ferner and Hyams Kraushaar, transferred the papers before maturity to be held for their convenience, and to cut off the defenses likely to be made in case the debt was litigated. It is not claimed that the assignees are bona fide holders without notice, or that they are not bound by all equities attaching to the securities. It is claimed by the defense, that the interest of complainants is not such as to authorize them to maintain this suit. But as they are assignees, by an absolute assignment, made with the full intention of the assignors that they should have all the powers of assignees, and this appears from the testimony of the assignors themselves, we see nothing to distinguish this from any other case where the party holding a legal title sues to collect the security. Where there appears to be no conflict between assignor and assignee as to the validity of the assignment, the latter may sue in equity as owner, though a mere trustee, to enforce the debt: Morey v. Forsyth, Walk. Ch. R., 465.
The defense rests on two grounds: First, The want or failure of consideration; and, second, the insufficiency of the proceedings to affect the homestead right which was mortgaged.
As both defenses rest somewhat on the same grounds of fact, it will be proper to refer to both in their order.
Defendants claim that the note and mortgage were given in consideration of goods to be furnished by Ferner & Kraushaar to Bernard L. Meister, which were not furnished as agreed. Complainants claim that the object of the note was to secure to Ferner & Kraushaar a larger amount than they were likely to get by way of dividend on an old debt, as creditors under a general assignment made by Meister, whereby his property was to be disposed of ratably among his creditors, and under which the dividends were not likely to pay the debts in full.
There is an amount of false testimony in this case exceeding any thing usually met with in the experience of courts, and it would be a waste of time to attempt to balance statements directly in conflict. We must judge of the case by probabilities and circumstances going to corroborate the different stories, and in the light of these we have no doubt where the equities are to be found.
Bernard L. Meister having made an assignment without preferences, under which Ferner & Kraushaar had a debt due them of between five and six thousand dollars, was employed by the assignees to aid in making sales: and Ferner & Kraushaar had furnished him goods to sell on commission without security, the goods being sold in the same store, and serving to keep up an assortment, and so help the sale of the assigned goods. He had faithfully accounted for these goods. In the beginning of May, 1866, the note and mortgage were given in pursuance of an arrangement begun in Detroit, and finished in Bay City. Ferner & Kraushaar profess that the security was given them because of former favors shown Meister, as a payment outside of the assignment upon their old debt, and obtained upon occasion of their having to raise money to pay off a liability arising out of their old dealings, which had cramped them. Meister says that they agreed, if he would give them a mortgage on his homestead, to sell him goods on credit to the amount of the mortgage, which was first talked of as a transaction of six hundred dollars, but afterwards fixed at one thousand dollars, at Bay City--the increased credit being given to induce his wife to consent to making the mortgage.
The probabilities are all in Meister's favor. By sacrificing his homestead to put one set of creditors on a preferred footing, after he had failed to do so on his assignment, he would gain nothing for himself, and would effectually debar himself from any means of getting back into business, by cutting off his last capital. His wife, who was not required to consent to such a transaction, would not be likely to do so for a purpose that could not fail to injure both; and the testimony shows that she was not in fact inclined to make any such sacrifice. Her testimony seems reasonable on this point.
The evidence shows that he had, since the assignment, and without any security given or required, sold a considerable amount of goods on commission for Ferner & Kraushaar, and had just closed up his commission account in full.
It shows that while in Bay City, and during the negotiations connected with the mortgage, and just before or after it was executed, Ferner and Meister made out a bill of goods, which was copied by a clerk of the assignees, Mr. Hyde, which, if that witness is correct in his recollection, conformed to Meister's claim, that he was to have goods forwarded to the amount of the mortgage. We take occasion to say that Mr Hyde's testimony is fair and candid throughout, and contrasts very favorably with that of some very unscrupulous witnesses, who seem to have had no regard whatever to truth or probability. Whatever he says in the case we have no doubt he says truly. And while it is quite likely that Meister would be willing to...
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