50 N.W. 864 (Mich. 1891), First Nat. Bank v. Weed
|Citation:||50 N.W. 864, 89 Mich. 357|
|Opinion Judge:||[89 Mich. 358] LONG, J.|
|Party Name:||FIRST NAT. BANK OF MARQUETTE et al. v. WEED et al.|
|Attorney:||J. E. Ball and Ball & Hanscom, for appellants. Flower, Smith & Musgrave and Tomkins & Merrill, ( C. F. Button and Benton Hanchett, of counsel,) for appellees.|
|Judge Panel:||GRANT, J., did not sit. The other justices concurred.|
|Case Date:||December 22, 1891|
|Court:||Supreme Court of Michigan|
Appeal from circuit court, Gogebic county, in chancery; WILLIAM D. WILLIAMS, Judge.
Action by the First National Bank of Marquette and others against Alfred Weed and others. From the judgment of the court below complainants and several of defendants appeal. Modified and affirmed.
The bill in this cause was filed for the purpose of declaring a certain bill of sale, given by A. Weed & Co. to Hoxie & Mellor, a chattel mortgage as security for certain accommodation paper made and indorsed by Hoxie & Mellor, and used by A. Weed & Co. in their business, and to decree the same to be a lien upon the logs described in said bill of sale, and the lumber
and other material manufactured therefrom, and that the same be declared a trust fund for the payment of such accommodation paper; to declare the articles of agreement or sale by said A. Weed & Co. to the South Branch Lumber Company null and void as against said bill of sale given to Hoxie & Mellor; that the bill of sale be decreed to be a lien upon said property in the nature of a chattel mortgage prior to the purchase of the said South Branch Lumber Company; that a certain chattel mortgage held by the First National Bank of Ashland, Wis., be declared to be a lien subsequent to the lien of the complainants upon said property; and that the accommodation paper held by the complainants be first paid out of the proceeds realized from the sale of the logs. The bill asked for an injunction against defendants restraining them from interfering, removing, or disposing of the logs, lumber, lath, shingles, or timber, and for the appointment of a receiver. Upon the hearing in the court below, a decree was made from which complainants and several of the defendants appeal. On November 28, 1889, A. Weed & Co., composed of Alfred Weed and Paul Weed, who were engaged in the business of getting out logs, manufacturing them into lumber, and selling the lumber, made with Hoxie & Mellor the following contract: "Antigo, Wis., Nov. 28, 1889. This agreement witnesseth that Hoxie & Mellor, in [89 Mich. 359] consideration of two promissory notes of A. Weed & Co., for $2,500 each, dated to-day, one due July 15th next, and one due Oct. 15th next, without interest, hereby agree to advance to A. Weed & Co. their notes for such amounts and at such times as will be necessary to carry on A. Weed & Co.'s business at Ramsay, and for the purpose of logging a certain four million tract at Ashland. Hoxie & Mellor also agree to indorse A. Weed & Co.'s notes for $14,000, for payment of purchase price of above four million feet of timber. It is also agreed between both parties that the amount of notes advanced for Ramsay business shall not exceed $70,000 in all at any one time, and that the amount advanced for Ashland business shall not exceed $30,000 in all at any one time, including the indorsement of $14,000 for purchase price of timber. A. Weed & Co. agree to use Hoxie & Mellor paper at such places as will not interfere with the collecting of their (Hoxie & Mellor) other business, and also agree that all notes shall be taken up by them before Dec. 31st, 1890, out of the proceeds of sale of stock. HOXIE & MELLOR. A. WEED & Co." Under this contract notes were advanced by Hoxie & Mellor to A. Weed & Co., and renewal of such notes was made by Hoxie & Mellor up to April 5, 1890, amounting to $108,000.
On March 30, 1890, Paul Weed, who acted for A. Weed & Co., wrote to Mellor, who acted for Hoxie & Mellor, the following letter: "Ashland, Wis., March 30, 1890. Mr. E. W. Mellor, Antigo, Wis. Dear Sir: We inclose the last $3,500 note for signature and return, as per my letter of recent date. We finished the last of our logging operations on April 2, and they have been very satisfactory. As fast as we market our lumber we shall retire the notes out, but that will not be until June or July. We have made arrangements to take care of our renewals in the mean time. I did not see Bishop but a few minutes, owing to a mistake, and we having a [89 Mich. 360] lawsuit on our hands the following day. Did he take the logs? Yours, truly, PAUL WEED." To this letter Mellor replied by letter of April 5th, as follows: "Ashland, Wis., April 5, 1890. Paul Weed, Ashland, Wis.-Dear Sir: Your favor of the 30th ult. came while I was away; hence delay in replying. I return the note herewith, as it is impossible for me to sign it under existing circumstances. Will explain more fully when I see you. Expected to see you ere this, and, if you are not coming down soon, let me know, and I will go up there, as I must see you ere long. I inclose you also your note which was renewed. Yours, truly, E. N. MELLOR."
After receiving this letter, Paul Weed went to see Mellor at Antigo, and there executed to Hoxie & Mellor the bill of sale which complainants, by their bill, claim was intended as security for certain notes indorsed, and thereafter to be indorsed, by Hoxie & Mellor. This bill of sale is as follows: "Know all men by these presents, that A. Weed & Co., of Ramsay, Gogebic county, Michigan, of the first part, for and in consideration of the sum of seventy thousand dollars lawful money of the United States to me in hand paid, at or before the ensealing and delivery of these presents by Hoxie & Mellor, of the second part, the receipt whereof is acknowledged, have bargained, sold, granted, and conveyed, and by these presents do bargain, sell, grant, and convey, unto the said parties of the second part, their executors, administrators, and assigns, twenty-eight thousand pine saw-logs, scaling seven million feet, more or less. Said logs are now lying and being in the Black river, near Ramsay, Gogebic couty, Michigan. [89 Mich. 361] To have and to hold the same unto the said parties of the second part, their executors, administrators, and assigns, forever. And we do, for our heirs, executors, administrators, and assigns, covenant and agree, to and with the said parties of the second part, to warrant and defend the same described goods, hereby sold unto the said parties of the second part, their heirs, administrators, and assigns, against all and every person and persons, whomsoever. In witness whereof we have hereunto set our hands and seals the fifteenth day of April, A. D. 1890. A. WEED & Co. [Seal.] Signed, sealed, and delivered in the presence of GEORGE R. FRASER."
When this bill of sale was made the logs were where they had been banked. The driving of them had not commenced, and A. Weed & Co.'s men were on the ground preparing for the drive. They continued the work, and drove the logs. The drive started about the 17th of April, and was finished about the 4th of May. Weed & Co. began sawing the logs about May 5th, and continued sawing them until some time in September, when all the logs in controversy had been sawed. The bill of sale before set out was not filed until the
10th day of May, 1890. On the 11th of June following, A. Weed & Co. made a contract of sale to the South Branch...
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