Campau v. Detroit Driving Club

• Decision Date: 02 February 1904
• Citation: 98 N.W. 267,135 Mich. 575
• Court: Michigan Supreme Court
• Parties: CAMPAU et al. v. DETROIT DRIVING CLUB (MORAN et al. Interveners.) Two Cases. MORAN et al. v. CAMPAU et al.

98 N.W. 267

135 Mich. 575

CAMPAU et al. v. DETROIT DRIVING CLUB (MORAN et al. Interveners.) Two Cases.

MORAN et al. v. CAMPAU et al.

Supreme Court of Michigan

February 2, 1904

Appeals from Circuit Court, Wayne County, in Chancery; William L Carpenter and Joseph W. Donovan, Judges.

Two suits, one by Daniel J. Campau and others against the Detroit Driving Club, in which Fred T. Moran and another intervened and filed various petitions; the other by Fred T. Moran and another against Daniel J. Campau and others. From a decree dismissing the bill of complaint in the second suit complainants and defendant the People's Savings Bank appeal. From a decree in the first suit complainants and intervening petitioners appeal, and because of certain other action therein the intervening petitioners take another appeal. Decree ordered.

Hooker C.J., and Montgomery, J., dissenting in part.

Fred A. Baker, for appellants Moran and Churchill Keena & Lightner, for appellant People's Savings Bank.

Moore & Moore (Otto Kirchner, of counsel), for appellees Campau and others.

MOORE J.

The three cases relate to the same litigation, and were heard as one case, though a question is raised, which will be referred to later, whether the last-named case is properly here. Some phases of this litigation have been before this court before in People's Savings Bank v. Campau, 124 Mich. 106, 82 N.W. 803, Moran v. Circuit Judge, 125 Mich. 6, 83 N.W. 1004, and Campau et al. v. Detroit Driving Club, 90 N.W. 49. A reference to the opinions filed therein will aid in understanding the issues before us, and will make it unnecessary to make so full a statement of facts as would otherwise be required. The bond referred to in People's Savings Bank v. Campau, supra, was signed by Messrs. Campau, Palms, Vail, Moran, and Churchill as sureties. The $18,366 Judgment mentioned in Campau et al. v. Detroit Driving Club, supra, represents the proportions of said bond paid by the first three of the above-named sureties for which demand notes were given to them by the driving club, which notes were sued upon and put into judgment. The $14,170 judgment obtained by the bank was for the balance of the debt to secure the payment of which said bond was given, and was assigned by the bank to the other two sureties. In January, 1901, Messrs. Moran and Churchill filed a bill in chancery against Messrs. Campau, Palms, and Vail and the driving club, in which was recited a history of the transaction from the point of view of the complainants, and charging Mr. Campau, both before and after his appointment as receiver, with mismanagement, and with a purpose to obtain an unjust advantage over the complainants, and praying that the judgment in favor of Campau, Palms, and Vail and the execution levy and sale thereunder might be set aside, and that the judgment creditors' proceeding be held void, and the appointment of Campau as receiver be set aside, and also praying for other relief. The case was put at issue, and a hearing had before Judge Carpenter, who dismissed the bill of complaint, 'but without prejudice to the rights of the complainants in the original bill to file a new bill of complaint, if they shall be so advised, asking for their pro rata share of the purchase price of the property sold under the execution, or, if the sale is set aside, to the pro rata share of the rights acquired by the execution levy as mentioned and referred to in the bill of complaint filed herein.' From that decree an appeal is taken.

In the case of Campau et al. v. Detroit Driving Club, 90 N.W. 49, Justice Long, speaking for the court, wrote, among other things, as follows: 'The only object of this petition is to obtain a decree declaring the execution sales illegal and void because they were made when the property was in the hands of the court by its receiver. Incidental to this relief the petition prays that direction may be given to the receiver to sell the real and personal property of the corporation free and clear of all liens and incumbrances, and distribution made of the proceeds among the secured and unsecured creditors. This second intervening petition is based upon a fact which occurred after the first petition was filed, viz., the execution sales of March 29 and April 3, 1900. Thus it appears that the only object of the second intervening petition is to obtain a decree declaring the sales void. The denial of the first petition is no bar to the filing of the second intervening petition. It appears from the record that the execution levy by the petitioners under the assignment from the People's Savings Bank was subsequent to the one held by the complainants, and it was prior to the appointment of the receiver on the judgment creditors' bill. Under our statutes relative to execution sales the petitioners had a right to redeem from the prior sales at any time within fifteen months from the day the sale was made. Section 9185, Comp. Laws 1897. If the prior sale was illegal and void, the petitioners could not safely redeem from it. The complainants would get their money--some $19,000--but the petitioners would not get title to the property; so that it is apparent that the second intervening petitioners are pursuing the only safe course open to them to preserve their rights.' An order reading in part as follows was entered in the case: 'That the execution sales made on the 29th day of March 1900, and the 3d day of April, 1900, of the personal property and real estate of the Detroit Driving Club, by the sheriff of the county of Wayne, under and by virtue of an execution issued by the circuit court for the county of Wayne on a judgment rendered on the 30th day of March, 1899, in favor of Daniel J. Campau, Francis F. Palms, and George M. Vail, and against the Detroit Driving Club, for $18,366 damages and costs, be, and the same are hereby, set aside, and the sales are hereby declared to be illegal and void. And it is further ordered, adjudged, and decreed that Daniel J. Campau, as the receiver in this cause, be, and he is hereby, ordered to resume possession of said real and personal property, and to continue in possession thereof until further order of the circuit court for the county of Wayne. And it is further ordered, adjudged, and decreed that this cause be, and the same is hereby, remanded to the circuit court for the county of Wayne, with directions to cause said real estate to be sold by circuit court commissioner for the county of Wayne, subject to the first mortgage thereon, to the highest bidder for cash; * * * and the said personal property be sold as a unit to the highest bidder for cash; that out of the proceeds of such sales the commissioner shall first pay the costs and expenses of the sale, including his commissions, and the balance of said proceeds to be paid into the circuit court for the county of Wayne in chancery. * * * It is further ordered, adjudged, and decreed that the said real and personal property be sold free and clear of all liens and incumbrances whatever, except the first mortgage on said real estate, and that the proceeds of such sale when paid into court shall be distributed, subject to the expenses of the receivership, among the secured and unsecured creditors of the Detroit Driving Club according to their respective rights and priorities. It is further ordered, adjudged, and decreed that the necessary proceedings be taken in the circuit court for the county of Wayne to ascertain and determine the liens and incumbrances of every name and nature upon said real and personal property other than the first mortgage on said real estate, and that the rights and priorities of the several claimants be ascertained and determined according to the rules and practice of the court, and that the court shall defer a sale of said real and personal property until the rights and priorities of the several claimants have been established and determined by the court.'

After the case was remanded, it was referred to a circuit court commissioner, who made the following findings. '(1) I find that the Union Trust Company of Detroit, Michigan, as trustee for the bondholders, has a first lien upon the real estate of said Defroit Driving Club to secure bonds to the amount of $75,000, bearing interest at the rate of 6 per cent. per annum, payable semiannually on the 1st day of July and January of each year. The principal sum of said mortgage will not mature until the 1st day of July, 1904. All the interest on said mortgage which became due and payable thereon up to and including the 1st day of July, 1902, has been paid, and there is now due on said mortgage the sum of $75,000, with interest thereon at the rate of 6 per cent. per annum, payable semiannually, from the 1st day of July, 1902. (2) I find that the said Daniel J. Campau has a second lien upon said real estate for interest upon said first mortgage paid by him either personally or as receiver, and for amounts paid by him for taxes and insurance upon said real estate for the sum of $17,546. (3) I find that Daniel J. Campau has a mortgage upon said land given to secure a debt of $55,000, with interest due semiannually at the rate of 5 per cent. per annum, which was owing by said Detroit Driving Club to said Campau; all of which debt is now due. That said mortgage in a third lien upon said property, and the total amount due thereon is $65,355.48. (4) I find that Daniel J. Campau, as receiver appointed in the above-entitled cause, had expended $2,152.34 in repairs on said property under and by virtue of an order authorizing him to do so, and there is now due said receiver for said repairs the said sum, and that said receiver has a fourth lien upon said real estate for the amount of the repairs so made upon said premises. (5) I find...