Eureka Iron & Steel Works v. Bresnahan

• Decision Date: 23 June 1887
• Parties: EUREKA IRON & STEEL WORKS v. BRESNAHAN and another.
• Court: Michigan Supreme Court

33 N.W. 834

66 Mich. 489

EUREKA IRON & STEEL WORKS v. BRESNAHAN and another.

Supreme Court of Michigan

June 23, 1887

Error to circuit court, Muskegon county.

Keating & Dickerman, (John H. Bissell, of counsel,) for plaintiff and appellant.

Smith Nims, Hoyt & Erwin, for defendants.

CHAMPLIN J.

Plaintiff brought trover for certain chattels. The declaration is in the usual form. The defendant pleaded the general issue, and gave notice. Bresnahan, as sheriff of the county of Muskegon seized and levied upon the goods and chattels named in the plaintiff's declaration, by virtue of five certain writs of attachment issued out of the circuit court for the county of Muskegon against the goods and chattels of the Woodward Manufacturing Company, and in favor of certain plaintiffs therein, and particularly describing each of said attachment writs; that judgments were recovered in each of said suits, and subsequently executions were issued upon said judgments, and levied upon said goods, and the same were advertised and sold to Horace L. Delano, he being the highest bidder at said sale, by virtue of which he became the owner of said property. A trial was had, which resulted in a verdict for the defendants. Upon the trial the plaintiff introduced in evidence a chattel mortgage, executed by the Woodward Manufacturing Company to the Muskegon Novelty Works and an assignment thereof by the last-named corporation to the plaintiff, which constituted the basis of the plaintiff's claim to the property in question. Plaintiff showed a demand of the property before suit brought, and the sale thereof by Bresnahan to his co-defendant. The defendant put in evidence the files and records of the several attachment suits set up in their notice. The fact appeared that the property was sold upon one of the judgments, and failed to fully satisfy it, and plaintiff's counsel claim that the files and records in the other attachment suits thereupon became immaterial, and the admission thereof in evidence was error. Not so. They were all levied upon the goods in question, and it was proper to show each suit, not only for the purpose of showing the sheriff's right of possession of the goods, but also for the purpose of showing that the Woodward Manufacturing Company had creditors at the time the mortgage in question was executed.

The defendants also offered evidence tending to show that the chattel mortgage under which the plaintiff claimed was fraudulent and void as to the creditors of the Woodward Manufacturing Company, as having been made to hinder, delay, and defraud such creditors in the collection of their debts. The plaintiff claims that such testimony was not admissible under the pleadings. No fraud is pleaded, and no attack is made in the pleadings upon the legal validity of the chattel mortgage. To this the defendants reply that the declaration does not disclose any source of title, nor set up any claim to the property in question under the chattel mortgage; that in an action of trover the plaintiff is not bound to disclose his source of title, nor is the defendant bound to anticipate under what source of title the plaintiff may claim; and that it is sufficient to meet the claim made upon the trial with counter-proof to show that such claim has no legal validity. Owing to the indefinite character of pleadings in trover, this must necessarily be so. The testimony was purely rebutting to that introduced on the part of the plaintiff to establish its ownership to the property. Had plaintiff added a count in trespass on the case setting out his source of title, the defendants would have been called upon, if they assailed it on the ground of fraud, to have put that question in issue by pleading it.

We are cited by plaintiff's counsel to the general rules of practice of 4 Wm. IV., (1833,) as authority for his position that the general issue in trover is a denial of the conversion only, and not of plaintiff's title to the goods. But these rules have not been adopted into our practice, and the general issue in this state, as formerly in England, puts the whole declaration in issue. To entitle the plaintiff to recover, two points are essential to be proved: First, property in himself, and a right of possession at the time of conversion; and, second, a conversion of the goods by the defendant to his own use. And under the general issue the defendant may prove by any competent evidence that the title to the goods was in himself, either absolutely as general owner, or specially as bailee, or by way of lien.

It was held in Fry v. Soper, 39 Mich. 727, and in Frankel v. Coots, 41 Mich. 75, 1 N.W. 940, that, in actions of trover for goods taken in attachment against a third person, the officer must give notice of his attachment, in order to admit evidence of justification thereunder. The reason for this is that although it is permitted to show paramount title in a third person or stranger to defend the action under the general issue, or to mitigate damages, yet it is not enough to set up title in a third person, but it must be followed by proof showing some right or claim to the goods derived by the defendant from the true owner. Earl v. Camp, 16 Wend. 562-571; Duncan v. Spear, 11 Wend. 54, and note to page 57.

The earlier cases in New York, following the practice in England before the adoption of the rules above referred to, permitted evidence, under the general issue in trover, to show title in a third person, in defense of the action. Schermerhorn v. Van Volkenburgh, 11 Johns. 529; Kennedy v. Strong, 14 Johns. 128; Rotan v. Fletcher, 15 Johns. 207. The case last cited was where a levy had been made, and defendant relied upon a fraudulent sale of the property. The correct rule is laid down by Barons PARKE and ALDERSON in Samuel v. Duke, 6 Dowl. 544, that in trover against a sheriff who has levied under fi. fa., if the act of conversion be the seizure of goods, a justification under the writ must be specially pleaded; but, if the conversion be the sale of the goods, the justification may be given in evidence, under a plea denying the plaintiff's right of possession. It is held that this plea, denying the plaintiff's right of possession, is equivalent to the general issue under the former practice; and under it the defendant may show that the goods belonged to a third person. Leake v. Loveday, 4 Man. & G. 972. The rule recognizes the distinction that before the sale the sheriff has a mere lien upon the goods, or special property in them, and therefore notice is requisite; but after sale the title of the former owner is divested, and passes to the purchaser, and in an action subsequently brought no notice is necessary.

It follows from what has been said that the errors assigned, based upon the insufficiency of the notice relative to testimony tending to show that the chattel mortgage under which plaintiff claims was void for fraud, cannot be sustained.

Plaintiff offered to show that the judgment obtained by the plaintiffs in the attachment suit under which the sale was made was obtained by fraud and collusion, and that it was taken for too large an amount. The files and records introduced showed that the Woodward Manufacturing Company had appeared by its attorney and pleaded to the action, and afterwards had withdrawn the plea, and judgment was taken by default. And the plaintiff proposed to show that this was done by collusion. The circuit judge excluded the testimony. It is a well-settled principle of law that the judgment of a court which had jurisdiction of the person and subject-matter is binding until reversed, and cannot be attacked collaterally. No offer was made to show that the court had no jurisdiction over the person of defendant or the subject-matter; on the contrary, the record showed due service, and the court had jurisdiction of the subject-matter. The record, therefore, imported absolute verity, and could not be contradicted. But this rule applies only to parties and their privies. It does not apply to such third persons, or strangers to the record, as would be prejudiced in regard to some pre-existing right, if the judgment were given full credit and effect.

The plaintiff claims that it occupies that position. No doubt the claim of plaintiff in this respect is correct. It is necessary, therefore, to consider how the question, to which the assignments of error are directed, came up, and the ruling of the court thereon, as shown by the record. It arose in this wise, and I quote from the record: "The plaintiff further recalled Charles E. Woodard, a witness who had been previously sworn in the case, and witness was asked: 'Question. Do you know how much the Woodard Manufacturing Company owed Ames & Frost or the Temple Manufacturing Company on the second of June, 1885? Counsel for Defendants. What is the object of it? Counsel for Plaintiff. The object is to show that they did not owe any such amount as the judgment was taken for. The Court. Has not that been passed upon? Counsel for Plaintiff. No, sir. The Court. And was not a judgment entered of the amount due? Have you authority that you can come in in that way and attack a judgment? Counsel for Plaintiff. It is proper for us to make a statement of what we propose to prove. The Court. I will sustain the objection.' To which ruling the plaintiff, by its counsel, did then and there except. 'Counsel for Plaintiff. Plaintiff proposes to show by testimony that at the date of the entry of judgment in favor of Ames & Frost, by direction of the president of the Woodard Manufacturing Company, all of the debt claimed under the plaintiff's declaration in that case had been paid before that time by the Woodard Manufacturing Company, excepting two hundred and nine dollars on book-account, and five...