Ferris v. McQueen

• Decision Date: 23 December 1892
• Citation: 94 Mich. 367,54 N.W. 164
• Court: Michigan Supreme Court
• Parties: FERRIS v. McQUEEN, Sheriff.

54 N.W. 164

94 Mich. 367

FERRIS v. McQUEEN, Sheriff.

Supreme Court of Michigan

December 23, 1892

Error to circuit court, Kent county; Allen C. Adsit, Judge.

Trover by Jay F. Ferris against John McQueen, sheriff. Judgment for plaintiff. Defendant brings error. Reversed.

p>Page C. O. Smedley, (Blair, Kingsley & Kleinhans and Peter Doren, of counsel,) for appellant.

Drury &amp Wolcott, for appellee.

LONG J.

Action of trover for the value of a stock of goods which defendant, as sheriff, held under certain writs of attachment, issued against one Benjamin A. Fish. Plaintiff claimed under a lien by chattel mortgage. Cause tried by jury. Verdict and judgment for plaintiff. Defendant brings error.

The assignments of error all relate to the refusal to give certain requests to charge, and the charge as given. The court was asked to charge the jury: "Where fraud is charged, express proof is not required. It may be inferred from circumstances. And if the jury find from evidence that Fish started in the grocery business without much capital in comparison with the business he was doing or intended to do that he was constantly running behind, and unable to meet his debts as they matured; and that in the spring of 1890 he was insolvent, and while in that condition devised the scheme of extending his business by adding to his stock dry goods boots and shoes, and other articles of merchandise; and if you find from the evidence that he had no means of purchasing such additional stock, except on credit, and that at the time he devised this scheme he was insolvent, and that he knew he would probably be unable to pay for this additional stock and that, in pursuance of this plan, Fish added dry goods, boots and shoes, and other articles of merchandise to his former grocery stock, and that such "additions were very considerable in comparison with the amount of stock which he had previously carried, and that such additional stock was obtained on credit from merchants who did not know of his insolvent condition, and that such additional stock remained substantially unpaid for until after the beginning of this suit, and that the indebtedness for the same has only been paid for, if at all, by the execution sales proved in this case,-I charge you that this would be fraud in law on the part of Fish, as against the unpaid creditors from whom he made such purchases. And if you further find from the evidence that Ferris knew all these facts and circumstances, and assisted and advised Fish in carrying out this plan, at the same time having a secret understanding with him, which was unknown to the other creditors, that, in case he was pressed by his other creditors, he (Fish) would secure Ferris what he was owing to him in preference to his other creditors; and if you further find from the evidence that, in pursuance of this secret understanding, Fish did give Ferris a mortgage upon substantially all his property, and that the mortgage in this case was for a larger amount than was actually owing to him, and at a time when Ferris had good reason to believe that Fish was insolvent, and was indebted to other creditors,-you may take into consideration these things in determining whether the mortgage was given fraudulently or not, and if the jury find from the evidence in the case that these claims, as made by the defendant, actually existed as facts, then I charge you as a matter of law that such acts would amount to fraud, and the mortgage would be void as against the subsequent attaching creditors, who are represented by the defendant in this case." These requests were refused, but were fully covered, so far as applicable to the case and proper, by the general charge.

It appears that the plaintiff is a wholesale and retail dealer in teas, coffees, groceries, etc., at Grand Rapids. Fish was a retail dealer in Cedar Springs, and commenced buying goods of plaintiff in February, 1889, getting a line of credit. In April, 1890, he was indebted to the plaintiff in the sum of nearly $4,000. Up to that time he had not been carrying dry goods, and was slow in making his payments. He came to the plaintiff, and told him that the people he got his trade from, the patrons of industry, wanted him to increase his line of goods by adding dry goods, and he thought by doing so his trade would be increased. He obtained further credit from the plaintiff, when in June, 1891, his indebtedness to him amounted to $6,644. Mr. Ferris called upon him for security and took a chattel mortgage for $7,000 on June 3, 1891, which was filed on the same date. The writs of attachment were levied on the store two days later. It was shown upon the trial that the mortgage was for $340 more than the actual indebtedness to plaintiff. The plaintiff claimed, however, that this was done by mistake in overlooking an indorsement of that amount on one of the notes which plaintiff held. Some testimony was given tending to show this fact. The fraud claimed in the case was in giving this chattel mortgage for more than the amount actually due, and also in that the plaintiff extended credit from time to time to Fish when he knew Fish was in failing circumstances; that the plaintiff was in the position of a confidential creditor with him, knowing his indebtedness, and expecting to be protected, though he knew Fish could not meet his bills, and thus enabled him to get credit from others who had no knowledge of his indebtedness to the plaintiff. It is also claimed that there was an agreement between the plaintiff and Fish during...