Fuller v. Michigan Cent. R. Co.

• Decision Date: 15 November 1889
• Citation: 43 N.W. 1085,78 Mich. 36
• Court: Michigan Supreme Court
• Parties: FULLER ET AL. v. MICHIGAN CENT. R. CO. ET AL.

43 N.W. 1085

78 Mich. 36

FULLER ET AL. v. MICHIGAN CENT. R. CO. ET AL.

Supreme Court of Michigan

November 15, 1889

Error to circuit court, Bay county.

Edgard A. Cooley, (J. L Stoddard, of counsel,) for appellees.

LONG J.

Plaintiffs in February, 1888, brought an action of assumpsit against defendant, Charles H. Rhodes, in the circuit court of Bay county, and on the 29th day of February, 1888, a writ of garnishment was issued out of that court in the cause directed to the Michigan Central Railroad Company as garnishee. Disclosure was made by the railroad company admitting an indebtedness of $600. Afterwards a second disclosure was filed by the garnishee, also admitting the indebtedness of $600, but disclosing that the moneys were claimed by W. I. Brotherton & Co., on the ground that they had a chattel mortgage bearing date December 9 1887, upon the property sold to garnishee by the principal defendant, and upon the proceeds thereof. The cause came on to be heard before the court without a jury, and W. I. Brotherton & Co. appeared, and took charge of the defense, and contested the rights of the plaintiffs to recover from the garnishee. The circuit court, at the request of the plaintiffs, made a written finding of facts and conclusions of law, as follows:

"That on the 9th day of December, A. D. 1887, Charles H. Rhodes was, and for many years had been, a resident of Bay City, in Bay county, and engaged in the business of making, buying, and selling railroad ties, wood, posts, and other forest products. That said Rhodes procured said ties partly from his own lands, and partly by purchase, and had at all times considerable quantities thereof on hand, and in process of manufacture, at different points along the Michigan Central Railroad and its branches, from Kawkawlin, in Bay county, north to the Straits of Mackinaw; and on said 9th day of December, A. D. 1887, he had a considerable quantity of such ties on hand. That all the ties so purchased or manufactured by said Rhodes were by him sold to the said garnishee defendant in this cause, the Michigan Central Railroad Company, and those which he acquired by purchase were hauled out of the woods to points along the line of said railroad, and there inspected from time by the inspectors of said garnishee defendant; and such inspection was the basis, not only of the settlement between said Rhodes and said garnishee defendant, but also of the final settlement between said Rhodes and his vendors, but he usually paid for them on estimates made previous to such inspection; and when such payment was made the ties were marked with his mark, and were, as between himself and his vendors, treated and considered as his property, the estimates being subject to correction when the inspection should be afterwards made. That on said 9th day of December, A. D. 1887, said Rhodes was indebted to W. I. Brotherton & Co., a copartnership composed of W. Irving Brotherton, Henry N. Watrous, Orville A. Watrous, and Henry W. Jenneson, and doing business at Bay City. in the sum of six thousand and four hundred and eighty-nine dollars and ninty-four cents, ($6,489.94;) and on that day, and in order to secure the payment thereof, and of such indebtedness as he might afterwards incur to them, said Rhodes executed and delivered to said W. I. Brotherton & Co. a mortgage, a copy of which is appended hereto, and made a part hereof; and on the 22d day of the same month said mortgage was duly filed in the office of the recorder of said Bay City, it having no officer known as 'city clerk.' That, after the making of said mortgage as aforesaid, said Rhodes continued to purchase from W. I. Brotherton & Co., from time to time, supplies to use in the prosecution of the work of getting out such ties and other forest products, and also from to time made payments in the manner hereinafter shown, to apply on his indebtedness to them; so that on the 29th day of February his indebtedness to them amounted to nine thousand three hundred and five and 86-100 dollars ($9,305.86,) and it now amounts to nine thousand and three hundred and twelve and 6-100 dollars ($9,312.06.) That said Rhodes had an account at the Bay City Bank, in Bay City, and was, at all times, allowed to check against said account, and said bank from time to time made advances to him on said account, to enable him to carry on his business, and the following course of dealing was established between said Rhodes and said bank, viz.: Said bank paid at maturity all papers given by said Rhodes to said W. I. Brotherton & Co., and all papers given by him to other persons, in the prosecution of his said business, and checks drawn by him for money used in said business, and said bank relied upon the monthly sales of ties and timber, hereinafter mentioned, to make said account good and repay advances. That once in each month said garnishee defendant paid for all the ties and timber purchased of said Rhodes during the preceding month, and, whenever the amount of any monthly payment about to be made was ascertained, said Rhodes ordered the same to be paid to said bank, and it was so paid, and was by said bank placed to the credit of said Rhodes in his said account. Said Brotherton several times asked said Rhodes why he (said Rhodes) did not give the orders for said monthly payments to said W. I. Brotherton & Co., instead of giving them to said bank, and was told by said Rhodes, in reply, that the cashier of said bank wanted the money paid to the bank because the bank was taking care of the paper given by said Rhodes to said W. I. Brotherton & Co., and was to make advances to said Rhodes, and was willing to make such advances if said Rhodes would give it the said order on said garnishee defendant, and notify the cashier from time to time of the amount of ties on hand, so that the repayment of such advances would be secure, and thereupon said Brotherton consented to the giving of said orders to the bank, as aforesaid, and the same course of dealing was continued; said W. I. Brotherton knowing of such sales, and consenting thereto, on condition that the notes of said Rhodes given to them from time to time, and his indebtedness to them on account, were paid at maturity, but always intending to retain their lien on the ties and timber sold, or the proceeds thereof, to secure the payment of the indebtedness of said Rhodes to them,-all of which was distinctly understood between them and said Rhodes. But there was no understanding or agreement whatever between said garnishee defendant and said W. I. Brotherton & Co. relative to such sales, or of the application of the proceeds thereof. That whenever said bank received money from said garnishee defendant, as aforesaid, the same was by said bank first applied to pay advances made by the bank to said Rhodes, paper given by said Rhodes to the said W I. Brotherton & Co., and paper given by him to other parties for the purchase of supplies used in his said business, and the balance, if any, remained to the credit of said Rhodes, and was used by him in said business, but usually there was no such balance remaining; and I do not find that there was any such balance remaining of the money paid in during either of the months of December, January, February, or March, but I do find that, if there was any such balance remaining during either of these months, it was only in one of those months, and was only a small amount. That during the month of December, A. D. 1887, said Rhodes sold to said garnishee defendant-

Post amounting to ...... $ 6 30

Wood amounting to ........... 3 75

Ties amounting to ....... 5,972 43

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Making a total of .. $5,982 48

All of which was by said garnishee defendant, on the order of said Rhodes, on the 16th day of January, paid to said bank, and then applied in the manner above described. That during the months of January said Rhodes sold to said garnishee defendant-

Wood amounting to ..................... $ 236 60

Ties, at 18 cents each, amounting to ... 12,299 70

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Making a total of ................. $12,536 30

-All of which was, on the order of said Rhodes, on the 14th day of February, paid to said bank, and then applied in the manner aforesaid. That during the month of February said Rhodes sold to said garnishee defendant-

Posts and wood amounting to ........... $ 438 12

Ties, at 18 cents each, amounting to ... 5,501 32

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Making a total of ................. $5,939 44

-All of which, excepting six hundred dollars, ...