Hinchman v. Town

• Decision Date: 21 October 1862
• Citation: 10 Mich. 508
• Court: Michigan Supreme Court
• Parties: Theodore H. Hinchman and another v. Reuben Town and others

10 Mich. 508

Theodore H. Hinchman and another v. Reuben Town and others

Supreme Court of Michigan

October 21, 1862

Heard October 15, 1862; October 16, 1862,

Appeal in Chancery from Wayne Circuit. The case is fully stated in the opinions.

Decree reversed.

Newberry & Pond, for complainants:

There can be no doubt of complainants' right to the relief prayed if the evidence shows the demand of defendants not to have been due when their attachments were levied: Drake on Attach., 273-275; Chandler v. Hale, 3 Mich. 531; 3 Humph. 431.

The evidence was conclusive that the sale by defendants was upon a four months' credit. The bills of sale have all the force of written contracts, and the burden to overturn them is upon defendants: 24 Vt. 55; 15 Ala. 317.

Complainants' judgment is not invalidated by their including in it a sum owing but not actually due: 7 Cush. 587; 15 Conn. 504; 9 Fost. 237.

Jerome & Swift and A. B. Maynard, for defendants:

If a party comes into a court of equity, he must come with clean hands. The court will not aid a party who is guilty of the same fraud which he charges upon the other party. The facts all show collusion between complainants and Young, and it is insisted that their conduct avoided their lien as to subsequent attaching creditors: 12 Pick. 383; 7 Greenl. 348; 3 Met. 49.

By the attachment of Town, Smith and Shelden, they acquired a lien on Young's property; the complainants attached the property subject to this lien, and they are so far in privity with Young, that the judgment is as binding upon them as upon him, unless it be shown that the judgment was fraudulently or collusively rendered.

If Young had not appeared, of course the judgment would not, by the provisions of our statute, have been conclusive upon Young, and therefore not upon the complainants, and herein this case differs from the case of Hale v. Chandler. That complainants can only impeach the judgment of Town, Smith and Shelden against Young for fraud, is shown by the following authorities: 7 Pick. 550; 8 Pick. 168; 5 Greenl. 188; 18 Penn. 482; 16 Penn. 18; 5 Johns. Ch., 555; 6 Ibid. 236; 4 Ibid. 329; 24 Mo. 44; 8 W. & S., 387; 13 S. & R 199; 5 W. & S., 473; 7 Cush. 587; 2 Comst. 269; 26 Me 411.

And in Hale v. Chandler, the court seems to base its decision upon the fraudulent intent of the plaintiffs, and their knowingly endeavoring, by their judgment, to take money which did not belong to them.

But supposing that the court entertains a different view of the law from that we have contended for, and that the question is not whether there was fraud, but whether in point of fact the debt of Young to Town, Smith and Shelden was due when their suit was commenced, must it not be a clear case to induce the court to interfere with their judgment? We have not been able to find a case where the courts have interfered, when there was any doubt as to the question whether the debt was due or not.

And in one case we find it expressly laid down, that it must be clearly shown that the debt was not due: 4 Zabr. 150.

And the admissions of Young are competent testimony on this point: 5 Pick. 410; 12 Pick. 199.

Campbell J. Manning, J. concurred. Martin, Ch. J. Christiancy, J. did not sit in the case.

OPINION

Campbell J.:

Complainants and the defendants Town, Shelden and Smith, upon the 15th day of August, 1859, sued out attachments against one Edwin Young, in the Circuit Court for the county of Washtenaw. The defendants' writ was served first. Judgment was subsequently obtained, upon the admission of Young, in each case.

Complainants filed their bill to obtain priority over defendants, on the ground that, when the latter sued out their attachment, this claim was not due; it having, as was alleged, arisen out of sales of goods on a four months' credit, which had not expired. Defendants answered, claiming upon facts set forth that their demand was due, and that, on the other hand, complainants had attached prematurely on a demand all of which was not then due.

Upon comparison of the testimony we are entirely satisfied that the goods sold by defendants were sold on four months' credit, which had not elapsed at the time of the attachment. There is no real conflict in the testimony on this point, although it is quite probable defendants may have misapprehended their legal position. It appears that Young applied to defendants to purchase goods, and purchased a bill consisting of part what where termed cash goods, and part time goods, which were billed separately. That time goods were usually sold at four months' credit, and in this case were marked on the separate bill and charged on the books at four months, while Young paid for the cash goods at the time. Other items were purchased by order subsequently, which were charged separately in the same manner, and of which similar bills were forwarded. Mr. Shelden, who sold the goods, testified that when time goods were sold for cash, five per cent was deducted, which was not deducted in this case. The facts relied on to show there was no credit are stated by Mr. Shelden as follows: "Young said he wanted to buy a bill of goods of us, and said he wanted to pay for them right along, and had nothing to do with his money but to pay for his goods in that way. Nothing was said about his buying or having the goods at four months, and he did not say he wanted them on any such time, except this: He asked me if we were going to charge him interest. I told him no, if he paid within four months." He then explained the ordinary differences between time and cash goods, where no special contract was made, and that the clerk who made the bills was not informed of the arrangement. That clerk was not sworn in the case. James S. Johnson, who was sent by Shelden to obtain admissions from Young, stated to the latter that Shelden said Young was to commence paying for the goods right away, and continue to pay until the whole bill was fully paid, and that, if the bill was paid within four months, Young was to have the benefit of interest off. Young also states that if he paid within four months he was to have interest off.

Taking any of these statements, they show conclusively that the sale was a credit sale. And if a credit sale at all, it was a sale at four months. We do not regard the witnesses as in any way contradicting each other on this point. Mr. Shelden was mistaken in regarding the facts, as he details them, as making a cash sale. It is very evident Young was not to be regarded as in default for not paying within four months.

When defendants issued their attachment there was due only eleven dollars and twenty-five cents; and they had no right to levy an attachment for any greater sum: Hale v. Chandler, 3 Mich. 531. That sum was not within the jurisdiction of the Circuit Court. (Same case.)

It is claimed, however, that inasmuch as Young permitted judgment to go against him for the full amount, no proceeding can now be had by other creditors to go behind that judgment, to inquire whether it was founded on a claim not due at the date of the attachment. This was fully considered in the case of Hale v. Chandler, and we shall not therefore discuss it at length. But the argument rests upon grounds entirely fallacious. Such a judgment is binding, perhaps, as between the parties. But it was rendered after complainants had levied their attachment, and thus obtained a legal statutory advantage; and...