Lyle v. Palmer

Decision Date29 November 1879
Citation42 Mich. 314,3 N.W. 921
CourtMichigan Supreme Court
PartiesDANIEL LYLE and others v. WILLIAM K. PALMER, Trustee, and others.

The owners of a woolen mill mortgaged such mill and the machinery therein, describing the latter as personalty. On sale on foreclosure the machinery was first offered as personal property, and there being no bids therefor it was sold with and as part of the realty. Held, that such machinery was realty, and its character was not changed by describing it as personal property, and it was not necessary that such mortgage be filed as a chattel mortgage; that if it is considered as personalty a trustee in bankruptcy stands in no better position for attacking such mortgage, especially from the time the mortgagee was in possession, than the mortgagor himself. Sale of the machinery in this case held valid, or if not, that defendant, occupying the position of mortgagee in possession, may have another sale, and is not liable to trustee in bankruptcy of mortgagor for conversion.

Error to Cass.

Spafford Tryon, for plaintiffs in error.

Joseph B. Clarke, for defendants in error.

COOLEY J.

Palmer as trustee in bankruptcy of the estate and effects of George and Jacob J. Van Riper, sued the plaintiffs in error in trover, to recover the value of certain machinery, consisting of a number of power and hand looms, spinning jacks, card machines, etc., constituting the ordinary machinery of a woolen factory. It appears that in March, 1868, the Van Ripers were the owners of a woolen factory and the land on which the same was situated, and of this machinery; and that the machinery was put up for use in the factory, and was propelled by a water-wheel, with shaft and belting. While it was so put up for use, and in the month aforesaid, the Van Ripers mortgaged the real estate to one Kingsbury, to secure the payment of $5,000, and in the mortgage described the machinery to be personal estate. The mortgage fell due in March, 1870, and in April of that year Kingsbury filed his bill in chancery to foreclose it. He obtained a decree for a sale of the property, and on April 28, 1871, a sale was made, and plaintiffs in error became the purchasers. It seems that the machinery was first offered for sale separately, but, no one bidding, it was offered with the realty, and the whole was struck off to plaintiff in error except two spinning jennies. The sale appears to have been for less than the amount of the decree.

The Van Ripers were adjudged bankrupts June 7, 1870, and Palmer was appointed trustee of their estate and effects the following month. In June, 1872, he demanded of plaintiffs in error the machinery in the woolen mill, and on their refusal to deliver it he brought this suit. Palmer claims that all this machinery was personal property, and therefore, conceding the Kingsbury mortgage to be valid, it must as to this machinery be regarded as a...

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