Nash v. Burchard
| Decision Date | 28 July 1891 |
| Citation | 87 Mich. 85,49 N.W. 492 |
| Court | Michigan Supreme Court |
| Parties | NASH v. BURCHARD et al. |
Appeal from circuit court, Kent county, in chancery; WILLIAM E GROVE, Judge.
Bill in equity by Homer W. Nash against Mary E. Burchard and Martin L. Sweet, to have a receiver appointed, and to secure plaintiff upon an indorsement. Judgment for defendants on demurrer. Plaintiff appeals. Affirmed.
Eggleston & McBride, for appellant.
Uhl & Crane, for appellees.
This case comes before us upon demurrer to the complainant's bill of complaint in chancery. The complainant is Homer W Nash, of the city of Detroit, and he files this bill of complaint against the defendants, the principal statements contained therein being as follows: First. He shows that prior to the year 1882, and up to June 23, 1882, there had existed a firm known and called C. Burchard & Co., which was engaged in the business of making and vending men's clothing in the city of Grand Rapids, which firm was composed of Mary E. Burchard and Frederick Lyon; that the firm of Burchard & Co. sold out the business and stock in trade to the firm of Lyon & Gray, composed of said Frederick Lyon and Lewis M. Gray; that the assets of the firm of Burchard & Co. at the time of the sale were as follows Stock of merchandise then on hand, claimed to have been inventoried at the sum of $7,317.46, and of good and collectible accounts to the amount of $2,406.71, and cash then on hand, $114.04,-which stock, accounts, and cash on hand were sold by the firm of C. Burchard & Co. to the firm of Lyon & Gray for the sum of $7,317.46, and a chattel mortgage upon the stock in trade was given by the firm of Lyon & Gray to Mary E. Burchard for that sum. Second. That there was afterwards paid upon the indebtedness to Mary E. Burchard the sum of $1,317.46 leaving a balance due and secured by the chattel mortgage of $6,000; that afterwards, in the month of March, 1884, the firm of Lyon & Gray became involved and unable to pay their debts, and made an assignment to Lyman D. Follett for the benefit of their creditors; the assignee took possession of the stock, and caused it to be inventoried, with the fixtures in the store, which inventory made about the sum of $5,800; that within a few days thereafter Mary E. Burchard caused the stock of goods to be seized under and by virtue of her chattel mortgage, and caused the same to be sold thereunder at a public auction in the city of Grand Rapids, which stock was sold for the sum of $2,600 to the complainant. Homer W. Nash. Third. That the said Lyon & Gray, in order to secure their indebtedness to their creditors, had given their notes and procured the indorsement of the same by the said Mary E. Burchard to the amount of $1,500, a part of which had been paid by the said Lyon & Gray, which left said indebtedness with her indorsement to the amount of about $900. Fourth. That, at the time of said sale by the firm of C. Burchard & Co. to Lyon & Gray, there were outstanding liabilities of C. Burchard & Co. for which Mary E. Burchard had given her individual notes, indorsed by Homer W.
Nash which were at that time unpaid. Fifth. That from the time of said sale by C. Burchard & Co. to Lyon & Gray, on or about the 23d of June, 1882, complainant had been acting as the friend, adviser, and assistant of the said Mary E. Burchard in her financial affairs, and at the time of the seizure of the said goods by the said Mary E. Burchard, under and by virtue of the chattel mortgage, it was arranged and agreed, by and between Mary E. Burchard and Homer W Nash, that he should attend the sale, and, unless the property should be sold to other bidders for something near its value, that he, Nash, should bid in the same in his own name, but for the said Mary E. Burchard, in satisfaction, so far as it should go, of her said mortgage; that under the said arrangement Nash attended the sale, and bid in the property in his own name, but for the use and benefit of the said Mary E. Burchard. Sixth. That the said Mary E. Burchard, being anxious to obtain employment for her son Frederick, at the same time agreed with Nash that he should take charge of the said stock in trade and business, and continue the same for her benefit, and permit her said son to have charge of the business of manufacturing and selling, and the collecting of moneys, and to account to Nash therefor; that Nash was to make purchases of goods as they might be needed, for the purpose of keeping up the stock of goods, and making the same salable, until such time as the money due to the said Mary E. Burchard should be made out of the same; that Nash entered upon said business, took possession of the store and stock in trade and business, and put the said Frederick into the store to manage and care for the manufacture and sale of the goods, and to attend to collections, and continued the same in that way for about two months, when it was found that said Frederick was inefficient and inattentive, and that the business was being neglected and injured; that thereupon Nash, with the consent of Mary E. Burchard, employed George R. Nash to enter into said store, and take charge of the sales, and the money accruing from the sales and collections of the said business, and that thereupon said Frederick abandoned the same; that the business was continued until the latter part of December, 1884, when Nash caused said property to be advertised for sale at public auction, with a view of closing up the said business, it having proved unsatisfactory and unprofitable. Seventh. That, after he had taken possession of the stock of goods under and by virtue of said sale, one A. Origet, who was a creditor of the firm of Lyon & Gray to the amount of about $3,300, thereupon attached the stock in the hands of Nash, and, to avoid suit, seizure of goods, and stoppage of business, it was agreed between Nash and Mary E. Burchard that a compromise should be made, if possible, with the said Origet, and that Nash succeeded in settling with him for the sum of about $1,860, for which Frederick Lyon gave his notes, payable to the order of Nash, and which he indorsed, and that it was at the same time agreed between him and the said Mary E. Burchard that the said notes should be paid out of the proceeds of the said business. Eighth. That, after he had purchased the stock of goods at the sale under the chattel mortgage, he gave to the said Mary E. Burchard his bond, conditioned for the payment of the purchase price of the said goods, to-wit, the sum of $2,600, in four years from the date thereof, which said bond was given in fact as security to the said Mary E. Burchard for the faithful discharge of his duties as agent of the said Mary E. Burchard in the carrying on and transacting of said business, and with the agreement that the moneys realized from the said business should be applied to the satisfaction of the said bond; that at the time of the giving of the said bond Nash was not in any way indebted to Mary E. Burchard, and the bond was not given for any indebtedness of his to her. Ninth. That, immediately after the said George R. Nash entered upon the control of the business, he caused an inventory to be taken of the goods then on hand, and found, upon examination, that they consisted mainly of old goods, remnants, and stock that had been on hand in the store many years before the purchase by Lyon & Gray, and were unsalable, and comparatively worthless; that the stock then on hand, inventoried at the old cost price, amounted to the sum of $5,821.08, while it was, in truth and in fact, not worth in the market to exceed one-third of that sum. Tenth. That during the time that Homer W. Nash carried on the said business, which was for a period of about 11 months, the goods purchased by him, and put into the business, and the cost of manufacturing the same, amounted to the sum of $7,420.23; that during that time the sales made in the regular course of said business amounted to the sum of $7,962.25, and the money realized upon the sale of the balance of said goods at auction amounted to the sum of $1,668.65. Eleventh. That, estimating the said goods at the price at which they were inventoried, the loss upon the business at the time of closing the same out was $3,610.41, which left the sum of $2,210.67 to be accounted for by Nash, and which he accounts for as follows: Expenses of closing out the stock, consisting of the salary of George R. Nash and store rents and incidental expenses, amounted to the sum of $1,598.20; the amount paid by Nash on the claim of Origet amounted to the sum of $612.47. Twelfth. That since the closing out of the business he has paid and secured to be paid the amount of the balance of the claim of said Origet, amounting to $1,277.53, and has given his note for $500, indorsed by Mary E. Burchard and Martin L. Sweet, and paid to Mary E. Burchard $29.84, making a total of $1,807.37, which Nash has neither paid nor become obligated to pay. Thirteenth. That, at the time of the sale of C. Burchard & Co. to Lyon & Gray, the firm of C. Burchard & Co. was indebted to various creditors for large sums of money, which were by Nash, as agent of Mary E. Burchard, reduced by various means to the sum of $2,200, for which said Mary E. Burchard gave her notes, which were indorsed by Nash, and are now unpaid, and held by the Fourth National Bank of the city of Grand Rapids; that he has advanced out of his own means, since the closing out of said business for Mary E. Burchard, the sum of $150, which was paid to Peter Doran for services and expenses incurred by him in attempting to collect of the estate of the father of the said Lewis M. Gray a part of the indebtedness of the firm of Lyon & Gray. Fourteenth. That he has paid in money and become...
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