Northrup v. McGill

• Decision Date: 06 May 1873
• Court: Michigan Supreme Court
• Parties: Myron Northrup v. Attilus D. McGill

27 Mich. 234

Myron Northrup v. Attilus D. McGill

Supreme Court of Michigan

May 6, 1873

Submitted on Briefs April 30, 1873.

Error to Sanilac Circuit.

Judgment reversed, with costs, and a new trial ordered.

Watson Beach, O'Brien J. Atkinson and Trowbridge & Atkinson for plaintiff in error.

A. E Chadwick, for defendant in error.

OPINION

Graves J.

On the 17th of June, 1869, the parties entered into the following written agreement:

"This agreement, made this 17th day of June, A. D. 1869, between Attilus D. McGill, of the first part, and Myron Northrup, of the second part, both of Lexington, Sanilac county, Michigan, witnesseth: that for and in consideration of the sum of four hundred dollars, to him to be paid, the said Northrup hereby sells to McGill his share and interest in the drug store and business heretofore carried on by them, together with the stock of medicines, drugs, wines, liquors, toilet articles, perfumery, and the entire lot of goods now in their store in Lexington, and also all accounts and demands due the firm of A. D. McGill & Co., all to become the property of said A. D. McGill, provided said McGill shall pay to said Northrup four hundred dollars, as follows: One hundred dollars down; one hundred dollars three months from date; one hundred dollars nine months from date, and one hundred dollars fifteen months from date, with interest at ten per cent., according to the tenor of three promissory notes, bearing even date herewith, and also pay all debts contracted by the late firm of A. D. McGill & Co., and until the said sums are paid, as aforesaid, said Northrup shall have a lien on said goods, drugs and medicines, wines and liquors, in the nature of a chattel mortgage, and in default of said payments may take possession of the same, and take such further steps as may be necessary to secure the payment of such sums of money."

About the first of September, 1870, the store was destroyed by fire, and only a small part of the stock was saved, and this was taken by Northrup and appropriated. McGill sued him in trover and recovered one hundred and fifty-seven dollars. Exceptions were taken on the trial, and a part of them are now insisted on as sufficient to overturn the judgment.

The most material question in its bearing upon the judgment, relates to the construction of the written agreement. The circuit judge gave the case to the jury on the hypothesis that when Northrup sold to McGill they were equal partners in the concern, and that Northrup bargained only an undivided half of the stock, and acquired or reserved a lien merely on that interest.

There is no express evidence that the parties had been partners at all, or of the quantity of the interest which Northrup held or sold. The contract undoubtedly suggests the idea that the parties had been partners, and the trial seems to have proceeded on an assumption that they had carried on business in that way up to the time of the agreement. The circumstances may, therefore, be thought to close that question.

Supposing that they were partners, the law would, doubtless, in the absence of explanations or of facts leading to another inference, fully authorize the presumption that they were equal partners. It was proved, and not disputed, that Northrup had some interest when he made the agreement, and whatever it was, in kind or quantity, the agreement made it security, so far as it went, in the "goods, drugs, medicines, wines and liquors," for the payment of the sale price. Indeed it is not denied that his security extended to an undivided half. But I think the contract was intended to go further and to give him security on the whole interest in the "goods, drugs, medicines, wines and liquors" on hand at the time.

The parties had been carrying on a drug store and had a stock on hand. They held demands and accounts more or less, against their customers. They were indebted to some extent themselves. Northrup was selling to McGill not only his interest in the drugs and other things of that sort, but also in the demands due from customers. He would still be liable upon the debts of the concern. He was to receive but one hundred dollars in hand, and the only security contemplated beyond the personal responsibility of McGill, for the payment of the old debts and the purchase price, consisted of goods, drugs, medicines, wines and liquors then in the store.

The parties contemplated that the business would go on and that the stock to be covered as security would be diminished daily. It was competent for the parties to involve the whole interest as security, and it was certainly, under the circumstances, not only natural and reasonable, but consistent with common prudence to do so. It would have been strange if Northrup had not desired, or if McGill had declined, to arrange the matter upon a basis to give the former something more substantial and ample by way of security, for the payment of the old debts and the balance of the purchase price for the demands and accounts and other property, than a bare undivided half of some of the tangible property.

The circumstances then would strongly incline us to expect and look for something more, and when the agreement is appealed to, we think it manifest that the parties agreed upon something more. The lien or claim by way of security is not there confined to a partial interest,...