Reeg v. Burnham
| Decision Date | 08 October 1884 |
| Citation | 55 Mich. 39,20 N.W. 708 |
| Court | Michigan Supreme Court |
| Parties | REEG v. BURNHAM and others. |
Appeal from superior court of Detroit.
CAMPBELL J., dissenting.
Griffin Dickinson, Thurber & Hosmer, for defendants.
On the ninth of October, 1880, the superior court of Detroit made a decree in a suit for divorce in favor of complainant and against the defendant Leonard Reeg, and for alimony. On the thirtieth day of August, 1881, $30 was due and unpaid on the decree for alimony, and execution was issued thereon and returned by the sheriff unsatisfied for the want of property from which to make it. On the fifth day of January [1882] there was due and unpaid upon said decree, by the terms thereof, $765.64, and on the next day complainant caused execution to be issued therefor, which was returned unsatisfied. On the eleventh day of January, 1883, the judge of the superior court made an additional decree in said cause in favor of the complainant, and against the defendant Reeg for the sum of $4,000, to be paid forthwith by the said defendant, and that complainant might have execution therefor. On the twelfth day of March, 1883, complainant caused execution to be issued against the defendant Reeg for the amounts then due upon said decrees, and placed it in the hands of the sheriff, and that said writ, for the want of property, was returned unsatisfied on the fourteenth day of May thereafter. The bill in this case was filed on the twelfth of March, 1883, by the complainant as a judgment creditor, and for the purpose of reaching personal property of defendant Reeg, to satisfy the above-mentioned decrees, in the hands or under the control of the other defendants, but which is alleged to be equitably the property of the defendant Reeg, the legal title thereto having been fraudulently transferred by him to his co-defendants for the purpose of defrauding the complainant out of the moneys due upon said decrees.
In addition to the facts above stated, the bill avers that at the time of making the first above-mentioned decree, and for several years previous thereto, defendant Reeg had been engaged in mercantile business in Detroit, and continued to be thereafter until about January 1, 1883; that at the time of filing the bill he had a large amount of claims outstanding due to him, for which he held paper and other securities, and owned a large amount of goods and wares and other personal property, which belonged to him and in which he was interested, and which he might and ought to apply to the payment of her decrees; that he owned and controlled, in a store occupied by him in Detroit, a large stock of dry goods, notions, and ladies' goods, and other merchandise, more than sufficient to satisfy her decrees; and that for 10 months prior to filing her bill the defendants, other than Reeg, have been in possession of them, and pretend to be the owners of them. The bill further avers that Reeg is the equitable owner of said property, and has been for several years, and that if he has made any transfer of the same it has only been colorable, and made with a view to protect them against the decrees of complainant, while Mr. Reeg in fact enjoys the avails thereof, and that the other defendants had notice of these facts; that the other defendants, or some of them, have under their control other property, debts, things in action, or effects in possession, belonging to or held in trust for the said defendant Reeg, beyond the reach of execution, and which she asks to have applied to the payment of the latter's indebtedness, and which ought to be so applied. The complainant also shows and avers, in a supplemental bill, the issuing of execution and its return not satisfied, upon the last decree as above stated. The relief asked is that the property of Reeg, aforesaid, may be applied to the payment of her decrees; that an account be taken under the statute of the property received by the other defendants from defendant Reeg; that the defendants be enjoined from disposing of any of such property; and that a receiver be appointed, according to the practice of the court and for the usual purpose in such cases, and further prays for general relief.
The bill was taken as confessed by the defendant Reeg, he failing to appear or answer. The other defendants made their joint and several answer thereto, wherein they say they have no knowledge or information in regard to the decrees, amounts due thereon, or the efforts to collect them stated in the bill. They admit that defendant Reeg was engaged in the mercantile business before and after the time the bill in this case was filed, and up to the last day of August, 1881, but deny that thereafter he was engaged in business on his own account, or otherwise than as an employe of another; and deny that defendant Reeg had any property, things in action, or equitable interests, except what was exempt from execution, after the last-mentioned date, as charged in the bill. They admit that he kept store in Detroit, and that he had a stock of dry goods, but deny that the stock was large or valuable, or that he owned or had any interest therein after September 1, 1881.
The defendants further admit that Corwin, or those claiming under him, was, within two months immediately preceding the filing of the bill, in possession of a certain stock of goods in the store in Detroit, mentioned in the bill, but aver that the stock did not belong to defendant Reeg, and that he had no interest therein, and that Corwin, or those claiming under him, were the owners thereof. They further deny that Reeg has or had any goods in Detroit, except a few store fixtures, since about the thirteenth of September, 1881, or that said defendants, or either of them, have any property in their possession belonging to said Reeg, or in which he has any interest, and hold no property in trust for him.
Defendants further aver that defendants Burnham, Munger, and Stoepel were copartners under the firm name of J.K. Burnham & Co., and engaged in the wholesale dry goods business in Detroit, and about the thirteenth of September, 1881, defendant Reeg, having less than $1,200 worth of goods, which were mortgaged, and being indebted for rent and unable to continue in business longer, went to J.K. Burnham & Co. and offered to transfer to them, or any person they might designate, his stock of goods, provided the business could be continued, and he, defendant Reeg, be given employment in the business; and further say that J.K. Burnham & Co. yielded to his solicitation therefor, and Reeg executed a bill of sale to J.K. Burnham & Co.'s clerk, at Burnham's suggestion, one Edward H. Dunning, who continued the business in the store where defendant Reeg had done business, and continued him in the store and in charge of the business,--J.K. Burnham & Co. really being the owners, and who subsequently paid up the back rent due, and the mortgage on the goods, and furnished to said Dunning such goods as defendant Reeg from time to time selected, the latter having the charge of and operating the business, and drawing therefor enough to pay his personal expenses, and relying on the company for his compensation, and such as they saw fit to give him; that in this manner Reeg continued the business until September 16, 1882, under the name of E.H. Dunning & Co.; that about that date said Dunning, in the name of E.H. Dunning & Co., at the request of J.K. Burnham & Co., executed a bill of sale of the stock, fixtures, and furniture to the defendant Corwin, in consideration of his assuming the liabilities which had been contracted in the business, and thereafter the business was conducted in a similar manner by defendant Reeg, under the name of Corwin & Co., until the third or fourth day of January, 1883.
Defendants, answering further, aver that the business said Reeg did was not profitable; that the assets inventoried $6,937.26, and that the indebtedness to J.K. Burnham was $6,353.07, and that the goods inventoried were, in fact, worth not more than 60 per cent. of the inventoried price, by reason of the same being broken, and thereupon J.K. Burnham & Co. removed Reeg from further connection with the business; that the stock was insufficient to pay the indebtedness; that a short time after Reeg claimed to own some fixtures and furniture in the store, which he had not sold, and represented that he was in need of money to go west with, and the defendants not recognizing his pretended claim, but desiring to help him, and in consideration of a settlement of all matters between them, gave Reeg $290; that J.K. Burnham lost by said Reeg from $1,000 to $2,000; that said Reeg has not by reason of the premises any claim, legal or equitable, against these defendants, or any interest whatever in said stock of goods.
Defendants, answering further, aver that complainant, prior to filing her bill of complaint, took garnishee proceedings against the defendants upon the first decree; that disclosure was made, and issue found therein, and that the same is still pending against said J.K. Burnham & Co. and said Corwin. Defendants also claim the benefit of a demurrer in their answer.
The case was heard before Judge CHIPMAN, in the superior court, on pleadings and proofs. The complainant's bills were both dismissed, and she now asks a review in this court.
From the proofs in this case it appears that the defendant Reeg resided in Detroit, and carried on the business of a dry goods merchant for a period of about 28 years immediately before the defendant obtained her decrees against him, and continued to do business there until about the fifth day of January, 1883, and to reside there until about the twelfth of September thereafter; that from the time of the rendition of the first of...
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