Robinson v. Denson

• Decision Date: 28 October 1886
• Citation: 63 Mich. 350,29 N.W. 858
• Court: Michigan Supreme Court
• Parties: ROBINSON and another v. DENSON and others.

29 N.W. 858

63 Mich. 350

ROBINSON and another v. DENSON and others.

Supreme Court of Michigan

October 28, 1886

Appeal from circuit court, Wayne county.

Judgment creditors' bill.

H.M Campbell, for plaintiffs and appellees.

Albert J. Chapman, for defendants.

SHERWOOD J.

John W Smith, the principal defendant, was engaged in the retail boot and shoe trade in Detroit in 1879, and on May 1 of that year he borrowed $2,000 of William McLaren, and gave his note therefor, payable six months after date. On the eleventh day of July, 1881, this note remaining unpaid Smith gave to McLaren a chattel mortgage upon his stock of goods as security for the payment of said note, and the mortgage was duly filed the same day in the city clerk's office. At that time Smith owed the plaintiffs about $900 and in a few days after the mortgage was filed the plaintiffs commenced an attachment suit against the defendant Smith, levying upon the stock of goods, and Smith then, in order to relieve the property from the attachment, gave to plaintiffs a second chattel mortgage upon the property to secure them; and about three or four weeks thereafter, McLaren, having learned of the second mortgage, came to Detroit, and sold his chattel mortgage and note to Karrer Bros., to whom Smith was then indebted in the sum of three or four hundred dollars. Karrer Bros. foreclosed the mortgage, and bid off the stock on the sale, which took place August 15, 1881, for the sum of $1,100.

Karrer Bros., after making the purchase, continued the boot and shoe business at the store which had been occupied by Smith, and employed the latter to conduct the business for them, under an arrangement by which they agreed to let Smith have the stock back when he paid the chattel mortgage, and the amount of a judgment they also held against him of about $560, and which was then levied on real estate of Smith. It is claimed by plaintiffs that Smith's indebtedness to Karrer Bros., on the twenty-fifth day of September, 1884, had been reduced to $1,130.96, and that at or about that time Smith sold some real estate which he owned, and out of the proceeds completed the payment of the Karrer indebtedness, and that the stock of goods then on hand was worth $3,000; that at that time Smith procured a transfer of the goods to be made by Karrer Bros. to Thomas Denson, and on October 3, 1884, at the request of Smith, who was still in possession of the stock, Denson sold and transferred the goods to Charles R. Richardson for the sum of $1,800; he paying $1,100 in cash, and securing the payment of the balance by giving his two notes for $350 each, to Denson, made payable, at the request of Smith, in 30 and 60 days, respectively. These notes were claimed by plaintiffs to be the property of Smith, and held by Denson for his benefit. On the contrary, Denson claims that the sale of the property by Karrer Bros. to him, and from him to Richardson, was made bona fide and in good faith, and that he is the true owner of the notes. The plaintiffs recovered judgment against Smith, and brought their garnishee suit against Denson and Richardson, claiming the right to recover in the garnishee suit the $700 for which the two notes were given. The proper issues were framed, and the cause was tried before Judge SPEED, who, after hearing all the testimony, found the facts to be as follows: "(1) That in 1881 John W. Smith was indebted to the plaintiffs for the debt upon which plaintiffs have recovered judgment against him in this suit as principal defendant. The judgment amounts to $952.96, with interest and costs.

"(2) That said Smith, in 1881, owned a certain stock of boots and shoes, situated at 151 Randolph street, in the city of Detroit; that during said year said Smith placed upon said stock a chattel mortgage for $2,000, which mortgage was purchased by and assigned to Karrer Bros.

"(3) That said Karrer Brothers also held, by assignment, a judgment levy against said Smith for $565.15, and interest from August 15, 1881, upon which execution had been issued and levied upon certain real estate belonging to said Smith.

"(4) That said Karrer Brothers foreclosed said mortgage, and acquired the title to said stock of goods, and Smith continued to manage the same under an arrangement whereby he was to have the stock back when he paid to Karrer Brothers the...