Ryerson v. Eldred

• Decision Date: 11 January 1869
• Citation: 18 Mich. 12
• Court: Michigan Supreme Court
• Parties: Tunis Ryerson and another v. Samuel D. Eldred and others

18 Mich. 12

Tunis Ryerson and another v. Samuel D. Eldred and others

Supreme Court of Michigan

January 11, 1869

Heard October 20, 1868; October 21, 1868

Appeal in chancery from Muskegon circuit.

The bill in this cause was filed by complainants to restrain Samuel D. Eldred, one of the defendants, from proceeding under the forcible entry and detainer act to remove them from certain premises, and to compel him to release his claim of title to the same.

Eldred filed his cross-bill, setting up his title to the same. Proofs were taken in both cases, and the cases were heard together. The court made a decree granting the relief prayed by the bill, and dismissed the cross-bill.

Decree of the circuit court reversed, with costs, the bill dismissed, and a decree of this court entered, and the record remitted.

L Patterson and Moore & Griffin, for complainants in original bill.

Edwin Potter, John T. Holmes and G. V. N. Lothrop, for complainants in cross-bill.

OPINION

Christiancy J.:

Samuel D. Eldred, of Muskegon, Michigan (one of the defendants in the original, and complainant in the cross-bill), together with Orson P. Eldred, Nelson Eldred, and Joseph H. Way, of Illinois, having been engaged in the business of selling lumber at Chebanse and Prospect City, Illinois, under the style of J. H. Way & Co., and at Kankakee, Illinois under the style of N. Eldred & Co., were also engaged, from 1856 to 1859, at Muskegon lake, in Michigan, in the manufacture of lumber, under the style of Eldred, Way & Co., and being somewhat embarrassed with debts, on the 15th of July, 1859, seem to have undertaken to make a real or pretended assignment to Frederick S. Eldred, of Janesville, Wisconsin, and on that day executed to him an instrument purporting to assign and transfer to him (not all their property generally, but) all their property mentioned in the schedule of property attached, for the benefit (not of all their creditors generally, but) of all their creditors mentioned in the schedule of debts attached, which included debts to the amount of about $ 9,000. Whether the property described or attempted to be described in the schedule included all their partnership property, does not distinctly appear by the evidence, though it does appear that it did not include all the individual property of the several assignors, nor does it appear that the debts mentioned in the schedule were all the debts owed by the said firms, though the evidence authorizes an inference that the whole amount of debts was not included in the schedule.

The property assigned consisted of lumber and other personal property, notes, accounts, etc., of real estate, situate in Iowa, Illinois and Michigan, and possibly intended to include, among others in the latter state, some five acres at Muskegon lake, with a steam saw-mill and other buildings thereon, known as the mill property, and which is the subject of controversy in these cases. The only description in the schedule which could possibly apply to this was "five acres of land in Muskegon county, state of Michigan, more particularly described in deed of Eben Smith, jr., to Nelson Eldred and others, and recorded in liber M of deeds, on page 455, in Ottawa county, valued at $ 15,000." The original bill alleges that this mill property was conveyed by Samuel Wood and wife to Samuel D. Eldred, and a mortgage given back for the purchase money, and this is admitted by the answer of S.D. Eldred; and there is nothing in the pleadings or proofs to show that it was ever owned or conveyed by Smith; and, so far as appears, Samuel D. Eldred never conveyed it, unless the assignment operated as a conveyance. The least, therefore, that can be said, is that the correctness of the description of this mill property does not appear, and there is at least an inference that the description, by reference to the Smith deed, is incorrect, or that the deed conveyed some other property. It does not, therefore, appear (admitting the assignment to be in all other respects valid) that this property was conveyed to the assignee.

The description of the lands in Illinois is simply "fourteen and a half lots of land in Kankakee City, Kankakee county, Illinois, valued at $ 5,400," and "two-sevenths of 1,600 acres of land in Green county, Illinois, at $ 2,500." That in Iowa is described merely as "one hundred and twenty acres of land in Chickasaw county, Iowa, valued at $ 600."

These descriptions of land, in Illinois and Iowa are too uncertain and vague to make the assignment operate as a transfer of title (had it been in all other respects well executed), at least, without clear evidence that the assignors owned certain lands in the city, or counties named which might fall within the description used, and that these were the only lands owned by them in such city or county.

There are other defects in the assignment. In form it is drawn in tripartite, as if to be executed by the assignors, of the first part, the assignee, of the second part, and the creditors, of the third part. The instrument itself is signed only by the assignors. No creditor signs it, nor does it appear that it was ever known to the creditors. It contains an express covenant on the part of the assignee to perform the trust. He does not, however, execute the instrument, but signs an instrument purporting to accept the trust, and appointing Nelson Eldred, of Kankakee, Illinois, and Samuel D. Eldred, of Muskegon, his agents, with full power to perform all acts in relation to the trusts which he might perform if present. The only acknowledgment of the instrument is in the following words: "Acknowledged by Samuel D. Eldred, this 5th day of December, A. D. 1859, before me, Theodore Davis, justice of the peace."

This was not a sufficient acknowledgment, even as to Samuel D. Eldred, to authorize the instrument to be recorded. It seems, however, to have been put upon record by Samuel D. Eldred. The assignment expressly authorized the assignee to sell on credit, and was, therefore, fraudulent and void as against creditors, at their option (Sutton v. Hanford, 11 Mich. 513), though they might doubtless have waived this by claiming under the assignment, which it does not appear they ever did.

The assignee does not appear to have taken any charge or control, in fact, of any of the assigned property. He resided at Janesville, Wisconsin, and it does not appear he ever saw any of the assigned property or gave any instructions in reference to its sale or management. No change whatever in relation to the actual control and management of the property seems to have taken place in consequence of the assignment, except in such matters of mere form as will presently be noticed. It is hardly probable from the assignment itself, and the evidence in reference to it, that the assignment was at the time of its execution considered of any actual validity by any of the parties. If so, they seem very soon after to have treated and considered it of no validity, and continued so to treat it until the attempted sale to Ryerson and Johnson, hereafter to be noticed. It would seem to have been executed only as a kind of blind to ward off creditors, in case they (the firm) could not otherwise avoid a sacrifice of their property, for there appears to have been at all times an honest intention and a real anxiety on the part of all the assignors to pay the creditors as fast as practicable, from the proceeds and the use of the property.

Samuel D., who resided at Muskegon, appears to have had entire control of the mill property, and immediately after the assignment, for the purpose already indicated, and to preserve an appearance of consistency, he seems to have commenced keeping his accounts, and doing other business, and executing papers in the name of Frederick S. Eldred, by himself, as agent; and this course seems to have been continued as to much, if not most, of the business, after his contract of purchase, presently to be noticed, and until August, 1862, when he went into the army.

But on April 1st, 1860, the assignors all appearing to regard the assignment as invalid, entered into a contract under seal, by which all the other assignors agree to sell to Samuel D. Eldred all the property and assets of the several firms (including of course the mill property), in consideration of which said Samuel D. by the same contract agreed, among other things, to pay all the debts of the said several firms, and when his contract should be complied with, the other parties were to convey to him all the real estate by good warranty deed. The assignee, Frederick S. Eldred, was informed of this contract and made no objection whatever, but silently acquiesced.

Under this agreement, Samuel D. Eldred proceeded to dispose of portions of the property and to pay debts; and in making the sale of some 500 acres of pine land (which seems to have stood in the name of all the partners), all the assignors joined in a warranty deed to the purchaser, who, however, for greater security, required that a quit-claim deed should be obtained from Frederick S. Eldred, the assignee. This was prepared by Samuel D., and forwarded to the assignee, who at once executed and returned it to him in a letter in which he says, "yours with deed is at hand. I have executed the same and ret. The expense is one dollar. Rufus has given me a note against your company for $ 380, which he wants the money on very much, as he is about buying a farm in Iowa. Please let me know what you can do about it." It is thus quite clear that the assignee did not look upon this sale in any respect as his, and expected to have Samuel D. refund the expense. He says nothing, and claims nothing of the proceeds of the sale.

Samuel D. continued to dispose of property and to...