Scripps v. Crawford

• Decision Date: 06 March 1900
• Citation: 81 N.W. 1098,123 Mich. 173
• Court: Michigan Supreme Court
• Parties: SCRIPPS v. CRAWFORD et al.

81 N.W. 1098

123 Mich. 173

SCRIPPS v. CRAWFORD et al.

Supreme Court of Michigan

March 6, 1900

Appeal from circuit court, Wayne county, in chancery; Joseph W Donovan, Judge.

Suit by George H. Scripps against Andrew J. Crawford and others. Decree for complainant, and defendants appeal. Reversed.

Flavius L. Brooke, for appellants Crawford and others.

Thomas S. Jerome, for appellant Union Trust Co.

Rowland M. Connor, for appellant Hill.

Robert Young, for appellee.

HOOKER J.

Andrew J. Crawford was a debtor of Scripps, the complainant. He was engaged in the laundry business in Detroit as equal co-partner with one Adams, and his interest in the laundry was all of his property subject to execution. Adams died, and the Union Trust Company was appointed administrator of his estate. The laundry had been profitable, having earned from $4,000 to $7,000 per annum, net, although the investment was comparatively small. Crawford purchased the interest of the estate in the business. An inventory was taken of the property, showing that it was worth about $3,000, and, in view of the good will of the business, Crawford agreed to pay for Adams' interest $1,500, and one-half of the net profits that should be earned for five years. The agreement stated that this was to be 'as interest on said loan, and compensation for the good will of the estate in the business and its interest in the leasehold' where the business was conducted. In 1897 the parties settled some differences by agreeing that the amount due the estate was $4,600, and this Crawford agreed to pay in weekly installments before July 20 1901, regardless of profits. It is claimed by the defendants that on October 25, 1897, defendant Hill purchased from Crawford a quarter interest in the laundry, and that the business was afterwards conducted for their mutual benefit. It is claimed by the complainant that this assignment was collusive and fraudulent as against him, if not fictitious. In December, 1897, the complainant put his claim against Crawford, amounting to about $2,000, into the hands of counsel for collection. Defendant Brooke was Crawford's attorney, and complainant's counsel was referred to him by Crawford when he presented the claim. Counsel arranged that complainant should defer bringing an action on the claim, and that Crawford should pay $50 a month thereafter in reduction of the demand. One payment was made in January, 1898, and, in default of a second payment, action was brought in February, 1898. Brooke appeared for defendant Crawford in that action, and at his request trial was postponed, upon the promise to make the payments thereafter. Two such payments were made after the action was brought,--one in March and one in July. On August 10th, the day to which the cause had been adjourned, Brooke requested further time to make such payment, and was granted until August 13th, and upon that day asked a further postponement and, this being refused, he stated to counsel for the complainant that the Grand Laundry had been incorporated the day before, and the articles had been filed in the office of the county clerk that morning. Complainant's solicitor testified that counsel (defendant Brooke) told him that they could not afford to let him get a levy on that property. Judgment was taken that day. The record shows that articles of association incorporating the Grand Laundry were filed on August 13, 1898, executed and acknowledged in due form on August 12th, signed by the following stockholders (the shares of each being stated): Andrew J. Crawford, 400 shares; George H. Hill, 175 shares; George E. Norris, 58 shares; Frederick Norris, 57 shares; Flavius Brooke, 10 shares. On the 12th day of August, 1898, Crawford and Hill assigned the property and business of the Grand Laundry to the corporation for an expressed consideration of $7,000. We are not advised that the shares subscribed were paid in money into the treasury of the company, but the property was put in by Hill and Crawford proportionately to their holdings of stock, the other stockholders adjusting with them for the stock subscribed by them. It is claimed that Brooke received his stock for a debt due him from Crawford, and that the Norrises paid Crawford $1,150 in checks for their shares. On August 12th or 13th,--and it is not clear which day,--Brooke, as Crawford's attorney, called upon the Union Trust Company, and delivered to it an assignment executed by Crawford of his 400 shares of stock, as collateral security for its claim against him (Crawford). Complainant took execution on his judgment, returnable September 6th. It was returned unsatisfied by the sheriff on September 7th, at which time an alias execution was issued, returnable December 5, 1898. It is claimed by complainant that this was levied on Crawford's interest in the corporation, and upon the property. He thereupon filed the bill in this case, and it is said to have 'the double aspect of a creditors' bill to reach equitable assets of Crawford not subject to execution, and one in aid of execution.' All defendants have answered, and the proofs were taken in open court. Mr. Jerome, representing the trust company, and defendant Brooke were the only witnesses sworn on...