Whitaker Iron Co. v. Preston Nat. Bank

• Decision Date: 16 June 1894
• Citation: 101 Mich. 146,59 N.W. 395
• Court: Michigan Supreme Court
• Parties: WHITAKER IRON CO. v. PRESTON NAT. BANK OF DETROIT.

59 N.W. 395

101 Mich. 146

WHITAKER IRON CO. v. PRESTON NAT. BANK OF DETROIT.

Supreme Court of Michigan

June 16, 1894

Error to circuit court, Wayne county; George Gartner, Judge.

Trover by the Whitaker Iron Company against the Preston National Bank of Detroit. Judgment for plaintiff. Defendant brings error. Affirmed.

Julian G. Dickinson, for appellant.

Alfred Lucking, for appellee.

MONTGOMERY J.

The plaintiff is a manufacturer of sheet iron. During the year 1890 it furnished to the Detroit Elbow Company goods to a considerable amount, including those in question in this suit. The elbow company, in December, 1890, sold the goods in question to the defendant, and the agreed price was indorsed as payment upon certain notes held by the bank and given by the elbow company. The bank held the guaranty of one of the directors of the elbow company, J. D Standish, which it was claimed by defendant was released by operation of law upon accepting the goods in question as part payment. The plaintiff, claiming that the goods in question were bought by the elbow company with intent not to pay for them, and that the credit was extended in reliance upon certain false representations made by the officers of the company relating to its financial standing, made demand upon the bank for the goods, and, on refusal of the bank to deliver, brought this action in trover. The case presented two issues of fact for the determination of the jury: First was there fraud in the purchase of the goods by the elbow company? And, second, was the bank a bona fide purchaser for value? The plaintiff recovered a verdict, and the defendant appeals.

1. It is earnestly contended that there was no evidence tending to show fraud in the purchase of the goods by the elbow company and that a verdict should have been directed for the defendant on this ground. We have carefully examined the testimony, and are not prepared to say that there was a total lack of evidence upon this branch of the case. The manager of the elbow company, Mr. Stoddard, was made a witness for the plaintiff, and denied any fraudulent purpose; but we think there was enough testimony to raise the question of the accuracy of the statement made by the company as a basis for credit. By this statement it was represented that there were accounts receivable amounting to $6,244.69, and personal property amounting to $39,779. There was testimony which tended to show that included in the accounts receivable was an item of $2,000 against McDonald & Co., of Toronto, and there was testimony which tended to show that there was no such indebtedness, but that McDonald & Co. had certain goods in their possession belonging to the company, which were afterwards sold for $300, and that this was the sole basis for the item of $2,000 account. There was also an item in the personal property for $5,000 for a patent, which the evidence tended to show was purchased some years before for $2,000, or thereabouts. While these statements may have been open to explanation, yet we are not prepared to say that they may not have some tendency to show that the statement was inaccurate, and did not justify the jury in so finding.

2. The circuit judge charged the jury as follows: "It will be for you to say as to whether the Preston National Bank-the corporation itself-parted with something valuable in itself and as to whether they did not have notice of the fraud." In another portion of the charge the circuit judge stated to the jury, in substance, that if the property was turned over in payment of a pre-existing indebtedness, this would not, under the law, constitute the purchaser a bona fide purchaser. There was no specific instruction as to...