Whitfield v. Stiles

• Decision Date: 17 June 1885
• Citation: 24 N.W. 119,57 Mich. 410
• Court: Michigan Supreme Court
• Parties: WHITFIELD and others v. STILES and others.

24 N.W. 119

57 Mich. 410

WHITFIELD and others v. STILES and others.

Supreme Court of Michigan

June 17, 1885

Error to Livingston.

Edward G. Embler and R.H. Person, for plaintiffs and appellants.

D Shields and J. Corson, for defendants.

CAMPBELL, J.

Plaintiffs who are a commercial firm in New York, sued the principal defendants, who were merchants in Howell, on a debt for goods. This suit was begun May 10, 1884. On the same day they garnished Allan Shelden & Co., a Detroit firm, as having assets of the principal debtors in their hands, and as indebted to them. The garnishees answered on the twenty-seventh of May, denying positively both allegations. Special interrogatories were also put to them, which they answered fully under oath, and the answers fully explained their dealings, and showed an absence of any liability. The case was then tried upon an issue, and the facts were all investigated, and the jury found a verdict for the garnishees.

The facts, upon which there is no serious controversy, were substantially these: Defendants Stiles & Brown were indebted to various persons, and among others to Allan Shelden & Co. of Detroit, who were their largest creditors, to whom they owed $3.516.50, for which, on May 3, 1884, Brown gave the firm note, secured by chattel mortgage on their stock. Just previous to this, Mr. Hayes, agent of Shelden & Co., having ascertained that Stiles & Brown were proposing to divide their stock, and Brown was to take part of it to another town, objected to their doing so, and insisted on security unless they abstained, which they promised to do. But, upon a dissension between the partners, Brown went to Detroit and gave the note and mortgage, on Saturday, May 3d, and on Monday, Hayes went out and took possession and began to inventory, Stiles assenting. The inventory, at purchase rates, was nominally $5,909.41, but it was testified the values had shrunk. When completed, a bill of sale was made conveying the property absolutely to Shelden & Co. for a consideration named of $3,700, being a small amount beyond what their debt would be, without adding expenses. The goods were then offered for sale and bid off by Shelden & Co. for $3,654, and they sold them again to Alley Bros., of Dexter for the same price.

The argument made before us is rather on the facts than on the law, and seems chiefly to rest on the claim that these transactions were void in law as against other creditors. The jury have found there was no fraud in fact. We can see nothing to sustain the claim that these proceedings, if honest in fact, were not valid. There is no rule of law which will prevent debtors from preferring any honest creditor by mortgage, or from selling out to him an entire stock of goods, to pay his debt. And there is no rule of law which will prevent him...