Court Opinion

ID: 7947887
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:22:48.462595+00
Date Added: 2024-06-11T16:33:50.727167
License: Public Domain

Ostrander, J.
(dissenting). Plaintiff’s right to recover in this action is based, initially, upon the fact that she owned a note for $2,400, dated September 1, 1908, payable $40 each month, with interest at 6 per cent, per annum, payable annually, made by one A. S. Miles to defendant and sold and assigned to plaintiff by defendant September 16, 1909, payment of which note, according to its terms, defendant guaranteed. Payment of the note was secured by a collateral assignment of stock of the Miles Shoe Company. Payments were made on this note to and including the one due in May, 1911, and when this action *28was begun in January, 1912, only a portion of the note was due and only a portion of it could have been recovered, of the maker or the guarantor, in an action on the note.
Plaintiffs right to recover rests immediately upon the alleged fact that defendant, who had the note for collection of the monthly payments, received payment of the entire balance due thereon June 17, 1911, by way of a check dated that day, made by the Miles Shoe Company, payable to the order of defendant. It will be noted that the Miles Shoe Company was not the maker of the note and not obligated to pay it; nor could plaintiff have been obliged, at that time, to accept payment of the note. The check was produced and is set out in the opinion of Mr. Justice McAlvay. As he points out, the check was drawn on the Benton Harbor State Bank, and it bore on its face the bank stamp, “Paid June 17, 1911.” In addition, plaintiff introduced the testimony of Mr. Miles, who testified that he paid the note in question to defendant by way of this check. There is the admission of the defendant that the check — one of two or more checks given —was for the amount of the note and for other indebtedness owed to defendant. This is, in substance, the evidence tending to prove that defendant had ever received money or money’s worth on plaintiff’s account. In saying this, I have not overlooked the testimony of defendant, upon his cross-examination, to be hereinafter referred to. Such evidence as the check afforded of payment to and receipt by defendant of money belonging to plaintiff was by the court held to be indisputable.
Defendant offered to prove that the check did not represent money and that not a penny of cash ever was disturbed by it, and, further, that none of the parties to a transaction of which the giving of the check was a part ever intended that any money should *29pass by the check. He offered to prove that the Miles Shoe Company and A. S. Miles were indebted to defendant in the sum of $6,300, evidenced by notes of which the one belonging to plaintiff was one; that the shoe company was involved, financially; that, to obtain security, a third person, one W. G. Newland, was introduced into the affair; that to Newland Miles gave three notes of $2,100 each, dated June 10, 1911, and to secure their payment executed a chattel mortgage on the stock of goods of the shoe company; that in return for these notes Miles received from Newland the check of defendant, drawn on the Benton Harbor State Bank, for $6,300; that Newland indorsed the notes and assigned the chattel mortgage to defendant for the check; that against this apparent credit created by defendant’s check, Miles drew checks to the same amount, in payment of old notes, including plaintiff’s note, and in this manner new notes, with new security, were substituted for the old; and that not one dollar in cash changed hands; and that no party to the transaction intended that any money should change hands. Repeatedly, rulings such as are indicated in the following excerpt from the record were made by the court (the witness Miles was being cross-examined):
“Q. Did you get any money from the bank on this check given by W. G. Newland to you on the 10th of June, 1911?
“Mr. Andrews: I object to that as immaterial and irrelevant.
“The Court: The objection is sustained.
“Mr. Sterling: Note an exception.
“Q. Was there a single penny of coin or currency that you obtained on the Newland check, or that Mr. Wells obtained on your check given him on the 17th of June?
“Mr. Andrews: I object to the question.
“Q. Was there any money, either currency or coin, obtained by anybody on that transaction?
“Mr. Andrews: I object to the question as irrelevant and immaterial.
*30“The Court:' The objection will be sustained. I don’t think it is well to contradict the paper itself.
“Mr. Sterling: Note an exception.”
Defendant was a witness and gave testimony. The following is a portion of what took place upon his direct examination:
“Q. Does this check, dated June 17, 1911, which bears your signature, marked ‘Exhibit 2,’ represent any money that you obtained from the Benton Harbor State Bank to the Miles Shoe Company?
“Mr. Andrews: We object to the question as irrelevant, incompetent, and immaterial.
“The Court: The objection will be sustained. The paper speaks for itself.
“Q. During the entire transaction between you and Miles, in which this check figures, and was given to you, did you obtain for Mrs. Hogue from Mr. Miles a single penny?
“Mr. Andrews: I object to that question as irrelevant, incompetent, and immaterial, and, further, calls for the conclusion of the witness.
“The Court: The objection will be sustained, and the question has substantially been answered three times, and has been substantially asked and ruled on three times.
“Mr. Sterling: I take exception to the ruling of the court.
“Q. Have you in your possession, or have you ever had in your possession, any money belonging to Mrs. Hogue that you have not turned over to her ?
“Mr. Andrews: The same objection.
“The Court: That objection will be sustained also. That would be his conclusion. What you are endeavoring to get at is his legal conclusion.
“Mr. Sterling: I do not think the question is susceptible of that interpretation.
“The Court: The court so thinks it is. There is a paper signed by Mr. Wells in which it appears that there was $3,700 passed to him. That represents money because it was paid to him by the bank, and that says it was to pay the Miles notes, and that whole paper is to be taken together. As long as the bank paid him that money, he must have had it. The ques*31tion whether it was or not to pay the Miles notes— it was to pay some notes, and the court held if it didn’t pay those notes you might show what notes it was intended to pay, but that he had that money. A blanket question whether he had the money in his possession that he had not paid to Mrs. Hogue might be misleading to the jury.
“Mr. Sterling: The witness testified that he did not get any money on this check.
“The Court: No, he has not. The court said he could hot 'contradict that paper very well.
“Mr. Sterling: I take an exception to the ruling.”
It is said in the brief for appellee:
“The trial court held that the check being drawn to defendant, as payee, and indorsed by him upon its back, and no other indorsement appearing thereon, except the stamp ‘Paid’ by the bank, and the check being returned to Miles, the maker, in the regular course of business showed conclusively that Miles had paid defendant the amount of money named in the check.”
This action is trover for money. It may be conceded that if, when all of the facts are elucidated, it appears that defendant directly or indirectly received from the maker of plaintiff’s note, or from anybody, money in payment thereof, he may be held liable in trover for the money so received by him. Defendant held the note for collection and if money, or its equivalent, was paid to him for plaintiff, he was bound to pay it over to her. It must be held, however, .that the check he received was not conclusive evidence that he received any money. He had the right to show, and was prevented from showing, that no money came to him, and that no one intended that any should come to him— to show the real transaction. Alfred Shrimpton & Sons v. Culver, 109 Mich. 577 (67 N. W. 907).
Defendant testified on cross-examination that, having concluded the transaction referred to, he did not pay plaintiff the amount due on her note because he regarded plaintiff indebted to himself in a greater *32sum. This statement he later on amended; but, assuming that the jury had the right to take this statement as true, it does not change the legal aspect of the affair. Plaintiff was not bound to accept for her old note and defendant’s guaranty a new note and chattel mortgage security. Defendant had the right to pay her her note and himself own the new secured notes. And if plaintiff insisted upon the demand evidenced by her note, she could insist upon payment only in accordance with its terms, namely, $40 monthly.
It is said in the brief of counsel for appellee:
“In conclusion, we submit the real and only question in this case is whether the trial court should have permitted defendant to have shown that Newland was a mere figurehead in the case, and loaned himself, and his credit, to defendant to secure defendant’s claim against Miles, by Newland taking a note and chattel mortgage from Miles, and then assigning this note and mortgage to Wells, on the ground that this circuitous transaction was for the purpose only of securing the indebtedness from Miles to Wells. The real result of this transaction, if it had been successful, would have been to defeat the claims of all the other creditors of Miles, and the Miles Shoe Company, and enforced the payment to defendant of his claim in full.
“Defendant says the purpose of this transaction was only to secure his claim against Miles. Defendant could have taken the chattel mortgage direct from Miles to himself, and secured his claim. Then the real object in involving Newland in the transaction was to gain an undue advantage over the other creditors of Miles by having the deal pass through the bank, and through an apparently innocent third party, thereby leaving behind the footprints of a legitimate transaction, and have the transaction less liable to a successful attack by the injured creditors of Miles. The defendant having failed in this unworthy attempt, by these creditors asserting their rights before the expiration of four months, fixed by the bankruptcy law, will not permit defendant to dispute the payment of the Hogue note by Miles to the defendant with the *33money he (Miles) had received from Newland, and for which he had given Newland his note secured by a chattel mortgage. As held by the trial court, it is immaterial where Miles obtained his money to pay defendant. However, it does appear by defendant himself that he obtained it from Newland. Plaintiff’s action cannot be defeated by defendant showing that at the time the money was obtained from Newland, that it was understood that defendant was to pay back to Newland the money he (defendant) had received from Miles, and take an assignment of the Miles note and chattel mortgage from Newland. Defendant will not be permitted to play fast and loose with the courts in this manner, changing front as often as it appears to him to be to his advantage so to do. As this court has many times said, Mr. Wells ‘will be left to lie in the bed he has made for himself.’
“The offer of defendant’s counsel set forth on pages 46 and 47, of the record, shows that the defendant’s position was that he had a right to show that, at the time Miles obtained the money from Newland to pay Wells, it was agreed that Newland was to assign the note and mortgage back to defendant, and, if so shown, it would refute the question of payment to defendant of the Hogue note. The proposition itself shows he had no such right. The payment from Miles to defendant was bona fide, or it was not; and, if not, it was fraudulent. If it was fraudulent, defendant was a party to the fraud, and he will not now be permitted to use this fact to defeat plaintiff’s action. If the payment was bona fide the payment was conclusively established. In either event, defendant is bound by the payment, and the case should be affirmed.”
Upon this, the comment which I make is this: There was a certain transaction, as a result of which plaintiff is claiming that defendant is liable to her in trover for money. If the transaction had not occurred, she would have no foundation for her action. Defendant seeks to show all of it. She seeks to rely upon the transaction to the point where the facts, with certain alleged rules of law, benefit her. It was not a divisible transaction. To the demand that the whole *34transaction be shown, it is no answer to say that in its entirety it was probably intended as a fraud upon the creditors of Miles, or of the Miles Shoe Company. The court does not sit in this case to penalize the defendant for his fraudulent conduct, if it was fraudulent, nor to permit plaintiff to profit by such portion of it as appears to benefit her. The essential thing to be determined is whether defendant, in fact, ever collected any money for plaintiff which he refused to turn over to her. The history of the whole of the transaction in the course of which it is claimed that such a collection of money was made should have been admitted in evidence.'
It seems to me to be unfortunate that the real, the meritorious, question in the case should not be considered in the majority opinion; that the case skould be made to turn upon a ruling that an offer of counsel to produce testimony was too broad. I have pointed out that the defendant, by repeated rulings of the trial court, was denied the right to prove that he received no money on the checks, no money from any source, for the plaintiff. To those rulings exceptions were taken, and error is assigned upon them. These rulings, these exceptions, the majority of the court decline to even consider.
The judgment should be reversed and a new trial granted.
Stone, Bird, and Moore, JJ., concurred with Ostrander, J.