Court Opinion

ID: 7939636
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:13:25.546058+00
Date Added: 2024-06-11T16:33:40.473908
License: Public Domain

Grant, C. J.
(after stating the facts). 1. Counsel for the plaintiffs insists that the transaction was, in effect, an assignment for the benefit of creditors, and void because of preferences. "We cannot concur’in this view. It was doubtful whether the goods at an auction sale would bring enough to pay 50 per cent, of the mortgages. Defendant gave evidence to show a bona fide sale. The debtors were released from their obligations. The creditors discharged them, and accepted in lieu thereof the obligation of Dillabaugh. The novation was complete. The case is clearly distinguishable from that of Hill v. Mallory, 112 Mich. 387. The entire question of fraud was submitted to the jury under full and correct instructions. The jury found there was no fraud, and their verdict has settled the question. •
2. This is not a case for the application of the rule established in Allen v. Stingel, 95 Mich. 195. It cannot be said that Dillabaugh purchased with knowledge that he was amply secured, and that Buchman Bros, were insolvent, and that he entered into the transaction for the purpose of defrauding the unsecured creditors of Buchman Bros. His mortgage was a second one. The goods were old, and, if sold under the mortgages, would have failed to realize the amount secured.
We find no error in the record, and the judgment is affirmed.
The other Justices concurred.