Court Opinion

ID: 7937124
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:10:47.48909+00
Date Added: 2024-06-11T16:33:34.820102
License: Public Domain

Grant, J.
In 1888 the plaintiff’s son opened a liquor saloon at Grand Ledge, and in 1890 'he opened another in the city of Lansing. Plaintiff had at different times loaned his son various sums of money, aggregating $3,140. He lived at Saranac, and kept a blacksmith, wagon, and *624carriage shop. About the time of the making of these loans he put the amounts and dates thereof on slips of paper, and kept them in a safe at his residence. These slips were produced on the trial. September 30, 1890, his son executed and delivered to him a chattel mortgage upon his stock of goods in Lansing for $3,4:12.55, which included the several loans, with interest thereon. Subsequently, Alexander Gordon, one of the son’s creditors, proposed to him to settle his claim for 25 cents on the dollar, and told him that his other creditors would settle upon the same basis. Gordon and the son went to Saranac to see the plaintiff, who agreed to pay the 25 cents on the dollar to the creditors, provided he was secured by a mortgage upon the property. The compromise would amount to-about $1,200. On December 11, 1890, the son executed another mortgage for this amount. Plaintiff at that time paid $262, and, before the attachment proceedings hereinafter referred to were commenced, had paid in all about $600. One Leo M. Prank, a creditor of the son, sued out *625a writ of attachment upon the stock of goods, and gave the defendant, Cook, the depnty-sherifl: of the county, a bond of indemnity. Cook thereupon seized the property covered by the chattel mortgages. Plaintiff, through his attorney, demanded possession of Cook, which was refused; Cook, under instructions from Frank, refusing to recognize the validity of the mortgages. Thereupon plaintiff instituted this action of replevin. The mortgages were duly filed. Prior to commencement of suit, plaintiff had been paid upon the first mortgage $650.
Complaint is made of the instructions of the court, the material parts of which are as follows:
“ I shall direct your attention and consideration entirely to the first and earlier mortgage, — the larger one, — which bears date the 30th day of September, and purports to have been given to secure the payment of $3,413.55, and interest, as therein expressed. I direct your attention entirely to this first and earlier mortgage, because in my judgment, if that is fraudulent and void, then the later $1,300 mortgage, given and received to secure a compromise which was based and founded, in part at least, upon the supposed validity of the first mortgage, would also be void; and, further, because in my judgment, if that first and larger mortgage is valid as to the other creditors, then the plaintiff would be entitled to a verdict in his favor, even if the later mortgage was fraudulent and void.
“The verdict in this as in other actions of replevin depends upon the facts and circumstances as they existed at the commencement of the suit. Up to the commencement of the suit, the plaintiff had done nothing with this first and larger mortgage except to file it in the clerk's office, and to demand the goods by virtue of it. These were legitimate steps under a valid mortgage, and therefore, if it was valid when given, it was yet valid when suit was commenced. If it was voidable by creditors when given, then it is yet voidable, and the plaintiff has no standing in court.
“As I said, if this first and large mortgage was valid when given, then it yet remained valid when the property was demanded of Mr. Cook;' and, if it was then valid, *626neither Mr. Cook nor Mr. Frank, the plaintiff in the attachment, could have been wronged or injured by coupling a fraudulent mortgage with it as the basis of such demand, even if the second mortgage was fraudulent, because this first-mortgage alone exceeded the appraised value of the goods, and, further, because a fraudulent intent which, from the very nature of things, cannot grow into a fraud in fact, injures no man, and affects no man’s legal rights.
“ Nor is it a fraud in and of itself alone, affecting this actionj that the plaintiff, Anderson, after the ■ replevin, turned the goods back into the possession of his son. The defendant officer, acting under the direction of the attachment creditor, exercised his option whether he recognized the mortgage, and levied subject to it, or denied the validity of the mortgage, and refused to recognize it at all. If he had levied subject to the mortgage, he could have held possession, and sold whatever interest George D. Anderson had in'the property over and above the mortgage, regardless of any intention which the plaintiff may have had as to the further disposition o'f the property. In levying regardless of the mortgage, and denying its validity, he became, if it was actually valid as to creditors, a wrongdoer from the beginning, acting under an illegal levy, and without a standing which would permit him to question the plaintiff’s actions or motives. I admitted evidence that plaintiff, after he had secured possession of the goods upon this writ, turned them over to his son, simply that you might give such fact whatever consideration it was worth in determining whether this first mortgage was or was not valid when it was made and received.
“ Neither was the failure of the plaintiff to indorse upon the mortgage the amount, if any, which had been paid, any fraud in and of itself. It was not his duty to make any such actual indorsement. The amount remaining, if any, exceeded the appraised value of the property, and the dispute itself was not as to the amount remaining unpaid upon the mortgage, but whether the mortgage was valid at all or not. The testimony, however, on this point may be considered by you in determining whether the mortgage was ever valid or not.
“We therefore get down to the single point, — and the only point which you need consider, — was this first mortgage void as to creditors at the start, when ft was given and received? Was this mortgage at that time taken by *627the plaintiff, Mr. Devello W. Anderson, in good faith, to secure payment of a bona fide indebtedness? When the mortgage was given, George D. Anderson, the son, either owed the father practically the entire amount which plaintiff claims or nothing. There is no middle ground to the testimony on this point. If the son was actually owing the father, as a bona fide debt, all moneys which the father claims were put into this mortgage, then I charge you this mortgage was valid, and your verdict should be in favor of the plaintiff. If the son was not owing the father, as a bona fide debt, substantially the amount put into the mortgage, then the mortgage was fraudulent and void as to creditors, and your verdict should be for the defendant.”
The jury rendered a verdict for the plaintiff.
We find no error in the charge against the defendant. The instructions were as favorable as he was entitled to.
The only evidence as to these loans came from the plaintiff and his son. Plaintiff testified positively as to the amounts and the dates, and from whom some of the money was obtained. The son corroborated his father. The only grounds on which the honesty of the transaction can be attacked are the facts that the father took no notes from his son, and no security at the time, as he was accustomed 'to do when he made loans to strangers, and the facts that the son gambled, kept no books, and was unable to give dates. If these were sufficient to cast doubts upon the bona fides of the transaction, that question was fairly submitted to the jury, and is settled against the defendant. The verdict established the fact also; under the evidence, that the value of the property was not equal to the amount secured by the first mortgage. It is very doubtful if there are any circumstances tending to establish fraud on the part of the plaintiff in taking the second mortgage. There was nothing legally or morally wrong in his advancing money, or agreeing to advance money, to secure a compromise, and in taking a mortgage to secure himself. He actually advanced money at the time, and I fail to find *628upon the record any evidence that he did not do it in good faith. -
It is argued, however, that because the full face of the mortgage was not due, the payment was not indorsed upon the mortgage on file, and plaintiff's counsel did not state to the defendant at the time of demanding possession the1 amount unpaid, therefore the mortgage was void as to creditors. The obvious reply to this is that a chattél mortgagee is not required to indorse payments upon the mortgage, or a copy thereof, filed in the office of the township or city clerk. He is only required to file at the end of each year an affidavit of the amount unpaid. Nor is he obliged to volunteer such statement • to one who refuses to recognize his mortgage as valid for any sum, or who fails to ask the amount due thereon.
It is not conclusive of fraud that plaintiff did not fore^ close his mortgage by advertisement, but permitted his son to sell at private sale, and account for the proceeds, which it appears was done in this case. The mortgage being valid, plaintiff was entitled to possession, and his security will not be destroyed by his failure to sell in the exact1 manner provided in the mortgage. The result of- such disposition would be that, if the goods were worth more than the amount of his lien, he would be held to account for the surplus to those holding subsequent liens.
This disposal of the case, renders it unnecessary to- discuss the other questions raised.
Judgment affirmed. ■
The other Justices concurred.