Court Opinion

ID: 7934504
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:08:03.291965+00
Date Added: 2024-06-11T16:33:29.151616
License: Public Domain

Campbell, J.,
(dissenting). Plaintiff sued defendants, in trover, for the engine and machinery and appurtenances of a saw-mill. Defendants pleaded, with a notice setting up a levy on the property as that of the firm of Buchanan & Misner, composed of Augustus Buchanan, John L. Buchanan, and John Misnex-, under two judgments, in favor of Sterns & Spencer and Lewis M. Cutcheon, respectively, rendered in November, 1887.
The case shows that in November, 1882, the firm of Buchanan & Misner, of Grand Rapids, — all of the members uniting, — conveyed their property to plaintiff, consisting chiefly of lumber, in various shapes, there and elsewhere, and of some real property, with a saw-mill, *45and the usual movable property used in the business. The property was about to be taken on chattel mortgages, and the parties were thinking of an assignment; but it was concluded to turn everything over • to plaintiff, who would thereupon provide for the mortgages, and carry the business until it could be worked out, if possible, so as to save something beyond the secured debts. Plaintiff assumed possession, employing the members of the firm to superintend the business, which was carried on- openly, in his name. He raised money by mortgage to pay off the pressing claims, and continued carrying on the business till June, 1886, when the property now in dispute was sold, conditionally, under contract, to Frederick L. Spencer and Alta Misner, for what plaintiff claimed was the balance still due him for his advances in carrying on the business; the sale- being defeasible on non-fulfillment.
The testimony of Outcheon and Frederick L. Spencer, the' complaining judgment creditors, shows that they were fully informed of the transfer, and its purpose, and that both of them dealt with Mr. Corbitt, as owner of the property, and took no steps to oppose him until after he had reclaimed the property now in controversy from Spencer and Mrs. Misner. It appears, also, that in purchasing from Corbitt the purchase was made on the expectation and agreement between Spencer and others that the property would be worth enough more than the amount due Corbitt to pay Spencer’s firm their debt, which was not in suit, and was only sued after the default in paying Corbitt.
From the whole record, it appears that the controversy chiefly turned on the validity of the original transfer to Corbitt, in 1882, and went to the jury on that basis. No point is made that it was voidable in law, and the legal questions were made dependent on fraud in fact.
It appears with equal clearness that the parties defend-' *46ing complain, chiefly, that Corbitt has not fairly accounted for the proceeds of the trust, and that there is not due him so much as he claims. It does not appear that any creditor but those now holding the judgments has ever complained.
If the property passed to Corbitt in 1882, there can be no leviable interest in his assignors. The transaction was not a mortgage, but a trust, the primary object of which was to enable Corbitt at once to raise money, by mortgage or otherwise, to save the property from sacrifice, and which also contemplated advances and other acts on his part, to be reimbursed out of the proceeds of sales, and management. There can be no doubt of his liability to account for his doings, and that there are means whereby the creditors of his assignors could reach their interest, if necessary; but that interest could only be worked out in a court of equity, and was not a leviable estate or interest by execution at law.
We do not think there is any testimony showing that, in putting their property in Corbitt's hands, his assignors meant to defraud their creditors. But the judgment creditors here, by their own showing, would be estopped from denying the original validity of the transaction, which, if properly carried out, was apparently calculated to save, and not to waste, their estate. Its validity cannot be destroyed by any matter ex post facto. If there was any subsequent fault anywhere, it could not destroy what was valid originally.
All the attempts to destroy it by testimony of these subsequent matters were improperly received, so far as they got in. The court below apparently held the proper view of the law on this point when the charge was given, but overlooked the fact that the judgment creditors had, by their own showing, acquiesced in the arrangement throughout. While the charge does not seem to recog*47nize any equity in Spencer, it recognizes Cutcheon’s right to complain, without reference to his acquiescence, which was as clearly shown as that of Spencer.
Defendants* brief refers to a chancery case in which it is claimed the same judgment creditors have impleaded Corhitt for relief. We are not informed, from the record, what that case is, and it is not pleaded in any way, so that we do not perceive its pertinency in this proceeding, ■and its introduction in the argument is irrelevant. If it was properly framed to reach any equities involved between the parties, the court in which it is pending can protect them; but, if the property ievied on by defendants was not subject to levy, it could not have any -direct bearing on the present suit. Whatever equities ■exist against Corbitt, this is not the forum or case to determine them. Taking this record as we find it, we think the judgment is erroneous, and should be reversed, with costs, and a new trial awarded.
Sherwood, O. J., concurred with Campbell, J.