Geer v. Traders' Bank

132 Mich. 215 | Mich. | 1903

Grant, J.

(after stating the facts). This conveyance was before the United States circuit court of appeals, and was there attacked by the same counsel, and for the same reasons that are now urged against it. Ontario Bank v. Hurst, 43 C. C. A. 193, 103 Fed. 231. The instrument is there given in full, and an able opinion filed, written by Judge Day, in which various decisions of this court are cited and discussed. The conveyance was upheld.

We will not attempt a review of the many cases involving conveyances made to secure creditors. If there be any apparent conflict between the decisions on this important question, it is because of the difficulty in laying down and applying a conclusive test to each case. The rule is not in doubt. The difficulty lies in applying it. We reach the same conclusion as that reached by the federal court, and for the reasons therein stated. Whatever the decisions of other courts may be, it is the settled rule of this court that it is not a sufficient reason to set these convej-ances aside that their effect is to hinder and delay other creditors, or even that the parties contemplated that other creditors might thereby be delayed in enforcing their debts. McMorran v. Moore, 113 Mich. 101 (71 N. W. 505); Webber v. Webber, 109 Mich. 147 (66 N. W. 960). The presumption is in favor of the validity of such instruments, and courts will ascribe to the parties thereto an honest, rather than an unlawful, purpose. Palmer v. Mason, 42 Mich. 146 (3 N. W. 945). Conveyances of land in trust to sell for the benefit of creditors are expressly authorized by statute. 3 Comp. Laws, § 8839.

By the instrument now in question, certain lands are conveyed to complainants for the sole purpose of selling them and paying the debts therein provided, and turning the surplus, if any, over to the grantor. The provision authorizing the trustees to rent does not invalidate the trust. The authority to rent is not in conflict with the authority to sell. Without this provision the trustees would have the same authority to rent previous to sale. As expressed in the deed, it means no more than that the trustees may rent until they can, in their judgment, sell to advantage. If such deed is not valid, the statute is of little use. Other creditors may have an interest in the surplus that remains, but they cannot reach it by attachment levy. It is clear that trust lands cannot be sold to advantage, if they can be sold at all, with an attachment levy made thereon. Such a conveyance is not a mortgage. It is an absolute conveyance of the title expressly authorized by statute, subject to be reconveyed to the grantor upon his paying the debts mentioned therein. It is in the nature of a mortgage, but is not a mortgage in fact, and does not require foreclosure proceedings. The trustees are entitled to have the property discharged from all subsequent levies, in order that they may carry out the power conferred upon them, and sell the property to advantage. We think the case of Palmer v. Mason, supra, rules this.

The decree is affirmed, with costs.

Hooker, C. J., Moore and Montgomery, JJ., concurred.