262 N.W. 644 | Mich. | 1935
In this cause plaintiff became receiver of the H. J. Cousino Company by virtue of his appointment October 11, 1932, by the circuit court of Wayne county on the application of the Detroit Hume Pipe Company contained in its judgment creditors' bill in said cause. The original obligation of the Consino company to the Detroit Hume Pipe Company accrued in 1930 and certain notes were given in renewal of that obligation and accepted by the Detroit Hume Pipe Company in May and. June, 1932. Upon the trial of the cause, the court refused plaintiff the right to introduce evidence concerning the original obligation. Had this evidence been admitted plaintiff would have shown that the acceptance of the renewal notes by the Detroit Hume Pipe Company was subsequent to the giving of the chattel mortgage and prior to the appointment of plaintiff as receiver; and that the Detroit Hume *50 Pipe Company became a creditor of plaintiff company in 1930.
In Molsons Bank v. Berman,
"A note is but evidence of the debt which still exists if the note is lost or destroyed and is not extinguished until it is in fact paid in money or something expressly accepted as such."
See, also, New Jersey Title Guarantee Trust Co. v. McGrath,
"Under our statutes any creditors have the right to avoid an unrecorded mortgage who have, during its absence from the record, done anything material which they may be fairly considered to have done on the basis of its nonexistence. It is admitted that new credits given are acts of this kind, and so are extensions of time on old debts for any definite period, and renewals of notes or other obligations." Root Co. v. Harl
(syllabus),
In Cutler v. Steel,
"Common prudence in business affairs would have prevented these defendants from renewing these notes had they been aware of this chattel mortgage and the other conveyances executed at the same time. It must be assumed, therefore, that as prudent business men the defendants accepted these renewal notes in reliance upon the nonexistence of those conveyances. It has already been decided by this court that such unrecorded mortgages are void as against creditors of the mortgagor who have accepted such renewals, or have extended time of payment on old debts for a definite period. Root Co. v. Harl,
See, also, In re Huxoll, 113 C.C.A. 637 (193 Fed. 851);Detroit Trust Co. v. Pontiac Savings Bank, *51
From the above authorities, we hold that the Detroit Hume Company was a subsequent creditor and was affected by the non-filing of the chattel mortgage; and that plaintiff, as receiver of the Cousino company, not only represents that company but the Detroit Hume Pipe Company as well.
The powers and authority of an assignee for insolvent debtors are determined by 3 Comp. Laws 1929, § 15353.
"Such assignment shall be deemed to convey to the assignee all property of the assignor not exempt from execution, and all rights legal or equitable of said assignor. The assignee shall also be trustee of the estate of the debtor for the benefit of his creditors and may recover all property or rights or equities in property which might be recovered by any creditor."
Plaintiff, as receiver of Cousino company, is entitled to recover from defendant the value of the machinery as of October, 1932, that being the date that defendant converted same. The plaintiff claims the machinery had a value of $2,700 as of said date, while the defendant contends that the machinery was worthless. The trial court indicated that the machinery had only a junk value, but made no finding as to its value.
The judgment of the lower court is reversed and the cause remanded to fix a value on the machinery as of October, 1932, with the privilege of taking additional testimony in order to determine its fair market value. Costs to plaintiff.
POTTER, C.J., and NELSON SHARPE, NORTH, FEAD, WIEST, BITZEL, and BUSHNELL, JJ., concurred. *52
