Lyle v. Palmer

| Mich. | Nov 29, 1879

Cooley, J.

Palmer as trustee in bankruptcy of the estate and effects of George and Jacob J. Yan Biper sued the plaintiffs in error in trover to recover the value of certain machinery, consisting of a number of power and hand' looms, spinning jacks, card machines, etc., constituting the ordinary machinery of a woolen factory. It appears that in March, 1868, the Van Bipers were the owners of a woolen factory and the land on which the same was situated, and of this machinery, and that the machinery was put up for use in the factory, and was propelled by a water-wheel, with shaft and belting. While it was so put up for use and in the month aforesaid the Van Ripers mortgaged the real estate to one Kingsbury to secure the payment of five thousand dollars, and in the mortgage described the machinery particularly, and included it. It appears that the parties understood the machinery to be personal estate. The mortgage fell due in March, 1870, and in April of that year Kingsbury filed his bill in chancery to foreclose it. He obtained a decree for a sale of the property, and on April 28, 1871, a sale was made and plaintiffs in error became the purchasers. It seems that the machinery was first offered for sale separately, but no one bidding, it was offered with the realty, and the whole was struck off to plaintiffs in error except two spinning jennies. The sale appears to have been for less than the amount of the decree.

The Van Ripers were adjudged bankrupts June 7, 1870, and Palmer was appointed trustee of their estate and effects the following month. In June, 1872, he demanded of plaintiffs in error the machinery in the woolen mill, and on their refusal to déliver it, he brought this suit.

Palmer claims that all this machinery was personal property, and therefore, conceding the Kingsbury mortgage to be valid, it must as to this machinery be regarded as a chattel mortgage. He then shows that it was never filed as such in the town clerk’s officó as the statute requires (Cómp. L., § 4706), and thereupon claims that it was void as to creditors. He further claims that he, as the representative of the creditors, has a right to take on their behalf all the objections to the mortgage which the creditors themselves might have taken had there been no bankruptcy, and to insist on all their rights.

The circuit judge finds that the machinery was personalty. This finding was no doubt based upon the fact that the parties so believed and considered it. This may generally be conclusive, but not always, and in this ease it is clear the parties were mistaken.' The machinery was specially adapted for use in connection with the real estate; it was put up for use and actually used with it; and was not severed from the realty in ownership. The fact that in the mortgage it was specially described was unimportant; a man in selling his homestead may mention .his house separately, if he so pleases, but this would not change the fact or the law; it is just as much a part of the freehold as if it had been sold with the land without mention.

But if we were to concede the machinery to be chattels, ¡Palmer would be no better off. Plaintiffs in error purchased the most of it, and obtained possession of all in April, 1871. From that time they had at least the rights of a mortgagee of chattels in possession, and Palmer shows no right to contest that possession. It is not pretended the Yan Bipers could have disputed the validity of the mortgage, because of the failure to file it, and Palmer stands in no better position. The foreclosure decree established the validity of the mortgage and the right to have the property sold to satisfy the mortgage debt, and the decree cannot be attacked in this collateral way. A sale of the machinery was specially directed by it, and plaintiffs in error claim its protection.

It was claimed, however, on the part of Palmer that the foreclosure sale was void as to the machinery for reasons of irregularity which we need not specially mention. Concede it and plaintiffs in error are nevertheless, as purchasers, entitled to the rights of mortgagees in possession. Gilbert v. Cooley, Wal. Ch., 494. This is sufficient for their protection as against this suit, and if they doubted the validity of their sale, nothing would be in the way of their causing another to be made. The sale, however, appears to have been confirmed by the court, and no appeal has been taken from the confirmation.

There are two articles, however, which the court finds were converted, which apparently the plaintiff below was entitled to recover for. These were a clock and a pair of scales, worth together twenty-five ■ dollars. Under the views above expressed, the failure to sell the two spinning jennies is immaterial in this suit.

Plaintiffs in error must have judgment on the findings for the costs of both courts. Prom the costs when taxed must be deducted twenty-five dollars for the value ' of the clock and scales, and execution may issue for the remainder.

The other Justices concurred.