McMorran v. Moore

113 Mich. 101 | Mich. | 1897

Hooker, J.

Upon application of the defendant, the circuit court dissolved an attachment, and the plaintiffs bring the case here for review upon the findings of the circuit judge. These are voluminous, and need not be incorporated in the opinion. The principal questions that counsel for the plaintiffs raise are:

First. That the findings show that certain instruments amount to a common-law assignment for the benefit of creditors, with a preference.

Second'. That they constituted grounds for attachment.

In brief, the finding shows that the defendant, David Moore, was engaged in the mercantile business upon his own account at Port Huron. He was also an equal partner with his brother Thomas'in a store at St. Clair, and both concerns were insolvent. On January 25, 1896, David Moore owed F. Saunders & Co. about $6,000, of which $622.85 was due from the partnership of T. & D. Moore. At the same time, David Moore owed the plaintiffs $1,386.02, and large sums to other creditors. On that day he executed to F. Saunders & Co. six warranty, deeds and two quitclaim deeds, covering all of his real estate except his homestead (which was mortgaged), for an expressed total consideration of $4,100. On the same day, he and his wife executed to Dixon, a member of the firm of F. Saunders & Co., as trustee, a chattel mortgage covering all of his personal property, in trust for the security of certain creditors therein named. This mortgage made no provision for the return of any surplus to the mortgagor. When executed, these instruments were handed to Thomas Moore, and David and his wife started for New Mexico. Thomas delivered the deeds and mortgage three days later.

We think that these instruments should not be held to be an assignment for creditors with a preference. The omission from the mortgage of a provision for the return of a possible surplus did not make the transfer absolute. In Austin v. First Nat. Bank, 100 Mich. 618, an instrument without a defeasance was held a mortgage, and what was there said is applicable to this instrument. It is definitely settled in Michigan that a debtor has a lawful right to prefer a creditor, and that the courts are not alert to deprive him and the preferred creditor of their rights, where the intention of the debtor is manifest, and the instruments do not legally constitute an assignment, and there is an ábsence of fraud. See Sheldon v. Mann, 85 Mich. 265; Warner v. Littlefield, 89 Mich. 329; National Bank of Oshkosh v. National Bank of Ironwood, 100 Mich. 485. The discussion in these cases fully covers the subject.

It is further contended that the attachment should not have been dissolved, because the evidence showed that the transfers were fraudulent and that the defendant had absconded. In applications for the dissolution of attachment, the burden is on the plaintiff in attachment to show, affirmatively, sufficient cause for issuing the writ, existing and continuing up to the time of hearing of the application to dissolve. Macumber v. Beam, 22 Mich. 403; Brown v. Blanchard, 39 Mich. 790; Folsom v. Teichner, 27 Mich. 107. It therefore was necessary for the plaintiffs to convince the circuit court of the facts relied upon, viz., that the defendant had absconded to the injury of his creditors, or that he had fraudulently disposed of his property with intent to defraud his creditors, or one of the other causes set forth. The court found explicitly that David Moore, in going to New Mexico, did not abscond, but went for his health, intending to return; also, that the making of the deeds was not with an intent to hinder, delay, or defraud creditors. The finding of fact is quite full in respect to the minutiae of the transaction. So far as it is necessary to find a specific intent, the conclusion of the circuit judge cannot be reviewed by us. “Absconding,” in the eye of the law, means something more than a temporary absence for health. It involves a design to withdraw clandestinely, to hide or conceal one’s self, for the purpose of avoiding legal proceedings. The court not only found an absence of such intent, but the facts found are consistent with the absence of such intent.

Upon the question of fraud we may say substantially the same. The facts found do not conclusively establish an intent to hinder, delay, or defraud creditors. Counsel assign error upon certain isolated facts, substantially asking us to say that such facts, in and of themselves, are grounds for attachment, for the reason, apparently, that they conclusively show an intent to defraud; such, for instance, as the “making and delivery of the eight deeds,” the “including the partnership account in the chattel mortgage,” and other things which need not be mentioned at length. Some of these were facts which collectively or singly might have led the court to find the presence of a fraudulent intent. But we cannot say that they conclusively show it. Nor can we say that they are necessarily grounds for attachment, unless we are to adopt plaintiffs’ claim that where an act will necessarily hinder or delay creditors, or possibly prevent their collection of their claims, it is a legal fraud. Such a rule undoubtedly applies in some classes of cases, as where a voluntary conveyance is made, but we think it cannot be said of this case.

It seems that, after David Moore left, he executed another mortgage to Dixon, and consented to a sale of the partnership business. It also appeared that Dixon had not taken possession of the stock of goods under his mortgage up to the time of hearing, and that certain dealings were had with the property by T. Moore, the defendant’s agent, by F. Saunders & Co.’s consent. The judge returns that he has “not considered the effect of this chattel mortgage, or the manner of dealing with the mortgaged property, for the reason that the facts justifying the Issuance of the writ of attachment must exist at the time it issues, and not afterwards.” While the intent to defraud must have existed at the time the writ issued, the subsequent conduct of the parties to the transaction was admissible to throw light upon the intent with which the instruments were made and accepted, and, had there been a jury, it would have been error to exclude them. The Judge seems to have excluded them as immaterial to the issue. While we cannot say that they should have affected the result, we cannot say that they should not. It was the duty of the judge to consider them. Inasmuch as he did not, we have no alternative but to reverse the order of dissolution, with costs, and direct a new trial. Such an order is therefore made.

The other Justices concurred.