Fifth National Bank v. Daboll

100 Mich. 67
CourtMichigan Supreme Court
DecidedApril 10, 1894
StatusPublished
Cited by1 cases

This text of 100 Mich. 67 (Fifth National Bank v. Daboll) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fifth National Bank v. Daboll, 100 Mich. 67 (Mich. 1894).

Opinion

Hooker, J.

, The Scofield Buggy Company, being in failing circumstances, gave a mortgage to a trustee to secure certain creditors. Subsequently it made an assignment for the benefit of creditors, and one Pearl was appointed receiver. Upon application of High, the trustee under the mortgage, the court ordered Pearl, the receiver, to pay over to the trustee the proceeds of the mortgaged property to the full amount of the secured claims. This order was made February 4, 1891. On May 18, 1891, Pearl filed a petition, alleging that a portion of the secured claims of the Fifth National Bank of Grand Bapids and other creditors arose upon indorsements by the Scofield Buggy Company of its customers5 paper, and that considerable of this paper had been paid after the execution of the mortgage, and that some had been paid after proof of claims had been filed. The object of this petition was to reduce proportionately the amount to be paid to the trustee, it being apparent that the property mortgaged would not produce the amounts of the debts mentioned in the mortgage. Answer was filed by the Fifth National Bank, and proofs were taken, and on May 29, 1891, “on final hearing,55 an order was made by the circuit court, fixing the amounts upon which the claimants should have dividends as follows: American Wheel Company, .$5,355.03; Julius F. Pratt, as assignee of the Home Savings Bank, $22,294.78; Julius F. Pratt, as assignee .of the Preston National Bank, $5,066.05; the Fifth National Bank of Grand Bapids, $9,592.06. An appeal was taken to this Court by the Fifth National Bank, which resulted in a reversal and vacation of the order as to the Fifth National Bank, as appears from the journal of this Court.1 There[70]*70after (and perhaps before) the Fifth National Bank claimed a dividend upon the amount of its claim as stated in the mortgage, which it would seem that other creditors had not done. Whether the reason of this was that it was not to their advantage to do so we need not inquire. At all events, we find some of them contesting this claim of the bank, and High, the trustee, on February 29, 1892, filed' a bill, by reason of such contest, to settle this question. All parties to this controversy were made , defendants, and the bill set forth.at length the respective claims of Pratt and the American Wheel Company, as filed, • for the amounts fixed by the order of the circuit court, hereinbefore referred to. The Fifth National Bank filed a separate answer. Pratt and the wheel company joined, admitting the averments in relation to their own claims. They neither admitted nor denied that they instigated the filing of this bill, but by their answer contested the claim of the Fifth National Bank. The case went to hearing upon stipulated facts, and among them the amounts of the respective claims of Pratt and the wheel company. A decree was made, fixing the amounts upon which the several claimants interested in the trust fund were entitled to payment, and the percentages of the fund to which they were respectively entitled, as follows:

American Wheel Company____$ 5,296 78 .0734 per cent.
Julius P. Pratt, Home Savings Bank claim____________ 22,014 50 .3095 per cent.
Julius F. Pratt, Preston National Bank claim........5,002 80 .0693 per cent. .
Fifth National Bank__________ 22,558 19 .3129 per cent.

The decree ordered distribution in accordance with these figures.

-From this decree Pratt and the wheel company appealed, and the only question presented and passed upon by this Court was the claim of the Fifth National Bank, which was modified, and the case remanded for a distribution in [71]*71accordance with the determination of this Court. The decree was in all other respects affirmed.1

On December 2, 1893, an order of distribution was made upon the application of the Fifth National Bank, in which the percentages were the same as those in the'decree appealed from. Soon afterwards a petition was filed by the American Wheel Company and Pratt, alleging that of the claims included in said mortgage they had made proof of only so much as remained unpaid, and that under the decree of the Supreme Court they were entitled to a dividend upon the full amount of these claims as they existed on the 19th day of September, 1890, i. e., the day of the execution of the mortgage. It alleged further that by the terms of the order of December 2 the Fifth-National Bank would receive a dividend upon $905 which was not secured by said mortgage, which fact did not-come to the knowledge of counsel until after December 2, 1893, and that the fund to be divided amounts to about. $33,000, and the claims secured to $72,000, in round numbers, and that by that order the Fifth National Bank will receive at least $1,300 more than it is entitled to, according to the decision of the Supreme Court. The petition* concluded with a prayer for an order vacating the order of December 2, and a distribution in accordance with the-decision of the Supreme Court, and that the contingent, claims of the Fifth National Bank, Julius F. Pratt, and the American Wheel Company be paid in full, and the-remainder of the fund distributed among the secured creditors named in the mortgage on the direct liability prorata, and that said Pratt and the American Wheel Company be permitted to make further proof as to the amount, of their contingent claims on the 19th day of September, 1890, as secured by said mortgage, and that a rehearing; [72]*72might be had upon the matters involved in the petition. An affidavit was filed in opposition to this application, from which it is argued that the order of December 2, 1893, was a consent order. After a hearing, the court made an order reciting that it appeared that the order of December 2 was erroneous, and in violation of the order of the Supreme Court, and gave the Fifth National Bank an undue advantage over all of the other defendants in the case, and ordering that it be set aside, and held for naught. It further provided that Pratt and the American Wheel Company might be permitted to take further proofs upon their contingent claims, and that the cause might in due time be noticed for rehearing for an order of distribution. It does not authorize proof as to the amount due the Fifth National Bank, or in any way attempt to reopen the question of what sum is its due upon its claim. A motion to vacate this order having been denied, the Fifth National Bank applies for a mandamus to compel it.

It is contended upon behalf of relator that the order of .December 2 was a consent order, and that it could not lawfully be vacated. The order does not, upon its face, purport to be' such, and apparently the circuit judge did ■.not so consider it. Again, it is contended by the counsel for relator that the credits of Pratt and the American Wheel Company are unalterably fixed by their admissions, ■and the decree of the circuit court, which it is claimed was .affirmed as to them.

Counsel for both parties seem to have misapprehended the effect of the decree of this Court, as appears from the fact that the aggregate of direct and contingent claims ■unpaid of each creditor is used as a basis for the computation of the percentage of the fund which such creditor should receive. That decree determined:

First. That the direct claim of the creditor, as stated ¿n the mortgage, was separate and distinct from the con[73]

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85 N.W. 112 (Michigan Supreme Court, 1901)

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Bluebook (online)
100 Mich. 67, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fifth-national-bank-v-daboll-mich-1894.