King v. Hubbell

4 N.W. 440, 42 Mich. 597, 1880 Mich. LEXIS 728
CourtMichigan Supreme Court
DecidedFebruary 11, 1880
StatusPublished
Cited by15 cases

This text of 4 N.W. 440 (King v. Hubbell) 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
King v. Hubbell, 4 N.W. 440, 42 Mich. 597, 1880 Mich. LEXIS 728 (Mich. 1880).

Opinion

Cooley, J.

We are not satisfied that the circuit judge was justified in taking this case from the jury on the facts. ' It cannot be said that there were no facts and circumstances in evidence calculated to cast suspicion on the bona fides of the mortgage. The mortgagor was the son of the plaintiff below, and áceording to his own evidence had started in business on money borrowed from the plaintiff but a short time before, and there is nothing in the case to show that either father or son had reason to believe that the son had made money in his business. Under these circumstances that the father should sell to his son $1500 of railroad stock,at par when it had no market value, and apparently no intrinsic value, and take for it a mortgage on his son’s stock in trade, was certainly a very extraordinary transaction, and might have been expected to result as it did, in the father soon claiming the goods on his mortgage, while the parties who supplied the goods on credit were left to look to the worthless railroad stock for their satisfaction. The trade may have been perfectly honest, and it is not our province or intention to raise any question of that; but if a jury were to conclude that it was entered into for the purpose of relieving the father of his railroad investment at the expense of the son’s creditors, it could not be said that there were no cir[600]*600cumstances favoring that view. This, and some other, circumstances which we need not refer to, fairly entitled the defendant to go to the jury on the facts.

The circuit judge was laboring under a misapprehension' when he assumed that if any portion of the mortgage debt was valid and unquestioned, that fact must put an end to all controversy as to the validity of the mortgage. That fact would by no means preclude the bona fules of the mortgage being called in question. This mortgage was upon a merchant’s stock in trade; and the nominal amount seems to have been sufficient to exhaust the stock or nearly so. It was sufficient, at any rate, to deter creditors from any attempt to collect their debts unless they believed they could successfully assail its validity. If the mortgage was in fact given and received for any considerable sum more than was fairly and honestly due to the mortgagee, this of itself would be a badge of fraud, and if the purpose was to keep the debtor’s interest in the goods from being reached by other creditors, it would be fraud in law. And the fact that the debtor was allowed to remain in possession of the goods and make sales in the ordinary course of business would be a circumstance tending to show that the mortgage in its inception had a purpose beyond securing the mortgagee’s demand. And this view would be strengthened rather than weakened by the plaintiff’s . explanation of his claims on his son; for this, if accurate, would show that the son must from the very start have been unable to meet his engagements, and that any credit which his father’s assistance to him gave was deceptive.

The principal question in the case, however, is whether personal property covered by a chattel mortgage is subject to be taken on attachment against the mortgagor. The circuit judge held that it was not.

No question is made that property thus situated is subject to be taken in execution. The statute expressly [601]*601.provides that “•when goods or chattels shall be pledged by way of mortgage or otherwise, for the payment of money, or the performance of any contract or agreement, such goods or chattels may be levied upon and sold on execution against the person making such pledge, subject to the lien of the mortgage or pledge existing thereon” (Comp. L., § 6097); and although the statute provides further that the execution creditor may pay off the mortgage or satisfy the terms and conditions of the pledge, and thereby acquire the interest of the mortgagor or pledgor, yet this is not intended to be and is not a condition precedent to an execution sale. Cary v. Hewitt, 26 Mich., 228.

But it is contended on behalf of the plaintiff below that this statute is expressly limited to levies and sales on execution and cannot be . extended by construction; that a levy by virtue of an attachment is not within its terms, and if the statute were by construction extended to cover the case, the levy would be wholly inconsistent with the legal interest of the mortgagee or pledgee, and in many cases would result in serious injury to if not destruction of his lien. The levy, of an execution must be followed immediately by a sale, and can therefore only displace the mortgagee’s or pledgee’s right to possession for a brief period, and at most only subject him to temporary inconvenience. On the other hand it is justly said that when property is seized upon attachment the law fixes no time within which it must be brought to sale, and it may never be brought to sale, as judgment may never be rendered against the defendant. If the officer can detain .the property after a breach of the condition of the mortgage, and after demand therefor, there is no practical limit to the time he may detain it, since the parties to the suit — in which the mortgagee cannot be heard — may delay a judgment as long as they please.

There is much force in these objections. In Lyon v. Coburn, 1 Cush., 278, which is cited in support of a [602]*602strict construction of the statute, it was held that a statute authorizing the levy of an attachment on mortgaged chattels would not justify their being taken in execution. But as an attachment would be worthless unless it conduced in some manner to the collection of the debt for which it was levied, it may be doubted if the court would have so held if it had not appeared that under the laws of Massachusetts there were other means of rendering the levy available. It was in fact found that the intent of the legislature in permitting the mortgaged property to be attached could be fully effectuated, without extending in the least its express terms.

But the attachment law of this State expressly provides that the writ of attachment “shall command the sheriff, or other officer to whom it may be directed, to-attach so much of the lands, tenements, goods, chattels, moneys, and effects of the defendant not exempt from execution, wheresoever the same may be found within the county, as will be sufficient to satisfy the plaintiff’s demand.” Comp. L., § 6401. The case is therefore-clearly within the terms of the statute; for if the section is applied literally, and according to its apparent meaning, the officer has only to look for property subject to execution, and he may attach whatever he finds. It is said, however, that this provision came into our law in 1846, while the statute authorizing a levy on mortgaged property was only passed' in 1861, and that the former must be construed in the light of statutes regulating levies on execution when it was adopted. But as this very provision in the attachment law was amended and re-enacted in 1869, the argument that might otherwise have been plausible falls to the ground. It plainly, as we think, intends that whatever is subject to execution is subject to attachment also.

We fully appreciate the difficulties that may arise in protecting the interest of the mortgagee when the levy of attachment is made; but it is not uncommon that a statute giving a new or further remedy introduces sim[603]*603ilar difficulties.

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Cite This Page — Counsel Stack

Bluebook (online)
4 N.W. 440, 42 Mich. 597, 1880 Mich. LEXIS 728, Counsel Stack Legal Research, https://law.counselstack.com/opinion/king-v-hubbell-mich-1880.