O'Connor v. Parker

23 Mich. 22, 2 Mich. N.P. 71, 1871 Mich. LEXIS 61

• Court: Michigan Supreme Court
• Decided: April 25, 1871
• Status: Published

Opinion

Cooley, J.

This appears to be a writ of error upon a judgment rendered against O’Connor in the court below, as indorser of a note made by McKinney & Co. The sole defense is that the note was given by McKinney & Co. and accepted by the Parkers in payment for a precedent debt, with knowledge on the part of all parties that McKinney & Co. were insolvent; that the giving of the note was with a view to prefer the Parkers as creditors; that' McKinney & Co. were soon after proceeded against in bankruptcy, and were actually declared bankrupts; and that by reason of these facts the note and indorsment thereof were altogether void. The circuit court held these facts to constitute no defense, and we see no ground for questioning the conclusion.

The argument of the plaintiff in error is that section thirty-five of the bankrupt law makes certain payments void when made to prefer a creditor or to defeat the policy of the act; and the giving of this note, it is said, is such a payment. We do not think so. The payments the law makes void are those which reduce the means of the debtor to pay his debts ratably. A change in the form of his own obligation from an account' to a note could not have that effect; neither could the accommodation indorsement with which a friend might favor him. These circumstances work no wrong to creditors, and are, therefore, not within the evils this section of the law had in view.

Motion for special damages.

B. W. Meddaugh, for defendants in error,

moved for special damages under § 5612, Gomp. L., citing Waterman v. Toms, 7 Mich., 78.

8. Lamed, contra.

Waiving all consideration of the other infirmities which we think are obvious in the case on the defense, an affirmance of the judgment is ordered.

The other Justices concurred.

The court

awarded twenty-five dollars damages.