Meigs v. Weller

¶1(dissenting). The judgment in this case against the garnishee defendant should not be sustained for several reasons.

¶21. Plaintiffs were guilty of laches in not bringing the case to trial as required by the statute. Judgment against the principal defendant was rendered March 18, 1890. The nest term of the court was in May, at which *636term plaintiffs did not notice the case for trial, and, so far as this record shows, no excuse is given for their failure to do so. The case was not tried till October following. Blake v. Hubbard, 45 Mich. 1; Kiely v. Bertrand, 67 Id. 332. When the case was called for trial defendant’s counsel objected to proceeding,' and moved to dismiss on the ground of this laches of the plaintiffs. Plaintiffs’ counsel thereupon stated to the court that‘defendant had forfeited his right to raise this objection by consenting that the case stand from day to day, and not be taken up for trial before the 1st day of October. Nothing further appears upon the record about this matter than the above statement of counsel. It does not appear when the term began, nor how many days the court had been in session, nor what opportunities the defendant had had to make his motion. I do not think this statement of plaintiffs’ counsel sufficient to establish a waiver or estoppel against defendant.

¶32. Defendant was a bona fide mortgagee in possession of the mortgaged property, and therefor^ not subject to garnishment under the plaintiffs’ theory. Whether he could have been held under How. Stat. § 8065, we need not discuss, since the plaintiffs made no attempt to proceed under that section. Daggett v. McClintock, 56 Mich. 51.

¶43. The conveyances in this case were three in number; two being real-estate mortgages, one a chattel mortgage. They were absolute in form, but were in fact mortgages, as was conceded upon the trial; the defendant having executed a contract of the same date as the conveyances, to reconvey upon payment of the • sum which Mernan owed Weller. The obligations which defendant agreed to assume for Mernan amounted to $9,000. The property conveyed was subject to mortgages of $1,800. At the time the garnishee process was served defendant had *637indorsed for Mernan notes to the amount of .about §6,-000, and he was also indebted to the defendant in the further sum of $630. The only evidence of the value of the property was that of one witness, who testified that in his opinion it was worth .from §18,000 to §20,000. The case was submitted to the jury upon the theory that these conveyances were fraudulent as to creditors. The principal, and in fact the only, reason urged as indicative of fraud was that the property mortgaged was of much greater value than the debt secured. It is too evident for argument that this was no evidence of fraud. A mortgagee cannot be charged with fraud because he has taken security upon property whose value may largely exceed his debt. . Yet the court instructed the jury, in substance, that they would be justified in finding fraud from that circumstance. -He charged them as follows:

, “'He would have a right to secure one creditor if it was done in good faith, and give a mortgage upon his property for a reasonable amount to secure the debt and claim. And that is one of the principal things and reasons urged here by counsel for plaintiffs, and which they claim tends to show fraud,- — that this mortgage was given upon an amount of property that was unreasonable in amount, or was more than was reasonable to secure Mr. Weller for any indebtedness then existing, or for any liability that might have been incurred. That, perhaps, is the most prominent question you will have to consider here, and you should consider it very carefully, and all the testimony bearing upon this point.”

¶54. There was no evidence showing the value of the personal property covered by the chattel mortgage. The sole witness as to value included the real and personal property in his estimate. A mortgagee of real estate cannot be made the subject of garnishee proceedings until he has foreclosed his mortgage, and has received from the sale a surplus over his mortgage debt. But under *638foreclosure proceedings in this State such surplus would not go into the mortgagee’s hands. If, by the consent of the mortgagor, the mortgagee should sell the land at private' sale, undoubtedly this proceeding would reach money so in his hands; bu,t at the time of the commencement of this suit the defendant had neither foreclosed his mortgage nor sold the land. If the plaintiffs claimed that these deeds were fraudulent as to them, they should have proceeded by attachment and creditors’ bill, in accordance with the statute.

¶65. The testimony of the witness of the value of the property was incompetent. His opinion was based, not upon personal knowledge, but upon the statements of others who, • he said, had examined the property, and reported to him.

¶7The principal judgment in this case was against two partners, and it is insisted on behalf of the defendant that the garnishee proceedings will not lie against a debtor of one of such joint principal defendants. Such was the law previous to the act of 1885. Ford v. Dry Dock Co., 50 Mich. 358; Farwell v. Chambers, 62 Id. 316. But the act of 1885,1 though it amended only the first section of the garnishee law, expressly confers the right to this proceeding. The Legislature clearly understood that the subsequent provisions of the statute were ample in providing the method of procedure. We see no difficulty in holding them applicable.

¶8For the other reasons above given judgment should be reversed. Possibly • the plaintiffs might be able to cure these ■ errors, and a new trial should therefore be granted.