Crippen v. Jacobson

Campbell, J. Plaintiff sued Jacobson in assumpsit, and established a claim against him on four demands, one of $75, belonging to himself as original owner, and three derived by assignment, one of $50 from Charles W. Greulick, and two of $50 each from Louis Hammerschlag. All of these were for money lent on the 12th, 13th and 14th of May, 1884. The demands of Greulick and Hammerschlag were absolutely assigned to plaintiff, but he holds them for their ultimate benefit. Suit being brought against Jacobson, defendant Fletcher was garnished and is found to have had possession of Jacobson’s stock in trade under a chattel mortgage dated May 9, 18S4, for $5000, given to secure three previously existing notes not yet matured. This mortgage was purposely kept from record until May 15, 1884, when Fletcher filed it and took possession of the property which was sold before the [388] disclosure, and on the day after service of writ of garnishment. The court below found that Fletcher’s mortgage was void as against debts created during the interval between its making and filing, and held Fletcher liable to that extent for the goods and their proceeds. Fletcher brings error, and the record contains several assignments. No exceptions were taken, and none but those depending on faults in the record can be regarded. The only two which are claimed to have such a basis are the alleged insuifieiency of the finding to support the judgment, and the premature trial of the garnishee suit. The trial was had October 11, 1884, upon the same day on which judgment was rendered against Jacobson. The statute provides that if the principal defendant shall not, within two days after judgment serve upon the garnishee notice of motion for a new trial, or of his intention to remove the case to the Supreme Court, the issue against the garnishee shall stand for trial at the same term. It is now claimed that a previous trial would be void. It is questionable whether this notice was not meant to be given to the plaintiff; but the statute as printed, provides as stated. It is of no consequence who is to receive it. The only question now is whether it affects the jurisdiction to proceed earlier where no one objects. It is clear enough that the garnishee defendant could not be compelled to go to trial within the two days ; and further that, if appellate proceedings should be had by the principal debtor, the garnishee judgment, if rendered, could be stayed by the circuit court until the other was disposed of. But there seems to be no reason why the garnishee defendant may not consent to have the issue as to him tried at any time, and in the present case it is found expressly that both parties came into court ready for trial, and no objection was made below at all. It cannot now be insisted the trial was improperly brought on. The garnishee also claims that the plaintiff could not unite the various claims, and so bring them within the jurisdiction [389] of the circuit court. One of the assignors — Hamnaerschlag— had a cause of action beyond the sum necessary to give jurisdiction. But the statute in regard to the rights of assignees of legal causes of action is express that any non-negotiable •cause of action may be assigned so as to. convey all the rights of the assignor. How. Stat. § 7344. It is held that this covers every cause of action which would survive. Cook v. Bell 18 Mich. 387; Final v. Backus 18 Mich. 218. That plaintiff by the assignment succeeded to all of the rights of his assignors is a necessary consequence from the broad terms of the statute. It is not claimed he could not sue; but only that he could not bring garnishment. The garnishee law provides for the issue of garnishee process in all cases where an action is brought on contract. And it also authorizes the proceeding to reach all property and assets held by the garnishee by title or transfer which is void as to creditors of the principal defendant. How. Stat. § 8059. If the mortgage in this case is void as against such creditors it is within the words of the law. We have heretofore held that a chattel mortgage not seasonably filed is void and not merely presumptively void against creditors whose rights intervene between the making and filing. Haynes v. Leppig 40 Mich. 607; Hurd v. Brown 37 Mich. 484; Fearey v. Cummings 41 Mich. 383; Cummings v. Fearey 44 Mich. 39; Waite v. Mathews 50 Mich. 392. Wallen v. Rossman 45 Mich. 333. The law does not require previous proceedings to exhaust other remedies. The garnishee law is unconditional upon this subject, and garnishee proceedings will reach the assets if they exist. When the debt is not incurred on the credit of an apparently •clear title which is in fact covered by a secret mortgage, the cases cited hold that there is no right to complain of a subsequent mortgage without taking some step which puts the creditor on a different legal footing than that of a quiescent party. But when a chattel mortgage exists and is concealed, it is under the statute void for the reason that it produces a false appearance of entire solvency when in fact a person known to have mortgaged his stock would not be as likely [390] to get credit as one who had given no such security; and those who deal with such a debtor are liable to be defrauded by appearances. One who gives credit under such circumstances is necessarily exposed to that mischief, and the law has removed all questions of suspicion or notice by making chattel mortgages void, at all events, against creditors who deal with a debtor so situated. Such creditors are directly within the policy of the statute.’ The court committed no error in holding the garnishee liable, and the judgment should be affirmed. Cooley, C. J. and Champlin, J. concurred. Sherwood, J. concurred in the result.