National Grocer Co. v. Plotler

Brooke, J.

The garnishee defendant reviews by writ of error a judgment against him upon a directed verdict.

Plaintiff, having secured a judgment against the principal defendant in the sum of $217.23, sued out a writ of garnishment against Plotler, as garnishee of Hanna. Plotler disclosed no liability. Upon the trial of the issue, it appeared that Plotler had purchased from Hanna a stock of general merchandise, in bulb, without complying with the provisions of the statute (Act No. 223, Pub. Acts 1905) relative to sales in bulk. It further appeared that the judgment against the principal defendant represented a merchandise debt due from him to plaintiff at the time the sale was made.

The inventory of the stock amounted to $1,251.30. Of this amount, Plotler retained $500, to apply upon a debt due from Hanna to himself, and the balance ($751.30) he paid over by agreement with Hanna to one Dixon, the cashier of the Thompsonville Bank, in which bank said sum was to be deposited to Hanna’s credit. The money was so deposited, and was paid out upon the checks of Hanna to his creditors, other than the plaintiff. It was urged by the garnishee defendant upon the trial, and he now insists, that the plaintiff should not be permitted to recover, because it had given its assent to the sale and the payment of the money by Plotler to Dixon. Plotler testified:

“ I called up Mr. Brooks, of the National Grocer Company, and I said: ‘ Mr. Brooks, I am buying Mr. Hanna out, and I want to know how much he owes you.’ He said, ‘Hold the phone, and I will see.’ I did so, and he came back and said it was $199 and some cents. I said, ‘ Would it be all right if I paid over the money to Mr. Dixon, to protect the creditors, and you can go and get your money ? ’ and he said, ‘All right,’ and so I did, under his instructions.”

Assuming that this conversation is correctly detailed by defendant, what is its effect? Brooks simply consented that defendant should pay the purchase price to Dixon to protect the creditors, upon the understanding that he could go to Dixon and get his money. Plotter did not pay the money to Dixon to protect the creditors, but paid it to be placed to the credit of Hanna, who checked it out at will, so that Brooks was unable to secure payment of his claim, as Plotter had assured him he could do. Plaintiff has done nothing, even giving the most favorable construction possible to defendant’s testimony, which would prevent it from taking advantage of the statute. Marquette County Sav. Bank v. Koivisto, 162 Mich. 560 (127 N. W. 680).

It is next urged that plaintiff in any event was not entitled to recover from Plotter the full amount of its judgment against Hanna, but only such proportion thereof as the value of the goods bore to the total amount of Hanna’s indebtedness, the amount of which appeared to be $1,437.88, while the value of the goods sold was but $1,351.30. The statute makes the sale absolutely void as against creditors, unless its conditions are complied with. In effect, therefore, at the time of the service of the writ upon him, the garnishee defendant had in his possession the entire stock of goods belonging to the principal defendant. We have held garnishment proceedings proper under this statute. Spurr v. Travis, 145 Mich. 721 (108 N. W. 1090, 116 Am. St. Bep. 330); Musselman Grocer Co. v. Kidd, Dater & Price Co., 151 Mich. 478 (115 N. W. 409); Marquette County Sav. Bank v. Koivisto, supra. In Musselman Co. v. Kidd, Dater & Price Co., supra, this point was considered and determined against the contention of defendant.

The judgment is affirmed.

Ostrander, C. J., and Steers, Moore, and Stone, JJ., concurred.