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fer, among other things, was to be used to pay these taxes, of which this defendant must take notice. This defendant will not be allowed in equity, under the circumstances in this case, to set up these titles against the interest of complainants, towards which interest in this property it at that time owed the same duty which rested upon its incorporators.
We do not agree with the conclusion and decree of the learned circuit judge that defendant acquired a good and perfect title to the one-fifth interest of complainants in the property of the Breen Mining Company through deeds of conveyance from Mrs. Sawyer to it, for the reasons we have already stated in this opinion, and therefore the decree of the circuit court is reversed, and a decree will be entered in this court declaring and determining that complainants, never having parted with their interest in and to all the estate and property of the Breen Mining Company, which they inherited from Salmon P. Saxton, the father of complainant Frankie E. Marsh, are the owners of a one-fifth interest in and to all of said property, both real and personal, which has come into the hands and possession of the defendant Breen Iron Company, and that they are entitled to a full and strict accounting of the whole thereof and all receipts of every name and nature from all sources which have come to the said defendant since its assumption of ownership and control thereof, and that complainants be decreed to have a lien for the amount of their interest in the Breen Mining Company against the entire property conveyed to the new corporation by a majority of the stockholders in interest against the consent of complainants; that the affirmative relief prayed for in defendants' answer and cross-bill be decreed denied, and such cross-bill be dismissed; that the cause be remanded to the circuit court for Kent county for a full and complete accounting, upon which accounting complainants will be charged with the amount which would be their equitable portion, according to their interest, of the sum actually and necessarily paid by the other stockholders at the time of the reorganization, not to include, however, items assumed and agreed to be paid by Josephine S. I. Sawyer, and such items as may have been caused or incurred by the neglect and delinquency of the officers of the Breen Mining Company. It is further decreed that complainants do recover their costs of both courts against defendant Breen Iron Company, to be taxed.
BROOKE, KUHN, OSTRANDER, BIRD, MOORE, and STEERE, JJ., concurred. STONE, J., did not sit.
COFFEY V. MOGAHEY.
1. FRAUDULENT CONVEYANCES-BULK SALES ACT-SALES-EQUITYJURISDICTION—CREDITORS' SUITS-JUDGMENT. The objection in a suit to enforce a claim against pur.
chasers of the business of complainant's debtor, who did not comply with the “sales in bulk" law, that the complainant was not a judgment creditor and was not entitled to relief in equity, should be presented by demurrer; it
comes too late at the hearing. 2. SAME-EQUITY-JURISDICTION—CREDITORS' Suits.
By the terms of the “sales in bulk” law (Act No. 223, Pub.
Acts 1905, 2 How. Stat. [2d Ed.] g 2612), creditors are given the remedy of impounding property of their debtor, who has not complied with the conditions of the law,
although the claim or claims have not been first reduced
to judgment. 3. SAME-ADEQUATE REMEDY AT LAW_EQUITY.
The remedy of garnishment, conferred by the statute, is
not exclusive, but the right to a receiver and other equitable relief necessarily results from the terms of the statute which creates a trust fund in the hands of the
purchaser for the benefit of the seller's creditors. 4. SAME—ADEQUATE REMEDY AT LAW.
Averments that the debtor absconded after transferring
his stock of merchandise, that the provisions of statute were not followed in making the conveyance, and that the purchaser disposed of and transferred the property to another defendant who is disposing of it, make out a case
of equitable cognizance. 5. SAME-WAIVER-SALES.
A waiver, being the intentional relinquishment of a known
right, is not to be inferred against a complaining creditor,
Appeal from Kalamazoo; Knappen, J. Submitted April 15, 1913. (Docket No. 62.) Decided July 24, 1914.
Bill by William J. Coffey against William A. McGahey and others for the appointment of a receiver, accounting, and injunction. From a decree for complainant, defendants appeal. Affirmed.
Samuel W. Oxenford, for complainant.
Jesse R. Cropsey (Don B. Sharpe, of counsel), for defendant Baker.
MCALVAY, C. J. This is an appeal by the defendant Herman D. Baker from a decree entered in this cause against him and his codefendants in the circuit court for the county of Kalamazoo, in chancery.
1 As to the remedy of creditors where sale is made in violation of bulk sales law, see note in 39 L. R. A. (N. S.) 374.
On the question of the constitutionality of bulk sales legislation, see notes in 2 L. R. A. (N. S.) 331 and 20 L. R. A. (N. S.)
The facts are as follows: Defendant McGahey, who had for some time owned and conducted a certain saloon in the city of Kalamazoo, on July 22, 1908, sold and conveyed the entire stock in trade, fixtures, and personal property owned and used by him in and about said business to defendant Baker in bulk. In making this sale, these parties in no form or manner complied with the provisions of Act No. 223, Pub. Acts 1905 (2 How. Stat. [2d Ed.] § 2612), known as the "bulk sales act.” This was the only property owned by McGahey, and defendant Baker had been acquainted with him but a few days. On the date of said sale defendant Baker took immediate possession of all of said property and proceeded to continue the business. Defendant McGahey absconded for parts unknown, and his whereabouts have not since been known. He was brought into court by publication. Defendant Baker continued this business until August 14, 1908, when he sold and transferred to defendant Felix Schmidt for the sum of $2,500 all the stock in trade, fixtures, tools, and personal property of every kind owned and used by him in and about the said business, being the property purchased from McGahey. Neither of the parties to this sale conformed in any manner to the provisions and requirements of the said "bulk sales act." Defendant Schmidt upon his purchase immediately took possession, and was engaged in carrying on the business when this suit was instituted. Complainant had been employed by defendant McGahey some time previous to the date of the sale to Baker in and about these premises as a carpenter in charge of the carpenter work in repairing and remodeling the building occupied by defendant McGahey as a residence upstairs and as his business place on the ground floor, and so
worked for him up to and including the date of sale, at which time he was indebted to him in the sum of over $200.
Complainant filed his bill of complaint in this cause against these defendants for himself and in behalf of all the creditors of defendant McGahey, setting up at length the foregoing facts, and asking the aid of the court in equity in the premises, to decree the amount due him from McGahey, and that defendants Baker and Schmidt be declared receivers of all of the said stock of merchandise and fixtures, and the proceeds and avails thereof, for his benefit and that of the other creditors who might intervene, and that Baker. and Schmidt come to a full accounting for the said property and the proceeds of the same, and that a receiver be appointed in their stead, and that pending the action an injunction be granted.
To this bill of complaint, defendants Baker and Schmidt filed their several answers under oath. The answer of defendant Baker, which is the only one necessary to be considered by this court, he alone having appealed, admits all but three of the charges of the bill of complaint, and the record shows those were admitted upon the hearing of the cause.
Defendant on this appeal contends that the court in equity has no jurisdiction of this cause, for the reasons that complainant is not a judgment creditor, that complainant has a complete and adequate remedy at law, and in any event that the record shows complainant has waived any right of action which he might have had against defendant Baker or the goods in question.
Defendant did not demur to the bill of complaint or claim the right of demurrer in his answer on jurisdictional grounds. It does appear that, when complainant was sworn as a witness and proceeded to prove the indebtedness of McGahey to him, an objection was made to the admission of any such evidence,