Brown v. Watson
| Decision Date | 09 June 1887 |
| Citation | 66 Mich. 223,33 N.W. 493 |
| Court | Michigan Supreme Court |
| Parties | BROWN v. WATSON and others. |
Appeal from circuit court, Osceola county. In chancery.
More & Wilson, for complainant.
G.A Wolf, Sayles & Trumbull, and Gleason & Bundy, for defendants and appellants.
Foreclosure of mortgage. Decree in the circuit court for the county of Osceola, in chancery, in favor of complainant. The defendants Jane Trembath, Henrietta Watson, Lillian Watson, Charles Watson, James Watson, David Wolf, and Benjamin Wolf appeal to this court. The bill of complaint was filed April 1, 1884, to foreclose a mortgage, covering 1,246 acres of land in Osceola county, executed by the defendants William Watson and Catherine Watson, (wife of William,) on the eighth day of April, 1880, to David F. Watson, to secure the payment of $4,350, as evidenced by three promissory notes of the same date,--one for $1,650, payable in six months after date; and two for $1,350 due in one and two years after date. These notes were executed by William in his individual capacity.
At the time of executing this mortgage William Watson was the surviving partner of the firm of J. & W. Watson, which had been composed of his brother James and himself. The mortgage in terms conveyed "all the interest of said William Watson, as survivor of himself and James Watson, deceased, composing the firm of J. & W. Watson, and as a partner of said firm, and as an individual, of, in, and to" the lands described therein. April 29, 1880, David F. Watson assigned the notes and mortgage to Marcus E. Brown of the city of Grand Rapids. Brown died intestate April 7 1881. May 9, of the same year, administration of his estate was granted to John W. Champlin and Mary E. Brown of that city, who duly qualified. January 14, 1884, the probate court of Kent county decreed distribution of Brown's estate, and, by virtue of such decree, these notes and this mortgage were on that day duly assigned and delivered by Champlin, as administrator, to Mary E. Brown, the complainant and the widow of said Marcus E. Brown.
James Watson died intestate on or about the twenty-second day of September, 1875. He left surviving him Jane Watson, (now Trembath,) his widow, and four children, who were all minors at the time of the filing of this bill, to-wit, Henrietta, Lillian, Charles, and James Watson. The defendants, David and Benjamin Wolf claimed certain of the lands under a warranty deed from the defendant James Lunney, whose title was derived from the defendants William and Catherine Watson after the execution of the mortgage. It is conceded that they have no standing as against this mortgage, and their solicitor claims that their only object in appealing was to bring properly before this court the question as to the admission of a deposition in the case which will be referred to hereafter.
The main controversy relates to the interest of James Watson in the lands embraced in this mortgage. The complainant insists that the mortgage is a valid lien upon such interest, and his heirs deny it. The lands were mostly purchased in 1874 and 1875, and the deeds ran to "James and William Watson" or "William and James Watson." William Watson swears that the lands were bought and held as copartnership property, and at the time of James' death, belonged to the firm of J. & W. Watson. There is no other proof in relation to the tenure of these lands as to whether they were owned in partnership or in common. No use had been made of them at the time of James' death. They were, however, not inventoried as a part of his estate, and seemed to have been treated by William, the widow of James, and his administrator, David F. Watson, as copartnership property.
As I view the case it is not necessary to determine the character of the holding of these lands, or to discuss to any great extent the power of William Watson, as survivor of the firm of J. & W. Watson, to mortgage or alienate them. One thing is certain and beyond dispute. As against the heirs of James Watson, he had no right to dispose of or incumber the interest of James in these lands for his own individual debts, or for any purpose other than their legitimate disposition, by sale or otherwise, to close up the partnership business and pay partnership debts. He held the legal title, if they were partnership lands, in trust for these heirs, and he could not violate this trust by mortgaging them for his own obligations, or fraudulently, to one who did not take such mortgage in entire good faith.
David F. Watson, the mortgagee, was a brother of James and William, and knew all about their affairs. He was also administrator of his dead brother's estate. The consideration of this mortgage, as proven by William and David, is not satisfactory to me as to its amount in the first place. And, secondly, it is clear to my mind that the sum secured by it was never a partnership obligation. When James died, David had been working for the firm only about a month. He claims that the notes running with the mortgage in question were given in settlement with William at their date, and the amount represented by them was made up of $1,100 owing to him from the firm when James died, $1,200 that he lent William to carry on the business afterwards, and his salary. He claims to have worked right along under the hiring in August, 1875, until February, 1879. He was to have the same wages as he could earn at milling, which was his occupation before he commenced work for the firm. While employed, he admits drawing $1,400 out of the business. I am not by any means convinced that he ever lent the firm any money before James died. At any rate I cannot find that he had any property, or was worth anything, when he commenced work. How he was able afterwards to lend William $1,200, and draw out $1,400, and have enough still coming to him from his salary to make an indebtedness of $4,350 to him from William, or the firm of J. & W. Watson, in February, 1879, is beyond my ability in arithmetic. His salary, under his own showing, could not have been over $50 a month.
When James Watson died, the firm was solvent, and worth, as appears from all the testimony, at least $15,000 over and above all liabilities. When William got through with the business, and absconded, there was not enough property to pay the debts. It is claimed that William had to keep on in the business of logging to fulfill the terms of two contracts, entered into by the firm before James' death, and from which he could not obtain release; and one of them, at least, extended five years, and could not be completed in less than that time. These contracts were not put in evidence, and there is therefore no definite testimony as to what they contained, nor any proper proof of their existence. It also appears that William engaged in at least two other contracts after his brother's death, and the business was not kept separate from the others. William lost money steadily from the time he assumed control of the affairs of the firm until he became so deeply involved that he quit business, and fled the country, leaving his creditors to secure by attachment what little was left of the truck belonging to a logging outfit.
Whatever was owing to David F. Watson...
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