Anderson v. Messinger

• Citation: 146 F. 929
• Decision Date: 05 June 1906
• Docket Number: 1,479.
• Parties: ANDERSON v. MESSINGER.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

146 F. 929

ANDERSON v. MESSINGER.

No. 1,479.

United States Court of Appeals, Sixth Circuit.

June 5, 1906

R. P Carey and C. H. Trimble, for plaintiff in error.

C. W Everett and H. E. King, for defendant in error.

SEVERENS Circuit Judge.

This is an action of ejectment brought by Anderson, the plaintiff in error, to recover the possession of certain lots in the city of Toledo, Ohio, described in his petition, of which he claims the legal title, and the possession of which, he says is wrongfully withheld by the defendant. The answer denies the alleged title of the plaintiff, and denies the plaintiff's right to the possession. A stipulation was filed waiving a trial by jury, and consenting to a trial by the court. Upon the trial, proof of all the material facts was made by mutual stipulations which are incorporated in the bill of exceptions. The court rendered judgment for the defendant, the entry reciting that the court 'does find the issues of the cause with the defendant. ' As the facts material to the judgment were agreed, this must mean that the court found the issues of law for the defendant. Supervisors v. Kennicott, 103 U.S. 554, 26 L.Ed 486; Hulitt v. Ohio Valley Nat. Bank, 137 F. 461, 465, 69 C.C.A. 609. When the facts are agreed, they are the equivalent of facts found by the court, and the question of the propriety of the judgment is, in each case, the same. Supervisors v. Kennicott, 103 U.S. 554, 26 L.Ed. 486; Lehnen v. Dickson, 148 U.S. 71, 13 Sup.Ct. 485, 37 L.Ed. 380. Some other matters hereafter to be referred to were received in evidence over objections which were incompetent to disturb or affect the ultimate material facts, and could not, therefore, affect the judgment. The case is properly here for review to determine whether the judgment is the one which the facts required.

Each of the parties derives his title from Edward Bissell, a former resident of Toledo. On May 19, 1838, Bissell, claiming to be the owner of the premises, gave his bond to Charles Butler of New York for the sum of $21,500, payable one year from that date, with his wife, to said Butler, a mortgage on the premises in question. This bond and the mortgage were assigned by Butler on September 23, 1841, to Henry Anderson, a resident of Holly Springs, Miss., to secure the payment of his note to Anderson for the sum of $20,000 and interest thereon; and for further security Butler assigned to said Anderson 546 shares of the Erie and Kalamazoo Railroad Company of the par value of $50 per share. Butler having defaulted in the payment of his note, Anderson, on September 19, 1843, filed his bill in chancery in the court of common pleas for Lucas county, Ohio, to foreclose the Bissell mortgage, making Bissell and his wife, Butler and other parties, defendants. These parties other than Butler were served with process. Butler was not served and did not appear. That suit was pursued to a decree which was rendered April 1, 1844, for the sum of $29,139.01. A sale was ordered and a master appointed to conduct it. The mortgaged lands were bid off by Henry Anderson at the price of $6,910. The sale was duly confirmed and the master was ordered to make the proper deed to the purchaser. At this stage of the proceedings and on October 4, 1844, an agreement was entered into between Butler and Anderson, which, after reciting the giving of the bond and mortgage by Bissell, the assignment thereof by Butler to Anderson and the assignment of the 546 shares of railroad stock to secure Butler's note, and the above-stated proceedings for the foreclosure of the mortgage, proceeded as follows:

'And, whereas, the said Henry Anderson at the instance and request of the said Charles Butler and in consideration of the covenant of the said Charles Butler hereinafter contained, is willing to relinquish and surrender to the said Charles Butler, the collateral securities, so assigned as aforesaid, for the payment of said note of twenty thousand dollars, so far as the same may be done without prejudice or injury to the order obtained for the sale of the said mortgaged premises, and the rights of the said Henry Anderson under the same, and without prejudice to the personal liability of the said Charles Butler, to the said Henry Anderson on the principal debt.

'Now, therefore, these presents witness, that in consideration of the premises and for the purpose of giving effect to the same, and said Henry Anderson has on the day of the date hereof executed and delivered a power of attorney to the said Charles Butler, empowering and authorizing him fully and effectually, if he shall see fit to do so, to release and discharge the said Edward Bissell of and from all personal claim, demand or liability, whatsoever for or on account of the said bond and mortgage, but without prejudice to the proceedings, which have been or may be adopted, to effect the sale of the said mortgaged premises, and that the said Henry Anderson has also by instrument in writing released and transferred to the said Charles Butler the said five hundred and forty-six shares of Erie & Kalamazoo Railroad Company stock.

'And the said Charles Butler, in consideration of the surrender and relinquishment of the securities, hereby covenants and agrees to and with the said Henry Anderson, that the same shall not be held or construed in any way to affect or impair the liability of him the said Butler on the said note for twenty thousand dollars, and the said Charles Butler also covenants and agrees to and with said Henry Anderson that he, the said Butler, will well and faithfully apply and pay over the said Henry Anderson, on account of the said note, all sums of money or other valuable consideration which he, the said Butler, may receive or derive, by reason of the surrender and relinquishment of the securities aforesaid by him, the said Henry Anderson.

'In testimony whereof the said Henry Anderson and Charles Butler have hereunto respectively set their hands and seals in duplicate this fourth day of October in the year one thousand eight hundred and forty-four.

'(Signed)

Henry Anderson 'Charles Butler.'

Thereafter, on November 18, 1844, the master in pursuance of the above-mentioned decree and of the sale and the order of confirmation thereof, executed and delivered his deed of conveyance to Anderson, his heirs and assigns of the premises here in question, and which, as above stated, had been bid off by him. Prior to the date of this last-mentioned agreement between Butler and Anderson, Butler had, on February 22, 1843, obtained a quitclaim deed of these premises from Bissell and wife. But this deed was not recorded until after Anderson's death, nor until October 13, 1849, and it does not appear that the latter ever had notice of it. After the contract of October 4, 1844, Butler made no further payment on his debt to Anderson during the lifetime of the latter, nor to his representatives until October, 1849.

The first question in the case is what, as the consequence of these proceedings for foreclosure, the sale of the property to Henry Anderson under the decree, and the agreement of October 4, 1844 between him and Butler, was the nature of the title conveyed to Anderson by the master's deed. The contention for the plaintiff is that it conveyed to him the title to the property freed from the incumbrance of the mortgage, and that the price which he paid was properly applicable to the payment pro tanto of Butler's note. For the defendant it is contended that Anderson being assignee of the mortgage and having bid off the property and taken the master's deed to himself, acquired only Bissell's equity of redemption and held the property thereafter as trustee for Butler and as a continuing security for the payment of the latter's note. It is a well-settled rule of law that when the owner of securities pledges them to secure the payment of his own debt, he impliedly transfers the right to the remedies which will make the securities available for the payment of his debt in case of his own default. Schlieman v. Bowlin, 36 Minn. 198, 30 N.W. 879; Slee v. Manhattan Co., 1 Paige (N.Y.) 48, 78. And there necessarily goes with this power to make the securities available, the incidental power to transfer the assignor's interest in the securities; otherwise the purchaser does not get the property pledged by the securities, but an indefinite interest depending on contingencies over which he has a remote, if any, control, a circumstance which would greatly depreciate the value of the pledge.

There is also another rule of general application which is that a pledgee, who is a trustee, cannot become the purchaser at his own sale of the pledge. But this rule is not applicable to a judicial sale conducted by an officer appointed by law. Nor indeed is such a purchase absolutely void in all circumstances when the sale is a private sale and the purchaser has an interest to protect. In either of the last-stated instances, the sale would be voidable if the purchaser were guilty of any fraud or other wrongful practice in the transaction; in the first instance by a refusal of the court to confirm the sale or by some judicial proceeding to impeach it, and in the latter instance by such appropriate action private or judicial as he should elect to make his objection effective. Richards v. Holmes, 18 How. 143, 15 L.Ed. 304; Smith v. Black, 115 U.S. 308, 6 Sup.Ct. 50, 29 L.Ed. 398; Allen v. Gillette, 127 U.S. 589, 8 Sup.Ct. 1331, 32 L.Ed. 271; Pewabic Mining Co. v. Mason, 145 U.S. 349, 12 Sup.Ct. 887, 36 L.Ed. 732.

In Richard v. Holmes, supra, a deed of trust had been given to secure the payment of a note, which, at the time of the sale under the trust, was held by Harper. The latter authorized the auctioneer to make a bid for him,...