Bush v. Wadsworth
| Decision Date | 08 April 1886 |
| Citation | 27 N.W. 532,60 Mich. 255 |
| Court | Michigan Supreme Court |
| Parties | BUSH v. WADSWORTH. (Two Cases.) |
Appeal from Kalamazoo.
E.M. Irish, for defendant.
These two cases were argued and submitted together, and involve nearly the same state of facts.
The first bill is filed to foreclose a mortgage executed by the defendant Wadsworth to one Hiram Lewis; and the other to foreclose a mortgage given by Wadsworth to one Isaac Van Kersen.
In the summer of 1876, Wadsworth bought the land which is covered by these mortgages,--part of it of Lewis and a portion of Van Kersen. He executed purchase-price mortgages upon the two parcels,--one to Lewis upon the land bought of him, for $2,074; and one to Van Kersen upon the other piece, for $3,000. He then sold both parcels to the Eagle Portland Cement Company, subject to these mortgages, the land becoming a part of the company's plant. This company was composed of the complainant, who resided in Kalamazoo, where the plant was located, and other parties, most of whom resided in Chicago, Illinois. The corporation was organized and existed under the laws of the state of Illinois. On the twenty-fifth day of January, 1878, this corporation, being indebted to various parties, elected the complainant its president, and voted to mortgage its plant in the sum of $25,000. It voted to issue, and did issue, bonds of $500 each for the above amount, and executed its mortgage upon its real estate and property to one George L. Otis, as trustee for the holders of said bonds, and to secure them; the mortgage being in form an Illinois trust deed. The corporation at this date were owing Bush & Patterson, the complainants in the second bill, who were copartners in business, the sum of $3,359.40; also some floating debts in Kalamazoo; about $12,000 in Chicago; and the amount of these Lewis and Van Kersen mortgages, less payments of $690; and one year's interest upon the one to Lewis; and $1,000 and $300 interest, upon the one to Van Kersen,--making in all a total indebtedness of about $21,000. Some of the stockholders were indorsers upon the Chicago indebtedness, and it was agreed that Bush and the others should take a certain amount of these bonds towards the company's indebtedness to them, or to indemnify them for their liability as indorsers. The complainant Bush took $2,500 of the bonds, and some of the others also took some and paid the amount of the same on the Chicago indebtedness. The indebtedness at the latter place was nearly paid in this manner.
The business of the company not prospering as expected, it is claimed by the complainant Bush that by an agreement between himself and the other directors, and at their request, he was authorized to run the works, with the understanding that he should do the best he could with the business, and if any profit was made, divide the same among the stockholders, who were also to share in the expenses, and also the losses, if any. This claim is supported by the proofs. Thereupon commencing about February, 1878, the complainant Bush, or Bush & Patterson, it is immaterial which, carried on the business of the company until the foreclosure of the Otis trust deed and sale of the property thereunder as hereinafter stated the complainant Bush further claims that when the payments of installments of principal and interest, during this time, became due on these two mortgages, in order to protect the interests of the trustee, Otis, and himself as holder of a portion of these bonds, he was obliged to pay, and did pay, upon the Lewis mortgage the sum of $1,671.90, and upon the Van Kersen mortgage the sum of $1,200, whereby he became subrogated to all the rights of said mortgagees, as far as these amounts are concerned. It is admitted that he paid these amounts, but not out of his own or Bush & Patterson's money, as he claims. The Improved Eagle Portland Cement Company, who defend, acquired the property subsequently, and assert that these payments were made with moneys belonging to the Eagle Portland Cement Company, and were paid by Bush as the president of that corporation.
March 1, 1882, at a foreclosure sale of the premises under the Otis trust deed, the land covered by the Lewis and Van Kersen mortgages was bid in by one John M. Roundtree, who conveyed to the Improved Eagle Portland Cement Company, the corporation defendant in these suits. This defendant also holds a deed from the old corporation, the Eagle Portland Cement Company.
In the Otis foreclosure proceedings, the old corporation, Jeremiah P. Woodbury, Allen Potter, and Frederick Bush were made defendants. Woodbury was made a party on the ground that he owned the Van Kersen mortgage, Potter because he was supposed to hold the Lewis mortgage, and Bush for the reason, as therein stated, that he claimed to have paid out moneys on these prior mortgages for and in behalf of the trustee, Otis and the decree in that case expressly states and finds that the lands to be sold thereunder are subject to incumbrances which are prior to the trust deed, as follows: To said defendant Woodbury, as holder of Van Kersen mortgage, $1,451.36; to holder of Lewis mortgage, $873.12; and to ...
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