Converse v. Blumrich

• Decision Date: 04 April 1866
• Citation: 14 Mich. 109
• Court: Michigan Supreme Court
• Parties: James W. Converse v. Laura Blumrich and others

14 Mich. 109

James W. Converse v. Laura Blumrich and others

Supreme Court of Michigan

April 4, 1866

Heard January 5, 1866 [Syllabus Material]

Appeal in chancery from Kent circuit.

The bill was filed by the complainant in this cause, to foreclose a mortgage executed by one Wenzel Blumrich (the husband of said Laura Blumrich, and the father of said infant defendant), in his life time, to said complainant, and said defendants resist such foreclosure upon the ground that said mortgage was fraudulently obtained and without consideration.

The facts sufficiently appear in the opinion.

Decree of the court reversed, and the complainant's bill dismissed, with costs.

Miller & Wilson, for complainant:

1. Misrepresentation, to constitute fraud, must be in regard to a matter of fact and not merely of opinion; and something which a party must have a right to rely on: 1 Story Eq. Jur sec. 197; 2 Pars. Con., 270, 275; 1 Hill. Vend., 344, n.; 1 Story Eq. Jur., § 199; 2 Kent's Com., 484.

A party must use means of knowledge in his reach: 1 Story Eq. Jur § 200, a; 3 Story's R., 659.

2. That notice is sufficient which should put a party upon inquiry: 1 Hill. Vend., 401.

3. Notice to attorney or agent is notice to principal: 1 Hill. Vend., 406-7.

4. The testimony of complainant concerning transactions with Blumrich is competent under the statute: Sess. Laws 1861, 168.

"Representatives of deceased person" means only executors and administrators: Bouvier's Law Dic., Title Representatives (3); 12 Abbott's Pr. N. Y., 1; Cited in 6 Abbott's N. Y. Dig., 597 (35, 36).

Miller & Rogers, and George Gray, for defendants:

1. The contract could not be forfeited or rescinded by the Union: 2 Parsons on Con., 191-2-3.

2. No steps had been taken by the Union to recover the possession of the premises. The contract remained in force until complainant procured his deed: 11 Mich. 9.

3. Complainant cannot deny the legal effect of the assignments, to himself, of Johnson and Coggeshall, but takes their equitable title and the legal title of the Union, subject to the Blumrich contracts: 1 Blackf. 91; 1 Johns. Ch., 288; 7 Id. 65; 6 Id. 398; White & Tudor's Eq. Cases, Vol. 2, pt. 1st, 37-90, and cases there cited.

4. A party will be precluded from denying his own acts or admissions, which were designed to, and did influence another, when such denial will operate to the injury of such other, or those claiming under him: 8 Wend. 480; 3 Hill 215, and cases there cited.

5. At the date of the new arrangement--June 1st, 1857--Blumrich was entitled to receive his deeds, the original contract being in full force and virtue: 11 Mich. 9.

6. Neither equity nor law will enforce a contract which is without consideration: 12 Barb. S. C., 685; 8 Mass. 449; 1 Parsons on Con., 350, 363; Chitty on Con., 25, and notes.

Complainant's bill should have been dismissed. If the case made by his bill is not sustained, he cannot have any relief on other grounds: 6 Selden 363; 4 Barb. S. C., 265; 1 Barb. Ch. Prac., 339.

Cooley, J. Campbell and Christiancy, JJ. concurred. Martin, Ch. J. did not sit in this case.

OPINION

Cooley J.:

The bill in this case was filed against the widow and heirs at law of Wenzel Blumrich, deceased, to foreclose a mortgage given by him to the complainant. The defense is, that the mortgage was procured by fraud, and is without consideration.

It appears that on October 25, 1847, the American Baptist Missionary Union, a corporation existing under the laws of Massachusetts, and which then claimed a right to certain premises in Grand Rapids, entered into a contract for the sale of the same to Simeon M. Johnson and Thomas J. Coggeshall, for the sum of $ 13,500, payable as follows: $ 3,000 May 1, 1848, and $ 10,500 at the option of said Johnson and Coggeshall, either on said first day of May, 1848, or in six annual payments of $ 1,750 each, commencing on the first day of May, 1849, with annual interest. The legal title to the land was then in the United States; and Johnson and Coggeshall were authorized by the contract, at their own expense, to procure a patent in the name of said corporation, and to compromise, adjust, and settle any claim it might have against the United States in respect thereto, and "all claims to said lands and improvements;" and they were to receive a quit-claim deed of the lands when the payments were fully made. The contract also contained a provision entitling the purchasers to a deed whenever the corporation obtained its title, on their giving back a mortgage to secure the unpaid installments, and in that case the corporation agreed to release from the mortgage, from time to time, any parcels sold by the purchasers, on receiving, to be applied on the mortgage, the amount for which such parcels were sold. The contract contained no clause of forfeiture.

At this time the premises were claimed adversely to the corporation by one Turner, and a suit was brought in its name in the United States circuit court against him. But Johnson and Coggeshall proceeded to lay off village lots, and to make sales thereof, for which they gave executory contracts. Among these were three to Blumrich; one dated November 3, 1849, agreeing to convey to him lot two in block two, on the payment of $ 200, as follows: $ 50 down, and the balance in three annual payments, with interest; the second, dated April 1, 1850, and agreeing to convey to him lot one in the same block, on payment of $ 200 in similar payments; and the third, dated October 1, 1850, agreeing to convey lot six in the same block, on the payment of $ 200, in four annual payments. The first two of these were given in the name of Thomas J. Coggeshall, by George Coggeshall, as his attorney, and the third in the name of Nathaniel Coggeshall, by the same attorney. In each it was agreed that a deed should be given, conveying the lot when payment was made, and that in case of failure on the part of Blumrich "to fulfill the covenants, conditions and agreements therein expressed, then such contract to be void at the election of the party of the first part." Blumrich went into possession of these lots, and made valuable improvements upon them.

Johnson and Coggeshall seem to have done very little towards performance of their contract with the corporation, and on May 12, 1853, its treasurer addressed them a letter, stating that Converse was about to visit Grand Rapids, and that he was fully authorized to make any arrangement with them in regard to the lands; expressing the hope that they would arrange for the speedy payment of the notes which they had given for the installments payable by their contract; and requesting them to deliver to him the patent which had been issued to the corporation therefor. Converse called upon them accordingly, and, as the result of some negotiation, obtained from Johnson an assignment of all rights which he had under the contract to himself. At this time four hundred dollars remained unpaid on the three Blumrich contracts.

It will be observed that the Blumrich contracts were not all given by Thomas J. Coggeshall, and that they take no notice of Johnson's interest, though there is some evidence that George Coggeshall acted as agent for him also in making them. There is also some evidence that both the original purchasers had assigned to Nathaniel Coggeshall before this transfer to Converse, but the assignments are not in evidence, and, as there is no showing that any of the Coggeshalls disputed Johnson's right, we are probably warranted in assuming that an undivided one-half of all rights at that date existing in the original purchasers under their contract with the corporation, was transferred to Converse by Johnson's assignment. It becomes important, therefore, to determine what those rights were, and also to ascertain what rights, if any, Blumrich possessed under his contracts at the date of the assignment.

Converse in his testimony assumes that he got nothing by the Johnson assignment, because the contract of purchase had become a nullity. This assumption has no better basis than the fact that the purchasers were in default in their payments. It will be seen that the letter from the treasurer of the corporation to Johnson and Coggeshall recognized their contract as still possessing validity. Some question is made of the right of the treasurer to give such a letter, but it is of little importance in this suit, as there is no evidence that any act whatever was done by the corporation to terminate the contract prior to May 1, 1855; and up to that time, Johnson and Coggeshall and their assigns were entitled to compel specific performance of the contract, on making payment. The corporation not only had a right up to that time to demand payment of the purchase money, but was actually seeking to obtain it; and it was not authorized to treat the contract as void, so far as it imposed obligations upon the vendor, and still enforce it against the vendees. All the acts of the corporation show that a forfeiture of the contract was neither attempted nor desired; but that the intention was to deal with the vendees with indulgence and liberality. It seems like supererogation to say that the vendees and their privies were not entitled to insist that the contract should be forfeited, for their own default, against the wish of the corporation; but the position of Converse in this case seems to require the statement.

The contracts of Blumrich were also in full force when the assignment was made by Johnson; for, though Blumrich was then in default in his payments, the Coggeshalls had never seen fit to exercise the option, reserved to them by the contracts, to forfeit them. The lapse of time alone could not put an end to them; for time is not of the essence...