Draper v. Ashley

Decision Date02 April 1895
Citation104 Mich. 527,62 N.W. 707
CourtMichigan Supreme Court

Appeal from circuit court, Jackson county; in chancery; Erastus Peck, Judge.

Bill by Gideon C. Draper against Byron Ashley and others. The Peninsular Building & Loan Association, a defendant, filed a cross bill setting up a mortgage on the same property. From a decree declaring the mortgage set up in this cross bill entitled to priority over plaintiff's mortgage, plaintiff appeals. Affirmed.

Melville Stone, for appellant.

Henry E. Edwards (Wilson & Cobb, of counsel), for appellee loan association.


Byron S. Ashley, being the owner of certain premises in the city of Jackson, on the 15th of June, 1886, executed a mortgage for the sum of $2,150 to Francis J. Wall and William Duffany which was recorded on the same day. On the 14th of September 1888, he executed a second mortgage covering the same premises, to Gideon C. Draper, for the sum of $970, which was recorded on the 27th of September, 1888. On the 15th of February, 1889, Duffany and Wall filed a bill in chancery to foreclose their mortgage, but did not make Draper a party defendant. The sale was made on the 8th of March, 1892, and the premises were purchased by the mortgagees, Duffany and Wall, for the amount of their mortgage, interest, and costs,-$2,500.37. Wall subsequently quitclaimed to Duffany and on the 12th of April, 1892, Duffany contracted to sell the premises back to the mortgagor, Byron S Ashley, who had continued in possession, upon an understanding that he should have an opportunity to secure money to redeem. The contract was for the amount due upon the mortgage, of which Ashley paid down $250, agreeing to pay the balance on or before June 1, 1892. Upon the payment being made, Duffany executed to Ashley a quitclaim deed of the premises on the 6th of June, 1892. On the same day defendant Ashley and his wife executed a mortgage upon said premises to the Peninsular Building & Loan Association No. 2, to secure the sum of $2,250, advanced to them to assist in the purchase of the premises from Duffany. Prior to the execution of this mortgage, however, and before the deed had been made from Duffany to Ashley, Ashley had applied to the loan association for a loan upon the premises, and $500 had been advanced, and a mortgage for that sum had been executed by Duffany, apparently with the expectation that it would be subsequently taken up when Ashley should effect a loan for the larger sum. Prior to the execution of the deed from Duffany to Ashley, the attorney for the building and loan association, by the direction of the association, investigated the title. This he did by the examination of an abstract of title, and reported as follows: "Have examined abstract for Ashley loan, and find the same correct down to April 6, 1892, and to William Duffany. We should have deed from Duffany to Ashley, and our mortgage discharged." This reference was to the $500 mortgage which had been executed by Duffany to the association. The president of the association testified that, when the loan was made, he understood that the Duffanys had acquired a good title to the land under their foreclosure, and that such foreclosure operated to cut off all previous mortgages. The attorney who made the investigation testified that he represented the association both at the time the loan in question was made, and also at the time the loan to Duffany was made; that the...

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