Drayton v. Chandler

• Decision Date: 04 November 1892
• Court: Michigan Supreme Court
• Parties: DRAYTON et al. v. CHANDLER et al.

53 N.W. 558

93 Mich. 383

DRAYTON et al. v. CHANDLER et al.

Supreme Court of Michigan

November 4, 1892

Appeal from circuit court, Antrim county, in chancery; J. G RAMSDELL, Judge.

Bill by Charles E. Drayton and others against Thomas E. Chandler and another. From a decree for complainants, defendants appeal. Reversed.

Nelson C. Weter, for appellants.

Leavitt & Guile, for appellees.

DURAND J.

This cause was commenced in the circuit court for the county of Antrim, in chancery, by sworn bill of complaint, signed by William L. Drayton and Hattie A. Drayton, as complainants for the purpose, among other things, of having a certain sheriff's deed on statutory sale on the foreclosure of a real-estate mortgage set aside, and the foreclosure proceedings declared void; and also for the purpose of having the said mortgage, and a promissory note given therewith declared satisfied and canceled. Before the proofs were taken, complainant William L. Drayton died, and his sons Charles E. and Ben S. Drayton, were substituted in his stead as complainants. The record shows that, after prolonged negotiations, one John W. Willis, on November 12, 1884, concluded a purchase from the defendants Chandler & Taylor of a second-hand sawmill, boiler, and engine for $1,600, payable according to three promissory notes executed by John W. Willis and Nancy Willis, his wife, to said Chandler & Taylor on October 15, 1884. One of the notes was for $200, due January 1, 1885; one for $600, due April 1, 1885; and one for $800, due January 1, 1886,-with 10 per cent. interest. As security for the payment of these notes, John W. and Nancy Willis, on November 12, 1884, executed a chattel mortgage for $1,600 on the sawmill, boiler, engine, and appurtenances; and on the same day Nancy Willis executed to Chandler & Taylor a mortgage for $1,600 on certain real estate owned by her, which mortgage was also given as security for said notes. On the same day William L. Drayton executed to Chandler & Taylor his note for $800, due April 1, 1886; and, as security for the payment thereof, he and his wife, Hattie A. Drayton, executed the mortgage, which was subsequently foreclosed by advertisement, and which this bill is filed to set aside, as having been satisfied, and which is the subject of the contention in this case. The parties do not agree fully as to the real consideration, or upon what contingency the mortgage was to become operative, and there is nothing in this note or mortgage to indicate what the real consideration for them was, but it is entirely apparent to us from the record that they were given as further and collateral security for the payment of the debt from Willis to Chandler & Taylor. At the time of making the contract for the purchase of the mill and other machinery from Chandler & Taylor, Drayton was the owner of land, upon which stood timber of more or less value, which he desired to have sawed up; and the fact that Willis was to set up this mill and machinery upon Drayton's land, and to saw up the Drayton timber, was undoubtedly the principal cause which induced Drayton to give the mortgage referred to, and in addition Chandler & Taylor declined to sell Willis this property without the additional security that the Drayton mortgage furnished. After the purchase of the mill, Willis caused it to be set up upon the Drayton land, and did some sawing afterwards, but not for a very great length of time, when he finally abandoned it. Chandler & Taylor then took possession of this mill and machinery under their chattel mortgage, but did not regularly foreclose the same, but such talk was had between the parties as finally resulted in the claim made by Chandler & Taylor that they took this mill as payment for the $600 note, including the accrued interest thereon, the first $200 note having been paid before that time by Willis. The record shows that Chandler & Taylor afterwards sold this mill and machinery to one Jones for $750. The last $800 note of the original indebtedness from Willis to them, according to their claim, still remained due and unpaid. No regular foreclosure and sale of the mill and machinery, which was taken and appropriated by them by virtue of the chattel mortgage held by them, had ever been made, or attempted to be made. No proceedings had been taken by them for the foreclosure of the Nancy Willis real-estate mortgage, and with this condition existing, and without any proceedings being taken or attempted by them looking towards the settlement of the equities existing between them and Willis or the Draytons, they treated the Drayton note and mortgage as a separate and...