Dye v. Mann

• Decision Date: 03 June 1862
• Citation: 10 Mich. 291
• Court: Michigan Supreme Court
• Parties: Richard Dye and others v. Loomis Mann and others

10 Mich. 291

Richard Dye and others v. Loomis Mann and others

Supreme Court of Michigan

June 3, 1862

Heard January 13, 1862; January 14, 1862 [Syllabus Material] [Syllabus Material]

Appeal in Chancery from Ionia Circuit.

The bill was filled by Richard Dye, John C. Dexter and Stephen F Page, against Loomis Mann and James Pattee, and set forth:

That prior to September 5, 1854, Loomis Mann and David Morse had been partners as hardware merchants at Ionia; that on that day they dissolved their copartnership, and Mann, by an instrument under his hand and seal, agreed with Morse to pay all of the indebtedness of the firm, and to save Morse harmless from the payment of said debts; that complainants, on the same day, by an indorsement in writing on said agreement, guaranteed the fulfillment of the same on the part of Mann; that Mann made default in the payment of the partnership debts, whereby complainants became liable to pay large sums of money to the creditors of Mann & Morse, and for the purpose of indemnifying them against loss on account of said liability, Mann executed to them an instrument (given in full in the bill) by which he agreed "to pay to said John C. Dexter, Richard Dye and Stephen F. Page, all sums that they may pay, or cause to be paid, arising in any manner from the breaches or breach" of the instrument the performance of which had been so guaranteed by them. And to secure the performance of this agreement, Mann executed to them a collateral mortgage on certain premises in the village of Ionia county seat, described in the bill, and containing one-fourth of an acre of land.

The bill further states, that complainants "have paid to the creditors of the said firm of Mann & Morse the sum of one thousand dollars, as they were obliged to do by the terms and legal effect of the guarantee above set forth, on account of the default of the said Loomis Mann; and that, because of the said default, they are still liable to pay large sums of money not yet ascertained." And the bill prays a foreclosure of said mortgage, and a sale of the premises to satisfy the amount so paid by them. Pattee was made a party as a subsequent incumbrancer.

This bill was taken as confessed by Mann. Pattee filed an answer, setting forth, among other things, that he held a mortgage on the premises, given March 25, 1859, by said Mann, and Anna B. Mann, his wife, for $ 1,755, all of which is unpaid; that at the time of the giving of the mortgage to complainant, Mann had a wife and several children, and resided with his family on the premises described in complainants' mortgage, which premises then, and ever since, have constituted Mann's place of residence and homestead, and did not exceed $ 1,500 in value; and complainants' mortgage was therefore invalid for want of the signature of Mann's wife thereto.

Replication was filed to this answer, and testimony was taken which it is not deemed necessary to state more fully than as given in the opinion.

Decree reversed, with costs.

Bell & Soule, for complainants:

The objection that the bill contains no sufficient allegation of payment, should have been taken by special demurrer: Hoff. Ch. R., 121; 7 Cow. 143. But the allegation is sufficient as it stands: 5 Johns. 168.

The guaranty of complainants made them primarily liable with Mann for the payment of the debts: 20 Johns. 364. It became their duty to pay them immediately on the default of Mann: 15 Wend. 509; 20 Johns. 364; 5 W. & S., 440. There being no time fixed for payment, if any debts were due the law required them to pay at once: 3 Denio 321, 324.

The guaranty sufficiently expresses the consideration: 4 Seld. 207.

Pattee can not claim relief by his answer. If he desires to have our mortgage set aside as void, or delivered up and canceled, he must file a cross-bill: Lube Eq. Pl., 142, note; Story Eq. Pl., § 391 et seq.; 2 Barb. Ch. Pr., 126; 2 Mich. 472.

The exemption of homesteads is for the benefit of the mortgagor and his wife and family, and they may waive or renounce the same if they choose, and no third party should have the right to interfere: 4 Hill 467; 3 Mich. 448; 28 Vt. 541. It is a personal privilege which third persons cannot claim or set up: 22 Barb. 656.

But it is claimed that the lot is not such an one as is exempted. It can not be called an agricultural lot, by any correct use of terms, and it is not exempted as a village lot: 8 Mich. 488.

G. V. N. Lothrop, for defendant Pattee:

1. The bill is defective. It does not show any legal contract on the part of Mann to assume the debts of Mann & Morse. It discloses no consideration. It appears on the bill as a mere voluntary promise. And if invalid, the obligation of the sureties falls with it: Theobald Prin. and Surety, 2; Edw. on Bills, 218.

The liability of complainants on their guaranty (if that was valid) was to Morse only. And the contract and mortgage given to them were of indemnity against this liability. But the bill shows nothing paid on the liability to Morse, nor that he ever set up any claim, or requested any money to be paid to any one.

The statement in the bill that complainants have paid $ 1,000 to creditors of Mann & Morse, is not sufficiently certain. And besides, the payment appears to have been entirely voluntary-the bill showing no liability to the creditors, nor even a request to pay, from either Mann or Morse.

The original agreement from Mann to Morse, is one of indemnity merely. No time was fixed when the debts were to be paid. Mann was only to pay so as to save Morse harmless. But if it is to be construed as an agreement to pay absolutely, it must be either on request of Morse, or when the creditors required payment from Morse, or in a reasonable time. The bill is defective in not showing a breach of either of these terms.

2. The proofs do not make complainants' case any better. The payment made on the debts of Mann & Morse was by Dye & Page only. This might give them a good personal claim against Mann, but none under the mortgage.

3. The mortgage upon Mann's homestead, without the signature of the wife, was a nullity, not only as to the wife but as to the defendant: 7 Mich. 506; 5 Wis. 534; 2 Gray 384; 5 Cal. 504; 6 Cal. 71; 7 Cal. 342; 8 Cal. 66; 9 Iowa 509.

Manning, J. Martin, Ch. J. and Christiancy, J., Campbell, J. concurred.

OPINION

Manning J.:

There principal objections are made to the decree of the Circuit Court by the defendant Pattee, the appellant.

I. That the bill of complaint makes no case.

1. Because it does not state any consideration for the agreement between Mann & Morse of the 5th of September, 1854, that was guaranteed by complainants.

The bill states the agreement is in writing, and under the hand and seal of Mann. That is sufficient. The seal imports a consideration, and dispenses with a statement of the consideration in the bill, as well as proof of it on the hearing.

2. Because the liability of complainants on their guaranty was to Morse only; and the agreement of 26th February, 1859, between Mann and complainants, which the mortgage was given to secure, was one of indemnity against that liability.

By the agreement of September, 1854, Mann covenants to pay all the debts then due and owing by the firm of Mann & Morse-saving Morse harmless. The covenant is to pay the debts of Mann & Morse, as well as to indemnify Morse against the payment. It contains a present absolute undertaking on the part of Mann, as well as a future contingent one, on either of which an action would lie in case of a breach. An omission to pay the creditors of Mann & Morse, as their demands became due, would be as clear a breach of the covenant as an omission to pay Morse after he had been compelled to pay them. In either case Morse would have a right of action on the covenant. The damages, it is true, in an action for not paying would be nominal; but still the action would lie.

The guaranty is unconditional. The liability of the guarantors is consequently co-extensive with that of their principal. What gives a right of action against him at the same time gives a right of action against them. What it is his duty to do as covenantor, it is theirs to do as guarantors. And by the agreement of 26th February, 1859, Mann not only undertakes to save them harmless against payments they should be liable to make to Morse, but...