First Nat. Bank of Grand Haven v. Honeyman

• Decision Date: 03 June 1889
• Citation: 6 Dak. 275,42 N.W. 771
• Parties: First Nat. Bank of Grand Haven v. Honeyman et al.
• Court: South Dakota Supreme Court

42 N.W. 771

6 Dak. 275

First Nat. Bank of Grand Haven

v.Honeyman et al.

Supreme Court of the Territory of Dakota.

June 3, 1889.

Appeal from district court, Cass county.R. M. Pollock, S. B. Bartlett, and D. H. Twomey, for appellants. Charles A. Pollock, for respondent.

SPENCER, J.

This action was brought to foreclose a mortgage executed on the 9th day of November, 1878, by Ebenezer Honeyman to one George Forrest, on certain premises in Cass county described in the complaint. The object and purpose of the mortgage was to secure the payment of certain sums of money which said Forrest had advanced to and for said mortgagor, and also such further sums as he should advance to and for him, from time to time, in the future. It was provided by said mortgage that the same should be void on the payment by the said Honeyman of all sums of money already advanced to and for him by said Forrest, and on payment, also, of all promissory notes and bills of exchange made by the said mortgagor to said Forrest, or indorsed or accepted by him, and of all sums of money, and the interest thereon, at the rate of 7 per cent. per annum, which might be advanced in the future by said Forrest to or for or on account of said mortgagor; and that on default in the payment of any of the moneys so advanced and secured by the said mortgage the whole amount thereof should become due and payable, and said mortgage might be foreclosed, and said premises sold for the payment thereof. Certain sums of money had been advanced by Forrest to the said Ebenezer Honeyman, and for him at the time and previous to the execution of said mortgage; and subsequently thereto there was advanced by said Forrest to and for said Honeyman, and upon his account from time to time, certain sums of money for which this mortgage was considered as security for the payment. On the 12th day of August, 1879, said Forrest and Honeyman, the mortgagor, had an accounting and settlement of their affairs, and concluded an agreement between themselves that the sum of money so advanced by said Forrest to and for said Honeyman was $3,782, and that said mortgage should be security for that sum, with interest at the rate of 10 per cent. per annum from that date. As evidence of this settlement and agreement, the said Honeyman at that time executed and delivered to said Forrest his seven promissory notes, bearing date on that day for different amounts, but aggregating said sum of $3,782, payable in from one to twelve months, with interest as aforesaid. No money was advanced by said Forrest on the security of said mortgage subsequently to that date. On the 9th day of August, 1883, said mortgage, and the debt secured thereby, was by said Forrest duly assigned and delivered to the plaintiff in this action. Default having occurred in the payment of the moneys thereby secured, this action was brought for a foreclosure of said mortgage, and a sale of the premises; the amount claimed to be due being the sum as fixed by said agreement and notes. It is admitted, or, at least, undisputed, that no part of the sum so agreed upon or interest has been paid. The defendants May Honeyman and John Reed each answered the complaint in said action separately, and for defense to said action alleged, among other things, that said Ebenezer Honeyman, the mortgagor, had, prior to the settlement and agreement between him and said Forrest, and the execution of said notes, and prior to the assignment of said mortgage to the plaintiff, to-wit, on December 31, 1878, conveyed, for a valuable consideration, all of the premises described in said mortgage to one John Honeyman, and that they were each owners of separate parcels of said mortgaged premises; and they each further alleged that said Forrest had not in fact advanced any money to or for or on account of said Ebenezer Honeyman for which said mortgage was security, and denied that the amount as fixed by said agreement and alleged in the complaint to be due on said mortgage was due in fact. Upon the trial of the action the district court found as a fact, and it is undisputed, that said Ebenezer Honeyman, the mortgagor, transferred and conveyed all his interest and title in and to the mortgaged premises to John Honeyman by warranty deed dated December 31, 1878, which deed, however, was not recorded in the proper register's office until August 13, 1879; it having been executed before the settlement between Ebenezer Honeyman and said Forrest, but not recorded until after the assignment of said mortgage to said plaintiff. The defendants May Honeyman and John Reed also on said trial offered to prove that said Forrest had not in fact made the payments and advances as agreed upon in the settlement between him and said Ebenezer Honeyman, and as evidenced by said notes, and that consequently a less sum was due on said mortgage than evidenced by such agreement and claimed in the complaint. To this proof the plaintiff objected, upon the grounds substantially, that it was immaterial, irrelevant, and incompetent, for the reason that it sought to open the accounting and impeach the settlement made between the mortgagor and mortgagee; and that the defendants, and all persons claiming under said Ebenezer Honeyman, were bound and estopped by such settlement. This objection was sustained by the court, and to such ruling the defendants duly excepted. The plaintiff had judgment as prayed for in the complaint, and that there was due on said mortgage $3,782 and interest; and the defendants May Honeyman and John Reed appealed to this court, assigning several grounds of error, and, among others, the ruling of the court above mentioned, which presents the only question we deem it necessary to examine, namely, whether the plaintiff, the assignee of said mortgage, took it subject to the right of the owners of the equity of redemption of the...