Huxley v. Rice

• Citation: 40 Mich. 73
• Court: Supreme Court of Michigan
• Decision Date: 14 January 1879
• Parties: Edward R. Huxley v. Harvey A. Rice and Francis King

40 Mich. 73

Edward R. Huxley v. Harvey A. Rice and Francis King

Supreme Court of Michigan

January 14, 1879

Submitted November 1, 1878

Appeal from Kent. Submitted November 1, 1878. Decided January 14 1879.

Decree affirmed with costs.

J. W & O. C. Ransom for complainant and appellee. Defendants are estopped from asserting title, 1 Greenl. Ev §§ 22-26, 207 et seq., Pickard v. Sears, 6 Ad. & El., 469; Smith's Lead. Cas., 479; Converse v. Blumrich, 14 Mich. 109; Voorhees v. Olmstead, 3 Hun 744; Linsley v. Sinclair, 24 Mich. 380. Parol evidence is admissible in cases of fraud, accident and mistake to show that a conveyance absolute on its face was meant to be a mortgage, 2 Story's Eq. Jur., § 1018; 4 Kent's Com., § 58; Vernon v. Bethell, 2 Eden 110; Marks v. Pell, 1 Johns. Ch., 594; Emerson v. Atwater, 7 Mich. 12; Wadsworth v. Loranger, Har. Ch., 113; Fuller v. Parrish, 3 Mich. 211; Swetland v. Swetland, 3 Mich. 482; Barnard v. Jennison, 27 Mich. 230. The equity of redemption cannot be separated from a mortgage, even by express agreement of the parties, Seton v. Slade, 7 Ves. 273; Newcomb v. Bonham, 1 Vern. 232; Holridge v. Gillespie, 2 Johns. Ch., 34; Cortelyou v. Lansing, 2 Cai. 209.

Henry B. Fallass for defendant and appellant. If mortgaged lands are sold in the wrong order, a court of equity will on proper showing give a party aggrieved a sale in the right order, but it must be in the same suit (Barb. Ch. Pr., 540; Brown v. Frost, 10 Paige 245; Requa v. Rea, 2 Paige 339; Collier v. Whipple, 13 Wend. 224) and not in one by original bill, Nicholl v. Nicholl, 8 Paige 349; Am. Ins. Co. v. Oakley, 9 Paige 259; Mott v. Walkley, 3 Edw. Ch., 590; Libby v. Rosekrans, 55 Barb. 220; March v. Ludlum, 3 Sandf. Ch., 51. To raise an estoppel the wrong must be coupled with an injury that is the legal result of it, 2 Smith's Lead. Cas., 715; Casey v. Inloes, 1 Gill 430; Traun v. Keiffer, 31 Ala. 136; Newman v. Edwards, 34 Pa. 32; Forsyth v. Day, 46 Me. 176; Cummings v. Webster, 43 Me. 192; Taylor v. Zepp, 14 Mo. 482; Alexander v. Walter, 8 Gill. 239. An estoppel in pais applies only to rights existing at the time of the act creating it, Bigelow on Estoppel, 438, 471; Donaldson v. Hibner, 55 Mo. 492; Dillett v. Kemble, 10 C. E. Green, 66; Langdon v. Doud, 10 Allen 433; White v. Ashton, 51 N.Y. 280. When a grant for a valuable consideration shall be made to one person and the consideration be paid by another, no trust shall result in favor of the person by whom the payment is made, but the title shall vest in the person named as alienee in the conveyance (Taylor v. Boardman, 24 Mich. 287; Weare v. Linnell, 29 Mich. 224; Hooker v. Axford, 33 Mich. 453; Garfield v. Hatmaker, 15 N.Y. 475; Norton v. Stone, 8 Paige 225; Comp. L., § 4120) except as against judgment creditors, id., § 4121; Maynard v. Hoskins, 9 Mich. 485; Trask v. Green, 9 Mich. 358; Tyler v. Peatt, 30 Mich. 63; Brewster v. Power, 10 Paige 563. Where the defendant, at plaintiff's request, verbally agreed to attend a foreclosure sale of plaintiff's farm, bid it in, take a deed in his own name and let plaintiff repay the amount of the bid and have a reconveyance, it was held that the agreement was within the statute of frauds and would not support an action (Lathrop v. Hoyt, 7 Barb. 59; Hall v. Shultz, 4 Johns. 240; Van Alstine v. Wimple, 5 Cow. 162; Bartlett v. Pickersgill, 4 East, 577, n.; Hughes v. Moore, 7 Cr. 176; Getman v. Getman, 1 Barb. Ch., 499; Steere v. Steere, 5 Johns. Ch., 11; Movan v. Hays, 1 Johns. Ch., 339; Kisler v. Kisler, 2 Watts 323; Williard v. Williard, 56 Pa. 119; Botsford v. Burr, 2 Johns. Ch.. 404; Woodhull v. Osborne, 2 Edw. Ch., 614; 2 Story's Eq. Jur., § 1201 a; Browne Stat. of Frauds, § 90; Perry on Trusts, §§ 134, 135), even if the agent was afterward convicted of perjury in denying the trust, Sugd. on Vendors, 438; The King v. Boston, 4 East, 572.

Graves, J. The other Justices concurred.

OPINION

Graves, J.

July 29, 1868, one Joseph W. Amphlett and wife and the defendant King and wife made their mortgage to one Jared P. Dodge for $ 1,000 payable in one year with interest at ten per cent. upon premises in the village of Lowell in Kent county, and being a parcel of land one hundred feet in width east and west and eight rods in length north and south, and bounded on the east by Water street and on the south by Bridge street. And subsequently, as may be inferred, the defendant King became vested with whatever interest belonged to Amphlett.

March 25, 1872, King and wife conveyed to complainant for an expressed consideration of $ 800 a strip twenty-two feet wide east and west and running from Bridge street to the north line of said parcel and lying forty feet west of Water street.

The deed contained the usual covenants of seizin, warranty and against encumbrance, and also provided specifically that King should pay the Dodge mortgage, and was duly recorded in September of the same year.

To secure $ 650 of the purchase price complainant gave his notes to King together with his mortgage on the parcel purchased. The papers were of even date with the deed and provided that $ 50 should be paid in six months; $ 200 in one year; $ 200 in two years, and the residue of $ 200 in three years, and that there should be annual interest at ten per cent. on all sums unpaid.

King further conveyed another parcel adjoining on the west and of the same shape and size to one Eli Cummings.

The original parcel mortgaged to Dodge was therefore divided after that mortgage into different holdings by these conveyances, and more than half in quantity and in value three times the amount of the mortgage being retained by King. The several holdings had buildings and they were occupied either by the proprietors or their tenants.

The record shows Rice to be a man of means, and that before and during the transactions relative to this case he dealt in money, made loans, bought paper and handled securities in his neighborhood about Lowell.

The case imports that he had become liable on a note given for King's benefit to the Lowell National Bank for $ 2,000, and on the 3d of February, 1873, in order to secure himself, had taken from King an assignment of three mortgages, and one of which was the foregoing given by complainant to King.

At the time of the foreclosure and sale hereafter mentioned on the Dodge mortgage, some $ 400 remained unpaid on the mortgage given by complainant to King and held by Rice, and the latter claims that there remained unpaid on the note to the bank on which he was liable between fifteen and sixteen hundred dollars.

It further appears that complainant on the 2d of October, 1871, sold to Rice a note given in May preceding by M. & J. C. Hiler for $ 186.46 with interest at ten per cent. and having over two months to run, and guaranteed the payment, and that Rice held this note at the time of such foreclosure. It is not shown that the securities, or any of them so held by Rice, were uncollectable.

King became embarrassed and unable to meet his engagements.

In this state of things, and in June, 1873, Dodge proceeded to foreclose his mortgage in chancery, and brought the mortgagors and Huxley in as defendants. No notice seems to have been taken of the cutting up of the premises subsequent to the mortgage. The complainant as well as the other defendants in the case omitted to appear, and the bill was taken as confessed, and on the 5th of September, 1873, a final decree for foreclosure and sale was entered, and on the 2d day of July, 1874, the entire premises were sold in one body to Rice for $ 1,570.50, that being sufficient to satisfy the mortgage and all costs, and he received the commissioner's deed accordingly.

At that time the portion of the premises which King had not disposed of was worth double the amount obtained on the sale of the whole, and Rice was well acquainted with the situation of the property and was aware of complainant's equities.

He knew that King was legally and equitably bound to guard complainant against the Dodge mortgage, and that according to the principles of equity, recourse ought to be had to the premises remaining in King before resorting to the lot held by complainant, and he also knew that as assignee of the subsequent mortgage given by complainant on the twenty-two feet strip he was entitled to insist upon the application of this doctrine, and by means of which complainant's rights would be saved without prejudice to the lawful interests of any one.

July, 1875, Huxley filed this bill against King and Rice to compel the latter to relinquish to him the apparent title made by the commissioner's deed to the strip he bought of King, and for general relief.

The bill claims that defendants fraudulently combined to keep him from taking steps in the foreclosure suit to protect his interest and fraudulently professed to him and caused him to believe that they had made arrangements between themselves by which Rice would guard or provide for guarding the premises of complainant against the Dodge mortgage, and that he, complainant, believed such professions and accordingly omitted to take measures to protect his interests. And it further claims in substance and effect that Rice's purchase was not an unqualified purchase made in good faith in his own right, but one made for the joint benefit of himself and King in bad faith to overreach the rights of complainant and deprive him of his property, and he insists he is entitled to claim that the effect of the course pursued and proceedings taken was to extinguish the lien of the Dodge mortgage on his, complainant's, parcel.

King made no defense, but Rice answered, and the record shows that the parties went into evidence at much length.

The court decreed that ...