Kimball v. Myers

• Decision Date: 04 October 1870
• Citation: 21 Mich. 276
• Court: Michigan Supreme Court
• Parties: William E. Kimball v. Nathan S. Myers

21 Mich. 276

William E. Kimball v. Nathan S. Myers

Supreme Court of Michigan

October 4, 1870

Heard July 7, 1870 [Syllabus Material] [Syllabus Material] [Syllabus Material]

Appeal in chancery from Lenawee circuit.

William E. Kimball filed his bill in the circuit court for the county of Lenawee in chancery, to compel Nathan S. Myers to deliver up to be canceled a certain mortgage, executed by one George Morton and wife upon premises, the title to which the complainant claims under Morton; the complainant alleging, as the ground of the relief sought, that the indebtedness which the mortgage was given to secure had been discharged. Answer and replication was filed and testimony taken. The cause was heard upon pleadings and proofs by the court below, and the bill dismissed, from which the complainant appeals to this court.

Complainant entitled to the decree prayed for.

Eldredge & Walker, for complainant:

Payment may be proved by parol: 2 Wash. Real Prop., p. 122. Payment upon the mortgage of any specific item secured by the mortgage is a discharge thereof to that extent. If the sum paid as a performance of the conditions of the mortgage is of an amount equal to the sum thereby secured, the mortgage is extinguished at once: Caruthers v. Humphrey, 12 Mich. 278; Spencer v. Perry, 18 Mich. 398; 2 Wash. Real Prop., pp. 122, 123, 152, 162; Moynahan v. Moore, 9 Mich. 9; Van Husan v. Kanouse, 13 Mich. 306; Marvin v. Vedder, 3 Cow. 671.

A mortgage for future advances is valid: Mich. Ins. Co. v. Brown, 11 Mich. 270. But if the amount limited in terms by the mortgage has been advanced, it is incompetent as against junior incumbrancer or a purchaser to show that it was intended to cover a larger amount: Bank v. Finch, 3 Barb. Ch., 294; Stoddard v. Hart, 23 N. Y., 556; Ladue v. D. & M. R., 13 Mich. 380. Such mortgage will, as to the subsequent purchaser or incumbrancer, be postponed to their rights: Craig v. Tappin, 2 Sandf. Ch., 78; Ladue v. Detroit & Milwaukee R., 13 Mich. 380.

So far as Myers is concerned, it is not competent for him to prove, even as between himself and Morton, and still more incompetent for him to show as to third parties without notice, that his mortgage was to secure more than one sum of $ 800: Adair v. Adair, 5 Mich. 210; Savercool v. Farwell, 17 Mich. 319. By the terms of the mortgage, the sum of $ 800 was due upon it "on or before one year" from April 16th, 1866. The payment then to Myers, or for his use, of $ 800 after that day, discharged the mortgage: Caruthers v. Humphrey, 12 Mich. 278.

But it may be claimed that if it is not competent for Myers to show that the mortgage was given for something beside the payment of $ 800, in cash, that it is equally incompetent for the complainant to do the same, and that--as a result of this reasoning--unless the complainant can prove the payment of $ 800, in cash, to Myers after the date of the mortgage, as payment thereon, the words of the instrument will be conclusive, and it must be held as a mortgage for $ 800, and for nothing else.

We think that while it is forbidden to the parties to enlarge the terms or the scope of an instrument, that the rule has no application to third parties, who are allowed to show the whole agreement, untrammeled by the writing in any way: 1 Green. Ev., sec. 279; 2 Phil. Ev., Cow. and H., and Ed. Notes, p. 650, note.

If it be urged that upon the whole agreement, as shown by the evidence, it appears that while the mortgage was primarily given as security to Myers for signing the note, yet it was also as security for such sums as Morton then was, or thereafter might be owing to Morton, we reply: First, That this is not established by the evidence; and, second, That it is unquestioned that the mortgage was given primarily to secure Myers for signing a note for $ 800; the exact sum secured by the mortgage and on the same day. And, as we claim, this legal liability of Myers--notwithstanding it was Morton's debt--was the $ 800 secured by this mortgage, and that payment thereof by any one was as against third parties, an extinguishment of the lien of the mortgage upon the property. That if Kimball had inquired and learned that the mortgage was given to secure the payment of the joint note, and that the note had been so paid as to extinguish Myers' liability without cost to him, he would have taken the place discharged of the mortgage, even though Myers had told him the whole agreement as he now claims it.

At all events the only amount that can be recovered by Myers is such as was due before June 12th, 1866, the date of the deed from Morton to the complainant, and under which he at once took possession: Ladue v. D. & M. R. Co., 13 Mich. 380.

A. L. Millard, for defendant:

The mortgage in this case contains an express acknowledgment of an existing indebtedness of $ 800, and a covenant to pay the same to the defendant in one year from date, with interest. There is no ambiguity in the terms, and no charge is made either of fraud or mistake. It is just what the parties intended to have it. There is no claim that the mortgage has been paid according to its terms. The bill alleges that instead of being intended for what it is on its face, it was for a totally different purpose; that the real contract between the parties was one of indemnity against the Waldby note, and nothing more; and that the note having been paid, the mortgage was satisfied.

Is it competent to change the contract, by parol, from that stated in the writing, to one entirely different? We think it clear that it is not: 1 Greenl. Ev., §§ 275, 281, 282; 2 Story's Eq. Juris., §§ 1531, 767; Stevens v. Cooper, 1 J. C. R., 425; Barber v. Buel, 5 Cushing 519, 31 Ill. 538; Columbia v. Amos, 5 Ind. 184, 30 Me. 94; Jackson v. Cleveland, 15 Mich. 94; Adair v. Adair, 5 Id. 210. In this last case the question was the precise one made here, and, as we submit, settles it for this state, whatever conflict of authority there may be elsewhere. And by consequence, the allegations of the bill, having nothing but parol proof to sustain them, must fall to the ground.

But if resort be had to the parol proof, the result must be the same. The answer denies that the sole purpose and agreement of the parties was to indemnify the defendant against the Waldby note, and alleges that Morton was indebted to defendant aside from that, and that the mortgage should be taken and held as security for any indebtedness then existing, or thereafter to be contracted. The burden of proof is, of course, on the complainant. He offers no testimony but that of Morton to sustain his allegation as to the agreement. The preponderance of proof is largely on the other side.

This is not a bill to redeem. The complainant does not ask to have the amount due on the mortgage ascertained, and offer to pay it. The only case made by the bill is that the mortgage was given solely for indemnity against the Waldby note, and that that has been paid by Morton. The complainant must sustain this therefore by the proofs, or his case fails. The proof does not make this out, as we have shown. On the contrary, it is shown that the mortgage was intended as security for any indebtedness he then owed or thereafter might owe to Myers.

There is no charge in the bill that this indebtedness, if there was one, has been paid, and we are not called on, therefore, to make any proof on that subject. But there is not only no such charge in the bill, but the proofs do not show that it has been paid. Even if this issue had been made by the pleadings, the least that could be required of the complainant would be that he should show clearly and unequivocally that it was paid. The burden would be upon him if he had asked to have the mortgage discharged on that ground.

One other position of complainant's counsel remains to be noticed. It was claimed on the argument in the court below, that even if the mortgage was given to secure any indebtedness of Morton to Myers, proof of the payment of the amount thereof on any such indebtedness at any time since the mortgage was given would discharge the mortgage, notwithstanding he might still remain indebted to Myers. This we think cannot be sustained. The mortgage was given to secure any indebtedness he might owe from time to time--any balance that might be due to Myers. It was a continuing security. The case of the Bank of Utica v. Finch, 3 Barb. Ch. R., 293, cited by complainant for another purpose in the court below, is an authority against this position of his counsel. And on this point it is not in conflict with any decision of this court.

There is, however, no proof of any payment of eight hundred dollars by Morton to Myers, since the making of the mortgage.

OPINION

Cooley, J.

The bill in this case sets forth that complainant, on the twelfth day of June, 1866, purchased of one George Morton a certain lot in the city of Adrian for the sum of one thousand dollars, and received a deed of conveyance thereof which contained full covenants of title and against incumbrances that complainant immediately took possession of the premises, and has been in the sole and exclusive possession thereof ever since; that at the time of purchase Morton assured complainant there was no incumbrance upon the premises except a mortgage of eight hundred dollars to one Wisner, and produced a certificate from the register of deeds to that effect; that complainant afterwards...