Leith v. Commercial

• Decision Date: 23 February 1943
• Docket Number: No. 75.,75.
• Citation: 8 N.W.2d 156,304 Mich. 508
• Court: Michigan Supreme Court
• Parties: LEITH et al. v. CITIZENS COMMERCIAL & SAVINGS BANK.

304 Mich. 508

8 N.W.2d 156

LEITH et al.

v.CITIZENS COMMERCIAL & SAVINGS BANK.

No. 75.

Supreme Court of Michigan.

Feb. 23, 1943.

Suit by John N. Leith and Marjory E. Leith against the Citizens Commercial & Savings Bank, trustee under the will of Asenath B. Edwards, deceased, for discharge of a mortgage. From a judgment in favor of the defendant, the plaintiffs appeal, and the defendant moves to dismiss the appeal.

Motion denied, and judgment affirmed.

Appeal from Circuit Court, Genesee County; Philip Elliott, judge.

Before the Entire Bench.

Walter C. Jones & Maurine L. Jones, of Flint, for plaintiffs and appellants.

Cline & George, of Flint (John H. Farley, of Flint, of counsel) for defendant and appellee.

BUTZEL, Justice.

On April 6, 1925, plaintiffs made a loan of $6,000 from J. E. Burroughs and gave him a note and mortgage payable in five years with interest at the rate of 7 per cent. per annum payable semi-annually. On the following day, the mortgage was recorded and $3,500 was advanced on the loan; $1,000 was paid later in the month, and $1,500 the following month. Burroughs added to the last payment the sum of $13.82 in order to pay unearned interest during the period in which the last two payments were withheld. Plaintiff J. N. Leith on the day that the mortgage was given wrote a check for $31 to a finance company. Burroughs was one of its officers and it acted as his agent. The check showed the endorsement of the county treasurer. It is quite evident that it paid the mortgage tax and recording fee. If the amount exacted from the mortgagors included interest at 7 per cent. per annum plus $31, the loan would be usurious. Union Guardian Trust Co. v. Crawford, 270 Mich. 207, 258 N.W. 248. Although the mortgage became due on April 6, 1935, it was not paid. However, interest continued to be promptly paid thereafter. On August 25, 1931, Mr. Burroughs sold the mortgage to Asenath B. Edwards, who at the time was 86 years of age. Mr. Burroughs made the collections for Mrs. Edwards. On June 19, 1933, she died and Citizens Commercial & Savings Bank, defendant, was appointed trustee in accordance with her will. On November 9, 1936, the interest on the loan was voluntarily reduced by defendant from 7 per cent. to 6 per cent. per annum. Plaintiffs continued to pay the interest at the rate of 6 per cent. per annum, and also made small payments on the principal. No payments were made after January 9, 1940, and on May 7, 1940, defendant began foreclosure by advertisement. On August 3, 1940, it bid in the property at foreclosure sale for the sum of $5,988.04, the amount due with interest figured at the reduced rate. On May 22, 1940, plaintiffs demanded the discharge of the mortgage, claiming for the first time that the loan was usurious, and that the sum of all amounts paid for interest during the past 15 years including those made after the reduction of the rate of interest together with the small payments made on principal, were more than sufficient to pay off the entire mortgage. Upon defendant's refusal to comply with plaintiffs' request to discharge the mortgage, plaintiffs filed a petition to discharge under section 14403, 3 Comp.Laws 1929 (Stat.Ann. § 27.1187). The judge denied the petition. He held that plaintiffs had not sustained the burden of proof necessary to show that Burroughs demanded or received payment of the mortgage tax. He based this finding upon the inability of the plaintiffs to recall other incidents in connection with the making of the loan, and also Burroughs' action in allowing a credit for interest for the period in which payments were withheld on the loan. The judge further held that the claim of usury came too late and that plaintiffs' waiting nine years after the mortgage became past due, and obtaining a reduction of the interest from defendant before claiming usury and thus causing the mortgagee's indulgence in extending the loan for so many years, constituted estoppel. The judge further questioned whether the entire proceeding under section 14403, supra, was proper in view of the wording, purpose and requirements of the statute and the many other questions that could be raised in regard to the constitutionality of the statute if it could be used in a contested case. He stated that while the trial court might disagree with the rulings of the appellate court, he thought it improper to do so in view of the case of McKenna v. Wilson, 280 Mich. 227, 273 N.W. 457. He further stated that the whole question of whether this was a proper procedure should be presented, to the Supreme Court. The judge dismissed the petition because of the other grounds.

Even assuming that there was some merit in plaintiffs' claims that the judge erred in his factual finding as to the payment of the mortgage tax, and also in his finding of law in regard to estoppel, questions we need not discuss, if he reached the correct conclusion, the proper administration of law does not require a reversal. Eames v. Barber, 192 Mich. 1, 158 N.W. 218. It was said in Lentz v. Teutonia Fire Ins. Co., 96 Mich. 445, 55 N.W. 993, that if it appears there is any conclusive reason why no recovery should be had, the judgment should not be disturbed.

Plaintiffs contend even if the procedure set forth in section 14403, supra, was not the proper one to use in the instant case, or if section 14403 would be unconstitutional if applied to a contested case of this nature, nevertheless, defendant-appellee did not perfect a cross-appeal and, therefore, cannot renew in the appellate court the...