Manwaring v. Powell

• Decision Date: 31 January 1879
• Court: Michigan Supreme Court
• Parties: William Manwaring v. Silas Powell et al

40 Mich. 371

William Manwaring v. Silas Powell et al

Supreme Court of Michigan

January 31, 1879

Submitted January 23, 1879

Appeal from Kent. Submitted Jan. 23. Decided Jan. 31.

Decree affirmed with costs.

G Chase Godwin for complainant. If the grantee of mortgaged premises is allowed the amount of the mortgage as a deduction from the purchase price, he becomes responsible for its payment to the mortgagee, Burr v. Beers, 24 N.Y 178; Lawrence v. Fox, 20 N.Y. 268; Foley v Cleveland, 4 Cow. 432; Arnold v. Lyman, 17 Mass. 400; Marsh v. Pike, 10 Paige 595; Halsey v. Reed, 9 Paige 445; Dorr v. Peters, 3 Edw Ch., 132.

John C. Fitz Gerald for defendants. Mortgaged property is primarily liable for the debt secured, but a grantee of the property does not assume it and is not personally liable for its payment. Belmont v. Coman, 22 N.Y. 438; Hamill v. Gillespie, 48 N.Y. 556; Binsse v. Paige, 1 Keyes 88; Weed S. M. Co. v. Emerson, 115 Mass. 554; Flagg v. Munger, 9 N.Y. 483; Packer v. Rochester, etc., 17 N.Y. 283.

Cooley, J. The other Justices concurred.

OPINION

Cooley, J.

In October, 1865, complainant received from Charles L. Moody and Lucy his wife a mortgage on certain lands in Kent county, conditioned for the payment of four hundred dollars in two years from date with interest. Moody then owned the lands, but on the sixth day of September, 1866, he sold the same to Silas Powell for the sum of one thousand five hundred dollars, all but four hundred of which was paid. The deed given to Powell was a warranty deed, containing a covenant against incumbrances, except the mortgage to complainant, and the covenant of quiet possession was made "subject to said excepted mortgage" to complainant. Complainant avers that in the negotiations between Moody and Powell it was expressly agreed that the latter should assume the payment of complainant's mortgage as so much of the purchase price of the lands, and that complainant, at Powell's request, communicated through Moody, gave a written consent to postpone payment of the mortgage for three years, which Powell required before he would complete the purchase. These averments of complainant are supported by the testimony of Moody, and denied by Powell, but it is not disputed except in an evasive way by Powell that the amount of the mortgage to complainant was taken into account as a part of the purchase price of the lands when Powell bought. That fact is clearly established.

It appears now that, unknown to either complainant or Powell, there was a prior mortgage on the same lands held by one Wabeke. When this came to Powell's knowledge does not distinctly appear. He paid interest on complainant's mortgage regularly for seven or eight years without raising any question respecting the other. Complainant testifies that Powell himself first told him of the prior mortgage in 1874, and said he should pay it. He also says that when he called on Powell for the annual interest falling due on his mortgage in October, 1875, Powell told him to wait until the next month, as he had got the Wabeke mortgage to pay and could not on that account pay complainant's interest sooner. This statement is denied by Powell, but it is not disputed that for some reason he allowed the interest on complainant's mortgage to remain unpaid for the year last named.

Meantime Wabeke had filed a bill in equity for the foreclosure of his mortgage, making Moody, Powell and complainant defendants, and on what purported to be personal service of process, took decree December 7, 1874, for a sale of the mortgaged premises at any time after October 1, 1875. A sale was made under the decree October 30, 1875, and Powell, jointly with his wife, became the purchaser for the amount due to Wabeke and costs.

Complainant first heard of this sale three days after it was made. He testifies that he never knew of the Wabeke foreclosure proceedings and was never served with process therein. On the other hand, the officer swears that he served the process personally; but he appears not to have known complainant at that time, and it is quite possible that there may have been some mistake on his part. It is scarcely credible that complainant would have allowed the Wabeke foreclosure proceedings to proceed without giving them any attention had he been aware of them, unless he had been so far quieted by Powell's assurances that he would take care of that mortgage as to have dismissed the proceedings...