Matteson v. Morris

• Decision Date: 08 January 1879
• Citation: Matteson v. Morris, 40 Mich. 52 (Mich. 1879)
• Court: Michigan Supreme Court
• Parties: James Matteson v. Amos Morris

40 Mich. 52

James Matteson v. Amos Morris

Supreme Court of Michigan

January 8, 1879

Submitted November 22, 1878

Error to Cass.Submitted November 22, 1878.Decided January 8 1879.

Decrees reversed, and the bills dismissed with costs of both courts.

Severens Boudeman & Turner for complainant and appellee.One who takes notes before they are due is presumed to be a bona fide holder for value without notice of any equities, Wightman v. Hart, 37 Ill. 123;Johnson v. Dickson, 1 Blackf. 256;Grimes v. McAninch, 9 Ind. 278;Hawks v. Hinchcliff, 17 Barb. 492;James v Chalmers, 2 Seld. 209;Wilson v. Lazier, 11 Gratt. 477;Ross v. Bedell, 5 Duer 462;Cummings v. Thompson, 18 Minn. 246;Kelly v. Ford, 4 Ia. 140;Harvey v. Towers, 4 Eng. L. & E., 531;1 Daniel'sNeg. Inst., § 814, p. 610.The fact that an assignment is under seal imports that the holder is a bona fide holder for value, Hancock's Appeal, 34 Penn. St., 155.

Geo. W. Lawton, E. Bacon and O. W. Coolidge for defendant and appellant.In a foreclosure bill the inducement should be pleaded, and a consideration averred aside from the recitals in the instruments themselves, 3 Daniell's Ch.Pr., 1908;Dye v. Mann, 10 Mich. 291.As to burden of proof, seeComstock v. Smith, 26 Mich. 306;Willett v. Shepard, 34 Mich. 106; effect of sworn answer, Schwarz v. Wendell, Walk.Ch., 267;Robinson v. Cromelein, 15 Mich. 316: Roberts v. Miles, 12 Mich. 297; sufficiency of denials of execution, Burson v. Huntington, 21 Mich. 415;McCormick v. Bay City, 23 Mich. 457;Gibbs v. Linabury, 22 Mich. 479;Anderson v. Walter, 34 Mich. 113;Smith v. Sac Co., 11 Wall. 139; no admission by implication, Morris v. Morris, 5 Mich. 171;Hardwick v. Bassett, 25 Mich. 149; as to what is responsive, Shook v. Proctor, 27 Mich. 349;Mandeville v. Comstock, 9 Mich. 536.

Campbell, C.J.The other Justices concurred.

OPINION

Campbell, C.J.

These proceedings are for the purpose of foreclosing two mortgages and accompanying notes, one dated February 14, 1873, for $ 3,469, payable at the expiration of five years, with interest annually at ten per cent., and the other dated February 28, 1873, for $ 1,770, payable in one year, with interest at ten per cent.

These securities purport to be payable to Milo D. Matteson, or order, and are claimed by complainant to have been assigned to him on the 21st of July, 1873.

The bill in each case sets up that Morris claims the notes and mortgages to be forgeries, and that he also claims that he never had any but certain specified dealings with Milo D. Matteson; which claims are controverted by complainant, who avers dealings to the amount of $ 15,000 borrowed and received by Morris, and notes to the number of upwards of forty, from small sums up to more than five thousand dollars each.

The bill does not in either case make any averment concerning the consideration of either of the securities in suit, but avers the amounts due and unpaid, and asks a decree for the full amount.

An answer under oath was required, and Morris answered, relying upon certain defects in the averments of the bill; denying positively any consideration received, denying the execution and delivery of any such notes and mortgages or any contract to make or deliver them, and averring his ignorance of their existence except as derived from the assertions of Milo D. Matteson.The answer asserts that if any such papers are in existence they were obtained by some fraud in procuring the signatures, and that defendant has no knowledge of making or acknowledging them.He also denies on information and belief that complainant is a bona fide holder.

These mortgages, together with a third one of $ 5,018, dated June 21st, 1873, were recorded in Cass county, where the lands lie, on June 28, 1873.Morris lived in Van Buren county, as did also Milo D. Matteson.Complainant lives in the State of New York.The assignments were never recorded.

One of these bills was filed in April 1875, and the other in September, 1875.On the 4th of August, 1873, a bill had been filed by Morris against Milo D. Matteson to set aside the mortgages and restrain their transfer.The oath of that defendant was waived, but he answered without oath, setting up the assignment to complainant and denying the statements of the bill, but not explaining the consideration of the notes beyond averring the advance of $ 410 on the earliest, and $ 240 on the second.He admits no money was advanced on the third.That suit does not appear to have been brought to a conclusion, and the substantial merits are all involved in the present controversy.

A preliminary question was raised whether complainant stands in the same position as Milo D. Matteson upon the defense of want of consideration--if the paper is genuine,--or whether as a bona fide holder without notice he can recover, although no consideration should have passed.

Complainant is not an endorsee of either of these notes.He took them under assignment merely, one of them purporting to be guaranteed and the other not.He is not therefore under our statute(Comp. L., § 5775) in a position to sue upon them at law in his own name.Moreover, there is no evidence of delivery beyond such presumption as may arise from the possession of the assignments, which were never recorded, and there is no evidence whatever that he paid anything for the securities.The only testimony showing any possession of the documents relates to their being received from him by mail several days after Morris filed his bill.As there was time in the interval to send forward the papers and have them returned, this testimony is not very important.The testimony concerning the papers was such as in our opinion to call for explanation, and we cannot assume from any thing we find in the record that James Matteson, with or without notice, ever gave value for these papers.He is therefore bound by any equities which would affect his brother Milo.

The whole case is open, then, to inquire whether these papers were either forged or fraudulent, or whether, on the other hand, they are valid and binding.

Before proceeding to discuss the merits, the case is one raising some questions concerning the burden of proof.

It is not explained satisfactorily why we have not been furnished with the testimony of the parties best acquainted with the facts.James Matteson and Milo D. Matteson are the only persons, so far as we can gather from the record, who could tell under what circumstances and for what purposes the alleged assignments were made.Milo D. Matteson and Morris both must know whether any transaction existed which could give legal efficacy to the securities, and whether such papers were actually and intentionally executed.The notaries, who were subscribing witnesses, did not see the signatures affixed, and knew nothing of the business beyond the recognition and acknowledgment.One subscribing witness, the father of complainant, was not sworn.James and Milo were not sworn.Morris put in a discovery under oath, and was not sworn further.It becomes, therefore, important to know which party had the burden thrown upon him.

The bill calling for an answer under oath put necessarily in issue the existence and consideration of both notes and mortgage.Anything was responsive to the bill which bore upon the transaction or explained its circumstances.Under the well settled rules of pleading Morris was called upon to answer not merely the special interrogatories, but the whole series of material averments, and his answer setting up no matters in avoidance, but referring only to the transactions mentioned in the bill, must stand until overthrown by sufficient counter evidence.Schwarz v. Wendell, Walk.Ch., 267;Robinson v. Cromelein, 15 Mich. 316.

The latter case is directly in point, and holds that under such an answer as was filed to each of these bills, the complainant is bound to show consideration or be bound by the denial.

It cannot be reasonably urged that the ordinary presumption arising from a promissory note can overcome the oath of a witness called by the complainant himself who denies it.Such a presumption except in favor of a bona fide holder is one which can always be overcome by proof, and is at best but prima facie evidence.It cannot overcome credible testimony.And the same rule of pleading before referred to called on complainant to show affirmatively the genuineness of the documents, concerning which defendant had been specially interrogated, and which he denied.

The defense of forgery rests on two alternative theories first, that the signatures themselves are not genuine; and second, that if genuine they were procured by some trick to be appended to false documents.And in this controversy the question of consideration becomes very important. ...