McMillan v. Bissell
| Decision Date | 14 October 1886 |
| Citation | 63 Mich. 66,29 N.W. 737 |
| Parties | MCMILLAN and another, Ex'rs, etc., v. BISSELL and others. |
| Court | Michigan Supreme Court |
Appeal from Wayne. In chancery.
H.M Duffield, for defendants.
Complainants are the executors of the last will of Hugh Moffat, deceased. The defendant Margaret A. Bissell is the daughter, and her husband, the defendant Edward W. Bissell, the son-in-law of said deceased. On February 23, 1883, the defendants conveyed by warranty deed certain real estate in Detroit to Mr Moffat. The complainants claim that the deed was given as security for indebtedness of Edward W. Bissell to Moffat, and to secure Moffat for indorsements he had made for Bissell. The executors bring this suit to have the deed decreed to be a mortgage, and to foreclose the same as such, against the property described therein, and for a sale thereof to satisfy the claim of the estate under the mortgage deed, and for such other relief in the premises as may be just and equitable and they aver that the amount due and unpaid upon the said lien on the twenty-third day of November, 1884, was $30,290.84. The defendants both appear and answer the bill. No question is made but that the amount claimed is due complainants upon their theory of the case. The defendants deny that the deed, when given, was intended as a mortgage, and claim that it was given upon an unconditional sale of the property by the Bissells to Moffat and the conveyance was intended to be absolute, and was received by Moffat in payment of Edwin A. Bissell's indebtedness to him; that the consideration in the deed was placed at $65,000, and was the real consideration; and that the estate of Moffat is indebted to Edward A. Bissell in the sum of about $5,000; that the consideration for the property conveyed was the prior incumbrances upon it, and Mr. Bissell's indebtedness to Moffat; and that said $5,000 was the amount of the consideration left after deducting said incumbrances and indebtedness. Moffat died the sixth day of August, 1884.
No question is made upon any of the probate proceedings, nor as to the right of the complainants to take the proceedings had in this case under their theory of the rights of the parties. The case was heard in the Wayne circuit, and the complainants' bill was dismissed. The complainants appeal.
The will of Hugh Moffat is dated February 1, 1884. The following extracts contain all the provisions relating to the defendant Mrs. Margaret A. Bissell, viz.:
Article 7. This article provides for the taking possession of the whole estate by the executors, with power to lease, sell, and convey the same, and pay the proceeds of such sales and leases to the devisees, "except that the principal of that part of my estate which is given to my daughter Margaret A. Bissell and her children shall be set apart and put at interest, and such interest only shall be paid to her, and on her death said principal shall be paid to her children her surviving, and the issue of any deceased child; such issue to take only such part or share as its parent would take if living."
The doctrine that a deed absolute on its face may be shown to be a mortgage is old and well established. Vern. 183, 268, 394; Prec.Ch. 95; 4 Kent, Comm. 141; Bloodgood v. Zeily, 2 Caines, Cas. 124; Strong v. Stewart, 4 Johns.Ch. 167; Van Buren v. Olmstead, 5 Paige, 9; 1 Washb. Real Prop. 126; Jackson v. Carr, 4 Johns. 186; Wadsworth v. Loranger, Harr.Ch. 113; Swetland v. Swetland, 3 Mich. 482; Fuller v. Parrish, Id. 214; Emerson v. Atwater, 7 Mich. 22; Hughes v. Edwards, 9 Wheat. 489-495; Barber v. Milner, 43 Mich. 248; S.C. 5 N.W. 92; Dow v. Chamberlin, 5 McLean, 282; Rogan v. Walker, 1 Wis. 527; Wilson v. Drumrite, 21 Mo. 325; Wadsworth v. Loranger, Harr.Ch. 113; Emerson v. Atwater, 7 Mich. 12; Johnson v. Van Velsor, 43 Mich. 208; S.C. 5 N.W. 265.
It will be noticed from examination of the foregoing Michigan cases cited that the question has several times been before the supreme court of this state, and the conclusion reached must be regarded as settled law upon the subject. There is less difficulty in ascertaining what the law is than in applying it to cases as they arise under it. No question can be made but that, in cases when the character of the conveyance is not what was intended by the parties, and the error occurred by accident, mistake, or through such misconduct of the creditor as will amount to a fraud, the doctrine contended for by counsel for complainants will apply, and parol testimony may be resorted to to show that a deed absolute upon its face was intended as a mortgage to prevent oppression of the debtor. This, however, I think may be regarded as a species of fraud.
The deed, with the defeasance, constitutes the mortgage. Indeed, it was never necessary that both should be contained in the same instrument; and it is now, even under our recording laws, not necessary to give the protection they offered to mortgagees. The agreement for the defeasance, whether written or unwritten, is no more than one of the conditions upon which the deed was given, and therefore constitutes a part of the consideration for the conveyance, and I have never been able to discover why it was not competent to show it by parol in any case, either at law or in equity, where it was competent to show the actual consideration for the conveyance. It is true, where the deed does not contain the defeasance, the presumption arises that the conveyance is absolute; and, in making proof that a defeasance was intended by the parties, and was in fact a part of the consideration upon which the conveyance was made, this presumption must be removed by testimony before the debtor can use the evidence showing his right to defeat the absolute character of the conveyance; and no more than this, I apprehend, is meant by the courts when they say clear, irrefragable, and most convincing proofs are required to show that a deed absolute upon its face was intended as a mortgage. It comes finally to a question of what was the understanding and the intention of the parties at the time the instrument was made; and this, like any other fact, depends for its support upon what was said and done by the parties at the time, together with all the other circumstances bearing upon the question.
Positive evidence is not required to be made of the intention and agreement of the parties if it does not exist; but the proof must be made by the best testimony attainable, and, if such testimony is not sufficient to satisfy the conscience of the court that the defeasance was made or intended to be made, or if the court, after canvassing the testimony carefully, has serious doubts as to what it does show upon the subject, the deed itself must control. In this case the real question is one of fact,--was it the intention of the parties to the deed that Hugh Moffat should receive but a lien upon the property as security for the money then owing to him by Edward W. Bissell, or for liabilities to him? If such was the intention, the conveyance is a mortgage. If such was not the understanding, then the deed must stand, and its legal effect must be determined from what is therein contained.
In establishing the fact that the instrument was intended to operate as a mortgage, it is not necessary to show any particular time was agreed upon when the mortgage was to be paid. This will be implied. Neither was it necessary to show what interest was agreed upon between the parties the mortgagor should pay. If the mortgage was due presently, the law will imply the agreement as to interest, and also fix the rate; and, if the case shows a state of facts from which these things will be implied, the bill will be sufficient if it states such facts without averring the implications which arise therefrom. Neither is a demand necessary before bringing suit to foreclose a mortgage, any more than in any other case. It is true, a court of equity ought not to declare a deed a mortgage, and leave the terms of payment and rights of the parties under such mortgage unsettled, where a foreclosure is asked in the same suit. Such terms of the mortgage, and the rights of the parties thereunder, may, however, as well be determined from the facts implied as from those proved by testimony.
In solving the question upon the facts, a few things are absolutely necessary to be found to exist before the deed can be construed a mortgage. A debt owing to the mortgagee, or a liability incurred for the grantor, either pre-existing or created at the time the deed is made, is essential to give the deed the character of a mortgage. The relation of debtor and creditor must appear. The existence of the debt is one of the tests. McNamara v. Culver, 22 Kan. 661, 668; 1 Jones, Mortg. � 265; Crane v. Buchanan, 29 Ind. 570. The amount of the debt, as well as its continuance, should also be...
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