Michigan State Ins. Co. v. Soule
| Decision Date | 03 October 1883 |
| Citation | 16 N.W. 662,51 Mich. 312 |
| Court | Michigan Supreme Court |
| Parties | MICHIGAN STATE INS. CO. v. SOULE and others. |
The owner of land subject to a mortgage conveyed a part of the land to a party who, as part of the consideration, agreed to pay the mortgage debt, such payment being stipulated in the deed, and a bond of indemnity being executed by the grantee as further security. Another portion of the land was conveyed to a third party, who had knowledge of all of the facts in the case. The mortgagee subsequently foreclosed the mortgage on the whole tract. Held, that the transaction had the effect to make the land sold to the party assuming to pay the mortgage the first fund to be resorted to, and the land retained the secondary or security fund, and that the mere declarations of the agent of the mortgagee that the land sold was sufficient for the payment of the whole mortgage debt and that it was expected that the debt would be paid by the grantee, made when the grantor requested a release of the portion of the land retained by him, which was never consented to, will not constitute an estoppel as against the mortgagee, and render a foreclosure of the whole tract of land invalid.
It is not the forbearance to collect a debt of the principal debtor, or a promise to forbear, but the contract of extension, based on a consideration, which discharges a surety.
The statute does not require the party foreclosing to sign his name to the notice; it is sufficient if the name is specified therein. Comp.Laws, � 6915.
Appeal from Ottawa. Bill and cross-bill.
T.J. O'Brien, for complainant.
Angel & Soule, for defendant and appellant.
The circuit judge who took the testimony and heard these cases found material facts as follows: That one Lucy Piquette was the patentee of certain lands in Ottawa county, including a parcel of about 44 acres now claimed by these parties respectively. That prior to August 6, 1860, she made a mortgage of said lands, which was subsequently the subject of a suit for foreclosure, in the Ottawa circuit court in chancery, in which suit decree for sale was made and the lands were sold to William M. and Thomas W. Ferry. That afterwards, and on December 16, 1867, said William M. and Thomas W. Ferry, for a valid consideration, by a deed with full covenants of warranty, conveyed 70 acres, including the lands now in controversy, to James B. Soule. That on August 28, 1868, James B. Soule mortgaged the lands so conveyed to one Edward L. Craw for the sum of $3,000, of which mortgage, after it had been indorsed down to $1,500, the insurance company became the owner. That the foreclosure of the Piquette mortgage was invalid, and did not cut off the equity of redemption, and on September 20, 1873, Lyman D. Norris became the owner of such equity of redemption by deed from Mrs. Piquette. That afterwards, on June 15, 1875, Norris conveyed the premises in controversy to Edward P. Ferry, executor of the estate of William M. Ferry, at the request and by the procurement of James B. Soule, who then continued to be the owner of the title derived from the Ferrys, and also of Edward P. Ferry, executor as aforesaid, and who was also agent and attorney of Thomas W. Ferry; and that it was the intention and purpose of the parties to said conveyance that the same should operate to perfect the conveyance from the Ferrys to James B. Soule, and to discharge the Ferrys from liability upon their covenants; and that the force and effect of the Norris conveyance was to perfect the title so conveyed by the Ferrys to Soule.
We concur in this finding, and do not deem it necessary to enlarge upon it. Some further facts, however, require to be now stated. March 10, 1871, Soule conveyed 20 acres, part of the land, for a consideration of $5,000, to one Alonzo J. Sawyer, and, as a part of the consideration, Sawyer was to pay $1,500, the balance owing on the Craw mortgage, then held by the insurance company. The deed was expressly made subject to this payment; and in January, 1872, Soule obtained from Sawyer a bond of indemnity as further security. He afterwards conveyed six acres more of the land to his sister, Mrs. Craw. Flavius J. Hough was then the general agent of the insurance company, and he was notified of this sale to Sawyer, and that Sawyer assumed the payment of the mortgage. Sawyer himself requested Hough to notify him as interest came due, and he did so, and Sawyer paid interest for several years. The lands were known as fruit lands, and Sawyer, who was a man of considerable means, was purchaser for a rise of other lands in the neighborhood. In 1876, however, there was a very great depreciation in the market value of these lands, and Sawyer became unable to meet his obligations. The insurance company then called upon James B. Soule for payment; failing to obtain it, foreclosed its mortgage by advertisement, and bid in the land. After the time for redemption expired, the company obtained possession, and filed its bill to quiet the title. Linnie S. Soule, who, with knowledge of all the facts, had received a conveyance from James B. Soule of the lands in dispute, filed a cross-bill, claiming title, and praying decree accordingly. The circuit court made decree as prayed by complainant in the original bill, and the complainant in the cross-bill appeals. Edward P. Ferry, who is defendant in both bills, makes no claim.
The decree is right if the foreclosure of the Craw mortgage is sustained. But it is contended by Mrs. Soule that there are fatal defects in the proceedings, and also that before the foreclosure the insurance company had estopped itself by the acts of its general agents from resorting to her lands. The supposed estoppel depends upon the testimony of James B. Soule, and of Craw, who is his brother-in-law. Soule testifies that shortly after the sale to Sawyer, having an ambition to get the remainder of his farm freed from incumbrance, he asked Hough to have the insurance company release it. Hough said he would see about it and let him know. Some time after that Hough told him it was a great deal of bother to release it, or something of that kind, but that he considered the land sold to Sawyer good security, and satisfactory, and all that, and that he was glad to deal with a man like Mr. Sawyer, who he knew would pay the interest. After that conversation Soule was not called upon to pay interest until 1876. Again he says: "Mr. Hough told me that it would be a good deal of bother for them to release a part of the land; that they had extended the time to Mr. Sawyer, and that the twenty acres and Sawyer were just as good security as the insurance company wanted; that he himself would be glad to have the Sawyer land for twice the amount of the mortgage; that the insurance company would never look to me or my land for any part of the money, and that I might rest at ease about the matter." Craw's testimony tends to confirm this evidence, and Hough's to contradict it.
No claim is made upon the evidence that there was in fact at any time an extension given to Sawyer, and Sawyer himself testifies that there was none. The demand was simply allowed to remain uncollected, so long as the interest was met. Soule claims, however, that by the sale to Sawyer, and the assumption of the mortgage by the purchaser, Sawyer in equity became the principal...
To continue reading
Request your trial