People's Nat. Bank v. Wilcox
| Decision Date | 23 May 1904 |
| Citation | 136 Mich. 567,100 N.W. 24 |
| Parties | PEOPLE'S NAT. BANK OF JACKSON v. WILCOX et al. JACKSON CITY BANK v. SAME. |
| Court | Michigan Supreme Court |
Appeal from Circuit Court, Saginaw County, in Chancery; Byron A Snow, Judge.
Actions by the People's National Bank of Jackson and by the Jackson City Bank against Homer Wilcox and another. From the decree (both cases being tried as one), complainants appeal. Modified.
Thos. E. Barkworth, for appellant People's Nat. Bank.
Pringle & Hewett, for appellant Jackson City Bank.
Wilson & Cobb, for appellees Homer Wilcox and Stanley Wilcox.
The bill in the first entitled cause was filed for the purpose of foreclosing a mortgage made April 23, 1898, by Homer Wilcox as surviving partner of the firm of A. & H. Wilcox, and also in his individual capacity, to complainant in said cause. The bill in the second entitled cause is filed by complainant, as an execution creditor of Homer Wilcox, individually and as surviving partner, for the purpose of setting aside or postponing the operation of said mortgage. By stipulation the cases were heard as one. From the decree entered in the case both complainants have appealed. No relief is asked against Stanley Wilcox. Homer Wilcox did not appeal.
The mortgage was made 'between Homer Wilcox, as surviving partner of the firm of A. & H. Wilcox, a copartnership, and in his individual capacity under and by virtue of a certain deed heretofore executed by the members of said copartnership and their wives, of the first part, and People's National Bank of Jackson, Michigan, of the second part,' and contained this recital: 'Provided always, and these presents are upon this express condition, that if the said party of the first part shall and do well and truly pay, or cause to be paid, to the said party of the second part, the sum of $20,562.35, as evidenced by certain promissory notes now in the possession of the party of the second part, to pay the said sum of $20,562.35 as provided in said promissory notes so held to secure the same, and to which these presents are collateral, or as may be hereafter provided in any note or notes given in renewal thereof, then these presents shall cease and be null and void.' The mortgage was signed, 'Homer Wilcox [L. S.] and as surviving partner of the firm of A. & H. Wilcox [L. S.].' The deed referred to in the mortgage named Homer Wilcox as the manager of the firm of A. & H. Wilcox, and gave him power to make deeds and other papers. It also provided for the settlement of the business of the partnership upon its dissolution, by notice from one partner to the other of his desire to terminate it, Andrews Wilcox died in December, 1891. The following notes were in the possession of the bank at the time the mortgage was made: One for $7,246.20, dated January 1, 1898, signed 'Stanley Wilcox,' indorsed and guarantied by Homer Wilcox; one dated January 1, 1898, for $603.62, signed 'Homer Wilcox'; one dated January 1, 1898, for $10,000, signed by Homer Wilcox; one for $729.96, dated January 24, 1898, signed by Homer Wilcox; and one dated April 20, 1898, signed by Homer Wilcox. At the time the mortgage was given there was a mortgage of $900 upon one of the descriptions of land included in it. This mortgage was foreclosed, and at the time the decree was rendered the mortgage lien had been acquired by the Jackson City Bank. The trial judge held that this mortgage lien should be the first lien on the property described therein. He also found that, though the mortgage was given for upwards of $20,000, that only $5,640 of it was the debt of A. & H. Wilcox to the bank, and held that amount should be a lien prior to the lien the Jackson City Bank obtained by reason of its execution levy. The People's National Bank claims the decree should have been for the full amount of the mortgage. The Jackson City Bank claims no decree should have been rendered in favor of the City National Bank, for the reason that the debt of A. & H. Wilcox had been released and paid by accepting the notes of Homer Wilcox. It also claims there was embraced in the mortgage a large amount of the personal debt of Homer Wilcox, which vitiates the entire mortgage, and, in any event, claims its lien by reason of its execution levy should have priority over the lien of the People's National Bank. Homer Wilcox claims he is liable as maker and guarantor of the notes individually, and not as surviving partner, and that partnership assets cannot be appropriated to their payment. He also claims that at the time the mortgage was given an oral arrangement was made of things the bank was to do in consideration of the giving of the mortgage, which agreement was to be put in writing, but was not, because the president of the bank, Mr. Root, sickened and died before it was done; and, as the bank did not carry out the arrangement, the mortgage did not take effect, or, if it did, an allowance for damages should be made because of the failure of the bank to carry out its agreement.
Before considering the main question, disposition should be made of two preliminary questions. Homer Wilcox was allowed to testify as to the conversation he had with Mr. Root, the president of the People's National Bank, at the time the mortgage was made, which conversation tended to show the entire agreement was not put in the mortgage, but was to be put into a separate paper. All the other officers of the bank testified they never heard of such a claim until long after the death of Mr. Root. Mr. Potter, the vice president of the Jackson City Bank, also gave testimony of a conversation with Mr. Root, which tended to show that the debt of A. & H. Wilcox had been released by accepting paper made by H. Wilcox in the place thereof. Objection was made to the reception of the testimony of Mr. Wilcox and Mr. Potter. It is claimed that as to the controversy between the two banks, Wilcox, though a nominal party, was neither prosecuting nor defending, and hence might properly testify; that, as the Jackson City Bank was not a party to the foreclosure suit, there is no reason why Mr. Potter might not testify in that suit, and if for any purpose in either suit Mr. Potter or Mr. Wilcox was a competent witness, his testimony could not be disregarded. The statute under construction is section 10,212, Comp. Laws. In Penny v. Croul, 87 Mich. 15, 49 N.W. 311, 13 L. R. A. 83, it was said the statute was intended to reach the real party in interest, and that a witness is not permitted to testify in his own interest as against one whose lips are closed in death. In McHugh v. Dowd's Estate, 86 Mich. 412, 49 N.W. 216, it is said the statute was designed to protect the estates of deceased persons against claims which depend in whole or in part upon testimony of a party which cannot be refuted by the testimony of the deceased. The statute is also intended to protect the interests of corporations when the testimony relates to matters within the knowledge of a deceased officer of a corporation. Apply these principles to the case at bar. In this case it is proposed to do away with the effect of the mortgage made by Homer Wilcoxas survivor of A. & H. Wilcox by showing conversations with Mr. Root, when, if that result could be accomplished, it would affect the interests of the bank of which Mr. Potter is manager, and the interests of Homer Wilcox. We do not think the testimony was competent. See, also, Seymour v. Wallace, 121 Mich. 402, 80 N.W. 242; Berry v. Adams, 122 Mich. 17, 80 N.W. 792.
A great many questions are raised in the voluminous briefs of able counsel, which, in our view of the case, it is not necessary to discuss. There are a few facts about which there is no dispute. First. The property described in the mortgage was partnership property belonging to A. & H. Wilcox. Second. The affairs of that partnership had not been closed. Third. The mortgage was made by Mr. Wilcox as...
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