Reed v. Bond

• Decision Date: 16 June 1893
• Citation: 96 Mich. 134,55 N.W. 619
• Court: Michigan Supreme Court
• Parties: REED v. BOND et al.

55 N.W. 619

96 Mich. 134

REED v. BOND et al.

Supreme Court of Michigan

June 16, 1893

Appeal from circuit court, Ontonagon county, in chancery; John W Stone, Judge.

Action by Charles Reed against Clara A. Bond and others to foreclose a mortgage. From a decree for plaintiff, defendants appeal. Affirmed.

J. R. Rauch, for appellants.

T. L Chadbourne, (Chadbourne & Rees, of counsel,) for appellee.

MONTGOMERY J.

The bill in this case was filed to foreclose a mortgage on the undivided one-fourth of certain lands in the county of Ontonagon, given on the 1st day of November, 1872, by George W. Knowlton to one James O'Brien, which mortgage was assigned to complainant in December, 1873. The defense is First, that the assignment from O'Brien to complainant was made in payment of a gaming debt; second, that at the time of the execution of the mortgage by Knowlton his interest in the property was that of a mortgagee only, and that, therefore, the mortgage by Knowlton was, in effect, a mortgage of a mortgage. This determined, it is claimed that the statute of limitations has run against the Knowlton deed considered as a mortgage, and hence that the complainant is not entitled to relief; and defendant asks for affirmative relief, and that the cloud upon her title be removed.

1. The gaming contract is fully executed, and where this is so the court will usually leave the parties where it finds them. Whatever remedy the assignor may have does not concern the defendants. They are fully protected by the assignment to the complainant. Bagg v. Jerome, 7 Mich. 145.

2. A question of greater difficulty is that of whether the instrument under which Knowlton derived his title is to be treated as an absolute conveyance with an option to repurchase, or, in legal effect, a mortgage. The instrument in its material parts, is as follows: "This indenture, made the 7th day of June, in the year 1859, between William A. Pratt, of the city, county, and state of New York, party of the first part, and George W. Knowlton, of the same place, party of the second part, witnesseth that the said party of the first part, for and in consideration of the sum of $2,738, lawful money of the United States of America, to him in hand paid by the said party of the second part, at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, hath granted, bargained, sold, aliened, remised, released, conveyed, and confirmed, and by these presents doth grant, bargain, sell, alien, remise, release, convey, and confirm, unto the said party of the second part, and to his heirs and assigns, forever, all his right, title, and interest in and to all the undivided one-fourth part of those certain lands and premises situate in the state of Michigan." Here follows a full description, and the habendum clause, as follows: "To have and to hold, all and singular, the above mentioned and described premises, and every part and parcel thereof, with the appurtenances, unto the said party of the second part, his heirs and assigns, forever." This is followed with the covenants of warranty, concluding: "And that the said party of the second part, his heirs and assigns, shall and may at all times hereafter peaceably hold, use, and possess and enjoy the same without any let, suit, trouble, or disturbance of said party of the first part, his heirs or assigns, or any other person lawfully claiming or to claim the same, except under and in pursuance of the agreements for the repurchase of the same, hereinafter contained." The agreement contains this further provision: "Whereas, this conveyance is made by the said Pratt to said Knowlton on account of said Pratt's indebtedness to said Knowlton, and no searches against the property above described have yet been made by said Knowlton as to the title or the incumbrance thereon, it is therefore further hereby agreed that said Knowlton have six weeks from the date hereof to make such searches, and that, if no deed, mortgage, attachment, or execution against said Pratt, or incumbrance of any kind, exists, or is to be found therein, the above conveyance shall be in full of all claims, demands, and causes of action of every kind whatever between the parties hereto, except the agreement for the said Pratt's right to repurchase said property within fourteen months from May 9, 1859, hereinafter mentioned. * * * On the payment of the price of $2,738, and interest from May 9, 1859, to the time of reconveyance, at seven per cent. per annum, and all taxes and necessary charges on said property incurred and paid for by said Knowlton, said Knowlton agrees to sell and convey to said Pratt, his heirs, executors, administrators, and assigns, at any time within fourteen months from May 9, 1859, all his equitable or legal claim and interest in said property, with the same title as he obtained by this deed, and with all the title which he may be entitled to obtain by virtue of this agreement, free from incumbrances on said property by him made or suffered, and to give a deed thereof with covenants...