Sessions v. Sherwood
| Decision Date | 28 December 1889 |
| Court | Michigan Supreme Court |
| Parties | SESSIONS v. SHERWOOD. |
Error to circuit court, Gratiot county.
S. J. & J. G. Scott, for appellant.
Mitchel & McGarry, for appellee.
This is an action of ejectment. Plaintiff claims title to 120 acres of land in Gratiot county by virtue of certain mortgage foreclosures by advertisement. The case was tried before Hon HENRY HART, circuit judge, without a jury, who made findings of fact and law, and gave judgment for plaintiff. The judge finds that the defendant came into possession of these premises March 2, 1865, by a warranty deed from one George who was then the owner in fee, deriving his title through mesne conveyances from the United States. February 13, 1867, the defendant executed a mortgage, in which his wife did not join, upon 80 acres of this land, the E. 1/2 of the S.E. 1/4 of section 2, township 11 N., of range 3 W., and other lands not involved in this suit, to his brother, Warren A Sherwood. When this mortgage was made Warren A. Sherwood was not present. It was made in his absence, and taken to the register's office, and put upon record by the defendant. The mortgage was made to protect the defendant and his property from litigation, in which defendant was fearful he might get involved through a partner of his, who was having a law suit; in other words, the mortgage was made and put upon record to prevent creditors, or persons who might in this litgation be adjudged creditors, from levying on this land. This mortgage was found in the register's office by A. G. Russell, administrator of the estate of Warren A. Sherwood, appointed by the probate court for the county of Ionia, Mich. Warren A. Sherwood died March 27, 1876, at St. Louis, Mo. This mortgage, containing the usual power of sale, was regularly foreclosed by advertisement under the statute, and the land purchased by William Reynolds, administrator of Warren A. Sherwood's estate, succeeding Russell. A sheriff's deed was made upon such sale to Reynolds. The premises were not redeemed, and the deed became absolute. The court further finds that December 20, 1870, the defendant, William C. B. Sherwood, with his wife, executed a mortgage to Warren A. Sherwood for $2,000 upon the 120 acres involved in this suit, containing the usual power of sale, which mortgage was recorded December 23, 1870. This mortgage was also regularly foreclosed by advertisement after the death of said Warren A. Sherwood, and purchased by his administrator, Reynolds. Sheriff's deed was executed on this sale, and, for want of redemption of the premises, became absolute. Reynolds was appointed administrator of Warren A. Sherwood by the probate court of Ionia county, Mich., and February 14, 1885, he petitioned said court for license to sell the lands in question. He was granted such license, and October 6, 1885, the premises were sold to plaintiff for $2,600, and he received a deed of the same.
The proceedings on foreclosure and in the probate court are not attacked, but are conceded to be regular; but it is claimed that these mortgages were given without consideration, and invalid. The circuit judge finds as to the $2,000 mortgage, Warren A. Sherwood was present when it was executed; but, while they were talking it over, it was found that the wife of defendant had objections to signing it, as it covered the homestead. It was then agreed to lay it aside, and, instead of the mortgage, to make a deed of the north 80 acres of the land, which was done, and the deed delivered to Warren A. Sherwood, which deed was understood and intended to be taken in the place of the mortgage, which was not intended to be delivered, although it was handed to Warren A. Sherwood, who looked it over. It does not appear in the record how this mortgage came to be recorded three days after it was made, or by whom, or for what purpose, it was recorded, or how it came into the hands of Warren A. Sherwood's administrator. It is rather singular that a mortgage, not intended to be delivered by the parties, and superceded by a deed made in its stead, should have so soon found its way to the register's office, unless taken there by one of the parties, or that it should have been recorded at all unless some purpose was to be subserved by such record. But the secret of this transaction is also found in an intent to defraud or hinder and delay creditors. The judge finds that the agreement not to use the mortgage, and to make the deed instead, was done after Mr. Hoyes, an attorney, had advised them that the 40 acres they levied upon was exempt from levy and sale on execution. He also finds that there was no money paid that day, and defendant was not indebted to Warren, except for $300, which he had collected for, but had not paid over to, Warren, and another mortgage was afterwards given to secure this amount. This mortgage of $2,000 was given, because there was an execution against defendant, and in favor of William Stanley, to assist defendant in avoiding payment of such execution. The foreclosure sales under these mortgages took place December 24, 1880. A bill in chancery was, on the 8th day of September, 1881, filed in the circuit court for the county of Gratiot by the defendant in this suit, William C. B. Sherwood, against William H. Reynolds, administrator, and the heirs of Warren A. Sherwood, deceased, in which said William set up that the first mortgage of $600 was never delivered to Warren, and that it was made to provide against a possible result of litigation in which his partner was engaged, and in which he was threatened to be involved also, but that it was not made or recorded with any design of defrauding, hindering, or delaying any creditors of William. In relation to the $2,000 mortgage, he alleged the same facts as found by the circuit judge in the present suit, and, further, that the mortgage was taken into the possession of Warren, and by him caused to be recorded, without his knowledge or assent, and contrary to the understanding between the parties. He also alleged that there was no consideration for or delivery of either of these mortgages; that he was in the possession of the premises, but that he had temporarily parted with the legal title to the same upon certain trusts and charges, which were then completely and fully ended; and that he was entitled to, and soon would be reinvested with, such legal title. The administrator and heirs of Warren answered, denying the allegations of William, and averring the delivery and full validity of both mortgages; and, at the close of the answer, by way of demurrer, set up that complainant had no right to bring his suit, for the reason that his bill showed he had no legal title to the land, and it did not appear in said bill that he had any equitable title to the premises. Proofs were taken by both parties bearing on the validity of the mortgages, as well as upon the matter of abatement, and the case was argued on the merits. October 5, 1883, the court, the same circuit judge who tried the case at bar, filed the following opinion, and dismissed complainant's bill: The decree was dated as of the date of the hearing, September 14, 1883, and the dismissal of the bill was absolute. The defendant in this case and complainant in that case made a motion for rehearing, which was denied June 14, 1884. No further steps were ever taken by the defendant, William C. B. Sherwood, to attack the validity of these mortgages, or the foreclosure of the same, until he defended the present suit. He and his wife, however, have occupied and remained in possession of the premises ever since; the homestead being on the S.E. 1/2 of the S.E. 1/4 of section 2, township 11 N., of range 3 W. There are about 70 acres of land improved, upon which is a dwelling-house and barn.
It is contended by defendant's counsel that, under the finding of facts by the circuit judge, there was no delivery of either of these mortgages, or any consideration for them, and that the chancery suit was not a bar to the right of the defendant now, and in this suit, to question their validity and that, therefore, the judgment upon the finding of facts should have been for the defendant. The counsel also claims that the wife of Sherwood should have been made a party I am inclined to hold that the chancery suit was not determined on the merits, but on the fact that Sherwood's title, as shown by his bill and the proofs in the case, was not such as enabled him to ask for the relief prayed. This is shown by the opinion filed in the case, and made a part of the judge's finding in this case. But the bill was dismissed absolutely, and, had not this opinion been filed by the circuit judge, stating his reasons for so doing, such dismissal would have been, without doubt, a bar to any further proceedings to test the validity of these mortgages, or any future defense against them on the ground that they were not delivered and were without consideration. As to the bearing of this decree of absolute dismissal upon the present case, I shall speak hereafter. I am satisfied, however, that the plaintiff is entitled to a judgment, beyond any question, as far as the defendant's interest is concerned, outside of the homestead, in the lands covered by the $600 mortgage, which would be the N.E. 1/4 of the S.E. 1/4 of section 2,...
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