56 Mich. 377 | Mich. | 1885
In April, 1877, Freeman Webb, then residing at Putnam in the county of Livingston in this State, was the owner in fee of the southeast quarter of section 8; also
In May following the making of these instruments, Freeman Webb died. In March, 1878, the daughters desired- to partition the land held by them as tenants-in-common, and agreed between themselves as to the manner it should be done. Eliza conveyed by quitclaim deed to Nancy thejwest half of the southeast quarter, the east half of the southeast quarter, and the southwest quarter of the northeast quarter, of section 8, and the north half of the northwest quarter of the northeast quarter of section 17, all in township 1 north, range four east. Nancy conveyed to Eliza, by quitclaim deed, the south half of the northeast quarter of the northeast
The mortgage covei’s the west half of the southeast quarter of section 8, and is conditioned to pay or cause to be paid to Sophia Webb $250 on the first day of July, and $250 on the first day of January, each and evei-y year from the date thex’eof during the whole xxatural life of Sophia Webb, accoi’ding to a promissory note of even date. This mortgage was recorded April 2, 1878. On the 16th of March, 1S78, Sophia Webb executed a discharge of the joint mortgage of Nancy M. Beebe and Eliza Crofoot to her, which discharge was recorded on the 29th of April, 1878.
In 18S1 Nancy M. Beebe commenced to hix-e money from the Ann Arbor Savings Bank, upon her son’s indorsement, without other security, for the purpose of aiding her son, who was engaged in business. The amount she borrowed from time to time soon ran up to about $8000; and of her own voluntary act, unsolicited by the bank, on the 5th day of August, 1881, the defendant Nancy M. Beebe, to secure payment thereof on that day transferred all the lands described in the said bill of complaint, by full-covenant wai’ranty deed, to Charles E. Hiscock, who was and still is
The bill of complaint in this case is filed to foreclose the last-named mortgage. The defendant Sophia Webb answered, admitting the execution of the mortgage, and also setting up her own mortgage executed by Nancy M. Beebe as an exist
The complainant, the Ann Arbor Savings Bank, answered the cross-bill, setting out its dealings with defendant Beebe; averring that she had engaged to give it the first lien upon the property, to secure her debt to them, and an agreement for an extension of time on condition that it should have the first lien on the property covered by the Hiscock deed, which included the premises covered by the mortgage of Mrs. Webb; that it was agreed, in order to give such first lien, that Mrs. Beebe and Mr. Hiscock should deed to Mrs. Webb, and she should execute her note to the bank, indorsed by Mrs. Beebe, and secure the same by a mortgage on the property conveyed to her; that Mrs. Beebe represented that her mother would be willing to carry out any agreement she might make with the bank, and she would get her mother to execute the note and mortgage; and it denies that any agent of the bank made .any representations, fraudulent or otherwise, to Mrs. Webb at the time she signed the mortgage, and claims that its mortgage is entitled to priority over that of Mrs. Webb. Proofs were taken in open court, and decrees rendered in the original and cross-suits in accordance with the relief prayed for in the cross-suit.
The testimony shows that on the 18th day of February, 1882, Mrs. Beebe had a conference with the bank officials and its attorney at the bank, in the city of Ann Arbor. At that time the situation of affairs was this : Mrs. Beebe owed the bank about $8000. As security for this indebtedness Mr. C. E. Hiscock held a deed, absolute in form, executed by Mrs. Beebe, by which she conveyed to him all her real estate, amounting to two hundred acres of land, eighty acres of which was subject to the mortgage of Mrs. Webb. The bank officials desired to obtain the first lien upon this eighty acres; in short, to get rid of the mortgage to Mrs. Webb. To accomplish this they proposed that Mrs. Beebe should give a warranty deed to Mrs. Webb, and also Mr. Hiscock should give to her a warranty deed; Mrs. Webb should then make her note to the bank, indorsed by Mrs. Beebe, and should secure the payment of the note by a mortgage to the bank upon the two hundred acres of land, payable in a year. To this proposition Mrs. Beebe assented, although she swears that she did not understand that the arrangement was to affect her mother’s mortgage. The papers were prepared by the officers of the bank and its attorney. Mrs. Beebe executed
It is proper here to pause and consider who were. the parties to this proposition. On the one side were the bank and its debtor, Mrs. Beebe; and on the other was Mrs. Webb ; the object being to get rid of Mrs. Webb’s mortgage, so as to give the bank a prior lien. The object sought to be accomplished and the interests to be affected thereby, by the bank and Mrs. Beebe, were identical. But Mrs. Webb, the other party to be affected, was not present. She knew nothing of what it was proposed to do. The officers of the bank testify that Mrs. Beebe promised and undertook to obtain the note and mortgage from her mother. There was an attorney by the name of J. H. Morris, who was out and in the bank during the interview, who had previously acted as the attorney of Mrs. Beebe in some of her matters, but he had never acted as attorney for Mrs. Webb. The note and mortgage prepared for Mrs. Webb to execute were placed in his possession. He took them and went with Mrs. Beebe to Pinckney, where she resided, on the evening of February 18th. The next day was Sunday. On that day he and Mrs. Beebe went to the residence occupied by Mrs. Webb, which was on the premises covered by her mortgage, a distance of about two and a half miles from Pinckney. There Mrs. Beebe told her mother, or asked her, rather, if she was willing that the farm should be deeded to her, and she give a mortgage to the bank, and she replied that she was willing, and she was requested to come to Pinckney the next morning to execute the papers. Nothing was said about her mortgage, or the effect it would have upon her mortgage security. She went to Pinckney the next morning and found Mr. Morris waiting and in haste to be taken to Dexter to catch the train for Ann Arbor. The note and mortgage were laid upon the table before Mrs. Webb without being read.
If Mrs. Beebe and Mr. Morris knew the purpose of making the deeds and mortgage was to obtain for the bank priority over Mrs. Webb’s mortgage, — and it is plain that the transaction had no other signification, — and if it is allowed to stand, then they perpetrated a fraud upon Mrs. Webb, who was there without a legal adviser, in obtaining her signature to the mortgage in the manner they did. Grant that Mrs. Beebe was ignorant of the effect upon her mother’s mortgage interest by the conveyances to Mrs. Webb, yet Mr. Morris must certainly have been aware of the law in that respect, and should have advised her correctly relative to her rights in the premises.
But the complainants in the original bill say the bank is not responsible for the statements of Mrs. Beebe or of Mr. Morris ; that they were not their agents. But it is evident that they acted for somebody in getting Mrs. Webb’s signature, and it is certain they did not act for Mrs. Webb, nor in her interest. Under all the circumstances, the bank must be held responsible for any misrepresentations which were made to Mrs. Webb in procuring her signature to the mortgage. The indirect manner in which it was proposed by the bank officials to obtain this priority, raises a strong presumption that they did not expect that Mrs. Webb would be willing to discharge her mortgage, or make it subject to the indebtedness of her daughter to the bank, if informed of that pro
Affirmed, with costs. .