Farmers' & Mechanics' Bank v. Bronson, 14 Mich. 361

14 Mich. 361 | Mich. | 1866

Cooley J.

The bill in this case was filed to redeem certain premises from the lien of a mortgage. These premises consist of a village lot in Niles. It appears that in 1838 Nathaniel Bacon, having previously been in possession and erected a building upon the lot, conveyed it to one Harris who gave back a mortgage for $4,000. Harris soon after gave Cogswell K. Green a deed of the lot, and Green took possession. October 15,1839, Green gave a mortgage of the lot to complainants, who have since foreclosed it and obtained the usual deed. Proceedings were also taken to foreclose in Chancery the mortgage from Harris to Bacon, and decree was obtained in June, 1840, which was soon after assigned to defendants Bronson, and is still held by them. May 1, 1845, Green quit-claimed the lot to the Bronsons, who then went into possession and have continued to occupy ever since. No sale has ever taken place under the decree in the Bacon foreclosure suit, and complainants now seek to redeem from it and to have the Bronsons required to apply upon it the rents and profits of the premises since they have been in possession.

If these were all the facts in the case there could be no doubt of the right of complainants to the relief prayed. But several defenses are set up, based upon other facts which we shall proceed to notice.

I. It is alleged that Green had no title at the time he mortgaged to complainants, and that the Bronsons are now occupying and claiming the land by title paramount to that derived through Harris. To show that title defective, the records of the county were put in evidence showing the following deeds upon record covering the premises in controversy:

From William Justice and wife to Hiram Chilson and Lois Olds a deed of the whole lot, dated December 20th, 1831.

From Hiram Chilson and wife to Erasmus Winslow, a deed of an undivided half, dated February 18th, 1833.

From Erasmus Winslow, Lois Olds and Daniel Olds, her husband, to Luther Rice, a deed of the whole, dated December 2Vth, 1833. This deed, it is alleged failed to convey an undivided one-half of the lot, for the reason that the acknowledgement by Lois Olds was defective within the decision of this Court in Sibley v. Johnson, 1 Mich. 380, and therefore void.

Frederick Bronson, in July, 1845, procured a quit-claim deed from Mrs. Olds to himself, and now claims an undivided h,glf of the lot under it.

Luther Rice gave a deed of the lot to Nathaniel Bacon and William H. Bacon, November 28, 1834. William H. Bacon deeded to Nathaniel Bacon, March 1, 1836, but the deed was not recorded until April 23, 1851, and on September 12, 1845, Frederick Bronson procured from William H. Bacon a quitclaim deed, under which he now claims to hold whatever title was vested in William H. Bacon by the deed from Rice.

We are of opinion that neither of these deeds is of any avail to defendants as against the right of complainants to redeem.

1. It clearly appears from the evidence that the deed from William H. Bacon was obtained by Frederick Bronson for the purpose of curing a defect in the title of record, and with full knowledge of the prior deed given by the^grantor therein to Nathaniel Bacon. He is not in position, therefore, to claim anything under his quit-claim as against any one claiming through such prior deed.

2. It is fully admitted by the answer that the Bronsons went into possession of the premises, under Green, as mortgagees, and for the purpose of applying the rents and jirofits of the premises upon a debt due from him to themselves, hereafter more particularly specified. Having thus taken possession under Green, they were not at liberty to repudiate his title afterwards; and all releases obtained by them to cover defects in the title must be held obtained in support of the Green title, and not for its destruction.

8. But if this were not so, and the case were to turn upon the apparent title as shown by the deeds, the claim of defendants would be equally defective. They claim to have derived a paramount title to 'the land through William H. Bacon and Lois Olds from William Justice; but there is nothing to show that William Justice ever owned the land beyond the fact that he assumed to convey it. This standing by itself is no evidence whatever of that fact. — Smith v. Lawrence, 12 Mich. 431.

4. Defendants, however, insist that complainants cannot dispute the title of William Justice and Lois Olds, inasmuch as they themselves claim to derive their title from them. But the only evidence of this fact is the record which the defendants introduce, and that record either shows nothing, or it shows too much for defendants’ purpose. The deed from Lois Olds was either valid as to her half or entirely void. If valid, Green acquired through it all the title that William Justice ever had to that half, subject to the Harris mortgage. If void, the record was a nullity, and not admissible in evidence. The law makes conveyances properly executed and recorded, evidence; but the record of those not properly executed, being entirely unauthorized, cannot prove the existence of originals.

If this case were one which required complainants to show title in their mortgagor we might be called upon to consider the validity of the deed from Mrs. Olds to Rice; but it is not. There is nothing in the case to warrant the application of any principle of estoppel to complainants. Prima facie, their right to the relief prayed is both legal and just; and they have a right to say of the record of Mrs. Olds’ deed, that it is either evidence of a valid conveyance, or it is no evidence whatever against them. Defendants assume the burden of showing a paramount title in themselves to overthrow an apparent right; and the only evidence offered for the purpose according to their own theory of the Olds’ deed, is entirely incompetent and .inadmissible.

II. But there is another branch of the case which requires examination. The defendants not only claim rights under the Harris mortgage, but they also set up an equitable mortgage in themselves from Green, prior to the mortgage to complainants. The latter was acknowledged November 30, 1839, and was recorded two days later. On the 24th of the preceding June, Green had entered into a contract with the Bronsons which is claimed to be an equitable mortgage, and which after providing for the sale of certain lands bought under a contract between them, of the date of November 5, 1835, and that the Bronsons should execute contracts of sale on receiving one-fourth the purchase money, contained a further agreement on the part of the Bronsons to pay and deliver to Green all the purchase moneys and securities, after deducting $12,310.60 and interest, and any costs and expenses they might have incurred. And Green, on his part, agreed that he would, immediately after the first day of October, execute to the Bronsons a mortgage on the premises in controversy, for said sum of $12,310.60 and interest; it being understood that the amounts received from the sales of the lands mentioned in the preceding contract should be applied to the payment thereof, as fast as received by the Bronsons. This agreement was acknowledged by one of the Bronsons, but not by Green, and was put upon record October 29, 1839.

The record of this agreement could not operate as constructive notice to any one claiming as subsequent purchaser or incumbrancer from Green. — Hall v. Redson, 10 Mich. 21. But it was prior in point of time to the mortgage from Green to complainants, and the Bronsons claim that it takes precedence of that, for the reason that that also was in fact only an equitable mortgage, as the mortgagors had failed to attach seals to their signatures. The original mortgage was not put into the case, and the evidence that the seals are wanting consists in the facts that no seals appear opposite the names in the copy given from the record, and that the Register of Deeds certifies that the words “not sealed” are entered in the record opposite the names, in the hand writing of Ms predecessor. This certificate is not legal evidence. The Register was bound to record all instruments properly executed by spreading a true copy upon the record, but he had no authority of law for entering statements of fact to make them evidence against other parties. The original entry being unauthorized would not be evidence, and the copy would be equally incompetent. Whether the want of any marks, indicating seals, opposite the names in the record, is proof that none were attached to the original, and would preclude the record or a copy thereof, being evidence, is another and a different question.

But the complainants claim that the agreement between Green and the Bronsons does not constitute an equitable mortgage, and that if it does, the question of priority between it and their mortgage is res jicdicata. It appears from the record that the Bronsons were made parties to the bill by complainants for the foreclosure of their mortgage, under the general allegation that they claimed some interest as subsequent incumbrancers or otherwise; that the Bronsons filed a cross-bill in the case, setting up said agreement as an equitable mortgage, and claiming on several grounds, that complainants’ mortgage should be postponed to their claims; that answer was filed in the case, proofs taken to sustain and rebut the allegations contained in the cross-bill, and on the final hearing a decree dismissing it was entered.

Defendants claim that this decree is not a bar to their defense in this suit, for the reason that the cross-bill was not a proper proceeding in the case in which it was filed, and wag properly dismissed without regard to the merits. We do not think this position well taken, or that it is of any importance now whether the matters set forth in that bill were proper to be used by way of defense to that suit or not. A bill filed as a cross-bill in a case not proper for it, is not to be dismissed for that reason, if it prays affirmative relief; and a decision upon the merits, based upon it, is just as conclusive as in any other case. A bill assuming to be a cross-bill, but bringing new matters into a case, not connected with the subject matter of the original suit, is to be regarded as an original bill, — Andrews v. Kibbee, 12 Mich. 94; and calling it a cross-bill is simply a misnomer. — Pollock v. National Bank, 7 N. Y. 274. Whatever view, therefore, we may take of the bill in question, the Court had jurisdiction to pass upon the questions raised by it, and as it was not dismissed without prejudice we must presume that those questions were disposed of upon the merits. The decree in that case, therefore, settled conclusively the priority of complainants’ mortgage over the equitable claim of the Bronsons.

We are not to be understood, however, in what we have said as intimating an opinion that the bill was not a proper cross-bill in that case. The complainants had made the Bronsons parties to their bill as having, or claiming an interest in the premises subsequent to their own mortgage. In fact the Bronsons had gone into possession under Green, but they claimed a right to appropriate the rents and profits to what they insist is an equitable mortgage of their own, which, if valid as such, was prior in time to that of complainants. The questions involved between the parties were, first, whether complainants’ mortgage was a legal one and properly executed and recorded; for if it was they wer & prima facie entitled to precedence ; and second, if not a legal mortgage, then, whether the agreement between Green and the Bronsons amounted to an equitable mortgage, which would entitle them to precedence. Questions both of law and of fact were involved, and it appears to us quite clear that the case was a proper one for a cross-bill. Conceding that prior and paramount rights are not to be contested in a foreclosure suit, yet when the very question is, which is prior and paramount, it is-as proper to dispose of it in the first suit as in 'any subsequent one. The possession of the Bronsons being taken under Green, was prima facie subject to complainants’ mortgage, and if they claimed an equitable lien which should give them priority, it was proper that they should present the facts concerning it that the Court might protect it by its decree. The Bronsons so thought at that time, and when the Court dismissed their bill and'granted decree for complainants, it in effect decided that their rights were not entitled to priority over those of complainants, but were in fact subject to them, as complainants had alleged.

But the Bronsons also claim that they have a tax title upon the premises to which they may refer their possession, and which is sufficient to protect them against the relief prayed. This title was acquired in 1840, under statutes which did not make the deed prima facie evidence of regularity. No evidence was given of the correctness of the proceedings, and the deed therefore fails to show title. The fact that the Bronsons held a tax deed of the premises was no reason why they should not be made parties to the foreclosure suit, if in fact they claimed any rights in the premises which were subject to complainants’ mortgage. — Horton v. Ingersoll, 13 Mich. 409. That they went into possession under Green, instead of under their tax title, is admitted by their answer, and the tax title was therefore no answer to the bill in the former case, or to an accounting in this.

The decree of the Court below, permitting redemption and requiring defendants to account forthe rents and profits of the premises, while occupied by them, to be applied on the Harris mortgage, must be affirmed, with costs of this Court.

The other Justices concurred.