123 Mich. 155 | Mich. | 1900
The bill in this case was filed originally by Frederick Miller. Since the case was submitted to the court below, a guardian has been appointed. The purpose of the suit is to set aside a mortgage of $250, executed by the complainant to defendant in July, 1894, covering complainant’s homestead in the township of Walker, Kent county, which consisted of about two acres of land, with a small house on it; the premises being worth from $800 to $1,000. The bill, as amended, avers, in substance, that the mortgage in question was given without any consideration whatever passing to complainant, and wholly for the accommodation of one Klugh’ who committed an outrageous fraud on complainant; that Klugh gave to complainant the pretended security of a chattel mortgage, which was insufficient — First, because it in terms professed to provide security on commercial paper not then in existence, but to be thereafter acquired by Klugh; and, second, because the tangible property mortgaged was not owned by Klugh. The bill avers that complainant was at the time mentally incompetent to execute the mortgage, which was well known to defendant’s agent, John B. Martin, who transacted the business for defendant.
The testimony shows that Klugh was slightly acquainted with complainant, and had had some previous talk with him about giving a mortgage on his place to enable him (Klugh) to raise some money; that Klugh went to John B. Martin, and stated that he had a friend who would give a mortgage to secure a loan, and furnished him an abstract; that Klugh had John B. Martin draw up a
The evidence is ample to show that complainant was weak-minded, and incompetent to understand the nature of the transaction. The only doubtful question is whether defendant had sufficient notice of this to put a prudent man on inquiry. We think that, on the whole record, there was sufficient to suggest caution. The defendant’s agent had for eight years been engaged in the business of loaning money and taking securities. While he was not a lawyer, he must have known that the so-called security on the commercial paper to be thereafter acquired was in fact no security. He also knew that the chattel mortgage, without this, was wholly inadequate. He knew that complainant was so ignorant as to believe that he was obtaining valid security on such paper. He knew that the transaction was in no way beneficial to complainant, and
The decree will be reversed, and a decree eritered in accordance with the prayer of complainant’s bill.