208 Mich. 392 | Mich. | 1919
November 22, 1913, the plaintiff, Elnora Jones, and her son, Orvis Grant Jones, entered into an agreement with one George B. Updegrove by the terms of which they purchased from Updegrove the formula and exclusive right to manufacture and sell in the District of Columbia and the State of Maryland a certain preparation called “Earthquake,” said to be used for cleaning carpets, rugs and other fabrics. The purchase price was $10,000; $3,000 to be paid on the execution of the agreement, and the balance when their profits on the sale of “Earthquake” had amounted to the sum of $70,000. The plaintiff then owned two pieces of real estate in Traverse City;' upon one of them was a mortgage for $500. To make
On December 2, 1913, Updegrove applied to the defendant Leon F. Titus, cashier and executive officer of the defendant First National Bank of Traverse City, for a loan of $1,500, offering the. Jones mortgage for $2,000 as collateral. He had before that cashed several checks drawn on his own bank, but had had no other business dealings with the Traverse City bank. The abstract was examined, the security was known to Mr. Titus, it was ample, the loan was made, and the Jones note was indorsed over to the bank, and it and the mortgage were left as collateral to secure the loan. One thousand dollars was drawn by Updegrove that day and the balance later. The note was due in four months. It was not paid when due, and on April 6, 1914,'Updegrove executed a formal assignment of the mortgage to the bank, and a request was made by him, and granted, for an extension of time. It would appear that the interest for the four months-was at this time paid.
The Updegrove note to the bank for $1,500 was not paid and the collateral, the Jones note and mortgage, was put up and sold; it was bid in by Mr. Titus, and on February 12, 1916, the bank executed an assignment of it to him in his individual name.
On April 23,1917, this bill was filed. By it plaintiff seeks to set aside the mortgage given by her to Upde- • grove for $2,000, to restrain its foreclosure, and for a decree holding it-invalid in the hands of defendants. By way of cross-bill, in his answer defendant Titus, seeks foreclosure of the mortgage only to the extent of the amount of the loan to Updegrove with its accrued interest. The trial judge, who heard the
But it is urged by plaintiff’s counsel that Mr. Titus dealt with this mortgage under an assumed name, that of “Trustee for Trust Mortgage Syndicate” in violation of Act No. 101, Public Acts of 1907 (2 Comp. Laws 1915, § 6349 et seq.), and therefore cannot enforce it under repeated decisions of this court. The bank held among its assets certain past due real estate mortgages. It devised a system of its own for hand-’ ling this past due paper and to facilitate its bookkeeping. The cashier gave to the bank a note with these past due mortgages as collateral signed by him as “trustee for trust mortgage syndicate.” The testimony shows that this name was used only as a memorandum, apparently for the purpose of carrying the account, and possibly with the idea of preventing the “charging off” of these items. Without commending this plan of carrying past due paper as live assets, we do not perceive that the statute in question inhibited Mr. Titus, who took an assignment of this mortgage in his own name, and not in the name of, or as trustee for the trust mortgage syndicate, from foreclosing it. Rossello v. Trella, 206 Mich. 20.
While this record discloses that plaintiff was defrauded by Updegrove, against whom she has a decree, there is no testimony tending in any way to establish that defendants were a party to such fraud, and no testimony justifying the conclusion that they had any knowledge or notice of such fraud when they made the loan to Updegrove, or that the transaction smacks in any degree of bad faith on their part. Nor is any
The decree of the court below will be affirmed, with costs to defendants.