New York Life Ins. v. Lord

100 F. 17 | 6th Cir. | 1900

TAFT, Circuit Judge

(after stating the facts as above). It is contended on behalf of the insurance company that no contract to make the loan is shown. We think it clear that the application for the loan, and the approval of it by the finance committee, who, it is conceded, had full power to make the loan, is quite enough to show a complete- contract. It is argued that Devlin, who- telegraphed Carlisle’s brokers that the loan was accepted, had no authority to make the loan, and that the vice president, who authorized Devlin to send the telegram, had no such authority; but it is not and cannot be denied that the finance committee, a majority of whom appended their names to the written approval of the application for the loan, had such authority. It is insisted that the application was not a proposal to take the loan, but only part of the negotiation leading up to it. We do not so read the instrument. It is called an application for loan. It is intended to embody the terms of a contract to take and to make a loan, and. when approved by the company, becomes, in our judgment, a completed contract, by which the applicants agreed to take-the loan on the basis of the representations contained in the application, and the insurance company agreed to make the loan. This renders it unnecessary to inquire what the authority of Devlin or of Welch was in respect of the making of loans for the insurance company.

Nor is it material whether a term Avas added to the contract, by Avhich the title of the land to be mortgaged should be finally submitted to the certificate of Harmon, Colston, G-oldsmith & Hoadly, for the reason that we agree with the judgment of the judge on the circuit that the title here tendered was marketable. The only defects were two uncanceled mortgages of record; one dated March 8, 1847, to secure the payment of a note for |10,000, made by Stetson, then the owner of the land, in favor of Lawrence, and by him assigned to the Ohio Life Insurance & Trust Company. A cancellation of this mortgage is entered upon the record, but the cancellation is not signed by the mortgagee. The second mortgage is from the same mortgagor to the same mortgagee, dated January 8, 1849, and recorded January 8,1849. Its condition of the defeasance was the payment of a note for $15,060 at the rate of seven per cent. The evidence does not show how long these notes were to run, and we are left to infer that they were demand notes. The second mortgage is giAren upon the same day upon which the first mortgage was canceled. It is proven that the plaintiffs and their ancestor from whom the property was inherited have been in constant possession, as the owners of the property, for more than 21 years prior to the 'date of the application for the loan. These mortgages were, therefore, at the date of the application of the loan, 49 and 47 years old, respectively, and, so- far as is shown, the notes became barred by the statute of limitations in 15 years after the dates of the two mortgages, to wit, in ’62 and ’64. It is contended, however* that because, in Ohio, a mortgage conveys the legal title, and an action bf ejectment may be brought upon condition broken, the barring of the notes does not remove the defect of the title. It is argued that the possession of the mortgagor after condition broken is not adverse to that o.f the mortgagee, and, conseqTiently, that in Ohio the right of ejectment on a mortgage deed is never barred, and the statute of limitations does not begin to run on it unless the mortgagor shall have taken some affirmative step to repudiate the title of the mortgagee, and brought it to the latter’s notice. Allen v. Everly, 24 Ohio St, 97. Conceding this statement of the law of Ohio to be time, it still does not follow that these uncanceled mortgages are such a cloud upon the title, or a defect in it, as to render the title unmarketable. It is clear that the statute of limitations has barred the notes which these mortgages wore given to secure, because, under the law of Ohio, suit upon a written instrument is barred in 15 years, and these notes, we must infer from the evidence, were demand notes, and due immediately after they were executed and delivered. The right of foreclosure upon flu; mortgages was also barred within the same time. Kerr v. Lydecker, 51 Ohio St. 240, 37 N. E. 267, 23 L. R. A. 842. It is well settled that, in the absence of proof to the contrary, there is a presumption of fact: that; after 20 years a note secured by mortgage has been paid, and the mortgage, satisfied. Hughes v. Edwards, 9 Wheat. 488, 6 L. Ed. 142; Downs v. Sooy, 28 N. J. Eq. 55; Jackson v. Wood, 12 Johns. 242; Inches v. Leonard, 12 Mass. 579; Howland v. Shurtleff, 2 Metc. (Mass.) 20; Jackson v. Pratt, 49 Johns. 380; 2 Wood, Lim. 229. The longer the time, the stronger the presumption. It is now 51 years since the later of the two mortgages and notes was executed. In'addition to this presumption, we must consider ihe further circumstance that these notes were due to the Ohio Life & Trust Company, which failed in the year L857, and was placed in the hands of a trustee for the benefit of creditors, whose duty it was to collect all debts due to the company; that the trustee continued in the performance of his duties as trustee for 39 years, and in all that time took no steps whatever to enforce either of these; mortgage;». Under these circumstances it admits e>f no doubt as a question of fact that the mortgages were satisfied. The Ohio Life & Trust Company ivas a banking and trust company engaged in the business e;f loaning money and collecting if. It is inconceivable that a debt of $10,000, or a debt of §15,(XMJ, should escape' the attention of its officers, and action not be taken by them to enforce the same. When afterwards a trustee was appointed, giving bond for the proper performance of his duty under the control of the' court, we think an objection based on the remote possibility that the debt was not paid must be regarded as fanciful, and lacking the slightest weight. We are supported in this conclusion not only by the judgment of the counsel for the insurance company at the time of the examination of the title, but also by tiie decision of the supreme court of Ohio in the case of Rife v. Lybarger, 49 Ohio St. 422, 31 N. E. 768. 17 L. R. A. 403, which, though it differs in some respects from the case in hand, presents a close analogy to it. It was an action for the snecific performance of a contract to sell land, and the implied term of the contract was held to be that the title should be marketable. The vendor showed a good title in every resnect, except that there was a mortgage uncanceled of record, securing certain promissory notes of even date. The mortgage notes were given to the ancestor of the vendors, and the notes and mortgage could not be found in his possession. The next of kin of the mortgagees executed a release after the death of the mortgagee, who lived more than 12 or 15 years beyond the time of the execution of the mortgage and note. Objection was made to the title on the ground that the mortgagee might have assigned the' notes and mortgage, and they might be outstanding in the hands of some third person. It was held that, while this was a possibility, the presumption of payment was so strong from the other circumstances that it did not make any substantial defect in the title. These views lead us to concur in the action of the court below, and to an affirmance of its judgment, with costs.