71 Mich. 467 | Mich. | 1888
This action was brought by the complainant to foreclose what purports to be a mortgage given by the defendants Watson to the Scranton & Watson Lumber Company, which is represented by the complainant, covering seven lots on Second street, in the city of Detroit. All the defendants, except the Watsons, are subsequent purchasers or incumbrancers. The bill is the ordinary foreclosure bill, with, the usual averments where filed by a receiver. All the defendants appeared and answered the complainant’s bill.
Joseph E. Watson and wife, the makers of the alleged mortgage, filed their joint answer, in which they deny all indebtedness to the Scranton & Watson Lumber Company, and deny making the mortgage in question; and they neither admit nor deny that the complainant was appointed receiver of the Scranton & Watson Lumber Company, as claimed in the bill. And they further say and aver that no sum of money is due from them upon said mortgage, and that said mortgage is fraudulent, without consideration, and void. And the defendants, further answering,
“ On the 31st day of May, A. D. 1886, said Joseph E. Watson, and Ida M. Watson, his wife, executed, and partly filled out, a mortgage blank, of the form in'ordinary use, and known as the c short form" mortgage blank, with nothing written in said blank excepting the said date, their names and -residence, as parties of the first part, c Scranton & Watson Lumber Company, of the same place, a corporation," as party of the second part, *ten thous- and dollars ($10,000)" as the consideration, and the description of the premises, as hereinbefore described; that the provisions and conditions of payment were left wholly in blank; that said consideration of $10,000 was written in said mortgage only for the purpose of mentioning some amount for a consideration, and not at all because said Watson was indebted to said Scranton & Watson Lumber Company in that amount, or in any amount whatsoever.
“That said Joseph E. Watson was, at the time of executing said mortgage blank, a member of said Scranton & Watson Lumber Company, and had also theretofore been a member of the Stoopel Lumber Company, and he-was giving and taking credit with various parties in large-amounts; that at the time of the execution of said mortgage blank, as aforesaid, it was understood and agreed by and between said Joseph E. Watson and said Ida M. Watson and James P. Scranton, of the Scranton & Watson Lumber Company, acting for said company, that said Joseph E. Watson and Ida M. Watson should execute said mortgage blank, as aforesaid, and if said Joseph E. Watson should thereafter become indebted or obligated to said Scranton & Watson Lumber Company for money or credit thereafter-furnished him by said company, and he should, after contracting such indebtedness, become insolvent, the said Joseph E. Watson would prefer the said Scranton & Watson Lumber Company, by completing and filling out said mortgage blank, by writing therein the amount to be paid to said Scranton & Watson Lumber Company to discharge the obligation of the said mortgage, which should be the amount of the debt thereafter contracted by said Watson to said company, and by delivering said mortgage, so filled out and completed, to said company.
“ That, after the said execution of said mortgage blank by said Joseph E. Watson and said Ida M. Watson, the-*471 said Joseph E. Watson did not contract any debt or obligation to said company; that neither the said Joseph E. Watson nor the said Ida M. Watson ever filled out said mortgage blank, or authorized said Scranton or any other person to fill it out, or consented to have it filled out, or had any knowledge whatever of its being filled out, until they learned of its having been filled out and recorded; that said mortgage blank, signed and executed as aforesaid, was left by said Watson in care of said Scranton & Watson Lumber Company, of which said Watson was then a member, but was never delivered to said 'Scranton or to said company.
“That on, to wit, the 15th day of June, A. D. 1886, in the absence of said Watson, and without the authority, direction, consent, or knowledge of said Joseph E. Watson or said Ida M. Watson, the said James P. Scranton took said mortgage blank, executed as aforesaid, and wrote or caused to be written therein the provision, obligation, and condition of payment referred to in said bill of complaint,, and as follows, to wit: ‘All liabilities which they may have contracted or incurred for said Joseph E. Watson, as sureties, indorser or indorsers, or any book-accounts, or choses in action, or any unlicjuidated amounts, due from said Joseph E. Watson to said Scranton & Watson Lumber Company, now due or to grow due/ and the subsequent parts of said mortgage blank, in accordance with said conditions of payment.
“ That after filling out said mortgage blank, by writing or causing to be, written therein the amount and conditions of payment as aforesaid, the said James P. Scranton, for the said Scranton So Watson Lumber Company, on the 16th day of June, A. D. 1886, caused the same to be recorded in the office of the register of deeds for said county of Wayne."
Defendants further say that the premises described in the mortgage constituted their homestead at the time the said blank mortgage was executed, and at the time it was so filled out and recorded by the • plaintiff; and that Mrs. Watson signed the blank when she did upon the express agreement that it was not to secure any present or then existing obligation of her husband; that there
Defendant William C. Stoepel answers, and, upon information and belief, states,. in Substance, the same facts as are contained in the answer of Mr. and Mrs. Watson, and, in addition thereto, says that on September 17, 1886, he purchased the premises described in the complaint, of defendants Watson, in good faith, paying therefor full value, not taking into consideration said mortgage, because of its alleged invalidity, and received therefor a warranty deed; and that he still owns the title thereto.. He also claims the benefit of a cross-bill, .and asks, that the mortgage be declared to be void, and an order that the same be delivered up to be canceled.
The defendants Lynch and Margaret Donaldson filed their joint and several answer. The Lynches claim to have a lien by virtue of an execution levy upon the property, upon a judgment rendered in their favor for the sum of $141.91 damages, and $29.15 costs, against the said Joseph E. Watson. Margaret Donaldson says, in said answer, she claims a lien against said property for the sum of $399.51; being the amount of a judgment rendered against Joseph E. Watson, and which is now levied upon said property by virtue of an execution issued upon said judgment.
These defendants all deny the validity of the mortgage; aver that it was never executed and delivered to the lumber company, and was fraudulently made and recorded.
The cause was heard before Judge Jennison, upon pleadings and proofs, a part of which were taken in open court, who on December 31, 1887, made the following decree:
“ This cause coming on to be heard upon the pleadings and depositions of Joseph E. Watson and Ida M. Watson, and upon proofs taken in open court, and Hoyt Post having been heard in favor of said complainant, and Charles K. Latham having been heard in favor of said defendant Stoepel, E. W. Pendleton in favor of said defendants Joseph E. Watson and Ida M. Watson, and Alfred E. Lucking in favor of said defendants Lynch and Donaldson, and it appearing to the court that said complainant has not, by preponderance of proof, showed what authority was given complainant to have the mortgage filled up after it was executed and delivered, and that parol authority would not be sufficient for that purpose, it is ordered, adjudged, and decreed that the bill of complaiñ't in said cause be, and the same is hereby, dismissed, with costs.”.
On leave (being duly granted by the circuit court, the complainant took an appeal to this Court.
We have examined the record in this case carefully, and we are satisfied the learned circuit judge came to the correct. conclusion, and that the mortgage must be held void, for the reason that it was never executed and delivered by the Watsons containing the material provisions it now does. When the alleged mortgage was delivered by Watson to the Scranton & Watson Lumber Company, if it ever was delivered, it is conceded it contained no conditions. And the defense in the case is that the conditions in the mortgage were .left blank when it was signed, and that those now appearing in the mortgage were written in afterwards, and without authority of the makers. Watson and his wife were both sworn, and both say they gave
Scranton was sworn, and testified that Mr. Watson-handed him the paper, and told him to take it to Davock, and have him fill it out. (Davock was the notary who-took the acknowledgment.) Scranton took the paper to Davock, at his office, who filled in the conditions as Scranton dictated. Scranton says the mortgage was given to secure past as well as future indebtedness to the company. In stating what Mr. Watson authorized him to do,, he says, in substance, that he was authorized by Watson to take the mortgage to Davock, and have him write in the conditions, so worded as to cover all past and future-indebtedness and liabilities from Watson to the company,, says:
“1 never saw Mrs. Watson with reference to this mortgage until after it had been filled up;” further says: “ Had no further conversation with Mr. or Mrs. Watson subsequent to the giving of this mortgage, with reference-to its validity.”
Mr. Davock, in his testimony, says that he filled out the condition of the mortgage as requested by Mr. Scranton; that the Watsons were not present, and he never had any authority from them to fill in the conditions; that the conditions that were afterwards filled in were not mentioned at the time the mortgage was executed.
Was the change in the instrument, made after it was executed and delivered, with or by the authority of theWatsons? This is the only question of any importance in the case. It is not a question whether, if Mr. Scranton's testimony is to be believed, the parol authority which he swears to would be sufficient (which we think it would not, under our statute and the weight of authority); but did the makers of the blank mortgage give Mr. Scranton any authority at all to fill out the mortgage? If the testimony of the Watsons and the notary is to be credited, they never gave any such authority.
We think the preponderance of the testimony is clearly with the Watsons, and that the decree must be affirmed, with' costs.