90 Mich. 290 | Mich. | 1892
The complainant filed this bill to foreclose a mortgage.
The undisputed facts of the case are substantially as follows: The defendant Cyrus J. Keyes, in 1884, was a merchant in the village of Bronson, Branch county, in this State. He owned lot 1 of C. D. Randall's addition to said village. There was located upon said lot a wooden store building, in which he was doing business. This building was destroyed by fire that year. At this time he was largely indebted to O. L. Luce & Co., of Toledo, Ohio. O. L. Luce, of that firm, agreed to furnish the means to rebuild, and did so, putting up two brick stores upon the lot, with a partition wall between them, but communicating from the inside with one or more doors. The amount advanced by Luce was $6,500. On December 18, 1884, Keyes gave his promissory note to Luce for that amount, payable in three years from date, with interest at 7 per cent., payable semi-annually, and Keyes and his wife, the defendant Sarah A. Keyes, executed and delivered to Luce a mortgage for the same amount upon the property as collateral security to said mote. This is the mortgage being foreclosed in this suit. In October, 1885, O. L. Luce borrowed $5,000 of the complainant, and gave h.is note therefor, and also turned out to him the Keyes note and mortgage as collateral security to his note, but executed no written assignment of the same. C. L. 'Luce died September 15, 1886, and the defendants Arthur B. Luce and Clarence Brown were appointed his administrators. After this, Cyrus J. Keyes sent for Arthur B. Luce, who went to Bronson. It was found that Keyes was owing O. L. Luce & Co., inclnd
“The two-story brick store and lot, being lot No. one of C. D. Randall’s addition to the village of Bronson,” and contained the following clause: “This deed is made subject to a certain mortgage made and executed by Cyrus J. Keyes and Sarah A. Keyes to Charles L. Luce, for $6,500, and recorded in Liber 17 on page 352 of Mortgages, Branch county, and is full payment of said mortgage.”
On the same day Cyrus J. Keyes made a deed to his wife, Sarah A. Keyes. The real estate conveyed was described in said deed as follows:
“ The brick store and lot situated on the north side of Chicago street, and known as lot number one, and a fractional part of lot number two, of C. D. Randall’s addition to the village of Bronson.”
In connection with these two deeds it may be stated that it is admitted in the record that at the time the mortgage was made, and before the brick stores were built, in order to make a better line between lots 1 and 2, measurements had been taken, and Sanborn, who owned lot 2, had agreed to deed to Keyes a wedge-shaped piece of land 'off from the north end of the west side of lot 2 in exchange for a wedge-shaped piece to be deeded to him by Keyes from off the east part.of the south end of lot 1. The stores were built so as to correspond with this new line, and it is stipulated by the parties that, whatever decree is made, it shall be in accordance with such line, as deeds have since passed
The defense to this foreclosure is, on the part of the defendants Cyrus J. and Sarah A. Keyes, that it was intended to deed only one of these brick stores, to wit, the west store, and that the east store was never intended to be deeded to Luce and Brown, and that they have never had possession of it, and that by the execution of the deed to them the mortgage was paid and released as against said east store property. It is not claimed that the note and mortgage were in the hands of Arthur B. Luce when this deed was made, but Keyes testifies that Luce promised to discharge the mortgage. He is coz’roborated by the justice of the peace, Seth Monroe, who drew the deeds to Luce and Brown, and also the deed to Sarah A. Keyes. Arthur B. Luce denies that the deed was intended to cover only the west store, and says further that he took the deed, not as an absolute conveyance in payment of the mortgage, but as additional security to his mortgage and other debts owing to C. L. Luce & Co., and also to aid Keyes in preserving his property from other creditors, to whom Keyes was owing $3,000 and .upwards. Luce says in his answer that the goods received at the time the deed was made were not sufficient to pay the indebtedness of Keyes to C. L. Luce & Co., nor would the real estate covered by the mortgage, if sold at a fair price, be sufficient to realize an amount sufficient to pay such indebtedness; butv that he and Brown, as administrators, are anxious to come to an accounting with Keyes, and that, if from the sale of such real estate there should be more than sufficient to pay such indebtedness, they are desirous it should be paid over to said Keyes; and they ask the same relief as though they had filed a cross-bill, and that an accounting may be had with said Keyes.
The fact that the deed to Luce and Brown recites that it is in full payment of the mortgage, and the further fact that a deed was made by Keyes to his wife the same day, which differed in its description from the other deed in its reference to lot No. 2, raise a strong presumption that the claim of Keyes that only the west store was to be conveyed by this deed is true. Monroe also swears positively that this was the intention of the parties, and that, if he had known that there were two stores on lot 1, he would have been more specific in his description of the land conveyed. It would also appear that Keyes or his wife has always retained possession of the east store,, and had the rents and profits of the same.
But it is unnecessary to determine or discuss this question. The note made by Keyes to C. L. Luce was a negotiable one, and was transferred to complainant before due, and for a valuable consideration. Under the previous rulings of this Court he took this mortgage free from all equities of which he had no notice between Luce or his administrators and Keyes; and any payment made to Arthur B. Luce, or arrangement between him and Keyes, after the note and mortgage were transferred to com
“The recording of an assignment of a mortgage shall not, in itself, be deemed notice of such assignment to the mortgagor, his heirs or personal representatives, so as to invalidate any payment made by them, or either of them, to the mortgagee.”
This statute has no application whatever to the present ■■■case. It was not intended to authorize the mortgagor to pay the mortgage to one not the holder of the note; but If a payment be made to one who,, by the possession of the evidence of debt, shows himself prima facie entitled to receive payment, or, in case of non-nego'tiable security, if the payment be made to the original holder, the fact that an assignment has been placed of record will not, of itself, invalidate a payment made in good faith to such apparent owner. The statute means no more than that the mortgagor shall not be required to search the .¡record before making payment to the one prima facie entitled to receive it. In case of negotiable securities, ithe holder alone is the one prima facie entitled to receive payment. Neither under the statute nor under the law-merchant can the maker of a negotiable note assume that it has not been transferred, and make payment thereof before maturity to the original holder, and thus
The decree of the court below must be affirmed, with costs.