Opinion
08-08-1887
WARD, Trustee. v. GREINLDS and others.
J. F. Harned and P. S. Scoville, for complainant. M. B. Taylor, for defendant McKee.
On bill for relief.
J. F. Harned and P. S. Scoville, for complainant. M. B. Taylor, for defendant McKee.
BIRD, V. C. This bill is filed to reinstate a mortgage which it is said was canceled of record by mistake, and to have the complainant subrogated to the rights of Brown, who held it at the time of payment, and to foreclose the same. The mortgage was paid by one of the executors of McKnight. The amount paid was $7,700, and the interest thereon for several years. He paid the amount due, and had the mortgage canceled because he believed that the real estate covered by the mortgage was owned by the testator at the time of his death, and that his estate was liable for the amount due thereon. In this he was mistaken. The title was not in the testator, who was also his father, but in another partially, if not absolutely. The mortgage so paid was made and executed by Pitfield to Gaskill, trustee, of whom Pitfield bought, and to whom he gave the said $7,700 mortgage as part of the purchase money. This transaction was in 1853.
Soon after, in the same year, Pitfield conveyed to Greinlds and Van Kirk the same land. Van Kirk was a builder and actual purchaser, and Greinlds was a straw man. They gave back to Pitfield 47 bonds, secured by as many mortgages, each upon a separate lot of the original tract sold to them. No money was paid on these mortgages at the time. They were to secure advances as the lots were improved. The dispute in this case is with respect to 12 of these mortgages, and, as to them, whether they should be prior to the mortgage of the complainant, in case the cancellation of it should be declared void, it being agreed that the other 35 cannot be regarded as liens. These 12 mortgages are now held by the defendant McKee, who claims that he is a bona fide holder for value. He swears that he knew of the existence of the complainant's mortgage, but was told that it had been canceled of record, upon which he relied. He says he paid in cash $744, and that the whole amount allowed for the 12 mortgages was $14,000 or $15,000. The balance of the consideration paid for the mortgages was old, unsettled accounts.
McKee should be held to the strictest account. He knew of the existence of these 47 mortgages, and understood their true character for many years before he took the 12. They were given with the view of raising money upon them, as the lots which they covered should be improved. In 1858, McKee and Pitfield had large business transactions, when Pitfield offered these 47 mortgages to McKee, when McKee learned of McKnight that the $7,700 mortgage was a first lien. McKee refused to take the 47 mortgages in the transaction. It is well to note the language of McKee with reference to that. He says: "I was not satisfied with the 47 mortgages. The trade did not go through in that way, but it did go through in another way. * * * Being so long ago, and in having so many transactions, it is a hard matter to keep the run of each one separately, there being so many of them." This is givento show the uncertainty of his recollection with respect to the transaction under which he claims in this suit.
McKee says in 1866 he had another important transaction with Pitfield, and that between the two periods there were many other transactions; and it is worthy of note that in 1866, using his own language, "there was an understanding between us as to how much was due from Pitfield to me. It was between $12,000 and $14,000. This remained unpaid until 1870 or 1871. * * * Pitfield offered me the twelve mortgages in dispute in this case. * * * After that, I agreed to take the twelve mortgages in settlement of what he owed me." Interest was calculated on both accounts in making the settlement. There was a written assignment. It was under seal, and it was acknowledged. Pitfield says that this assignment was never recorded, and that it was destroyed by rats. He says: "There was several agreements relating to these mortgages and other transactions destroyed at the same time." I cannot but observe that this fact—the destruction of these papers in this manner—seems to me to be such willful carelessness as to be decisive of this question, and to bar the defendant of any favorable consideration.
If this assignment, and these several agreements, were produced, the exact character of the transactions between the parties would be developed and understood. The fact that they were permitted to be placed within the reach of rats shows conclusively that they had ceased to be evidences of any title. That a business man, such as McKee says he has been for years, engaged in hundreds of thousands of transactions in real estate, should place the paper title to $14,000 or $15,000 worth of mortgages within the reach of rats, is plenary proof that they were of no other value. Independent of this consideration, the legal presumption is that these mortgages have been paid. They were given in 1853, and nothing has ever been paid upon them, nor has anything been demanded, nor is there anything to show the slightest acknowledgment of liability. Downs v. Sooy, 28 N. J. Eq. 55-58.
McKee insists that the complainant is in laches in filing his bill, it being about 16 years after the alleged payment and cancellation. Since McKee has no standing in court, he cannot be heard on this point. The other defendants make no resistance. The complainant is entitled to the relief he seeks, with costs.
NOTE.
The existence of means of payment in the hands of the creditor, and the lapse of time, are conclusive evidence of an actual discharge of the debt, or are of themselves facts which require a court of equity to adjudge such application to have been made. Belden v. State, (N. Y.) 8 N. E.ep. 363.
Evidence that the obligee in a bond was in poor circumstances, and dependent upon the interest of the bond for support, and that the obligor was always able to pay the interest, and paid the obligee money whenever she needed it, is sufficient to raise the presumption that the interest has been fully paid. Mertz's Appeal, (Pa.) 7 Atl. Rep. 187.
Prior to the adoption of the Michigan statute of 1879, courts of equity followed the analogies of the law, and refused relief in cases where it would have been barred at law by lapse of time, Baent v. Kennicutt, 23 N. W. Rep. 808; see, also, Cowie v. Fisher, 8 N. W. Rep. 586; but the presumption of payment could be rebutted by circumstances, Baent v. Kennicutt, supra; Baldwin v. Cullen, 16 N. W. Rep. 191; Lewis v. Schwenn, (Mo.) 2 S. W. Rep. 391. A mortgage is not necessarily presumed paid, from lapse of time, if the mortgagee asserted his right to foreclose in due season, and there does not appear to be any adverse holding under the mortgage. Baldwin v. Cullen, 16 N. W. Rep. 191.
After the death of an executrix and trustee, a mortgage given to secure a loan of money made by her was found uncanceled on the record. Held that, after the lapse of 48 years from the date of the loan to the death ol the mortgagee, and 34 years from the date of the loan to the death of the executrix, the non-production of the bond and mortgage will furnish satisfactory and conclusive evidence of their payment. Lammer v. Stoddard, (N. Y.) 9 N. E. Rep. 328.