Opinion
Docket No. 137, Calendar No. 35,431.
Submitted June 9, 1931.
Decided October 5, 1931.
Error to Ionia; Hawley (Royal A.), J. Submitted June 9, 1931. (Docket No. 137, Calendar No. 35,431.) Decided October 5, 1931.
Assumpsit by Arthur E. Bradt against George W. Amsden on a contract of guaranty and under the common counts. Judgment for plaintiff. Defendant brings error. Affirmed.
Eldred Gemuend, for plaintiff.
Watt Colwell, for defendant.
This case was tried before the court without a jury. Findings of fact and conclusions of law were filed, followed by a judgment in favor of the plaintiff for $4,006.13, of which defendant seeks review by writ of error.
There is little dispute as to the material facts. On July 9, 1923, the defendant, then a resident of Lansing, conveyed certain property in the village of Lyons, in Ionia county, to George J. Duncan, of Lansing, and as a part of the purchase price was given a promissory note secured by a mortgage on this property for $3,000, payable in three years. Defendant had formerly resided in Lyons, having been then employed as cashier in a bank near there.
On Sunday, November 18, 1923, the defendant drove to Lyons and called upon the plaintiff at his home. He knew that plaintiff was a man of some means, and solicited him to purchase the mortgage. While the property mortgaged had upon it a large dwelling house, erected at much expense, it required an outlay for maintenance so great that it was unsalable at its location. It was designated by some of the witnesses as a white elephant. After some negotiations, plaintiff consented to purchase the mortgage, but on condition that defendant would guarantee its payment. An assignment was prepared by the defendant and signed by him. It was dated November 17th. Defendant took it to the home of James H. Ruel, a notary public in the village, and, not finding him at home, he left it there with a request in writing that Ruel should notarize it on his return and deliver it to the plaintiff. This Ruel did. On the same day (Sunday) defendant executed an instrument, also dated the 17th, unconditionally guaranteeing the payment of the mortgage, and delivered it to plaintiff, who at the same time transferred to defendant certificates of deposit in a local bank to the amount of $3,000.
In August, 1924, Duncan sold the property subject to the mortgage to Peter J. Gardner, of Lansing, who agreed to assume and pay the mortgage at maturity.
Interest on the mortgage was paid to plaintiff by the defendant, who, however, testified that the money therefor was paid to him by Gardner. The first default occurred on January 9, 1926. Plaintiff notified defendant thereof, and received a reply advising him to begin foreclosure proceedings. Soon after, at a conference, the matter was discussed and defendant assured plaintiff that if he would foreclose he would take the property off his hands as soon as his title matured. This plaintiff did by advertisement. While pending, plaintiff received a letter from a party who had recently purchased the property subject to the mortgage, asking for particulars concerning it. Defendant, on being informed of the inquiry, advised plaintiff to discontinue the proceeding, and this was done. Payment of the interest due not having been made by the purchaser, defendant advised plaintiff to again foreclose. Such proceedings were again taken, resulting in a sale of the premises on May 31, 1927, for the amount then due, including the expenses of foreclosure, amounting to $3,478.97, and the issuance of he sheriff's deed to plaintiff therefor. Soon after the period of redemption had expired, plaintiff gave defendant a statement of the amount due for principal, interest, taxes, and expenses of foreclosure, and requested payment. He was assured that it would be paid in a few days. In reply to a letter written by plaintiff on July 9, 1928, defendant wrote him denying liability for the reason that plaintiff had foreclosed the mortgage by advertisement and thus deprived him of his right to collect "from the makers of the mortgage note or their assigns." Plaintiff thereafter made tender to defendant of an assignment of the note and mortgage and a conveyance of the property, which was rejected. He thereupon began this action, and recovered a judgment as before stated.
Defendant admits that the first foreclosure proceedings were taken with his approval. He denies the truth of some of the above statements of fact, but in our opinion they are established by a preponderance of the evidence.
It is conceded that the contract entered into between the parties on Sunday, November 18, 1923, was void. Under it the defendant received $3,000 of money from the plaintiff. In Rott v. Goldman, 236 Mich. 261, 264, it was said:
"Although the weight of authority is to the contrary, the rule in this State is that the money paid to defendants on the void contract is recoverable."
Defendant so concedes, but insists that plaintiff, by foreclosing the mortgage and bidding the property in at the sale has estopped himself "from saying that he is not the owner of the mortgaged premises."
The foreclosure proceedings were had and taken at defendant's request. Based as they were upon the void assignment of the mortgage, plaintiff acquired no title in himself to the property described therein. But, as found by the trial court, he "holds the record title to said premises for the use and benefit of defendant who is entitled to a formal conveyance thereof from plaintiff as already tendered." The expense thereof and the moneys paid by plaintiff for taxes and insurance were properly allowed to plaintiff under the common count in the declaration "for money then and there paid by the plaintiff for the use of the defendant at defendant's request."
The judgment is affirmed.
BUTZEL, C.J., and WIEST, CLARK, McDONALD, POTTER, NORTH, and FEAD, JJ., concurred.