text:
    The Phœnix Insurance Company v. John Allen.
    A note payable in “ current funds,” in the absence of all evidence showing that any tiling else is current at tbe place of payment, must be regarded as payable only in such funds as are current by law.
    Where one receives a draft as conditional, payment of a debt due him, his right of action upon the debt is suspended until the draft is properly presented for payment and payment refused.
    By accepting a draft as conditional payment, the creditor accepts the duty of doing everything with respect thereto which is necessary to fix the liability of the parties. And the onus is upon him to show that he has performed that duty when he seeks to recover upou tho original cause of action.
    A draft payable at sight should be presented for payment within a reasonable time; and a Court can not, as matter of law, say that any delay is reasonable beyond that wbioh is required in the ordinary course of business, without special inconvenience to tho holder; or by the special ciroumstances of the particular case.
    A draft drawn at Cincinnati, May 2d, 1861, on persons in Chicago, payable at sight, was received at Detroit May 4th, but not transmitted for presentment until the 25th of that month. There was a daily mail between Detroit and Chicago, occupying from twelve to fourteen hours in its passage. No evidence was given to explain or excuse this delay, and it was held that, without any evidence bearing upon the point, it was error to submit to tbe jury the question whether the draft was presented for payment in a reasonable time.
    Held also, that counsel should not be permitted to read to tho jury and comment upon cases found in the books of reports, upon the question, submitted to them as one of fact,-,,whether, the draft was presented for payment in a reasonable time.

      Heard May 29th.

      Decided July 17th.

    Error to Wayne Circuit. Tbe case is sufficiently stated in tbe opinion.

      Douglass & Andrews, for plaintiff in error:
    1. The Court erred in permitting counsel for the plaintiff below to read and comment upon, to the jury, cases from the books of reports touching tbe question of diligence.
    If the question of whether due diligence had been used was one of law merely, for the Court, then the counsel had no right to read such cases to the jury. If it was a question of fact for the jury, then what due diligence required should have been shown by legal evidence. Decisions of courts canriot be tortured into evidence of facts for the consideration of a jury. It is a mere quibble to say that such cases are read as part of the argument, and as illustrations merely. The jury have no more right to listen to decisions by other courts or other juries upon the question of fact before them than to affidavits of bankers.
    2. Stephens & Beatty kept the draft in their hands twenty-one days before transmitting it. The sole question to be decided was whether this period of delay was a reasonable one. Who should have decided the question, the jury or the Court? No evidence was before the jury authorizing them to find that any delay "beyond the time actually necessary for the transmission of the draft was reasonable, and if they found under the charge that the above period of twenty-one days was reasonable, it must have been, not upon the evidence, b.it from the light of their own inner consciousness. This cannot be the way in which the law requires that such questions be settled. If a'reasonable time in any case includes more time than is abundantly sufficient to place the draft in course .of transmission, then such further time must be determined by some rule of law. It cannot be that it is in all cases absolutely impossible to determine beforehand a point so essential to the rights of parties, and that those rights can be ascertained in each case only by asking ex post facto counsel of the whims of a petit jury. Uniformity of decision would be unattainable under such a system. The jury in the present case must be supposed to have found the delay reasonable. What assurance have we that the jury that shall pass upon the same question when we sue the drawer of this draft will come to the same conclusion ? Questions of due diligence, probable cause, and the like, are always called and treated by the courts as questions of law, or of mixed fact and law, and in all such cases, the facts being ascertained, the only remaining question is for the court. It is absurd to say that a question is one of mixed fact and law, and then to leave the whole question for the jury, and reserve nothing for the court: — 1 Greenl. Ev. §49 n; 2
      Ibid. §§ 186, 454; 3 Comst. 274; 1 Pet. 583; 9 Ibid. 46; 15 Ibid. 173; 2 Wend. 427-8; 1 Ibid. 352; 7 Cow. 709; 7 Ibid. 717; 1 Metc. (Ky.) 95; 1 Head, 616, 624; 29 Mo. 203; 2 Hilt. 272; 21 Wend. 643; 2 Caines, 371; 27 Barb. 227-8; 9 Ind. 577; 14 Me. 57; 22 Pick. 555; 5 Jones (L.) 246; 3 Ibid 47; 1 Bosw. 326; 20 Mo. 64; 19 Ala. 612; 7 Gray, 220; 28 E. L. & Eq. 93; 12 Met. 212; 16 Md. 170; 2 Hill, 592; Busbee (L.) 393; Ibid. 394; 13 Ired. 253; 7 Ired. 283-5; 9 Gill, 355; 4 Johns. 389; 1 B. & P. 389; 11 M. & W. 214, 211; 2 Q. B. 191.
    The delay in the presentment of the draft was unreasonable, and the defendant was discharged from its indorsement, and from the original debt: — 2 Hilt. 272; 7 Cow. 713; 4 M. & W. 721; 17 Wend. 368; 20 Ibid. 321; 7 Blackf. 367; 16 East, 248; 2 Hill, 430-2; 20 Wend, 192; 23 N. Y. 28; 34 Barb. 249; 10 Wend. 304; 13 Ibid. 135; Ibid. 549.
    The case is not affected by the draft in question not being negotiable. There is no reason for such a distinction, and no case sustains it. The draft, though not technically negotiable, is payable in currency recognized and treated as money by all persons in the community, and for all purposes affecting this question having the same qualities. Every reason for requiring diligence in the presentment of .negotiable paper applies with equal if not greater force to this: — 9 Wend. 122; 2 Wils. 353; 23 Wend. 348; 2 Am. Lead. Cas. 269.
    The rule for which we contend arises from the nature of the indorser’s undertaking, and does not, like the negotiability of paper, depend upon technical conformity to a definition. We conceive that an instrument drawn for an uncertain sum, or payable upon a contingency, would not, for this, be excluded from the operation of the rule, though it certainly would not be a bill of exchange. The reason of the rule would apply with full, force to such a case, and to the one before us.

      C. I. Walker and G. V. N. Lothrop, for defendant in error.
    The important question in the ease is, whether the question of due diligence in the presentation of the last order or draft, the facts being undisputed, is one of law for the Court, or one of fact for the jury.
    That the question of reasonable time and reasonable diligence, is, in general, a question of fact to be submitted to the jury under a proper charge, there can be no doubt. This arises from the nature of the questions, and is abundantly supported by authorities: — 1 Greenl. Ev. §49 and n; 4 B. & Ald. 202; 2 A. & E. 256; 10 Q. B. 69; 5 E. & B. 764; 6 Cranch, 268; 5 Gray, 432; Day v. Owen, 5 Mich. 520; Maher v. The People, 10 Mich. 212.
    On the other hand, it will be freely admitted that the question of time within which the notice of the dishonor of negotiable paper shall be given, is, in many cases, and perhaps generally, a pure question of law, growing out of settled usage and a series of adjudications.
    The reason and the limitations of this rule are pretty clearly stated in the case in which the rule itself had its origin.
    In Tindal v. Brown, 1 T. R. 168, Lord Mansfield said: “What is reasonable notice is partly a question of fact and partly a question of law. It may depend in some measure on facts, such as the distance at which parties live from each other, the course of the post, etc. But wherever a rule can be laid down with respect to this reasonableness, that should be decided by the Court and adhered to by every one for the sake of certainty.”
    There can be no doubt that, originally, the question of reasonable time and due diligence, whether applied to the presentation • of negotiable paper, or to notice of its dishonor, was one purely of fact, to be decided by the jury. The earliest decision found upon the point is by Lord Chief Justice Holt, and that has been either expressly or practically followed, as to the question of reasonable time, by a very large number of English cases, both previous and subsequent to the case of Tindal v. Brown, which was decided in 1786: — Lee v. Lewis, Skinner, 410; Same case, 1 Salk. 132; 1 Ld. Raym. 743; 1 Strange, 508; 2 Strange, 910; 1 W. Blk. 1; Doug. 514; 2 H. Blk. 561; 6 East, 13, note; 6 East, 15, note; 7 Taunt. 160; Ibid. 397; 1 M. & M. 133; 9 Bing. 416; 4 M. & W. 721; 28 E. L. & Eq. 86.
    In accordance with these are many American decisions: — 1 Dall. 252; 7 S. & R. 324; 18 Penn. 362; 2 McCord, 388; 2 Rich. 67; 3 Rich. 71; 9 Ala. 160; 13 Mass. 138; 4 Mason, 345; 5 Mason, 118.
    It is true that there are some English cases, and many American cases, that lay down the doctrine in very gen. eral terms, that the question of reasonable time and due diligence, in relation to negotiable paper, where the facts-are not disputed, .is a question of law for the Court. But a careful examination of these cases, we apprehend, will lead to the conclusion that this rule is applicable only to that class of cases where, in the language of Lord Mansfield, “a rule can be laid down.” To this class belong,
    1st. Those cases which require that a note or bill, payable at a certain time and place, shall, in general, be presented at such time and place, or the indorser is discharged.
    2d. Those cases which require a notice of dishonor to be given on the day or the day after the fact of dishonor, or by the next mail.
    3d. Those cases that require notice, when parties reside in the same town or city, to be sent otherwise than through the post office.
    In these cases, and some others, a certain rule can be established, and such rule becomes a convenient and important guide to business men, and to which they adapt their business habits.

      But from the very nature of things, it is impossible to fix any certain rule in relation to the presentation of bills of exchange, payable on demand, or at sight. Reasonable time depends upon such a variety of circumstances, so many, of which are peculiar to each case; as upon the distance from each other of the parties, the course of trade, the course of the mails, the facilities of intercourse, the rates 'of exchange, the number of hands through which the paper passes, the accidental delays attending its transmission, that it is entirely impossible to lay down any rule in relation to the matter. — 1 Pars. .Notes, 339, 343.
    It seems utterly absurd to say that it is a question of law, when no lawyer, however wise or learned, can, in advance, safely advise his client what the rule of law on the question is.
    [Counsel further argued that, even if this was to be considered as , a question of law, and if the order in question was negotiable, it was presented within a reasonble time, and that neither drawer nor indorser were discharged by the delay.]
    It was not objectionable for the counsel to read from the reports for the purposes stated in the record. — 1 Ohio St. 286; 9 O. d> P. 362.
   Christiancy J.:

This was an action of assumpsit brought by Allen, the plaintiff below, against the company, to recover the amount of a loss by fire under a policy issued by the company to Allen.

The declaration contained counts upon the policy, and the common counts. The plea was the general issue. It appeared from the evidence introduced by the plaintiff (and of these facts there was no dispute), that on the 20th day of April, 1861, the loss under the policy had been adjusted by compromise between Allen and the company (the latter acting through one Holden, their agent, having power to adjust losses), at the sum. of eleven hundred and six 25-100 dollars, which was agreed by said agent to be paid by a draft drawn by him on the general agents of the Phcenix Company at Cincinnati “payable in Chicago exchange.” The draft for the amount was so drawn on the same day, upon R. H. & H. M. Magill, general agents of the company at Cincinnati, payable to the order of Allen at one day’s sight. This draft was indorsed by Allen to Stephens & Beatty, of Detroit, for whose use the action was brought; the plaintiff, however, retaining some interest in it (but what, did not appear). Stephens & Beatty indorsed and transmitted this draft to Harrison & Hooper, their agents in Cincinnati, for presentment and demand of payment, who duly presented it to the drawees, on the 2nd of May, 1861, and received and accepted from the drawees, as and for a compliance with said draft or order, a bill of exchange drawn by J. H. Bussing & Co., bankers at Cincinnati, upon Hoffman & Gelpecke, bankers at Chicago, and indorsed by said R. H. & H. M. Magill, general agents as aforesaid. This last draft was in the following words and figures:

“$1,106 25. Walnut Street Bank: Cincinnati, May 2, 1861.

Pay to the order of R. H. & H. M. Magill, general agents, eleven hundred and six 25-100 dollars current funds.

G. II. Bussing & Co.

To Hoffman & Gelpecke, Chicago, III.”

This draft was received by Stephens & Beatty, at Detroit, from their agents in Cincinnati, on the 4th day of May, 1861, and on the 25th day of the same month they transmitted it by mail to their agents in Chicago, for presentment and demand of payment; and, on the 29th day of the same month, it was duly presented to Hoffman & Gelpecke, the drawees, and payment demanded, which payment was refused; and it was thereupon protested for non-payment, and due notice thereof given.

It was admitted there were daily mails between Detroit and Cincinnati, between Detroit and Chicago, and between Detroit and Grand Rapids, and that the several times occupied in the transmission of the mails between these several points were as follows: Between Detroit and Cincinnati, from twelve to twenty-four hours; between Detroit and Chicago, from twelve to fourteen hours, and between Detroit and Grand Rapids, less than twelve hours. There was no other evidence touching the question of diligence in presenting the draft for payment.

The draft was offered in evidence by the plaintiff, under the common counts, but rejected by the Court on the .ground that it was not negotiable, because payable in current funds, and not in cash. As the plaintiff does not complain of the judgment, and we think the draft was properly excluded for another reason, it is only important to notice this point for the bearing it may be supposed to have upon another question in the cause. But in the absence of all evidence that anything else than cash was treated as current, funds in Chicago, we do not see how the Court could assume judicially to know the fact or presume it; until this should be made to appear, the current funds in which it was made payable, should, we think, be held to be such funds only as were current by law. We must therefore treat this draft as a negotiable bill of exchange payable in money. It does not appear to have been obtained for the purposes of exchange; that is, for the purpose of transmitting funds to Chicago; but it is clear that it was received in payment of the first draft or order drawn by Holden and indorsed to Stephens & Beatty, or, in other words, in payment of the sum due the plaintiff for his loss under the policy. Whether received in absolute or conditional payment, was a question for -the jury upon the evidence. Had they found it was received as absolute payment, they could not have found for the plaintiff: as his remedy would then clearly have been confined to the draft itself, which the plaintiff was not allowed to introduce in evidence. It is only therefore in respect to its reception as conditional payment that we are to consider the question of the plaintiff’s right to sue for the original indebtedness, and the question of diligence in presenting the draft for ■ payment. Its reception as conditional payment would operate as a suspension of the plaintiff’s original right of action till the draft should be properly presented for payment, and such payment was refused (See authorities cited 2 Am. Lead Cas. 182). And we think the plaintiff, by such acceptance, must also be understood to have accepted the duty of doing everything with respect to the paper which was necessary to fix the liability of the drawer and indorsers, and the onus of proving that he has performed this duty when he seeks to recover upon the original cause of action for which the paper was received;

In Jennison v. Parker, 7 Mich. 355, it was held by a majority of this Court that where a draft drawn by a third person was indorsed by the debtor, and by him sent to the creditor to be applied when paid, the creditor made the paper his own and could not sue upon the original debt if he neglected the steps necessary to hold the debtor liable as indorser. We see no reason for departing from the rule there laid down. We think the same reasons apply here, not only with reference to the •indorser, but with at least equal force to the drawers also; since, if the drawers have been dischai’ged by the neglect of the holder to present for payment in due time, the indorsers (who, so far as the present question is concerned, may be considered as the company for whom they acted) would lose their remedy over upon the drawers; for there is nothing in the case to show that the drawers could be held liable without due presentment.

In 2 Am. Lead Cases, p. 183, upon a careful review of the cases it is laid down as a general principle of the law merchant that, “a plea that the plaintiff has taken the note or bill of a third person on account of the cause of action, is a sufficient bar to the suit, which can only be removed by showing that the ordinary course of business has been pursued with reference to the security thus taken, and that it has, notwithstanding, proved inadequate as a means of payment.” As a general rule we think this is just and equitable to all parties, though we think the same special circumstances affecting the time of presentment and notice might be shown as in cases between indorser and indorsee. Thus understood, the rule is substantially the same as that which requires presentment to be made within a reasonable time, having reference to the ordinary course of business, and the circumstances of each particular case. The law upon this subject, as a general rule, adapts itself to the ordinary course of business, or, more properly speaking, the ordinary course of business constitutes the general rule of law. When the ordinary course of business has established a rule as to time of presentment, which the law has recognized, courts are bound judicially to notice it without proof, as in the case of bills payable at a specified day or a certain number of days after date: and doubtless the ordinary course of business may, to some extent, be judicially noticed in other cases. But where the law has adopted no rule as to time of presentment, except that it shall be within a reasonable time, as in the ease of bills payable at sight, like the present; the court can not, without overlooking the objects for which such presentment and notice of non-payment are required, say, as matter of law, that any delay is reasonable beyond that which may be fairly required in the ordinary course of business without special inconvenience to the holder; or by the special circumstances of the particular case. And in a case like the present, where the paper does not appear to have been obtained for mere purposes of exchange, but in payment of a precedent debt; and was not put in circulation, but detained by the plaintiff for twenty - one days before it was transmitted for presentment; if we can not take judicial notice that this delay was greater than required by any considerations of necessity or convenience in the usual course of business, we certainly can not, without evidence. upon the point, determine, as matter of law, that this length of time was required by any such considerations, or authorized by any usage or course of business which we can judicially notice without proof. If there was any thing in the special circumstances of the case to require it, or to excuse the delay, those circumstances should have been proved. But no such evidence was given or offered. Nothing whatever was shown to excuse or explain the .delay, or to show why the paper might not, with equal convenience to the holder or any other person, have been sent by the first, or next succeeding mail. There was, therefore, no evidence before the jury tending to show that the time was reasonable. The time — the unexplained delay of twenty-one days —was shown. But there was no evidence of any usage or course of business, nor any special circumstances connected with the particular case, from which the jury could be authorized to draw any inference that the time was reasonable. And the burden of proof upon this point rested upon the plaintiff. So far as the jury are to pass upon the question of reasonable time, their verdict must be based upon evidence before them. If from the naked fact of the length of time, the juiy are to determine its reasonableness without any evidence bearing upon the point, they must necessarily determine it as a question purely of law: and this is not within their province. The Court therefore erred in submitting the question to the jury.

Had there been evidence upon the point, the questions might have arisen, which were so fully and ably discussed by the counsel, whether the reasonableness of the time was a question of fact for the jury, or — the facts being undisputed — a question of law for the Court, or, if disputed, of mixed law and fact, to be decided by tbe jury under the charge of the Court upon the law. But the plaintiff, upon whom the burden of proof rested, having failed to produce any. evidence tending to show that the time was .reasonable, and there being no such evidence in the case, these questions are not properly before us, and we shall not enter upon their discussion. But whatever view may be taken of these questions, we can see no ground on which the counsel for the plaintiff could be allowed to read to the jury, and to comment upon, decided cases upon the question, found in the books of reports. So far as the question was one of law, these cases and the arguments upon them were for the consideration of the Court only: so far as it was a question of fact, it was to be decided by the jury upon the facts given in evidence in the regular course of the trial: — See Darby v. Ouseley, 36 E. L. & E. 519; and the finding of courts or juries in other similar cases would be wholly inadmissible as evidence in any stage of the trial.

As there was no evidence tending to show the time to be reasonable, and the Court held the question to be one of fact for the jury, and permitted the reported cases to be read to them against the objection of defendant’s counsel, the jury must naturally have inferred that they were at liberty to consider those decided cases as evidence upon which they had a right to base their verdict. The cases could only be properly read to, or considered by the jury upon the hypothesis that they were to decide the question as one of law: and such, in this ease, must have been the result, so far as their verdict may have been in any way influenced by the cases and the argument based iqion them.

The judgment must be reversed, with costs, and' a new trial granted.

Manning and Campbell JJ. concurred.

Martin Ch. J. did not sit in this case.


source: Caselaw Access Project

author: Manning J.:

license: Public Domain

text:
    Asa U. Sutton v. Daniel Hanford and another.
    A olaijso in a general assignment for the benefit of creditors, ■which authorizes the assignee to sell the assigned property on oredit, renders the assignment fraudulent and void in law.

      Heard May 27th and 28th.

      Decided July 17th.

    Error to Lenawee Circuit.
    Sutton brought action against defendants in error for certain property covered by a general assignment made to him by the firm of J. C. Satterthwaite & Co., for the benefit of their creditors. Defendants. held the property under executions against the assignors, and they claimed the assignment to be fraudulent, for the reason, among others, that it allowed a sale of the assigned property on credit. The clause for this purpose was as follows: “And
    the said party of the second part is hereby authorized * * * to sell any of the aforesaid property on reasonable short credit, if need be to prevent an unreasonable sacrifice of the same, or if the same can be sold on credit in such manner as best to serve the interest of said creditors of said first parties.” The Court below held the assignment void, and Sutton brought error.

      C. A. Stacy and T. M. Cooley, for plaintiff in error:
    The doctrine that a clause allowing sales on credit avoids the assignment, rests substantially on the New York decisions. But in New York such a clause was deemed unobjectionable prior to the decision of Meacham v. Stearns, 9 Paige, 398. A sentence in the opinion carelessly quoted and misapplied afterwards has led to the rule in question. 7 Paige, 273; Burr, on Assts. 211.
    That the rule has since been maintained in New York we do not deny. This is doubtless due mainly to two circumstances.
    1. The New York courts have never been satisfied with the law allowing assignments with preferences, and have omitted n.o occasion to attack the principle upon which they are upheld, and to invent unfounded pretences for disregarding it.
    2. The other circumstance doubtless is that questions with respect to assignments in New York arise in a class of cases which may be called exceptional; and that a reason exists there for denying credit which does not prevail in the country.
    New York is the great commercial metropolis. Assignments in the great majority of cases are of stocks of goods which there can be best sold at a speedy and public cash sale. A power to sell such property on credit is Susceptible of abuse, and it is probably true that a cash sale at auction- would best subserve the interest of creditors in most cases of a mercantile crash.
    Far different is it when a farmer, a mechanic, a miller, even a merchant fails in the country. A forced cash sale of his property is utterly ruinous to both debtor and creditor-. Real estate can not be sold for cash to advantage. Such a sale is against the custom of the country. Every one knows that even horses, cattle, farming or mechanical implements are best sold on reasonable short credit. Rarely indeed can even a stock of goods be sold to advantage at a forced cash sale.
    A large concourse of bidders can not be got in the country. A purchaser must be found who will take the property in gross on credit; and that assignee, who would force a sale at cash, might reasonably expect to be called to account before a court of equity for a violation of his trust.
    The rule against credit, then, is a rule which the supposed interests of a mercantile community have .led its courts to adopt as an innovation upon a common law rule which subserves far better the general interests of the country at large.

      But in principle the New York doctrine has no foundation whatever.
    It would seem to be very clear that if the assignee has power to sell on credit without special authority being given, a clause allowing him to do what the law itself allows, must be, to say the least, a perfectly innoxious, because inoperative clause. Yet the overwhelming weight of authority recognizes such a power: — 7 Paige, 272; 5 Ohio St. 137; 4 Pick. 57; 1 Met. 79; 21 Pick. 187; 1 Morris (Iowa), 296; 11 Grat. 776; 13 Md. 164, 179.
    But the N. Y. decisions appear to rest upon this idea: The authority to sell on credit given by the assignor is a special power, vested in his discretion. No court can control him in the exercise of this discretion; consequently he has an uncontrollable power to operate to the* disadvantage of the creditors. The creation of any such special power must therefore be regarded as evidence of an intent on the part of the assignor to defraud: — 17 N. Y. 19; 19 N. Y. 520.
    But the courts of N. Y. have frequently sustained such special powers. See 11 Barb. 198; 21 Barb. 65; 21 Barb. 128; 2 Seld. 511 and 522; 1 Kern. 304; 3 Kern. 215; 19 Barb. 176; 15 Barb. 618; 9 Barb. 255; 8 How. Pr. 468. See also the special power in Nye v. Van Husan, 6 Mich. 345-6-7; Hollister v. Loud, 2 Mich. 321.
    So in N. Y. it has been repeatedly held that equity might control the assignee in the execution of the power. 7 Paige, 37; 19 N. Y. 522.
    The power of equity to call assignees to account is undoubted. Burr. 463, 550.
    And to appoint a new trustee if the one selected fails to act, or for any other reason it becomes necessary: — 5 Paige, 46; Burrill, 307; 17 Barb. 392 ; 19 Barb. 177.
    And any trustee, though the power be clearly vested in his judgment or discretion as to the management of the trust estate, may be compelled by equity to a reasonable exercise of judgment or discretion. See Hill on Trustees, 743; 22 Ala. 243; 2 Mich. 321-2 ; 7 Ves. 487; 3 Hare, 249; 6 Ohio St. 611; 26 Ill. 27.
    But if we examine tbe doctrine of tbe N. Y. courts closely, we shall find it leading to conclusions positively startling in their character. Thus, they have held the following powers valid:
    To fix the time of sale.
    To fix the terms of sale.
    To sell for cash exclusively.
    Now if these powers rest wholly in the discretion of the assignee, and that discretion is entirely uncontrollable, it is easy to see that the most enormous frauds might be perpetrated by assignees, under the forms of law; and equity is powerless to interfere while the fraud is being carried on.
    The N. Y. doctrine that an authority to sell on credit vitiates, is opposed to the clear weight of authority. See 5 E. L. and E. 431; Curtis' Conveyancer, 44; Ang. on Assignments, 216; 9 Port. 566; 16 Ala. 560; 22 Ala. 243; 21 Ala. 333; 5 Ohio St. 124; 6 Ohio St. 611; 30 Mo. 33; 2 Cal. 113; 11 Grat. 778; 8 Leigh, 271; 11 Humph. 285; 15 Md. 63; 22 Texas, 724.
    But if the N. Y. rule be correct, a distinction is made under it which clearly excepts the present case. The distinction seems to be this:
    If by the express terms of the assignment the assignee is vested with a power to be executed as in his discretion or his judgment he shall deem it best, this refers the whole matter to his judgment and discretion, and takes it from the control of the law. It is then void.
    But when the act to be done is not thus referred to the discretion of the assignee, the ordinary rules relative to assignees apply; the power is not then uncontrollable, but he is subject to the control of equity, and the assignment is valid. See Jessup v. Hulse, 21 N. Y. 168. Compare this with 17 N. Y. 16, 19, 20; 2 Seld. 518-526.

      The whole question is thus made' to' turn on the point whether a simple authority is given, or a power vested in the assignee’s discretion. The former is controllable by the courts, the latter not.
    The power in the present case is not discretionary. It is “to sell any of the aforesaid property on reasonable short credit if need be to prevent an unreasonable sacrifice of the same, or if the . same can be sold on credit in such manner as best to serve the interest of said creditors.”
    While therefore we do not admit the N. Y. doctrine as to uncontrollable powers, it is clear that this is controllable even within the decisions of that State.
    The difference between a simple authority and a power vested in discretion will be best seen by observing the position of the assignee when he comes to account.
    In the one case he must show that the circumstances justified what he has done. In the other it is sufficient for him to say: “I saw fit to do it. I thought it best to do it.”

      C. I. Walker, for defendants:
    Upon principle, and- the clear weight of authority, any power given to the assignee- to sell upon credit, renders the assignment void, as it necessarily tends to delay, and thereby defraud the creditors. They are entitled to the immediate appropriation of the property. But if such a provision is valid, no court can enforce such immediate appropriation, nor restrain the power of the assignee thereunder, except in case of collusion or fraud: — 9 Paige, 405; 2 Comst. 371; 11 Barb. 198; 12 Barb. 168; 2 Seld. 510; 5 Seld. 151; 3 Kern. 219.
    There are other cases in New York, not directly upon this point, but so closely connected therewith that they illustrate the views of the courts of that State upon this subject, and for that purpose we call attention to them:— 9 Barb. 255; 21 N. Y. 171; 17 N. Y. 9.

      The principle of these New York cases has been followed in 24 Ill. 260; 1 Wis. 286; 2 Ibid. 42; 8 Ibid. 187; 26 Vt. 462; 28 Vt. 465.
    And seems to be recognized in Am. Ex. Bank v. Inloes, 7 Md. 390; Inloes v. Am. Ex. Bank, 11 Ibid. 182.
    But there are peculiarities in the conditions of this assignment upon the subject that demand our attention.
    The assignee is authorized to sell this property on “reasonable short credit.” This reasonable credit must, of course, have reference to the kind of property, and the ordinary mode of selling that property on credit.
    Under this provision would not the assignee-be authorized to sell this real property upon a credit for a term of years, and to secure the payment by taking a mortgage thereon, or even sell without security? If he has such a right by the assignment, no court can control its exercise, unless there be fraud or collusion: — 2 Seld. 520; 17 N. Y. 19; 12 Barb. 173.
    But again, there are two grounds upon which the assignee is thus authorized to sell the property.
    1st. “To prevent an unreasonable sacrifice of the same.”
    2d. “If it will best serve the interest of the creditors.”
    Now, it is clear from this provision, that, irrespective of the interest of the creditors, and solely with reference to the interest of the assignors, and the increase of their surplus, the assignee was empowered to sell this property upon credit.
    We submit that it is tco clear for argument that, even if in any case an assignee can be authorized to sell upon credit, such authority could not be given for the mere purpose of preventing a sacrifice of the property:— 2 Mich. 445; 2 Seld. 520; 3 T. B. Monr. 1; 21 N. Y. 25; 1 Sandf. Ch. 4.
   Manning J.:

The first objection to the validity of the assignment is, that it authorizes the assignee to sell the assigned property on ciedit. We think this objection is well taken.

Assignments by insolvent debtors for the benefit of creditors, are binding on the latter, when made by the debtor for the purpose of converting his property into money to pay his creditors. When the assignee goes farther than this, and stipulates for, or authorizes, the assignee to do some act for his ■ personal gain, or unnecessarily postpones the payment of his creditors without their assent, the assignment can not be sustained as against them without encroaching on the statute against fraudulent conveyances.

In authorizing the assignee to sell on credit, the assignor not only exposes what he professes to give up to his creditors tó a loss — a hazard incident to credit — but, to the extent of the credit given, hinders and delays them in the collection of their just dues. If he may authorize a sale on credit, may he not also authorize the assignee not to sell, or to hold on to the property for a giveu period of time, unless it can be sold at a certain price? If he may make the assignee a trustee for any other purpose than the one above stated, what power may he not give him? and how long may the payment of creditors be delayed ?

There is some force, we admit, in the argument that real estate — for there is much of it embraced in the present assignment — will ordinarily bring a higher price when sold on credit than when sold for cash. But in law this is not a sufficient consideration to support the clause under discussion. Execution and mortgage sales are for cash, and not on credit, and the interest and relations of debtor and creditor are the same in those cases as in the one before us. We see no good reason why a credit should be given in one and not in the other.

What was the object of the assignor? If it was tho liquidation of a greater amount of his indebtedness, it was for a personal benefit to himself. If, on the other hand, it was to prevent a sacrifice of the property to the detriment of his creditors, it is a trust not necessary for that purpose, and depriving the creditors of the right of electing for themselves — forced upon them by their debtor — for there can he no doubt that without the credit clause in the assignment the assignee may sell on a credit with the assent of all the creditors. That all the creditors do not consider a sale on credit beneficial to them is evident from the present suit.

Conveyances made to hinder or delay creditors, as well as to defraud them, are declared void by the statute. The delay incident to an assignment made in good faith does not, however, come within the statute, as it is not the object, hut only an incident or property, of' the assignment, which credit is not. The length of the delay is immaterial. It might, under the present assignment, he for a few months only, or for one or two years. A credit of less than six months or a year would not materially affect the price of real estate. And the best security would be a mortgage on the land sold, which it would take fifteen months to foreclose, if not paid when due.

The question we have been considering has been decided differently in different states.

For the reasons stated we think the assignment void as to creditors, and that the judgment should he. affirmed, with costs.

Christiancy and Campbell JJ. concurred. Martin Ch. J. did not sit in the case.


author: Campbell J.: Manning J.:

text:
    John L. Baxter and another v. William A. Robinson, Judge, &c., for the use of Daniel W. Littlefield.
    "Under our prolate system, an administrator cau not sell the interest of the estate in an executory contract for the purchase of lands, except as real estate and after license. Comp. L. §§ 2516, 2517, 8065.

      Where payments fell due on such a contract, which the administrator had no funds in his hands "to pay, but money for that purpose was promised by creditors of the estate which he neglected to obtain, and the contract became forfeited; it was held that these fads did not render the administrator liable to the heirs for the value of their interest in the land thus forfeited»

      Heard April 17th.

      Decided July 17th.

    Error to Kent Circuit. The case is stated in the, opinion.

      J. T. Holmes, for plaintiff in error.

      Ashley & Miller, H. B. Brown & A. Russell, for defendant in error:
    The case sufficiently shows that the property in question came into possession of the administrator. lie charged himself with the land in the inventory, he offered to sell it, he paid the interest due upon it in 1858, he demanded and obtained the certificate of purchase, and he claimed the general management and control of the estate.
    It is true there is no direct proof that he entered upon the land, yet upon the other hand there is no evidence that an actual occupation of the premises was possible.
    Evidence that defendant neglected to pay the interest due upon the certificate in 1859, when money was offered him for that purpose by the creditors of the estate, was properly admitted to show a devastavit.

    This term is not confined to direct acts of embezzlement or misappropriation of assets, but includes every act of abuse or negligence whereby property of the intesjate is lost or diminished in value: — Wms. on Exrs. 1631 to 1660.
    An administrator is bound to use such diligence in preserving the assets as a reasonable man should exercise in the management of his own affairs, his liability being alrin to that of a bailee for hire: — 1 McMullan Ch. 153; 1 Madd. 298; 1 McCord Ch. 456; 2 Graft. 116.
   Campbell J.:

This was a suit brought upon an administrator’s bond. The cause of action alleged and relied on is that Baxter, the administrator of James P. Littlefield deceased, allowed a certificate of University lands to become forfeited by non-payment of interest. The suit is brought on behalf of one of the heirs at law. The certificate was in the usual form under the statute, and interest was made payable annually on the purchase money remaining unpaid. The administrator had no assets in his hands out of which he could pay', this interest, but, in the year 1858, money was furnished by the creditors and applied. In 1859, money was promised him from the same quarter, but he neglected to obtain it, and the land became forfeited and lost.

The only question which we have deemed it necessary to consider is, whether under these circumstances the heirs .at law have any cause of action.

Under our probate system an, executory contract for the purchase of land is regarded in the light of real estate, so far as to give the administrator no right to dispose of such a contract, which he would not have to dispose of the land itself, had it been conveyed to his intestate during life. This class of certificates is specially mentioned, and put on that footing. Comp. L. §§ 2516, 2517, 3065.

The administrator, therefore, has no right to dispose of such a contract except to provide means to pay debts and charges against the estate. He has. no primary interest in or control over the property, and it belongs to the heirs and not to' him. He has therefore no general duty to preserve it for their- benefit, and is not obliged on their behalf either to sell it, or to borrow money to preserve it. His powers over the land are for purposes adverse to the inheritance. It is entirely unnecessary to determine in advance whether, as against the' heirs, he would be liable to apply rents and profits to preserve the inheritance, or what might be demanded of him in a case where there was a clear surplus of personal assets beyond any debts. The case before us presents the question in a very simple form, and we are satisfied that no cause of action exists in 'favor of the heirs, whatever may be .the case as regards others.

Upon the facts as found by the Court below judgment must be reversed, and a judgment must be entered in this Court upon the finding, in favor of the plaintiffs in error, with costs of both Courts.

Martin Ch. J. and Christiancy J. concurred.

Manning J.:

I agree with my brethren in a judgment for the plaintiffs in error. It does not appear from the Judge’s finding that Baxter, the administrator, ever took possession of the land. In Streeter v. Paton, 1 Mich. 341, it is held that the heir is entitled to possession, unless possession is taken or claimed by the administrator under the statute giving him the right of possession and of the rents and profits until the estate is settled. If the Judge had found that Baxter, as administrator, took possession of the land, claiming the rents and profits, I should think the action well brought, unless some good excuse was shown by him for not paying the interest due to the State, for which the land was sold.

Judgment reversed.


text:
    Amos Littell v. Samuel A. Fitch and others.
    Where one member of a copartnership gives a note in the copartnership name* the presumption is that it is given for partnership purposes; and the burden, of proof is upon the copartnership to show the oontrary.

      Heard July 17th.

      Decided October 14th.

    Case made, from Macomb Circuit.
    Littell brought suit against defendants to recover moneys which he had paid on a judgment, rendered upon a promissory note, given by defendant Fitch, in the name of S. A. Fitch & Co., a copartnership, composed of the defendants, and signed by Little as surety. Upon the,trial the copartnership of the defendants was admitted, and that on September 25th, 1859, the note was made and signed in the firm name by Fitch, payable to one Dyer or bearer, but negotiated with one Prentiss, and the money obtained upon it. The plaintiff signed the note as surety, and at the request of Fitch, and suit being afterwards brought against him thereon, and judgment recovered, he paid the amount. On the trial of this suit the plaintiff testified that Fitch showed him the note with the name of the firm to it, and wanted him to sign the note with Fitch and the company; and he did so. Fitch told him the firm owed some money in Detroit, and he could not get out to collect, and wanted to borrow it, and asked him to sign so he could raise it until he got around.
    On the part of defendants the following evidence was given:

      George B. Van Eps testified, that he was a member of the firm of Van Eps & Co., and managing partner, doing business in Mount Clemens. “During the partnership of S. A. Fitch & Co., I made all the purchases of goods sold by that firm, upon the credit of Van Eps & Co. S. A.- Fitch & Co. received their goods from Van Eps & Co., and purchased hides and sent them here. Their stock was drawn from our stock here, and the money proceeds and such hides as they purchased were sent here. No goods were purchased by that firm to my knowledge, and no moneys were .ever raised for the benefit of the firm of S. A. Fitch & Co. to my knowledge. They had no occasion to raise money. The members of both firms were the same.”
    Samuel A. Fitch testified, that he was doing business in Romeo about the first of March, 1857. That he heard the testimony of Amos Littell, and that he does not recollect of stating to him that the firm of S. A. Fitch <fe Co. wished to raise money to pay in Detroit; “ don’t think I said so when he came into my room, or at any other time. I told him I wanted to raise some money to pay some matters that I had in Detroit, and think I told him I could raise the money, if I could get any one to sign with me, of Mr. Prentiss, and don’t think I said anything about the firm, and finally told him I would sign the firm name. I used the money in my own private matters. The firm of S. A. Fitch & Co. owed no money in Detroit at any time, that I am aware of. I never purchased any goods on account of that firm. I managed the business of that firm, and it never purchased any goods to sell. I had been intimately acquainted with Littell. X got goods from Van Eps & Co., and never purchased any hides for them but from the proceeds of sales of goods received from Van Eps & Co. I suppose Littell knew these facts, as I was very intimate with him.”
    The Circuit Court rendered judgment for defendants.

      Maynard & Meddaugh, for plaintiff.

      R. P. & J. B. Eldredge, for defendants.
   Manning J.:

As the note was made in the name of the firm, by Fitch, who was a partner, and. signed by Littell as surety, the presumption is that it was to be used for the partnership. Fitch had no right to use the partnership name for any other purpose. It is for defendants to show Littell knew that it was to be used by Fitch to raise money for himself, instead of the firm. The affirmative of the issue upon this point is with -them. It is for them to prove it, and not for Littell to disprove it. We do not think it established by the evidence, but on the contrary that Littell supposed he was lending his name to the firm when he signed the note at the request of Fitch.

The judgment of the Circuit Court must be reversed, and judgment be entered for plaintiff, with costs of both courts.

Martin Ch. J. and Campbell J. concurred.

Christiancy, J. was absent.


author: Campbell J.:

text:
    William Dyson v. Alanson Sheley and others.
    In. order that premises may be exempt as a homestead under our Constitution and laws, they must have been set apart as a home, and for the purposes of the owner and his family.
    Where the owner of a city lot built a double house upon it, in.suoh a way as to show that he designed it for the-use of two families, and not for one and leased one part of it, occupying the other part himself, it was held that he could not claim the whole as exempt from execution as a homestead.
    The fact that the yard of the part leased was used by the owner in common with the tenant would not vary the case.

      Sudmitted July 17th.

      Decided October 14th.

      Appeal in Chancery from. Wayne Circuit. The facts sufficiently appear by the opinion.

      T. Romeyn, for complainant,
    referred to Wetz v. Beard, 12 Ohio St. 431; Phelps v. Rooney, 9 Wis. 70; Walters v. People, 18 Ill. 197, and 21 Ill. 178; Kitchell v. Burgivin, 21 Ill. 40.

      Maynard & Meddaugh, for defendants.
   Campbell J.:

The bill in this cause was filed to restrain the sale on execution of certain premises claimed as a homestead.

It appears that complainant owns a lot with a double house upon it, in the city of Detroit. The levy was made upon one half of this lot, and the part of the house upon that half, occupied by a tenant under a lease. Complainant occupied the other portion of the house. The yard in the rear was not fenced off between the houses, but was left open. The penstock used by both was in the middle of the lot. A double privy used by both was upon the east side of the premises, being the portion levied on. The house was divided equally, except as to an unfinished garret in the rear, which was not divided, and was used, if at all, by complainant. The entire premises are by some witnesses valued at more than $1,500, and by some at less.

Under our Constitution and laws a homestead, in order to be exempt, must be “ owned and oecvpied” by a citizen of this State. This language clearly implies that the premises must have been set apart as a home, and for the purposes of the owner or his family. It is not necessary in the case before us to inquire whether land thus set apart may or may not be leased temporarily, nor whether, if all the land claimed is covered by a dwelling used by the family, separate stories over or under their domicil may not be used or rented for other purposes. The cases deciding these points, to which reference was made on the argument, are not applicable to the case before us. Here the complainant built upon his lot in such a way as to show he designed it for two families, and not for one. The portion levied on has been leased for several years. It is plain that this portion could never have been properly regarded as a homestead. The law does not exempt property to the amount of $1,500, whether designed as a homestead or 'not. It ■ merely covers so much as comes within that designation, although worth but a trifle. Its object is to preserve the home, and no more.

The fact that the yard is used in common can not exempt the whole of it in favor of complainant. It is designed as much for the benefit of the rented portion of the dwelling as of the remainder. There is no evidence to the contrary; and such must be presumed from the whole case. The tenant is in actual occupancy of the east half of the entire premises, and if complainant has any rights there at all, they are not of such a character as to show that as to that portion of the premises they predominate over those of the' tenant, or that the latter holds a mere easement. The bill was properly dismissed, and the decree below must be affirmed, with costs.

Martin Ch. J. and Manning J. concurred.

Christiancy J. did not hear this case.


author: Christiancy J.:

text:
    Hannah Peckham v. John G. Buffam.
    Though the evidence in a suit in chancery makes out a good case, yet if it be a different case from that made by the bill, the bill must be dismissed.

      Heard October 6th.

      Decided October 14th.

      Appeal in chancery from Branch Circuit.
    The bill was filed to compel a release by defendant of a piortion of a village lot in Coldwater, which had been conveyed by complainant to defendant’s grantor. The bill alleged that complainant conveyed to one Smith the west half of lot 117 in the village of Coldwater, “reference being- had to the plat of the village of Coldwater, recorded in the Register’s office of Branch county ”; that in fact the plat of said village as recorded was erroneous, and showed lot 117 to be larger than it was in reality, and to embrace a portion of another lot owned by oomplain.ant, and not intended to be conveyed, and never claimed by Smith; and that Smith conveyed to complainant who had knowledge of the -mistake at the time. The main facts stated in the bill were denied by the answer, and evidence was taken, from which it appeared that the plat was laid out by the village authorities in pinrsuance of a special statute for that purpose, and that lots were platted in accordance with their oceupiation at the time; so that the error alleged in the recorded pilat did not exist. The evidence also tended to show that complainant did not sell to Smith, nor suppose she was conveying to her, a part of what constituted the west half of lot 117, according to the recorded plat, and that both parties were laboring under a mistake as to the location of the boundary line. It also tended to show that defendant was aware of these facts when he bought. The Court below rendered a decree for complainant as prayed.

      T. M. Cooley, for complainant.

      C. Upson, for defendant.
   Christiancy J.:

The bill makes one case, and the evidence another. Had the case made by the bill been supported by the evidence, it would have entitled the complainant to relief; and perhaps the same may he said of the case made by the evidence, had it been founded on an appropriate bill; but upon the latter alternative we express no opinion.

The hill bases the claim to relief entirely upon an alleged error in the village plat referred to for description in complainant’s deed; while the evidence shows that the plat was correct, and made in compliance with the act, “ as the lots were used and occupied ” when it was made; hut that the description in the deed was erroneous, in referring to the plat for the description of the land intended to he conveyed. It is plain, we think, that these questions present very different issues, and that the latter is not fairly included in the former. Complainant is only entitled to relief secundum, allegata et probata; 'and the hill is not sustained by the evidence. We do not therefore think it necessary to refer to any of the other questions- presented by the case.' The decree of the Circuit Court in Chancery must he reversed, with costs to the defendant in this Court and' the Court below, and the bill must be dismissed without prejudice.

The other Justices concurred.


text:
    Charles Byram and another v. Henry Gordon and another.
    It is not neoessary to the validity of a chattel mortgage, as to third persons* that it bo for the payment of any oertain sum of money, or for any money whatever. It may be for the performance of any other act, or of any contract, by tho mortgagor, or by a third person, as well as for the payment of money.
    When no time is specified for the performance of such act or contract in the agreement itself, the omission does not vitiate the contract, but the law steps in «and requires performance within a reasonable time.

      "Whore a chattel mortgage is given to secure the performance of a written agreement, the latter is no part of the mortgage, and does not require to be filed with it in order to render the mortgage operative against third persons.

      Submitted on briefs, July 11th.

      Decided October 14th.

    Error to Wayne Circuit. The case is fully stated in the opinion.

      T. W. Lockwood, for plaintiff in error:
    The agreement between Hillson & Lee and Gordon & Martin was incompetent as evidence as against the plaintiffs in error; because,
    1. It did not by itself tend to show Gordon & Martin’s title to the lumber; as it is an agreement by them to part with the title to the logs; nor,
    2. Does it, in fact, even if reference to it is permissible as against strangers to it, show what sum of money was intended to be secured by the chattel mortgage.
    3. As the chattel mortgage was not, in any respect, notice to the plaintiffs in error unless filed in the City Clerk’s office, so this agreement can not be treated as a part of it, or used to make it valid as against plaintiffs in error, the agreement not having been filed with it: — • Sawyer v. Pennell, 19 Me. 167.
    The chattel mortgage was not competent evidence of the title of Gordon Ss Martin to the lumber in question, as against plaintiffs' in error, who where bona fide purchasers for value, and without actual notice of their claim, because of the uncertainty of its terms.
    1. The amount intended to be secured by it was altogether uncertain, and the filing of the mortgage is not notice to plaintiffs in error of what the claim of Gordon & .Martin against the propert}^ was. Neither does the agreement help it out in this respect, even if Byram & Carpenter had notice of it, which they had not: — 19 Me. 167; Hinchman v. Town, 10 Mich. 514.
    2. The time of performance of the condition of the mortgage is also altogether uncertain. It is $80 per week during the delivery of the logs; and when the logs are to be delivered does not appear either in the mortgage or in the contract.
    3. The property covered by the chattel mortgage becomes also uncertain, by reason of the uncertainty in the condition as to time of payment, as the mortgage professes to cover the property which shall be in Hillson & Lee’s yard and boom, during the continuance of the mortgage, and there is nothing to show how long this is to be.

      Morrow & Davidson, for defendants in error.
   Manning J.:

This is an action of trover, brought by defendants in error for a quantity of lumber. To make out their title to the lumber they gave in evidence a chattel mortgage from Lee & Hillson, and also an agreement between themselves and Lee 3s Hillson for a sale by them to Lee <fc Hillson of a quantity of logs. This evidence was excepted to, and the ease is before us on the, exceptions.

The agreement bears date 30th June, 1860. By it defendants in error were - “to go on and deliver all the whitewood, oak, maple, ash and black walnut logs, belonging to them and now (then) in Lake St. Clair,” at the mill and boom of Lee & Hillson in Hamtramck. And Lee and Hillson were to pay them $100 on the execution of the agreement, which sum the agreement states with previous payments would make $350 paid by them on account of logs delivered, and they were to pay $80 per week until full payment should be made for all logs delivered or which should be delivered under the contract. The logs to be paid for at the following rates: maple logs at the rate of five dollars per thousand feet, and other logs at the rate of five dollars and seventy-five cents per thousand feet.

The mortgage bears even date with the contract, and by it Lee & Hillson bargain and sell to defendants in error “all the logs, lumber, stock and materials of any and every kind, now in, or which during the continuance of this mortgage shall be in the boom and mill yard of the said parties of the first part during the performance of the conditions hereinafter stated, and especially all the logs, and the lumber made of said logs, which have been or shall be delivered by the parties of the second part to the parties of the first part,” &c. “It being the object of the parties of the first part to secure to the parties of the second part the payment of the logs delivered and to be hereafter delivered to them by the parties of the second part under an agreement already existing between them.” Conditioned “that if the said parties of the first part shall and do well and truly pay or cause to be paid, to the parties of the second part, the sum of $80 per week during the time of the delivery of logs to them by the parties of the second part, and until all logs delivered or to be delivered under said agreement shall be paid for at the following rates; maple logs at the rate of $5 per thousand feet, and all other logs at the rate of $5.'IS per thousand feet, then these presents and any matter therein mentioned shall cease and.be null and void.”

The uncertainty of the mortgage in not stating the sum of money secured by it, and the time -within which it is to be paid, and the fact that a copy of the agreement was not filed with the mortgage, are the objections to the evidence.

It is not necessary to the validity of a mortgage as to third persons, that it should be for the payment of any certain sum of money, or of any money whatever. It may be for the performance of any other act, or of any contract by the mortgagor, or by a third person, as well as for the payment of money. And when no time is specified for the performance of such act or contract in the agreement itself, the law steps in and requires it to be performed within a reasonable time. Such omission does not vitiate the con" tract.

The agreement is no part of the mortgage. The two instruments are separate and distinct contracts; as much so as a promissory note and mortgage. It was necessary to prove the agreement to give effect to the mortgage, but there is nothing in the statute requiring a copy of it to be filed with the mortgage to render the later operative against third persons.

The judgment is affirmed, with costs.

The other Justices concurred.


text:
    Samuel Brown v. George W. Cady.
    In order to being a deed, executed in another state, not in compliance with our laws, within the saving of the confirming act of 1861, “ to confirm, deeds and instruments intended for the conveyance of real estate in certain cases,” it is necessary to show that, although not valid under the laws of Michigan as a conveyance for all purposes, it was executed according to the laws of the State where the execution took place, as well as regularly acknowledged. And these facts can not he presumed without evidence. Ko presumptions of validity can he raised whero our own laws have not been complied with.
    Iu the absence of a statute authorizing it, the record of a deed is not primary evidence of the existence and genuineness of the original.
    Under the said statute the record of a deed defectively executed is not made evidence of a valid sale without the production of the. deed itself. The law makes such a record “hereafter operate as legal notice of all the rights secured by such instrument,” but does not render it of any validity except for notice.
    On case made, though the record shows that judgment below should have been for the party against whom it was rendered, yet if the case does not show that it is brought here for review upon the facts, this Court can not render such judgment as the Court below should have given, hut can only order a new trial.

      Submitted on briefs July 17th.

      Decided October 14th.

    Case made from Lapeer Circuit.
    The action was ejectment. The land in controversy was shown to have been patented by Prentice Williams; and the plaintiff then offered in evidence the record of a deed jn the office of the Register of Deeds of Lapeer county, which pm-ported to have been executed by Prentice Williams to John B. Cady, June 15th, 1838, and to convey said premises, but defective because witnessed by one person only.
    No evidence of any kind was offered to show that the deed was executed according to the laws of Massachusetts. The date of the record was March 23d, 1838. The defendant objected to the introduction of this record in evidence, but the Court admitted it, and plaintiff then gave further evidence to show that Cady’s title had been acquired by himself.
    The defendant also gave evidence to show title in himself derived from Williams.
    The Circuit Court rendered judgment for the plaintiff.

      Heminway & Stickney, for plaintiff.

      Baldwin & Draper, for defendant.
   Campbell J.:

This was an action of ejectment. The plaintiff below, in order to make out his' case, introduced the record of a deed purporting to have been executed January 15th, 1838, by Prentice Williams, the patentee, to John B. Cady, having but one witness, and having an undated acknowledgment purporting to be taken in Massachusetts before a justice of the peace. The date of the record was in March, 1838. No other certificate vas appended, and no proof was offered with it.

Tins record was objected to as invalid for several reasons assigned, and was claimed by the plaintiff below to be within the statute of 1861 (Laws 1861 p. 16) confirmatory of certain deeds and conveyances.

This deed, if admissible at all, comes within sections one and four of the statute, relating- to deeds not validly executed according to the laws of Michigan, but which are made good between the parties as deeds or executory contracts under certain circumstances.

In order to bring this deed within the saving of section one it is necessary to show that, although not valid under the laws, of Michigan as a conveyance for all purposes, it was executed in Massachusetts according to the laws of that State, as well as regularly acknowledged, and therefore valid under the confirming statute. To presume this without evidence would be to disregard the express terms of the statute, which is only applicable to such deeds as are shown to fall within it. No presumptions of validity can be raised where our own laws have not been complied with.

But the record was inadmissible upon a further ground. The statute of 1861 makes a distinction between those deeds which are defectively executed, and those which are well executed but defectively certified to have been acknowledged. By section three it is provided that deeds legally executed and freely acknowledged before a proper officer, and Saving a certificate of acknowledgment substantially correct but not strictly formal, or having an informal clerk’s certificate of a valid acknowledgment, such clerk’s certificate being sufficient in substance, shall, if recorded, be valid to all intents and purposes, and the record shall be effectual for all purposes of a legal record, and such record or a transcript thereof may be given in evidence as in other cases — saving always the rights of bona fide purchasers.

Neither section one nor section four (which relate^ to defectively executed deeds) make any such provision in regard to past or future records. They provide simply that the past or future record of such defective deeds “ shall hereafter operate as legal notice of all• the rights secured by such instrument.” The law is prospective as to notice, and therefore requires no saving clause ; and it does not make the record of any validity except for notice. In the absence of a statute authorizing it the record of a deed is not primary evidence of the existence and genuineness of the original, and there would be serious objections — which doubtless struck the framers of the law — against allowing an instrument, invalid when made, and the record of which was therefore doubly defective as an unauthorized registry of an ineffectual conveyance, to furnish evidence of a valid sale, without the production of the deed itself. The deeds provided for under section three were perfect so far as the parties could make them; the defects not attaching to the conveyances themselves. These were complete and binding, and there was a sound reason for preferring them over others not thus complete. The deeds contemplated by sections one and four were not complete legal conveyances, and to recognize them as such would be to disregard substantial rules of property; and this the Legislature have not been disposed to attempt. The law is carefully framed to avoid confounding rights substantially unlike.

The record should not have been received in evidence.

The case shows that a good record title was made by the defendant below, and that judgment should"* have been in his favor. But the form in which the case is certified does not show that it is here for review ‘upon the facts, and we can only grant a new trial, with the costs of this Court, in favor of Brown, the defendant below.

Martin Ch. J. and Manning J. concurred.

Christiancy J. did not hear the , argument.


text:
    Roswell Enos v. John E. Sutherland and another.
    Whore land is conveyed by a debtor to bis creditor, and an instrument given back whioli shows that the land is to be reconveyed on payment of the debt, such instrument cannot be regarded as an agreement for the sale of the land, but the transaction is plainly a conveyance of the land as security for tho debt — in other words, a mortgage.

      "To such an instrument of defeasance a seal is not essential.
    If the grantee in such a deed conveys the property to a bona fide purchaser, he must account for it to the grantor at its value at the time of the sale, whether he received that amount or not.
    Where after the death of the grantor in such a case his administrator filed a bill in chancery for redemption, not making the heirs parties, and objection was for the first time taken at the hearing on pleadings and proofs that the heirB were necessary parties complainant; it was held, that as a decree in the oase would in no way operate to the prejudice of the heirs, and the administrator, under the statute, had such an interest in the real estate as entitled him to redeem, and complete justice could be done to the parties in the case as it stood, the objection was not well taken.

      Heard July 17th.

      Decided October 20th.
    Appeal in chancery from Berrien Circuit. The case is stated in the opinion.

      F. Muzzy, for complainant:
    1. The transaction amounted to a mortgage of the land as security for the debt: — 2 Lead. Cas. in Eq. pt. 2, p. 432; 9 Wend. 227; 4 Johns. Ch. 167; 24 Me. 185; 4 Pick. 349; 5 Paige, 9; 3 Mich. 482.
    2. The bill to redeem was properly filed by the administrator: — 8 Met. 36; Comp. L. §§ 2903, 2904, 3038, 2913; 1 Kern. 237; 2 Hill, 181.
    3. The want of proper parties is not a sufficient ground for dismissing the bill, unless it is manifest that a decree can not be made without such parties: — 3 Cranch, 220; 4 Vt. 178; 5 Paige, 172.

      D. A. Winslow, for defendants:
    The administrator could not file a bill to redeem in his own name: —2 Barb. Ch. Pr. 193-4; Little v. Lesia, 5 Mich. 119.
    The instrument given to Joseph Enos was not a defeasance, as it contained no proper words of defeasance. And a seal and the other requisites of a deed would be necessary to render it valid: — Comp. L. §§ 2720, 2727. It can at best only be treated as a parol defeasance; and as such is void.

      But that it was not intended as a defeasance fully appears. It was a conditional sale of the land, and can not be treated as a mortgage: — 4 Kent, 143; Swetland v. Swetland, 3 Mich. 491-8.
   Campbell J.:

Complainant as administrator of the estate of Joseph Enos, deceased, filed his bill to redeem certain premises from an alleged mortgage, given by his intestate to defendants as partnei'S under the name of- J. E. Sutherland & Co. The bill alleged that Joseph Enos made an absolute deed to defendants, who gave him back a defeasance of the following tenor:

“Bond of J. E. Sutherland & Co., to Joseph Enos. The conditions of this bond are as follows: That whereas, said Joseph Enos is indebted on settlement to J. E. Sutherland & Co., at this date, the amount of two hundred and seventy dollars, and a further sum to the amount of one hundred and forty dollars in cash furnished, and the consideration therefox, for the purpose of going to California, making in all the amount of four hundred and ten dollars, which amount is embraced in a certain deed of same date of this instrument, in favor of J. E. Sutherland & Co., and signed by Joseph Enos and Ms wife Lucy Enos, covering the following described parcels of land, viz:
[Here follows description.]
“The final conditions are, that said Josejxh Enos is to pay to said J. E. Sutherland & Co. the full sum of two hundred and seventy dollars, with lawful interest from date, on or before the first day of April, eighteen hundx’ed and fifty-two, and the full suxn of one hundred and forty dollars, without interest, within the same time, which amounts, if well and truly paid, all within the tixne as above specified, then the said J. E. Sutherland & Go. are to deed back to said Joseph Enos, or his heirs, our entire right and interest in said lands above described. But in case said amounts as named are not thus paid, them this instrument to be void.
J. E. Sutherland & Co.”

The bill further alleged that defendants had sold a portion of the premises to an innocent purchaser, and that the value of the premises sold exceeded the amount of the debt. These allegations were fully made out by the proofs, and the Court below decreed a release of the unsold premises, and a personal judgment for the value beyond the amount of the mortgage debt.

It was claimed on behalf of the defense that the defeasance was invalid, or, if valid, that it showed the transaction to be an agreement for a re-sale, and not a mortgage. The instrument shows that the land was to be reconveyed on payment of an existing debt with interest. It is so plainly an instrument for securing a recognized indebtedness that there is no rule which can authorize ns to treat it as anything but a landed security, or, in other words, a mortgage. It is in the commonest form of a separate defeasance as familiarly resorted to in practice. Neither is it open to any question under the Statute of Frauds. That does not require executory contracts to be under seal, but requires deeds only where trusts or powers, or estates in land, are created or assigned: — Comp. L. §§3177? 3179. We are aware of no authorities which require of defeasahses any formalities not necessary in executory contracts for the sale of real estate. The recording statutes for the protection of purchasers refer expressly to other instruments of defeasance than “ deeds,” as entitled to be registered. Comp. Tj. § 2751.

It is also claimed that the suit is improperly brought by the administrator, and that the heirs should have been made parties. Whether in such cases the heirs are ever-necessary parties under our system, where the bill is filed for redemption, or to remove an alleged cloud in the shape of an undischarged mortgage, it is not now important to examine. Tbe objection was not taken until the hearing, and the facts are such that the decree made upon them in no way operates to the prejudice of the heirs, and leaves their title unimpaired. They are not called upon to execute any releases or conveyances, and no good purpose can now be subserved by bringing them in. The administrator, being entitled under the statute to the possession of the lands of his intestate, has such an interest as entitles him to redeem, or to compel a release of a satisfied mortgage; and if the heirs would have been proper parties, the decree is nevertheless valid,' inasmuch as it does complete justice as it stands, provided it is sustained by the proofs.

We think the evidence fully sustains the decree,. Defendants, in violation of their duty, disposed of a portion of the lands to an innocent purchaser. They are bound to account for the full value of the lands sold, whether t.they received that value or not. The Court below charged them with the value at the time of sale. We think the amount was correctly fixed by the decree.

Upon a review of the whole case we see no error in the conclusions of law or of fact, and think the decree should be afiirmed; path costs.

Martin Ch. J. and Manning J. concurred.

Christiancy J. did not hear the argument.