Case Name: Mary Ann Durfee v. James McClurg
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1859-01-12
Citations: 6 Mich. 223
Docket Number: 
Parties: Mary Ann Durfee v. James McClurg.
Judges: Martin Ch. J. concurred.
Reporter: Michigan Reports
Volume: 6
Pages: 223–239

Head Matter:
Mary Ann Durfee v. James McClurg.
Where complainant, a married woman, made an unconditional assignment of a mortgage to defendant, and delivered it to her husband, who delivered it over to defendant, and the latter gave the husband a receipt, stating that the mortgage was received of the husband as collateral security for a debt owing by him to defendant, and there was no evidence of any negotiations between complainant and defendant, or of any understanding on her part that tho transfer of tho mortgage was to be upon any condition, or of any instructions by her in reference to it; — Held¡ That the Court could not say from these facts that tlie assignment was intended by complainant as security only, and not to be. passed absolutely to defendant.
Complainant’s husband having made an arrangement of the debt secured by the assignment, and agreed with defendant that tho latter should have and retain an absolute title to the mortgage, — Held) That this arrangement was binding upon complainant, and that she could not require defendant to re-assign to her the mortgage.
Under the present statutes of Michigan, contracts of sale by a married woman are to be treated as if made by a feme sole.
Where an answer on oath is waived, complainant may use the answer as an admission by defendant of any facts stated in it necessary to establish his case. But he can not use one part and exclude other parts relating to tho same subject that would be responsive to the bill had tho answer been under oath.
Heard December 2d, 1858.
Decided January 12th, 1859.
Appeal from Wayne Circuit in Chancery.
The bill alleges that complainant is the wife of Benjamin C. Durfee: That on the 14th day of November, 1855, said Benjamin was in partnership in the drug and grocery business, in Detroit, with one Edward J. Moore, under the firm and style of Moore & Durfee; that on that day Moore & Durfee were indebted to defendant as follows: $500 on a promissory note for that amount, dated August 15th, 1855, payable seven months from date, with ten per cent, interest; $500 on a note, dated September 10th, 1855, payable six months from date, with ten per cent, interest; $500 on a note dated September 29th, 1855, payable six months from date, with ten per cent, interest; $1800 on three promissory notes of $600 each, dated respectively November 14th, 1855, and payable at six, nine, and twelve months from date, with ten per cent, interest; that said Benjamin was also indebted to defendant in $1400, on a note dated November 14th, 1855, and j>ayable one year from date, with ten per cent, interest payable semi-annually: That on the said 14th day of November, 1855, at the request of said Benjamin, the complainant made an assignment to defendant of a mortgage given by Langford Gr. Berry to her for $1800, and dated April 1st, 1854, upon which mortgage was endorsed, April 1st, 1855, $5'76; and which assignment was made as collateral security for the payment to defendant of the notes so held by him against Moore & Durfee and said Benjamin, and was on condition that if the said notes should not be paid, the said mortgage should be collected at the expense of complainant, and the money applied on said notes; that on the 30th day of May, 1856, defendant purchased all the right,-title, and interest of said Benjamin in the firm of Moore & Durfee, and that in said sale, said Benjamin actually paid all the said notes of Moore & Durfee and of said Benjamin.
The bill further states that said defendant, previous to the payment of said notes by said Benjamin, had collected $500 on said mortgage, but had not applied the same on the notes; that since the payment of said notes, complainant has requested defendant to re-assign the mortgage to her, and pay her the moneys collected thereon; which he refuses to do. And she prays for decree for the reassignment of said mortgage, an account of the moneys paid thereon, and the payment of the same to her.
Defendant, by his answer, admits substantially the facts alleged in the bill; but says that whether the assignment of the Berry mortgage to him was made at the request of said Benjamin, he does not know; that he never saw complainant, and never transacted any business with her; that he loaned moneys to said Benjamin, and to Moore & Durfee, on receiving security therefor; that said Benjamin assigned to him another mortgage made by S£¿d Berry as security for some of the same indebtedness; that said Benjamin wanted to obtain a further loan from defendant, and offered to jiroeure, as security therefor, an assignment of complainant’s said mortgage; that defendant loaned money accordingly on the security of said assignment, and was entirely regardless from whom the assignment came, provided it properly conveyed the mortgage; that he had no privity of contract with complainant, and did not' then, and does not now, know whether said Benjamin bought or borroAved of her the mortgage; but ho alleges, on information and belief, that Moore & Durfee bought the mortgage of complainant for the purpose of using the same to borroAV money Avith, and gave her their notes therefor, secured by chattel mortgage on their stock of goods; and he says the assignment of the mortgage to him Avas absolute in its terms, and the understanding that it Avas to be held as collateral Avas by parol; and he denies that complainant Avas to be at the expense of its collection.
As to the purchase of said Benjamin’s interest in said firm, defendant says that said Benjamin agreed to sell out his interest at $1035, in the assets of Moore & Durfee, tó be selected by him, and the defendant purchased at that rate, agreeing to pay complainant’s chattel mortgage on the goods, and to take the tAvo Berry mortgages in full payment of the indebtedness from the firm and from said Benjamin to defendant, and further to pay and assume all the existing liabilities of Moore & Durfee, and indemnify said Benjamin against the same; that it Avas further agreed, as a part of the same transaction, that, instead of paying complainant in money, she should be paid by a transfer of one of the Berry mortgages; said Benjamin asserting that she was willing to receive such assignment in lieu of money; and that said agreement was carried out in all its particulars: That said Benjamin procured from complainant a release of said chattel mortgage, which was delivered to defendant on his assigning to complainant the mortgage assigned by said Benjamin to defendant; which mortgage was so assigned to her instead of the other, because the one made to her had been in part paid to defendant, and the other was of the same amount as her chattel mortgage, and therefore more convenient to use in paying such chattel mortgage. And defendant avers that complainant was fully aware of all the terms of this arrangement, and has since collected, in whole or in part, the mortgage so assigned to her, and appropriated the proceeds.
A general replication having been filed, and the several papers referred to in the bill and answer put in evidence, the evidence of E. C. Walker was taken for complainant, as follows: “I was retained as one of defendant’s attorneys May 30th, 1856. At that time there had been an inventory taken of the assets and liabilities of Moore & Durfee. From a statement made at that date, I have no doubt that defendant held the notes of Moore & Durfee and B. C. Durfee to the amount of $4'T00. He held the three $600 notes mentioned in the bill — as to the other notes, I do not recollect their amount.” “I think a payment had been received by defendant on the mortgage in question, of that date. I can not tell its amount. I do not know whether it had been endorsed on any of the ■notes or not.” “I do not know where the $1400 note of B. C. Durfee is — -whether he ever took it up or not. ■ Defendant still holds the three $600 notes.”
Being examined for defendant, the same witness stated: “In May, 1856, Moore & Durfee were indebted to defendant as shown in the receipt” [a copy of which is given below]. “Moore & Durfee did not entirely agree in business matters. Defendant was Moore’s father-in-law. He directed me, as Moore’s counsel, to procure a dissolution of the firm of Moore & Durfee, in some way, at all events. I examined into their affairs, and spent several days in negotiating the matter between defendant and Moore & Durfee, who were all in Detroit, and all present at the termination of the negotiations. A settlement of all matters between them was finally agreed upon as follows: The defendant took the two mortgages as payment on the indebtedness to him, as far as they went. He bought all the assets, notes, and accounts of Moore & Durfee. For Mr. Durfee’s interest, he was to pay as follows: He was to pay to Mr. Durfee the amount of the mortgage which he (Durfee) had procured his wife to assign to defendant, for which Durfee had given to complainant, his wife, a chattel mortgage on the stock in trade of Moore & Durfee. In consideration of such payment, the chattel mortgage held by complainant was to be discharged. Defendant was to indemnify and hold harmless Mr. Durfee from all debts of Moore & Durfee. It was agreed that the sums paid to Mr. Durfee should he paid as follows: In part by the re-transfer of the mortgage which he had originally assigned to defendant, and the balance was to be paid in certain bills receivable of Moore & Durfee, which were to be transferred to his individual use. Payment was made as above stated, and the papers drawn, and all ready to be delivered except the release of complainant’s chattel mortgage. I drew such a release, and went with Mr. Durfee to Ms house, in his buggy, to get complainant to execute it. I did not get out of the buggy. He took the release into the house, and, after the lapse of about half an hour, returned with it signed. When the re-assignment above mentioned was about to be made out, Mr. Durfee requested that it might be made to complainant. The papers were all delivered, and the arrangement carried out as above set forth. The defendant has since then paid most of the debts of Moore & Durfee.”
On his cross - examination, the witness stated: “ The complainant was not present at all during any of the negotiations. I do not know that she knew any thing of them, except from her signing the release. The whole of the transaction between defendant and Moore & Durfee was closed by the single arrangement disclosed in my direct-examination. The different parts of the settlement were all closed at once as one thing. To get at the settlement, I myself made an examination of all the books of Moore & Durfee, and got a full statement of the sums due to and by them. For the value of the goods, I took, as a basis, an inventory then lately made by Moore & Durfee. I made out an estimate of the value of all their assets, and of the amount of their liabilities, and thus came at the amount of Mr. Durfee’s interest in the concern.” Being asked, “Were the mortgages referred to, and the notes to which they were collateral, figured, in general, among the other 'matters of account on the final settlement referred to?” — the witness replied, “I do not recollect how they were figured in, exactly. Many different estimates and statements were made during the negotiations. In some of them, I know the indebtedness to the defendant was included among bills payable, and the mortgages reckoned among the assets. TJpon the final settlement, Mr. Durfee was to receive $2496.34. I saw the chattel mortgage of which I have spoken, on the files.. In that way I knew of its existence. The indebtedness of the firm of Moore & Durfee was quite largo — several thousand dollars. The consideration which defendant got for assuming to pay the debts, was all the goods of the firm, and the bills payable and accounts. I can not state whether Mr. Durfee gave any particular reason why he wished to have the mortgage as signed to his wife. It may have been because he wished to put it in her name to prevent his responsibility for this indebtedness, which the defendant had assumed to pay. I know nothing about the chattel mortgage, except from seeing it on the files, and from hearsay.”
The following is a copy of the receipt given by defendant on receiving the assignment of the mortgages: “Received
November 14th, 1855, from Benjamin C. Durfee, an assignment bearing even date herewith, of a certain mortgage made by Langford G-. Berry to Mary Ann Durfee for the sum of $1800 and interest, dated April 1st, 1854, upon which is endorsed, April 1st, 1855, $576. Also the assignment of another certain mortgage made by said Berry to said B. C. Durfee, dated April 1st, 1854, for the sum of $1966.03, and interest, upon which are the following endorsements, viz.: June 3d, 1854, $155; April 1st, 1855, $107.90; April 1st, 1855, $357.22; — which said mortgages are assigned to me as collateral security for the payment of the following described promissory notes, viz.: Moore & Durfee’s note, dated August 15th, 1855, for $500, at seven months, with interest at ten per cent.; Moore & Durfee’s note, dated September 10th, 1855, at six months, for $500, with interest at ten per cent.; Moore & Durfee’s note, dated September 29th, 1855, at six months, for $500, with interest at ten per cent.; Moore & Durfee’s three several notes, each for $600, dated November 14th, 1855, at six, nine and twelve months respectively, with interest at ten per cent, semi-annually; and Benjamin C. Durfee’s note, dated November 14th 1855, at one year, for $1400, with interest at the rate of ten per cent, payable semi-annually. In case any of said notes should not be paid, said mortgages to be collected at the expense of assignors, and applied.”
“James McClueg.”
The assignment to defendant of the mortgage in question, by complainant jointly with her husband, was also put in evidence.
On the hearing in the court below, a decree was rendered dismissing the bill, and complainant appealed.
J. JE. Bigelow, and II. T. Backus, for complainant.
IS. C. WalJe&r, for defendant.

Opinion:
Manning J.:
On the 14th November, 1855, and previous thereto, Benjamin C. Durfee, complainant's husband, and one Moore, were partners in trade under the name of Moore & Durfee, and the firm was indebted to defendant in the sum of fifteen hundred dollars, for which amount he held the notes of the firm. He also held three other promissory notes of the firm, given on that day, for six hundred dollars each, payable in six, nine, and twelve months, with interest at ten per cent. On the same day, two mortgages were assigned to defendant, both given by one Berry — one to complainant for eighteen hundred dollars, and assigned by her and her husband to defendant; and the other to her husband for nineteen hundred dollars and odd, and assigned by him to defendant. The mortgages bore even date, and one or more payments had been made on each. Both assignments were absolute on their face. The mortgages and assignments were delivered to defendant by complainant's husband, and defendant at the same time gave to him a receipt describing the mortgages, and stating defendant had received them of Benjamin C. Durfee, as collateral security for the payment of the aforesaid notes of Moore & Durfee, and of an individual debt Durfee was owing defendant. By a subsequent agreement, made in May or June, 1856, between Moore, Durfee, and defendant, the latter purchased Durfee's interest in the co-partnership; and in the settlement then made between the three, the notes of the firm and the individual debt of Durfee were paid, and the mortgages were transferred to defendant.
Complainant files her bill for a re-assignment to her of the eighteen hundred dollar mortgage, and for all payments made on it to defendant, stating in her bill that the mortgage was assigned by her to defendant as collateral security for the payment of the aforesaid notes of Moore & Durfee, and the individual debt of her husband, and that the notes and debt had been paid.
There is nothing on the face of the mortgage, assignment, or receipt, nor is there any parol testimony, showing complainant was a party or actor in any of the transactions between defendant, and Moore, and her husband, Benjamin C. Durfee, unless the assignment of the mortgage by her and her husband to defendant is to be regarded in that light. The assignment, it is to be observed, is absolute on its face; and the receipt given by defendant is to her husband, and not to her, and does not mention her name, except in describing the mortgage and assignment in the body of it. If the receipt had been made to her, or to her and her husband, the case would be altogether different. It would show she was a party to the delivery of the mortgage and assignment to defendant, and that she had not parted with her interest in the mortgage to her husband, and at his request assigned it to defendant.
If she did not intend he should have the absolute disposal of the mortgage, she should have made the assignment conditional, or had the receipt taken in her own name. From the facts before us, we can not say the assignment was intended by her as security only, and that there was no intention to part with her interest in the mortgage, to her husband, unless it be a legal inference to be drawn from the circumstance of the mortgage having belonged to her before the assignment. The law draws no such inference.
She was not present when the mortgage and assignment were delivered, nor does it appear there was any negotiation between her and defendant as to the mortgage or its assignment, or that her husband was acting in her behalf, or as her attorney, or not solely for himself. As her agent, the assignment would be equivalent to a power of attorney authorizing him to sell the mortgage to defendant; and any instructions given him to the contrary, unless brought home to the knowledge of defendant, would not affect him. The great difficulty is, there is no evidence the assignment was intended by the wife to be conditional.
Real and personal property belonging to a married woman may be " contracted, sold, transferred, mortgaged, conveyed, devised, or bequeathed by her, in the same manner and with the like effect as if she were unmarried." —Comp. L. p. 966, §3292.
The reason why complainant's husband joined in the assignment, probably, was that the statute (Comp. L. p. 965, §3289), before it was amended, in February, 1855, required the husband to give his consent to all transfers made by the wife of her individual property, and the parties, most likely, were not aware, at the time, of the alteration in the law. Since the amendment, we think, we should treat all contracts of sale by married women as we would were they made by a feme sole. If complainant had been unmarried, there would be nothing in the case showing she did not intend, by assigning the mortgage, and delivering it and the assignment to Durfee, to give him the absolute control and disposition of it, and we see no reason why her rights should be placed on any different footing on account of her coverture.
We should not, without some evidence at least, presume her husband has deceived her; and even if he has (we suppose the case, for there is no charge of the kind), inasmuch as she has, by her' own act, enabled him, not only to deceive her but defendant, she, instead of defendant, should be the sufferer.
It was said on the argument, the answer admits the assigment was made by complainant as security.
The bill waived an answer on oath, and a replication was filed. When no replication is filed, the answer is received as true, and is evidence. When a replication is filed, it is not evidence, but complainant may use it as an admission by defendant of a fact necessary to establish his case. He can not, however, use a part of the answer, and exclude other parts relating to the same subject that would b,e responsive to the bill had the answer been under oath.
In the answer, defendant admits "complainant, jointly with her husband, did make, execute, and deliver to him an assignment of the mortgage as " collateral security." Here is an admission that the assignment was delivered to defendant, by complainant and her husband, as security. Defendant means nothing of the kind, as is evident from other parts of his answer. A few lines lower down, after describing the mortgage, and debts to be secured by it, the answer says: " But whether said assignment was made by complainant at the request of said Benjamin C. Durfee, or not, the defendant has no knowledge, and can not state. But he avers he never saw said complainant, or ever transacted any business with her." A little lower down still, the answer says: " That he had no privity of contract, of any kind, with complainant, and knew not then, and knows not now, what were her rights or interests in said mortgage, or what induced her to join her husband (the said Benjamin) in assigning the same to him."
The decree of the court below must be affirmed, with Costs.
Martin Ch. J. concurred.