Court Opinion

ID: 6632843
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:38:25.637426+00
Date Added: 2024-06-11T15:58:59.551964
License: Public Domain

Christiancy J.:
This case comes before us for the second time on demurrer to complainant’s bill. The decision of the case as formerly presented, 9 Mich. 465, disposes of several questions which might otherwise arise.
The only questions which remain to be decided on the present demurrer to the amended bill, are those which grow out of the trust deed to Rose, which was not set forth nor its provisions sufficiently described in the former bill to enable us to judge of its effect upon the rights of the parties. The complainant there alleged that he was interested in the mortgaged premises by contract, but set forth no contract giving him an interest. And we there held that there was nothing in the trust instrument to Warner, nor in the contract with Reed, which gave him a' right to- redeem, or which would entitle him to be subrogated to the rights of a mortgagee under the Austin or Reed, mortgage, by paying them off, according to the terms of the trust instrument to Warner and of the contract with Reed; but that, without showing any interest in the premises derived from the mortgagors, and subject to the mortgages, he stood in the position of a mere volunteer or stranger. Ifj then, the complainant has, by his present bill shown any interest in the mortgaged premises to entitle him to redeem, or to have the mortgages released, or to subrogation under them on payment, that interest and the right of subrogation must be founded upon or grow out of the trust deed to Rose.
It is manifest from an examination of this deed, that no beneficial interest was to vest in complainant until the full payment of the Warner & Catlin contract, as well as of all the five classes of creditors known as the Ohio creditors (the claims of the latter amounting to some *40$70,000) ; and that it was for the complainant so far to pay .or take care of the Austin and Reed mortgages as to prevent the mortgaged premises being lost by foreclosure before all the above mentioned claims should be paid; and that if the property should be sold, either by the trustee, or, with his approval, by the complainant or his agent,, under the qualified power contained in the trust deed, complainant would be entitled only to such balance of the ¡proceeds as should remain after full payment of all these claims. It is true the deed, being executed only by Warner and wife, and not by complainant, did not, of itself, bind the complainant to pay these claims, but such payment (and the protection of the property from foreclosure until such payment) constituted the condition upon which alone he could obtain any interest in the mortgaged premises, or their proceeds if sold.
This deed, the bill alleges, was executed and delivered by Warner to Rose, at the request and by the procurement and for the benefit of the complainant. He states, and it is clear from the whole bill, that he went into possession and managed the property under this trust up to the close of the year 1857, and paid off about twenty thousand dollars of the debts therein provided for. It is clear also that it was by this instrument alone that he obtained any right to enter into the possession or in any, manner to interfere with the property, and that by this alone, and his possession under it, be obtained whatever right and power he possessed of entering into the trust agreement with Warner, of December 28, 1857, and the dependent agreement of the same date with Reed. The trust instrument to Warner professes on its face to be made subject and subordinate to the Rose trust, and the agreement with Reed refers to and adopts the Warner trust agreement. Roth these agreements relate to the payment of the mortgages, against which, by the Rose trust, it was the duty of complainant to fprotect the property by payment or *41otherwise, and are therefore merely subsidiary to the Rose trust.
Doubtless this Rose trust, while it remained open and subject to be performed by complainant, and not abandoned or repudiated by him, might constitute a sufficient interest pa complainant to enable him to maintain a bill for redemption or release of the mortgages, and perhaps for subrogation under them, if the case were such in other respects as to call for such subrogation; but that interest would be subject to all the trusts and conditions of the Rose trust deed until performance of the conditions by complainant. And, admitting that complainant, after, as he alleges, having gone into possession and paid off some twenty thousand dollars of the debts, might have repudiated or abandoned the trusts, without any liability on his part to pay more; yet if he elected to'do this, he could have no claim, legal or equitable, for the amount he had so expended; since it was only upon the faith of his paying this and a much larger sum, that he was permitted to go into possession, or to obtain any interest in the property. When, therefore, he declares his. inability, or repudiates all obligation, to make the payments-, which constituted the condition upon which his interest, was to depend, he abandons or repudiates all interest in the mortgaged premises, and stands as a mere stranger or-volunteer, without any interest whatever in the premises,, or in the redemption or release of the mortgages. This,, and even worse than this, is the position in which the. complainant has placed himself by his present bill; for after having alleged his going into possession and paying off some twenty thousand dollars of the debts, and stated the filing of Reed’s bill of foreclosure, he goes on to say that “your orator became also convinced that he coiild not pay. said Ohio indebtedness, and also said mortgages, and desiring to save at least what he had .'been induced to put into said property, being about thirty thousand dollars, pending the said foreclosure proceedings made cer*42tain agreements with the holders of said mortgages for an extension thereof” — referring to said trust instrument to Warner, and the Reed contract — “as far as regarded your orator, one of the defendants in said proceedings; ‘that said agreements were made on the part and behalf of your orator, as an individual, for his own protection, to enable him if possible to get back his advances, and not for the benefit of the creditors provided for under ■said Mose trust." So far, therefore, from claiming in subordination to the Rose trust, or offering to perform its •conditions, or asking relief for the purpose of enabling ¡him so to do, this is a clear repudiation of that trust. He claims his interest under this trust deed, and yet asks the court to aid him in defeating it, that he may obtain its benefits without bearing the burdens upon which alone those benefits were to depend. He claims under and against the instrument at the same time, and asks the aid of the Court to enable him to defeat the Ohio creditors, to the amount of seventy thousand dollars or more, which by the same instrument he was to pay as a condition precedent to the vesting of any interest of his own; and asks to be allowed to redeem the Austin and Reed mortgages, and to be subrogated to their rights under them, for the purpose of cutting off and defeating the claims of those creditors, when by the terms of the very instrument under which he claims, it was his duty, as a condition precedent to any rights of his own, to protect the property for the benefit of those creditors against these very mortgages. This, in plain English, is asking the Court to aid him to perpetrate a fraud upon the creditors provided for under that trust, and whose interests were by that very instrument made paramount to his own. This no court could permit, though all the parties to the suit should fail to make the objection.
It is no answer to this objection to say that these Ohio creditors were cut off by the foreclosure of the Reed *43mortgage against Rose, the trustee, who was a party to the foreclosure, when it was the complainant’s duty to those ■creditors to have protected the property from that fóre- ■ closure, and when, as assumed by the bill itself, complainant was not bound by that foreclosure. He could only be allowed, therefore, to set aside that foreclosure for their ■benefit as well as his own, and in preference to his own rights. This he has not asked, but he asks that their rights may be cut off while his are protected.
The decree of the Court below, allowing the demurrer 'and dismissing the bill, must be affirmed, with costs.
The other Justices concurred.