Bearss v. Preston

32 N.W. 912, 66 Mich. 11, 1887 Mich. LEXIS 439
CourtMichigan Supreme Court
DecidedMay 5, 1887
StatusPublished
Cited by8 cases

This text of 32 N.W. 912 (Bearss v. Preston) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bearss v. Preston, 32 N.W. 912, 66 Mich. 11, 1887 Mich. LEXIS 439 (Mich. 1887).

Opinions

Morse, J.

The plaintiff brought suit in the superior court for the city of Detroit against the defendant, declaring in trespass on the case in four counts.

The plaintiff’s claim in substance is that he was engaged in the lumber business in the city of Detroit, renting and occupying an office and lumber yard on Fort street west. The defendant was his banker, and had made advances to him, and held a large amount of his paper, and the paper of his customers indorsed by plaintiff.

October 16, 1884, the plaintiff, to secure defendant, gave [13]*13him a chattel mortgage on his stock of lumber in his yard, payable within ten days after demand. The mortgage also covered a team, wagons, buggy, and harness. It purported to secure the sum of $7,100,—

“Or whatever sum may then be due, * * * within ten days after a demand for the same has been made, including notes, indorsements, checks, overdrafts, etc.”

This indebtedness consisted of Bearss’ personal notes, sold to Preston by Bearss and indorsed by him, and Bearss’ accommodation indorsements for one Jenks.

August 11, 1885, the debt thus secured had been reduced to $6,024.18. On that day, at the solicitation of Preston, Bearss gave a second mortgage to secure this amount. This mortgage covered all of the lumber and timber in the yard,—

“Together with all laths, shingles, posts, or other stock and chattels that are now on said lots [lumber yard], or that may hereafter be added thereto, together with one two-horse team, four two-horse wagons, one single wagon, one buggy (phaeton), one'double set of harness, and two single sets of harness.”

There was no time of payment expressed in the mortgage; the condition being that Bearss should pay the said sum of $6,024.18,—

“Or whatever may be due to the party of the second part on notes, indorsements, checks, overdrafts, or other liabilities.”

In default of such payment Preston was authorized to enter upon the premises of Bearss, or any place where the chattels were, and take possession of the same, and sell and dispose of the said goods at public vendue or private sale. He was also empowered to take possession and sell, in case Bearss should sell or assign or dispose of any of the goods without the written assent of Preston.

Bearss claims that he was induced to give this second mortgage, for the reason that Preston had demanded payment under the first mortgage, and said to him that if Bearss [14]*14would give a new mortgage, without any time in it, and take hold, and reduce the indebtedness promptly, he should not “suffer from the new mortgage.” Preston also promised him further accommodation, and said he would not put the mortgage upon record, and would give him notice before foreclosure.

In violation of this agreement, Preston, in the absence of plaintiff, took possession of all the mortgaged property, and also of the lumber office and yard, and with no condition of the mortgage broken, and sold and converted the lumber to his use unlawfully. At the time Preston so took possession of the goods, there was due only $4,703.88. The sale of the lumber brought $5,490.59, while the minimum wholesale value of the same was $8,745.82, and the maximum value, at current retail rates, was $11,321.74. Preston claims there was $4,761.80 due. This left an excess from the sale of $728.79, against which he charged $613.25 for expenses. These expenses were attorney’s fee, $100; insurance, $17.50; and rent, $250; and expenses of sale. The payment of rent is conceded to be all right. It is claimed that, notwithstanding this excess of the indebtedness realized from the sale of the lumber, Preston illegally held possession of the horses, wagons, harnesses, and buggy until October 31, 1885, and unlawfully kept Bearss out of the possession of the lumber yard until January 1, 1886; that by this action the business of the plaintiff was broken up and destroyed, to his great damage.

Bearss contends, first, that there was no default or condition broken, and therefore Preston acted tortiously in taking possession and selling the lumber under the new mortgage.

This is the first point to be considered.

The court below took the case from the jury, and directed a verdict for the defendant, holding that defendant had a right to enter and take possession under his mortgage, and sell the goods, and that plaintiff could not .recover for the other [15]*15wrongs alleged, for reasons which will be considered hereafter.

The defendant denied that Bearss was induced to give the new mortgage as stated by him, or that he made the representations or promises claimed by Bearss.

The plaintiff requested the court to charge the jury, in substance, that the mortgage, under the circumstances, must be considered to have been given with reference to a default in the payment of that portion of the indebtedness not due at the time it was executed; and that, it being conceded that, between its execution and the taking possession by Preston, no part of such indebtedness became due, and that due having been reduced by a payment of $500, there was really, therefore, no default in the conditions of the mortgage, and the entry and sale' by Preston was tortious and unwarranted, and the plaintiff was entitled to recover the market value of the property sold, less so much of the defendant’s jirst claim as should be applied thereon.

The defendant contends that the mortgage was clearly, upon its face and by its terms, due immediately; no time of payment being stated therein, it was at law due at once, and could be foreclosed immediately. We think this contention is correct. The verbal promises and agreements claimed by plaintiff, if true, cannot be received to vary or contradict the contract as written in the mortgage. This instrument contained no express promise of interest, and specified no time of payment, either at a future day or on demand. It was therefore a mortgage due presently, or as soon as given, to secure so much of the indebtedness as was due at the time of its execution. Eaton v. Truesdail, 40 Mich. 1, 6; Lyon v. Ballentine, 63 Id. 102.

It also appears beyond dispute that, without the consent or knowledge of Preston, Bearss had assigned a portion of this stock to one Lamphere. As soon as Preston learned of [16]*16this, and not until then, he commenced the foreclosure of his mortgage, claiming the condition broken as to selling or assigning without his written assent.

We also think that, under the mortgage, Preston had a right to enter and take possession of the yard, and all the property in it, for the purposes of sale. The whole business was mortgaged, and the right of entry and sale was expressly given by the mortgage; and it was certainly for the interest of Bearss that the lumber should be sold where it stood upon the yard. To have removed the whole of it to some other place would nave destroyed the business of plaintiff as effectually as to sell it in the yard, and the cost of such removal, chargeable to plaintiff, would have been an added detriment.

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Bluebook (online)
32 N.W. 912, 66 Mich. 11, 1887 Mich. LEXIS 439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bearss-v-preston-mich-1887.