Grunert v. Becker

58 N.W. 608, 100 Mich. 50, 1894 Mich. LEXIS 755

• Court: Michigan Supreme Court
• Decided: April 10, 1894
• Status: Published

Opinions

McGrath, C. J.

On the 16th day of October, 1889, defendant Becker sold and conveyed to defendant Meier 160 acres of land for the sum of $3,000. Meier had no means, and Julius Grunert was to advance to. Meier certain moneys. Becker, Grunert, and Meier had an interview. Grunert agreed to advance the sum of $1,500, but insisted upon a first mortgage for the money so advanced, and Becker insisted upon a first mortgage for the balance of the purchase money. It was finally agreed that Grunert should have the first mortgage, but the parties disagree as to the conditions upon which the Grunert mortgage was to have priority. The parties repaired to the office of a justice of the peace, where the deed and mortgages were prepared and executed. The justice spoke English only. Grunert spoke and understood English, but imperfectly. Becker, although a German, spoke English fluently, and gave the instructions to the justice. The deed and both mortgages were executed in blank, and were filled out by the justice after the parties hád separated. Neither mortgage contained any reference to the question of priority. What arrangements were made with reference to recording the papers does not clearly appear; but Becker secured the record" of his mortgage first, and Grunert received his mortgage after its record, which was the first time he had seen it. Meier was already indebted to Grunert, and received but $1,400 upon the mortgage, and of this sum he paid Becker $1,100 upon the real estate, and $300 for personal property which was upon the farm. Grunert’s mortgage was for $1,500, and Becker’s for $1,900; and both were for five years, with interest at 6£ per cent., payable annually.

Meier defaulted upon the first year’s interest, and Grunert (since deceased) filed this bill to have his mortgage declared the first, and to foreclose the same. A decree pro confesso was taken against Meier. Becker answered, admitting that Grunert’s mortgage was to be first, but, although both mortgages are silent upon the subject, set up that the agreement was that Grunert should not foreclose his mortgage until the end of the five years, and that in the mean time, in case Meier should fail to pay the interest and principal of the Becker mortgage as it became due, Grunert was to pay tbe’ same, and that, at the time of the execution of the mortgages, Grunert signed the following paper:

“ This agreement, made between Henry Becker and Julius Grunert on the 16th day of October, 1889, witness■eth said Julius Grunert agrees to pay to Henry Becker if the said Meier, who gave a mortgage, fails to pay Henry Becker, the said Julius Grunert agrees to pay the said Henry Becker the balance what he owes on said farm described in mortgage.'”

Grunert insisted upon the hearing that this paper was not understood by him, and that he was. imposed upon; but we think the fact of execution, with knowledge of its contents, was fully proven, whether he understood the legal effect of the writing or not. The record utterly fails, however, to- establish the other agreement set up by Becker. Hnder this supplemental agreement, Grunert ■occupied the situation of a surety, simply. The only consideration for this agreement was the priority of his mortgage. The only advantage that such priority gave him was the right to cut off Meier upon his default. Nearly four and one-half years of the' five have now elapsed, and ■during all that time Becker has practically defended Meier’s possession. In the mean time the interest on Becker’s mortgage has accumulated so that the principal, the interest, and the costs of foreclosure approach the original consideration for the farm; and, from the testimony in this record, it is doubtful whether the farm will sell for sufficient to satisfy that claim, with the costs of sale. It would be grossly inequitable, in view of the fact that, by Becker’s conduct, complainant has been deprived of all benefit and advantage of the priority of his mortgage, to compel him now, not only to lose his own claim, but to pay Becker’s.

The proceeds of the sale of the premises, after deducting the costs of the court below and the further costs of sale, should be divided, 15-34 to complainant, and 19-34 to defendant Becker. Complainant should be released from all obligations upon the said personal agreement, and the land be thereupon discharged from both liens.

The decree will bp modified accordingly, and complainant will be entitled to the costs of this Court against defendant Becker, and the record remanded.

Long, -Grant, and Hooker, JJ., concurred with Mc-Grath, C. J.