Tompkins v. Batie

Lake, J. The principal question in this case was raised in the court below by an instruction to the jury, of which the following is a copy: “ If you find from the evidence that illegal interest has been taken pr contracted'for, and that the bank was not the bona fide holder thereof” (the note and mortgage), “then, to make the tender sufficient in amount, it was enough for Batie to tender the sum received by him without any interest; and in order to discharge the lien of the mortgage, such tender, if refused, need not be kept good, or the money brought into court.” , The act of tender here referred to took place long after the maturity of the note which the mortgage was given to secure, and the question is, whether the last proposition of this instruction states the law correctly. Counsel on each side of the question have argued it with consummate skill, and have fortified their respective positions with numerous authorities, so that we are relieved from the labor of extended research. — 150 — From the cases cited, it is certain that there is much conflict in the more recent decisions as to the effect of a tender upon a security, if made after what is termed the “law day” has passed, while probably there is none as to the fact that if made on that day it will release the property from the lien. At the common law, to have this effect, the tender must be made on the day the debt falls due, but need not be kept good. The case of Kortright v. Cady, 21 N. Y., 343, is one on which great reliance is placed by defendant’s counsel to sustain the charge of the eoui't. This, however, appears to have been decided by a divided court, and Denio, J., while concurring in the result, did so, as he said, on the ground that the question was so far determined by previous decisions in that state, “that it would be indiscreet to examine it in the light of reason and the analogies of the law.” But Welles, J., went further, and gave a very able dissenting opinion, wherein he reviewed the course of decisions by the eoux'ts of New York, and concluded that the better authority was that a mere tender of payment after the maturity of the debt would not release the lien of a mortgage given to secure it. However, the rule of the majority of the court in that ease is now to be regarded as the settled law of New York, as it confessedly is of Michigan. But in California, where the eonti’ary rule prevails, it was said in one case that, “ The debtor is as much in default for not paying when the debt is due, as the creditor is in default for not receiving the money afterward when offered. It would be very harsh to hold that the debt is lost — the general effect of loosing the security by a mere refusal, at a particular moment, to receive it — that refusal induced, too, as it might be, by a variety of circumstances morally excusing it, or at least, not grossly violative of any positive duty, and — 151 — productive of little or no injury to any one.” Perre v. Castro, 14 Cal., 519. See also Himmelmann v. Fitzpatrick, 50 Id., 650, and Crain v. McGoon, 86 Ill., 431. In the last named state it is held that a tender of the amount due after the time agreed upon, unless kept good, will not operate to release the lien of a mortgage given to secure it. And this, we think, is a wholesome rule. The foregoing, and most of the cases cited, relate to real estate mortgages, whereas the one now under consideration is a mortgage of chattels, which, in this state is, in its legal effect, strikingly analogous to a mortgage of real property under the common law. “ According to the strict rule of the common law, a mortgagor who failed to perform the conditions contained in the mortgage would forfeit his right to the land, or to redeem it by subsequently tendering the amount due upon the mortgage.” Broom & Hadley’s Com., Yol. 1, Am. Ed., 612, N. 288. In case of such forfeiture the mortgagor could obtain relief only in a court of equity, wherein the land mortgaged was treated as a mere pledge which the mortgagee held as security for the debt due to him. In Adams v. Nebraska City National Bank, 4 Neb., 370, it was held, “ That a chattel mortgage transfers to the mortgagee the whole legal title to the things mortgaged, subject only to be defeated by performance of the condition.” And in Tallon v. Ellison & Sons, 3 Id., 63, it was said, “The legal title passes to the mortgagee, subject to the mortgagor’s right to perform the condition, and after default the legal title is said to become absolute in the mortgagee.” But the mortgagor has a right to redeem the mortgaged property, at any time before it is sold, by paying the mortgage debt. Such being the character of the instrument, and the rights of the parties under it, there seems to be good — 152 — reason for adopting as our guide those adjudications which were made upon mortgages governed by the principles of the common law, rather than those in which the mortgage is regarded as a mere security for a debt, and the mortgagor regarded as the owner of the fee until his right of redemption is foreclosed. Accordingly, we feel constrained to hold, as was held in Crain v. McGoon, supra, that a tender after the law day must be kept good or it will be entirely unavailing as such. There is another question really back of the one we have been considering, discussed by counsel, which must not be overlooked. It is whether what is relied on for that purpose is sufficient in law to constitute a tender. It was this as disclosed by the testimony of the defendant himself from which we quote.as follows: Q. You may-state whether you ever rnade-a tender to Mr. Reynolds of any sum of money on account of those notes? A. Yes, sir. Q. How much did you tender him ? A. $500.00. That is, I showed him $500.00. Q. And told him he could have it for his claim? A. Yes, sir, it was settled with me. Q. Did he take it ? A. No, sir, he said he wouldn’t take it. Q. You may state whether you have always been ready and willing to pay him $500.00 in settlement of the notes ? A. Yes, sir, up to the time he took my property. There was some further examination which disclosed the fact that the reason of the refusal to take the sum offered was its alleged insufficiency to cover the amount claimed to be due. A tender is defined to be the offer of a sum of money in satisfaction of a debt or claim by producing and — 153 — showing the amount to .the creditor, or party claiming ■and expressing verbally a willingness to pay it. Worcester. The tender must be unconditional. Brown’s Law Dictionary, 352. “Thus, although a party who •tenders money has a right to exclude any presumption against himself, that the sum tendered is in part payment of the del>t; yet, if he add a condition that the party who receives the money shall acknowledge that mo money' is due, this will invalidate the tender.” ■Chitty on Contracts, 699, marginal. And in Wood v. Hitchcock, 20 Wend., 47, it was held that a tender of money in payment of a debt to be available must be without qualification, that is, there must not be anything raising the implication that the debtor intended to cut off or bar a claim for any amount beyond the sum tendered; and it was accordingly held that the tender of a sum in full discharge of all demands of the ■creditor was not good. In this case Cowen, J., said, ■“It was clearly a tender to be accepted as the whole, balance due, which is holden bad by all the books.” The reason of this rule is manifest, for if the tender be .of a sum, as all that is due, that being disputed, and the •creditor receives it, under these circumstances it might ■compromise his rights in seeking to recover more, whereas, if the same sum were tendered unconditionally no such effect could follow. Such being the law, let us apply it to the testimony •of the defendant, and how stands the alleged tender ? He says: “ I showed him ‡500 and told him he could have it for his claim.” That is, if the plaintiff would surrender his entire demand, he would give him the $500, ■otherwise not. This certainly was within the operation ■of the rule that a conditional offer of payment which the creditor cannot accept without barring all further claim is unavailing as a tender. Here was a dispute as to the amount actually due, and the offer was made — 154 — evidently with the view to an adjustment of the whole matter, and to cut off all further claim. And had the offer been accepted, such doubtless would have been the effect. Such being our views, the judgment must be reversed and a new trial awarded. Reversed and remanded. Cobb, J., dissents.