Fargo v. Lovell

By the Ooart, Sutherland, J. The bill is filed in this case to redeem real estate conveyed by deed, absolute in form, but in fact intended as security, after a possession by the mortgagee for twenty-seven years subsequent to the maturity of the mortgage debt.— Hence it is necessary for the complainant to show by bis bill such facts as will sustain that conveyance as a still substituting security subject to redemption. Reynolds vs. Green, 10 Mich., 355. They must be facts that bring the case within the statuotory exceptions [20] preventing the bar, or rebut the. presumption arising from the lapse of’ time. Campau vs. Chene, 1 Mich., 400. The bill attempts to avoid the bar that would arise from the lapse of time and the defendant’s possession, by alleging that the defendant fraudulently conveyed the property in apparent fee simple to Michael Lovell, in 1842, and that such title was retained by him until 1840; that complainant was not informed of. the re-conveyance for some time afterwards, and was soon thereafter under disability from The bill does not directly allege .that the defendant’s dock will be ill health, which continued for several years. It will doubtless be a prominent question onr the final h,earing whether these facts if proved, explain and excuse the delay, and preserve the right to redeem. I forbear, on this motion, to express any opinion upon it. The defendant, by his answer, alleges a parol extinguishment of the equity of redemption over twenty years before the filing of the bill, by the agreement of the parties. This matter in avoidance is set forth .circumstantially in- the answer, and is. not controverted by any contrary showing. The defendant alleges that the complainant proposed in 1841, to relinquish the right to redeem, the premises in question if other property conveyed to defendant to secure the same debt should be re-conveyed, and the notes for the un'paid part of that debt surrendered; that defendant immediately made the conveyance, and in 1848, after regaining possession of one of these notes that had been pledged to a third person,he returned them to the complainant on the express understanding that-such surrender and caneelment of the notes should be full satisfaction of the equity of redemption. The complainant became a bankrupt between making his proposition and the surrender of the notes, and had the equity of redemption not been acquired by him afterwards, his acceptance of the notes might have been inoperative to extinguish the right now claimed; but since he now represents that right, equity may undoubtedly give effect to the agreement in aid of the defendant’s long possession as fully as though he had owned it without any interruption. The only-plausible objection that can be urged to this defence, on this motion, is that it is matter in avoidance. Though it has sometimes been held that an injunction will not [21] be dissolved upon an answer alleging such a defence, notwithstanding it is sufficient if true in point of fact, it not being a responsvie disclosure to a bill asking discovery, and because the practice was supposed not to allow affidavits to be read controverting the facts on which such defence is based, yet I think such is not the modern practice. .The complainant may reply on this motion, by affidavit, to the defence, by way of avoidance, either traversing it or avoiding it by new matter, and in the absence of any such showing to the contrary, an injunction may be dissolved in the discretion of the Court, on such a defence being set up. See Florence vs. vs Bates, 2 Code R. 110; Opinion by Mason, J. cited at length in 1 Wat., Eden on Inj. p. 138 and note 1. A defendant ought not to be in a worse position for complainant not having anticipated and negatived such defence in his bill. The injunction is not important to the complainant in respect to the real estate remaining unsold, for a notice of lis pendens will subject all purchasers, pendente lite, to the final decree. And should the complainant be decreed to be entitled to redeem and have the proceeds of sale which defendant has made, paid over to him, after the satisfaction of the mortgage debt, there is no reason suggested in the bill to doubt the ability of the defendant to respond to such a decree. The injunction must be dissolved.