Warner v. Connecticut Mut. Life Ins. Co., 109 U.S. 357 (1883)
U.S. Supreme CourtWarner v. Connecticut Mut. Life Ins. Co., 109 U.S. 357 (1883)
Warner v. Connecticut Mutual Life Insurance Company
Argued November 13, 1883
Decided November 26, 1883
109 U.S. 357
A husband and wife join in a mortgage of the wife's real estate to secure a debt of the husband contracted simultaneously with the execution of the mortgage. The wife dies before maturity of the debt, leaving a will devising all her estate to her husband in trust to enjoy the income during his life, with remainder to her children at his decease, but provided that said Cyrenius Beers may encumber the same by way of mortgage or trust deed or otherwise, and renew the same for the purpose of raising money to pay off any and all encumbrances now on said property, and which trust deed or mortgage so made shall be as valid as though he held an absolute estate in said property. The will appointed the husband as sole executor, and waived all security. Held that the executor was empowered by the will to extend the mortgage debt at maturity without notice to the devisees of the remainder and without affecting the mortgage security.
The husband, on the maturity of the debt secured by the mortgage, extended it by an instrument which did not refer to the will or to the power which it conferred. Held that under the circumstances, it was to be construed as an execution of the power.
Bill to foreclose a mortgage and cross-bill to have that mortgage set aside. The appellees filed the bill as plaintiffs in the court below, against the appellants and one Charles G. Beers, their brother, and against other parties to foreclose a mortgage on real estate in Chicago. The appellants filed in that suit their cross-bill, setting forth their title to the mortgaged property, alleging that the mortgage was a cloud upon it, and praying a decree for the discharge of the mortgage. The controversy arose on the following facts:
On the 24th February, 1869, one Cyrenius Beers borrowed of the insurance company, appellees, $20,000, and executed and delivered to them his bond conditioned for the payment of that sum, with interest, payable semiannually at the rate of eight percent per annum. On the same day Beers and Mary Beers, his wife, duly executed and delivered the mortgage in controversy,
to secure the payment of that debt. The title to the mortgaged estate was in the wife, and was so described in the will, which was duly admitted to probate in March, 1872, and of which the following is a copy:
"I, Mary Beers, wife of Cyrenius Beers, of Chicago, of lawful age and sound mind, in view of the uncertainty of human life, do make, publish, and declare this my last will and testament."
"First. I order all of my debts to be paid, including the expenses of my funeral and last illness."
"Second. I give and bequeath to my husband, Cyrenius Beers, all the estate, both real, personal, and mixed, of which I die seized or possessed, to be held by him in trust for the following uses, purposes, and trusts, and none other, that is to say, to receive the rents, income, and profits thereof during his life, with the remainder to my children, Mary C. Foster, wife of Orrington C. Foster, Rissa J. Beers, and Charles G. Beers, share and share alike, to them, their heirs and assigns, forever. But provided that said Cyrenius Beers may encumber the same by way of mortgage or trust deed or otherwise, and renew the same, for the purpose of raising money to pay off any and all encumbrances now on said property, and which trust deed or mortgage so made shall be as valid as though he held an absolute estate in said property."
"But provided further that the said Cyrenius Beers may, in his discretion during his life, sell and dispose of any or all the real estate of which I may die seized or possessed, as though he held an absolute estate in the same, and out of the proceeds pay any of the encumbrances upon any of the property of which I may die seized and possessed, and the remainder, over and above what may be required to pay the indebtedness upon said property, the same being now encumbered, to rein vest in such way as he may see proper, and from time to time sell and reinvest, such reinvestment to continue to be held in trust the same as the estate of which I may die possessed -- that is to say, the said Cyrenius Beers only to have the use during his life of said estate, with the right of sale and to encumber and reinvest, the remainder after his death to go to my children and their heirs forever. "
"Third. I hereby appoint said Cyrenius Beers executor of this my last will and testament, hereby waiving from him all bail and security, as I have a right to do under the statute in such cases made and provided, as such executor."
"In witness whereof I have hereunto set my hand and seal this fourteenth day of September, in the year of our Lord one thousand eight hundred and sixty-nine."
"MARY BEERS [Seal]"
"The above instrument, consisting of three pages, was, at the date thereof, declared to us by Mary Beers, the testator therein mentioned, to be her last will and testament, and she at the same time acknowledged to us, and each of us, that she had signed and sealed the same, and we thereupon, at her request, and in her presence and in the presence of each other, signed our names thereto as attesting witnesses."
"SAMUEL BEERS [SEAL]"
"GEORGE T. BEERS [SEAL]"
Cyrenius Beers, the husband, accepted the trust and duly qualified as executor and administered upon the estate, and was discharged on the 20th September, 1877.
When the debt secured by the mortgage matured on the 24th February, 1874, it was not paid, but instead thereof Beers on that day entered into a written agreement with the company in which, after reciting the execution of the bond and that it was wholly unpaid, and the execution and delivery of the mortgage "by the said Cyrenius Beers and Mary his wife" "to secure the payment thereof," it was agreed as follows:
"Now this memorandum witnesseth that the said The Connecticut Mutual Life Insurance Company, in consideration of the covenants and agreements on the part of the said Cyrenius Beers hereinafter contained, the prompt and faithful performance whereof is a condition precedent hereto, and time being the essence of this contract, doth hereby extend and postpone the time of payment of said principal sum of twenty thousand ($20,000) dollars in the condition of said bond mentioned until
the twenty-fourth day of February, which will be in the year of our Lord one thousand eight hundred and seventy-nine, interest to be paid thereon at and after the rate of nine per centum per annum, half yearly, in the same manner and at the place or places in the condition of said bond mentioned."
"And the said Cyrenius Beers, in consideration of such extension of the time of payment of said principal sum, doth hereby covenant, promise, and agree to and with the said The Connecticut Mutual Life Insurance Company, its successors and assigns, that he will well and truly pay the said The Connecticut Mutual Life Insurance Company, its successors and assigns, said principal sum of twenty thousand ($20,000) dollars, on the twenty-fourth day of February which will be in the year of our Lord one thousand eight hundred and seventy-nine, at the place in the condition of said bond mentioned, and also interest thereon at the rate of nine per centum per annum half yearly, to wit, on the twenty-fourth day of each of the months of August and February, which will be in each and every year during such extended time of payment, according to the tenor and effect of the ten (l0) coupons or due-bills signed by said Cyrenius Beers, bearing even date and given herewith, it being expressly understood and agreed by and between the parties hereto that in the event of a failure to pay either or any of said coupons at maturity, then, at the election of said The Connecticut Mutual Life Insurance Company, its successors or assigns, the whole of said principal sum of twenty thousand ($20,000) dollars in the condition of said bond mentioned shall thereupon at once become due and payable, and may be collected without notice, together with all arrearages of interest thereon, in the same manner as if said extension had never been granted."
"It is further expressly understood by and between the parties hereto that nothing herein contained shall operate to discharge or release the said Cyrenius Beers, his heirs, executors, or administrators, from their liabilities upon said bond, but it is expressly understood that this instrument is to be taken as collateral and additional security for the payment of said bond."
"It is also expressly understood and agreed by and between the parties hereto that in the event of a failure on the part of the said Cyrenius Beers, his heirs, legal representatives, and assigns, to fulfill, keep, and promptly perform, as well in spirit
as in letter, the covenants in the said mortgage contained given by said Cyrenius Beers to said company, then, at the election of said The Connecticut Mutual Life Insurance Company, its successors or assigns, the whole of said principal sum in the condition of said bond mentioned shall thereupon at once become due and payable, and may be collected without notice, together with all accrued interest thereon at said rate of nine per centum per annum, anything hereinbefore contained to the contrary notwithstanding."
Cyrenius Beers died intestate in February, 1878, leaving the mortgage debt still due and unpaid.
The appellants and Charles G. Beers, one of the defendants in the original suit, were his heirs. They were also the children and devisees of the said Mary Beers. Charles G. conveyed his interest in the property to the appellants before the date of the cross-bill.
The extension of the mortgage debt in 1874 was made without the knowledge or consent of the appellants or of the said Charles G. Beers. The contention of the appellees was that under the circumstances it operated as a discharge of the mortgage lien.
The court below decreed the foreclosure of the mortgage and sale of the mortgaged estate. From this decree the defendants below appealed.