Fowler v. Sapre , 243 Mich. 266 ( 1928 )

The bill herein was filed to foreclose a mortgage covering about 6,000 acres of land in Montmorency county. The mortgagors made no defense. The mortgage contained the following provision:

"Mortgagors shall have the privilege of obtaining a release of this mortgage, or to any of the parcels of land herein described containing forty (40) acres, or any multiple thereof, by paying two dollars and fifty cents ($2.50) per acre upon said tract to be released, which sum so paid is to be applied as partial payments upon the note, or notes above described first maturing after such payment to the said parties of the second part."

The mortgage described 93 parcels of land. Some of the land mortgaged consisted of lots according to government survey and fractional 40's located on lakes and streams.

John G. Krauth intervened, set up his purchase, subject to the mortgage, of five parcels of the land containing respectively 45.54 acres, 38.05 acres, 38.05 acres, 31.30 acres, and 31.31 acres of land, claimed tender of the sum of $2.50 per acre, offered to pay interest and taxes, and prayed for release of the parcels. At the time of his purchase Mr. Krauth was aware of the provision in the mortgage. In the circuit the parcels were released from the mortgage and decree of foreclosure granted against the remainder of the lands. Plaintiffs appealed, and claim the privilege of release was personal to the mortgagors and did not pass to intervener; that the privilege in any event did not extend to lots or fractions of more or less than 40 acres, and claimed the parcels released by the decree have greatly increased in value since the giving of the mortgage, because of location on waters and availability for resort purposes.

If the parcels selected by Krauth fall within the covenant it is of no moment that he chose the best in demanding releases. As said in Lane v. Allen, 162 Ill. 426 (44 N.E. 831):

"It would be singular if he did not make such a selection."

While there is authority holding that the covenant to release parts of land is personal to the mortgagor (Rugg v. Record,255 Mass. 247 [151 N.E. 95]), the weight of authority is that the right to invoke the covenant is in the mortgagors, their grantees and assigns (Gammel v. Goode, 103 Iowa, 301 [72 N.W. 531]). Default in payment of the mortgage did not bar right of the mortgagors or of grantees to have partial release in accordance with the mentioned covenant. Gammel v. Goode, supra. Without words of limitation, the right to release of parcels of land was not personal to the mortgagors but a covenant running with the land. Intervener, grantee subject to the mortgage, acquired rights, inclusive of the right to have release in accordance with the very terms of the mortgage. The provision in the mortgage limited right of release to parcels containing 40 acres of land or multiples thereof, and most of the descriptions in the mortgage are of 40-acre parcels or multiples thereof, and none of the selected parcels, with the exception of one, consists of 40 acres, and that parcel exceeds 40 acres.

Counsel for intervener contend that, inasmuch as all the descriptions in the mortgage are in terms of quarter sections, lots, half sections and sections, it was obviously the intention to provide for the release of any parcel so described even if a fractional 40. It is well understood that quarter sections, except bordering the west and north lines of a township, are divided into quarters by lines drawn north and south and east and west equi-distant from the corners, and counsel claim such a "subdivision is the smallest 'legal' subdivision — or smallest tract of this character recognized by the statutes of the United States," and insist "it is obvious that it was used in this sense by the mortgagors in the instant case."

We have given consideration to the fact that quarter sections are divisible into quarters, and, except on the west and north town lines and on rivers and lakes, each quarter of a quarter is usually allotted an area of 40 acres, and, if short or plus of such quantity for any reason, is designated as fractional or as a lot, but we cannot employ such knowledge in construing the right to release under the covenant in the mortgage.

The contention of intervener would be persuasive had the privilege of release specified "any of the parcels of land herein described," and omitted the express limitation, "containing 40 acres or any multiple thereof." We cannot ignore the designation adopted by the parties. The mortgage covered many parcels containing 40 acres and multiples thereof, but intervener does not ask for the release of any such descriptions. The covenant applies, by its express terms, to parcels "containing 40 acres, or any multiple thereof." Four of the parcels released by the decree in the circuit do not contain 40 acres each, and the other contains 40 acres and a fraction over of 5.54 acres. None of the parcels fall within the designation in the covenant.

To sustain right to release of the parcels mentioned we would have to change the wording of the covenant in the mortgage, for the language thereof is too plain to admit of accomplishment of plaintiff's contention by way of interpretation or construction. At first blush it would seem highly technical to say the right to release applies to 40 acres and multiples thereof and not to fractional 40's, surveyed as such or as lots of more or less than 40 acres, but we must hold that the covenant governs, and, as plaintiff plants right to release upon the covenant, it is not technical to confine his rights to the terms of the covenant.

In Hall v. Home Building Co., 37 Atl. (N. J. Eq.) 1019, a mortgage gave the mortgagor the right to have lots containing 2,000 square feet of land released upon payment of $90, and in foreclosure the mortgagor contended that:

"By the interpretation of the release clause in the mortgage itself, they have a right to releases of their several tracts from the lien of the mortgage upon payments to the mortgagor at the rate of $90 for each 2,000 feet released, whether they contained exactly 2,000 square feet or fractional parts thereof."

To this the vice-chancellor said:

"I cannot interpret the clause as expressed in the mortgage to give a right to the mortgagor and its grantees to secure the release of a smaller portion than 2,000 feet, or any fractional part of 2,000 feet, without violence to the expressed words and manifest meaning of the contract, by thrusting into the agreement (which is perfectly clear in itself) a term not assented to by the mortgagee."

(We do not find this opinion in the New Jersey reports.)

We hold that intervener, as purchaser subject to the mortgage, succeeded to all the right, title, and equities of the mortgagors, inclusive of the right to have release of portions of the mortgaged property on compliance with the covenant in the mortgage; that such right survived default in payment of the mortgage; that under the covenant in the mortgage the right to release was limited to parcels of land containing 40 acres or any multiple thereof and did not extend to the parcels of land selected.

This does not mean that a resurvey would be necessary in order to fix upon parcels having exactly 40 acres of land, for such may be selected from descriptions in the mortgage, but does mean that parcels confessedly containing less than 40 acres of land or with a considerable fraction in excess of 40 acres do not fall within the terms of the covenant.

The portion of the decree in the circuit granting intervener releases should be reversed. Plaintiffs should recover costs of this court against intervener, and a decree should be entered in this court in accord with this opinion.

FELLOWS and McDONALD, JJ., concurred with WIEST, J.