EMERSON V. ATWATER.

services. They knew no one but Atwater in the business, until the day of sale, when he produced a letter from Green to them. Were the mortgages Green's, or did he hold them for Atwater? If they were his, Atwater was his agent in procuring them, and he is chargeable, through Atwater, with notice of Emerson's equities.

If the mortgages were assigned to Green, and subsequently foreclosed, and the premises bid off in his name, in pursuance of an agreement between Atwater and Green, and to vest the title in Green, to indemnify him for past and future advancements and indorsements made by him for Atwater, or Durfee & Atwater-and this, we are inclined to think, is not far from the truth-instead of proving the plea, it disproves it, by showing that Green has a mortgage interest only in the land. Nay, more, it would seem to go further, and imply something vicious in the conveyance from Emerson to Atwater.

Green must have known of the conveyance from Emerson to Atwater. Why did he not take a deed from Atwater to himself, if the deed from Emerson to Atwater was what it purported to be on its face? There must have been some very good and cogent reason, one would think, for incurring the expenses of two foreclosures, and waiting some fifteen months and more, for a title through the Rockwell and Little mortgages, when it could as well as not be had at once from Atwater. Was it to get a title back of Emerson's title to Atwater? And, if so, why? Was Emerson's title to Atwater defective? It was subject to these mortgages, and to the Eaton & Blackmar mortgage that had been foreclosed at law, and which Emerson, by an agreement with them, still had a right to redeem when he conveyed to Atwater. On paying these incumbrances, Emerson's title was good. And before the Rockwell and Little mortgages were assigned to Green, Eaton & Blackmar had been paid by Atwater, and a conveyance of their interest in the land had been taken by him in his

own name.

EMERSON . ATWATER.

Instead of a deed from Atwater, the following measures were taken to vest the title to the land in Green: The payment of the, Rockwell and Little mortgages by Atwater, and the assignment of them, at his request, to Green, and their subsequent foreclosure in Green's name, and the purchase, in his name, of the premises on the foreclosure sale. Why an assignment and foreclosure of both mortgages? Because neither covered the whole premises. The Eaton & Blackmar mortgage, that had been paid by Atwater, was given after the Rockwell and Little mortgages, and Atwater's title from Eaton & Blackmar, as well as from Emerson, was cut off by the foreclosures of the Rockwell and Little mortgages. One Jennison, it appears, had a small interest in the property. This Atwater purchased, and afterwards quit-claimed to Green. But the question still recurs, why was so much pains taken to ignore Atwater's title from Emerson, and to get a title paramount to it? We have already stated that Atwater's deed from Emerson, though absolute on its face, was intended by the parties as security for what Emerson was owing Atwater, and to pay the incumbrances on the property. Was it to get rid of this feature in Atwater's title? If so, Green, as well as Atwater, must have been aware of the true character of the conveyance from Emerson to Atwater. On no other theory can we account for the assignments of the Rockwell and Little mortgages to Green, their subsequent foreclosure, and his deraignment of title through them.

It may be said it was done to perfect Emerson's title. The bill states Emerson consented to it on such a suggestion from Atwater. Was not Emerson's title, with the exception of the incumbrances, good? Nothing appears to the contrary. If not, how was it to bettered by the foreclosure of these mortgages? They were given by Emerson and one Eldridge, when they owned the premises together, and Eldridge had conveyed his interest to Emerson, or to

EMERSON v. ATWATER.

A pur

Atwater in trust for him, on the 6th June, 1849. chaser under a foreclosure of these mortgages could get no better title than the mortgagors had.

He

The objection to Atwater's testimony is sustained. was examined as a witness for his co-defendant Green. His examination, instead of being confined to matters in which he was not interested, in proof of the plea, was extended to the whole case. This was wrong. It should have been restricted to the truth of the plea, which was the only issue between complainant and the defendant Green. So much of his testimony as relates to the plea, tends to show Green holds the property for advances to, and liabilities for, Atwater, or Durfee & Atwater. The plea is of an absolute, and not a mortgage interest in the land, and is not sustained by his testimony. If it was of a character to be proved by his testimony, he would most clearly be interested, for it would take the property from Emerson to pay witness' own debts. As his evidence, without reference to the plea, shows his interest in the matter to which he was examined, it must be rejected, for it is the interest of the party in the subject matter to which he is examined, and not the effect his evidence may have in the final determination of the issue, that renders him incompetent.

The Circuit Judge made a final decree without any reference to a commissioner, to take and state an account between the parties, or to inquire and report what part of the property had been sold, and what remained unsold, &c. We do not see how a final decree could be entered, understandingly, without such a reference, and a report thereon. For this cause the decree must be reversed, and an interlocutory decree be entered, declaring the deed from Emerson to Atwater of the 27th May, 1853, though absolute on its face, was intended by the parties to be, and is, in its nature, a mortgage, with power to Atwater to sell the whole or a part of the premises, to pay off the incumbrances and the debt Emerson was owing Atwater:

EMERSON v. Ꭺ Ꭲ Ꮃ Ꭺ Ꭲ Ꭼ Ꭱ .

That Green is not a bona fide purchaser of the premises, and that he holds them subject to Emerson's equities, and must account for all sales and acts done by him touching the property, to the same extent Atwater would have to account had they been done by him.

And there must be a reference to a commissioner to take and state an account between complainant, on one side, and Atwater and Green on the other, charging complainant with what he was owing Atwater on the 27th May, 1853, with all advances, if any, since then made to complainant, and debts incurred by him to Atwater or Green, if any; with the several incumbrances on the property at the time it was conveyed, and the judgment of the Michigan Insurance Co. assigned to Green - said judgment to be discharged by Green; with the rent of the house and lot on the six acres occupied by complainant; and with such other just and equitable demands as should be allowed to Atwater and Green, or either of them: And crediting complainant with the sale of the old mill and six acres of land, at $16,000; with the twenty-one water lots at $250 each, and all moneys received on sales or contracts of sale of any part of the property; with all payments, if any, made to Atwater, and debts incurred by Atwater to complainant since the said 27th May, 1853, and with such other demands, if any, as should in justice and equity be credited complainant.

At first we were in some doubt with which of the considerations, stated in the two bills of sale of 27th May, 1853, and 17th June following, complainant should be credited. They are both for the same property. The con sideration of the first is $5,000, of the last, $7,560.95. As the case stands, we think he should be credited with the $7,560.95, for the following reasons: The first bill of sale bears date on the day the real estate was conveyed, but there is no evidence the two instruments were executed at the same time, or are parts of one and the same

EMERSON . ATWATER.

transaction, while there are reasons for believing them dif ferent transactions. It was witnessed by Watrous, at Flint, and not at Saginaw. The bill of complaint makes no mention of any personal property sold to defendant when the real estate was conveyed. Neither does the answer of Atwater. It states Emerson was indebted to him in the sum of $30,000, and that the real estate was conveyed to him in consideration of that indebtedness. If the real estate paid the whole debt, how were the $5,000 paid Emerson for the personal property? It would seem, from Ashman's testimony, that Atwater, at the time the real estate was conveyed to him, contemplated an absolute purchase of the mill by himself and partner, Durfee, and that he stated in that event he would take all the personal property. Soon after his return to Buffalo he sent Dorr to take charge of the mill and personal property, in the name of Durfee & Atwater, and wrote and sent by Dorr the two letters we have already referred to. In his individual letter to Emerson he speaks of an inventory of the personal property. It is true, he says nothing of an appraisment or bill of sale to Durfee & Atwater. Dorr, however, says he had both verbal and written instructions from Atwater, in relation to the personal property, before he left Buffalo, and that he was to "take an inventory and delivery of the property, in due form, with prices all fixed and annexed." An inventory was taken with the prices fixed, and a bill of sale of it made out and executed by Emerson to Durfee & Atwater. It in no way affects the transaction, as it respects Emerson, that Durfee afterwards concluded not to be interested with Atwater in the purchase of the mill and personal property, as they were taken possession of by Dorr, and the business for a long time was carried on in the name of Durfee & Atwater; the latter in the end assuming the sole ownership. For these reasons we think complainant should be credited with the $7,560.95.

The commissioner must also inquire and report what part