28 Ind. App. 548 | Ind. Ct. App. | 1902
Appellee sued appellant and others to recover the difference between the value of certain real estate and the amount of a mortgage lien thereon, which real estate she conveyed to appellant, but which deed of conveyance she avers was a mortgage. The complaint avers that on July 2, 1896, she executed to appellant a mortgage on certain real estate to secure the payment of $930, which amount she had borrowed from it; that by the terms of said mortgage it was to be paid in weekly payments running-through an indefinite number of years; that if such weekly payments should be suspended for three months the entire sum so secured should become due, and the mortgage might be foreclosed; that on September 20, 1897, appellee was, by appellant, through its officers, induced to convey said real estate to it by a deed of conveyance which was absolute on its face, but in fact only intended further to secure said mortgage; that at the time of said conveyance appellee was not indebted to said association in any sum except as shown by said mortgage; that she was a widow, having had no experience in business, and had no one to advise her; that the secretary of appellant association urged and requested appellee to execute said deed; that though said deed
The facts specially found are as follows: That on July 2, 1896, appellee executed to appellant a mortgage on certain real estate to secure the payment of $930 which she had borrowed of it; that said mortgage provided that she should pay to appellant each week, in dues, premiums, and interest, the sum of sixty-five cents on each share of stock owned by her in said association, together with an assessment of five cents per share for expenses, payable quarterly, and all other assessments and fines which might be assessed against said shares of stock; that the mortgage provided that upon failure to pay said dues, etc., for thirteen weeks,, the mortgage should be deemed forfeited, and might be at once foreclosed; that for a period of fifty-seven weeks prior to September 20, 1897, appellee failed to pay said dues, etc.; that said mortgage was duly recorded; that on September 20, 1897, at the request of .appellant, appellee executed it a deed, absolute on its face, to said real estate, upon a parol agreement that if she would execute said deed it should not go of record until the end of forty-five days, and that if she
To entitle appellee to recover, under the averments of her complaint, two material and important facts must appear: (1) That the instrument executed by her on September 20, 1897, to appellant was> in fact, a mortgage; and (2), that by reason of the conveyance by appellant to Grubbs, and the subsequent mesne conveyances, she has been deprived of her right to redeem. To have lost her right to redeem, it was essential that the court should fend
The deed to Wright in trust did not convey to him any title, for he was not a bona ficle innocent purchaser for value. He took the conveyance for the express and sole purpose of reconveying the property to Grubbs and wife as tenants by ■entireties. He was a mere trustee. Under §3403, Burns 1901, no title vested in him. He had no right of possession and no control over the real estate except to reconvey the same to Grubbs and -wife. In such case the law puts the legal title at once in the beneficiary. Myers v. Jackson, 135 Ind. 136-142. It follows from this that Grubbs and wife, the present holders .of the paper title, stand in the relation of assignees of appellant’s interest in the real estate, and hence appellee’s rights have not been changed or affected. Devlin on Deeds, §1141, says: “Where a purchaser has knowledge or notice of the true state of the title, his deed is only an assignment of the grantee’s interest in the property.” In Jones on Mortgages, (4th ed.) §340, it is said: “If a purchaser take a conveyance from the grantee, with a knowledge that the grantor claims an interest in the property, he takes it charged with the same equities with which it was charged in the hands of the mortgagee.” French v. Burns, 35 Conn. 359.
The right of redemption is cut off by a conveyance from the grantee to a bona fide purchaser for value, and without notice, and such bona fide purchaser holds the land free from the equity. Brophy Min. Co. v. Brophy, etc., Co., 15 Nev.
But the right to redeem still continues against a purchaser from the grantee with notice. Graham v. Graham, 55 Ind. 23. If the -instrument, though a deed absolute on. its face, is shown to be a mortgage, it will be treated as a mortgage as against all those deriving title from or under the original trustee who are not bona jide purchasers-for value and without notice. Kitts v. Willson, 130 Ind. 492, at p. 499, and authorities there cited. In such case the grantee may maintain an 'action for the foreclosure of the grantor’s equity of redemption, and the grantor m-ay maintain an action to redeem and to compel a reconveyance upon his payment of the debt secured. Pomeroy’s Eq. Jur. §1196, and authorities cited. In the case of Graham v. Graham, supra, it was said: “If the conveyance from John J. to Plianuel Graham was intended as a mortgage, it would seem that nothing whatever passed to the plaintiff by the deed from Phanuel to her, she having notice of the facts, and the debt not having been assigned to her.”
Under the facts found, and upon the authorities cited, Grubbs and wife took the paper title to the real estate in question charged with any equity appellee had in it, for théy stand in the place of the appellant, and acquired no greater rights than it possessed. Appellee has not been deprived of her right to redeem by the conveyances which placed the paper title in them.
It is urged by appellant that the transaction between it and appellee by which she conveyed by deed, absolute upon its face, the real estate to it, constituted a conditional sale. This position does not find support in the authorities. To constitute the conveyance a conditional sale, it must appear that the debt owing to appellant from appellee was thereby extinguished. The special finding of facts shows that the debt was not extinguished, for appellee was given the right to pay it and have reconveyed to her -the land.
Under the facts in this case there is no doubt but what the instrument executed by appellee to appellant, September 20, 1897, must be regarded as a mortgage. This being true, and the title not having passed to innocent purchasers, for value, without notice, but to the present holders of the paper title, with notice, appellee has not been deprived of any right she had, under the conveyance, as against appellant. It would seem that she has mistaken her remedy.
Judgment reversed, and.the court below is directed to restate its conclusions of law in harmony with this opinion and render judgment against the appellee.