136 Ky. 197 | Ky. Ct. App. | 1909
Opinion op the Court,
— Affirming.
This action was instituted by the appellee, Mrs. Rebecca A. Rowland, to have a deed, absolute in its terms, by which she conveyed a tract of land in Wolf county, Ky., to her brother; S. N. Hobbs, declared to be a mortgage. The petition alleges, that S. N. Hobbs under a fraudulent pretense of aiding his sister, financially, obtained from her an absolute deed to a tract of 40 acres of land which she owned, and which was situated in Wolf county, Kentucky; that the deed was made absolute in its terms, and recited a cash payment of $300 in order that appellant might be able to borrow the money necessary to assist appellee on the faith of his being the real owner of the land;
We do not think it necessary to examine the facts as detailed by the evidence with minute particularity. It is sufficient to say that, in our opinion, if parol evidence is competent to show that a deed absolute in its terms was realty intended .by the parties to be a mortgage,'appellee’s contention was amply sustained by the testimony adduced upon the trial, and the court was fully warranted in leaching the conclusion on the facts that was arrived at. This brings us to the question as to the competency of parol testimony to show the deed was intended to be a mortgage. After examining the authorities we have reached the conclusion that parol testimony is admissible to show that a deed -absolute in its terms was intended’ by the parties as a mortgage to secure an indebtedness.
Ire the case of Oberdorfer v. White, 78 S. W. 436, 25 Ky. Law Rep. 1629, on-'this subject we said: “A deed absolute on its face may be shown to have been executed’ as a mortgage. The -rule- on this subject-is thus well stated in-3 Pomeroy’s Equity, Section 1196: ‘Any conveyance of land absolute on its face, without anything-in its terms to indicate that it is otherwise than an'absolute conveyance, and without any accompanying written defeasance, contract, of purchase, or other agreement, may-in equity, by means of extrin
In Seiler v. Northern Bank of Kentucky, 86 Ky. 128, 5. S. W. 536, 9 Ky. Law Rep. 497, the rule under discussion is thus stated: . “The doctrine is well settled that a conveyance absolute in form may be shown by parol evidence -to be but an equitable mortgage. In fact, courts lean to this- conclusion in doubtful cases.”
In the case of Russell v. Southard et al., 12 How. 139, 13 L. Ed. 927, the Supreme Court of the United States, in upholding the doctrine that a deed absolute on its face may be shown by parol evidence to-have been intended as a mortgage, said: “It is insisted, on behalf of defendants, that this question is to be determined by inspection of the written papers alone;
In the case of Morgan’s Assignees v. Shinn, 15 Wall. 105, 21 L. Ed. 87, it is said: "It is not questioned that an instrument absolute in its terms may be shown by parol evidence to be only a mortgage.” To the same effect are Jackson v. Lawrence, 117 U. S. 680, 6 Sup. Ct. 915, 29 L. Ed. 1024; Brick v. Brick, 98 U. S. 514, 25 L. Ed. 256; Peugh v. Davis, 96 U. S. 332, 24 L. Ed. 775.
In Bispham’s-Principles of Equity, Section 155, the rule is thus stated: "In favor of the equity of redemption, a court of chancery will allow a deed, abso
Jones, in his work on Mortgages (volume 1, p. 226), says: “The statute of frauds was at first supposed to stand in the way of allowing a grant, absolute on its face, to be established-by parol evidence as a mortgage. But the courts, after a struggle and much hesitation, established the doctrine, as otherwise it was found that the statute designed to prevent frauds and perjuries would become in this way an effectual instrument of fraud or injustice. Although the admission of such evidence is placed upon different grounds by the different courts, there is a substantial unanimity in holding that, when once the fact is established that the grant was intended as a mortgage, the conveyance will be so regarded. The statute of frauds does not interpose any insuperable obstacle to granting relief in such a case, because re
In 27 Cyc. 1020, on the subject in hand it it said: “Unless it is otherwise provided by statute, as a general rule parol evidence is admissible to prove that a deed, absolute-and unconditional in its terms,-was understood and intended by the parties to operate as a mortgage only.”-
In- the note to Thornbrough v. Baker, 2 White & Tudor’s Leading Cases in Equity, pp. 1987, 1988, the principal above announced is approved and a large number of cases collated which sustain it.
There is no doubt that, by a vast preponderance of authority, a deed, absolute ■ upon its face, may be shown to be a mortgage -by parol testimony. As is stated in many of the cases, and in text-books, this principle has been advanced by slow degrees and.halting steps. In some of the earlier cases it was said to he necessary to allege that the right .of redemption was omitted by fraud or- mistake. But this position was found to unduly > shackle a principle necessary to be maintained, that fraud might not prevail or confidence deceived and betrayed. It was found that no good could come of holding that, because it was so nominated in the letter of the bond, the real contract between the parties could not be shown. It was apparent that to so hold would be to make fraud successful, and therefore the courts arrived at the conclusion that they would look behind the mere words of the contract, and see what the real agreement between the parties was, and enforce that. This position does not overthrow or militate against the statutes against frauds and perjuries. It does not
Judgment affirmed.