Lynch v. Ryan

| Wis. | Jun 20, 1907

Lead Opinion

The following’ opinion was filed April 30, 1907:

Wietslow, J.

The appellant makes a number of minor contentions, which we find it unnecessary to consider in consequence of the conclusion which we have reached upon the merits .of the case.

After careful consideration of the evidence we are unable to agree with the conclusion that the plaintiff’s equity of redemption in the lands in question was extinguished by the deed from Slattery to the defendant Ryan, and we shall briefly state the reasons for this conclusion. Where the relation of mortgagor and mortgagee of real estate has been once established between two parties, and it is claimed that by a subsequent deed of the premises by the mortgagor to the mortgagee the equity of redemption has been extinguished and the mortgagee has become the absolute owner of the premises, it must be clearly shown that the conveyance or release was voluntary on the part of the mortgagor, was based on an adequate consideration, was untainted by fraud, and that no advantage was taken of the debtor’s necessities to drive a hard bargain. Such transactions will be closely scrutinized, and if the proof be clear and satisfactory that the requirements above named have been observed the transaction will be sustained, otherwise not. In doubtful cases the courts incline to hold that the mortgage relation still exists. These propositions are very well established. Rockwell v. Humphrey, 57 Wis. 410" court="Wis." date_filed="1883-04-04" href="https://app.midpage.ai/document/rockwell-v-humphrey-6604075?utm_source=webapp" opinion_id="6604075">57 Wis. 410, 15 N. W. 394; Kunert v. Strong, 103 Wis. 70" court="Wis." date_filed="1899-04-25" href="https://app.midpage.ai/document/kunert-v-strong-8186275?utm_source=webapp" opinion_id="8186275">103 Wis. 70, 79 N. W. 32. It is manifest that, where no part of the debt is discharged at the time of the conveyance or release, the change in the relationship' of the parties is one in name only and not in substance. A mortgagor cannot gratuitously release his right to redeem or bar himself from exercising it by any agreement, whether made contemporaneously with the mortgage or subsequently thereto. 2 Jones, Mortg. (5th ed.) §§ 1038 — 1046.

In the present case the court found that the consideration for tlie transfer by Slattery to J oseph A. Byan. was the assumption by Byan of the prior mortgages on the lands and the discharge of Joseph A. Byan’s claim against Lynch for payment of the judgment on the administration bond. We have searched the evidence in vain to find any basis for these findings. Byan did not assume the payment of the prior mortgages by any stipulation in the deed, nor do we find any evidence of-any agreement so to do either oral or written outside of the deed. There Was no discharge of the indebtedness from Lynch to Byan made nor any delivery of the bond. Doubtless a formal discharge would not be necessary, but it must at least appear that the parties agreed that the debt should .be considered paid, and there is no evidence of such ah agreement or even of any conversation concerning the ■matter. All the'evidence tends strongly to the conclusion that the idea was simply to put the title into Byarís name, in order that a good deed might be made to a purchaser at any time without the necessity of a foreclosure. If there were any doubt about this as a conclusion of fact from the acts of the parties, it would seem to be removed by a very significant clause in the written agreement which J oseph A. Byan gave to E. H.- Ryan at the time of the execution of the deed giving E. H. Ryan the exclusive right of sale of the lauds until March 1, 1899. This clause is the final one in the agreement and reads,as follows:

“On the first day of March, 1899, this appointment of Edward H. Ryan as agent of Joseph A. Byan to sell the lands herein described, and all rights, privileges, and authority hereby conferred, shall cease and terminate and become null and void, and said Edward H. Ryan hereby agrees to surrender this evidence of authority to said Joseph A. Ryan, who upon said day Iasi named shall become the owner thereof

The final words of this clause expressly negative the idea that the deed itself transferred or was intended to transfer the absolute title. They are only consistent with the idea that the real ownership was still to remain in Lynch (or in Slattery for the benefit of Lynch) nntil the 1st of March, 1899. In other words, they recognize in no uncertain terms the continued existence of the mortgage relation. Many other facts in evidence reinforce this conclusion. In view of the requirement of law that the release of the equity of redemption must he clearly proven to have been voluntarily made without fraud or overreaching and must he based on an adequate consideration, we are forced to the conclusion that the proof in this case was insufficient to justify the finding made. The mortgage relation was not extinguished by the deed from Slattery to Joseph A. By an. The plaintiff was entitled to a decree adjudging said deed to be a. mortgage, that he has the right to redeem therefrom, and that an accounting must be had before the court or a referee, and for this purpose all necessary additional evidence may be taken.

By the Court. — Judgment reversed, and action remanded for further proceedings and final judgment in accordance with this opinion.

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Rehearing

The following opinion was filed June 20, 1907:

Winslow, J.

Upon a motion for rehearing made by respondents a long and vehement brief is presented, in which the former opinion in this case is vigorously attacked. In the course of this brief it is said that one of the respondents’ contentions is disposed of “cavalierly;” that a certain legal proposition in the opinion “almost defies commentthat “such a decision violates every instinct of justice, disregards the fundamental maxims of equity, rewards conduct which the law abominates and abhors, and from which all moral sense recoilsand the brief further asks with regard to one of the conclusions stated in this opinion: “Is it not a mere quibble — a juggling of words?”

This language is certainly disrespectful to the court, and the brief might well he stricken from the files under Supreme Court Rule 50. After due deliberation, however, we have concluded not to proceed to this extreme, feeling sure that counsel will, on reflection, recognize the impropriety of their remarks and refrain from such outbreaks in the future.

This court endeavors to approach and decide every motion for rehearing without pride of opinion, but with the single desire to ascertain whether it has erred in its judgment, and it will cheerfully retrace its steps if convinced of error. To this end it welcomes free discussion and invites honest and fearless criticism, but when discussion and criticism give place to vituperation, counsel abuse their privilege. Counsel in the present case, deeply impressed with the belief that injustice has been done by the decision, seem to have forgotten for the moment that measure of true courtesy which is always due from counsel to a court which is honestly and laboriously seeking to administer justice and justice alone. This court makes no claim to infallibility, but it does claim to make every effort in its power to ascertain the law and apply it to the case in hand; and the writer hereof claims, both on his own behalf and on behalf of the court, entire freedom from the charge of quibbling or juggling with words. Counsel who make such charges can have no just appreciation pf the labors of this court. If they had they would know that their words are neither fitting nor just. A court which is striving simply to do its duty neéds no flagellation of this nature. The lash is for the shirking horse, not for the willing one which is bending its neck and straining every'muscle to move the load.

Turning to the legal propositions urged in the brief we find the most important one to be that the court failed to consider the effect of the voluntary deed from Lynch to Slattery. The argument is that Lynch’s deed to Slattery conveyed the absolute title, and that Lynch ceased to have any interest in the land or any right to enforce any trust therein; that when Slattery conveyed to Ryan he transferred to him such absolute title; and hence that Lynch has no remedy of any nature against Ryan any more than he had against Slattery. It seems that a brief consideration of the situation will disclose the fallacy in the argument. It is doubtless' true that Lynch could not have compelled Slattery to recon-vey the land to him nor to convey it to any one else. The deed was absolute in form, and Slattery could do with the land as he chose, unless the deed was attacked and set aside by Lynch's creditors. He had, however, received the title upon a parol trust arrangement by which he was to hold the title for Lynch's benefit and subject to his order. This trust was incapable of enforcement, but if Slattery voluntarily executed. it the beneficiary (i. e. the plaintiff) would be placed in the same position as though the trust had been fully expressed in writing. Main v. Bosworth, 77 Wis. 660" court="Wis." date_filed="1890-11-05" href="https://app.midpage.ai/document/main-v-bosworth-8183490?utm_source=webapp" opinion_id="8183490">77 Wis. 660, 46 N. W. 1043; Karr v. Washburn, 56 Wis. 303, 14 N. W. 189. Now, if Lynch had conveyed the land to Slattery by deed stating that the title was conveyed simply in trust to mortgage or convey the same to Ryan as security for Lynch's debt to Ryan, there can be no doubt that up to the time of the execution of the trust Lynch would have retained the beneficial equitable title and Slattery would have held simply the legal title charged with the execution of the trust. When he had executed the trust Slattery would clearly havé divested himself of his trust estate, and Ryan would have become the mortgagee of the land and Lynch the mortgagor. Slattery would simply have served as the conduit through which the mortgage interest passed from Lynch to Ryan. The voluntary performance of the parol trust puts the parties in the same position under the authorities cited as though the trust had been expressed in writing, and we therefore find no error in the previous opinion in this regard.

We have examined carefully the other contentions made in the brief, but we do not find it necessary to discuss them at length. The principles laid down in the opinion are in onr judgment in full accordance with the previous decisions of this court and with the general current of decisions elsewhere.

By the Gourt. — Motion overruled, with $25 costs.