61 Colo. 417 | Colo. | 1916
delivered the opinion of the court.
Action by the defendant in error upon, a promissory note for $1500 and interest, bearing date June 1, 1911, exe-. cuted by one Hurlbert, secured by mortgage deed upon real estate, recorded June 6, 1911. The complaint prays for foreclosure, etc., and that the defendant Marshall be barred from claiming any right to the land except the right to redeem. The decree was for the plaintiff. Marshall only brings the case here for review.
The record discloses that at' the time this note and mortgage were given there was a prior deed of trust upon the real estate in controversy, given by Mr. Hurlbert’s grantor, to secure $3,000 with interest; also that prior to the execution of the note and mortgage sued upon, Mr. Hurlbert had deposited with The International Trust Company warranty deeds for this and other lands to one John Smith, together with some personal security, accompanied by a writing signed by him and Smith in which it was pro
The plaintiff in error contends that when the deed from Hurlbert to Smith was placed of record, the existence of which Russell had notice of, that this conveyed absolute title to the property to Smith, and thereby defeated any claim which Russell had under his mortgage; that the re-conveyance from Smith to Hurlbert did not re-in vest • any title .in Hurlbert to the property, sufficient to inure to the benefit of Russell, for the reason that in taking this reconveyance and redeeming the property from the trustee’s sale, that he, Hurlbert, was a mere conduit for the transfer of the title to The American Fuel Company, who furnished Hurlbert the money with which to secure its redemption and conveyance, under an agreement that it was to be conveyed to The Fuel .Company, who, in turn, contemplated mortgaging it to the plaintiff in error, and that the deed from Hurlbert to Marshall, given to secure-this indebtedness, ac
The fact that the escrow agreement states that in the event of non-payment, etc., the instruments shall become absolute, does not change the rule. It is a familiar and undisputed proposition that’no force will be given to a stipulation in a mortgage, or in a deed intended as a mortgage, or in any instrument executed at the same time accompanying such deed, by which the mortgagor agrees that if he fails to make payment by a stated time the mortgagee shall become the absolute owner of the property. Vol. 12 Cyc. 1098; Vol. 11 Am. & Eng. Encyc. of Law, 243.
The deed when executed, being simply a mortgage for the security of a debt, could not thereafter become anything else except through the execution of a subsequent agreement, based upon a valuable consideration. Such was not done, for which reason the cases cited by the plaintiff in error are not applicable; but to the contrary not only were these instruments when executed, given as security for this debt, but they were thus treated by the parties to them, not only at the time of their execution and delivery, but thereafter. The testimony of Mr.' Smith is convincing of these facts
The fact that Mr. Hurlbert secured money from The American Fuel Company with which to redeem from the first deed of trust does not change the condition of the title, which it is conceded was absolute in him after such redemption, except for the instruments delivered to Smith, when, as stated, he redeemed from them by securing a reconveyance of the property from Smith to him, at which time Russell’s mortgage became the first lien upon the property. The fact that he agreed to sell the land to The American Fuel Company did not change these facts, and the fact that he afterwards executed a quit-claim deed to the plaintiff in error, to secure the payment to them of certain indebtedness of The American Fuel Company, likewise could not change these conditions, and the' fact that Mr. Hurlbert, who made no defense, and did not testify in the case, gave to Mr. Marshall a quit-claim deed for the land, without any guaranty of title, rather than a warranty, as security for the indebtedness of his fuel company, if evidence of anything concerning title, would' be an inference to the effect that he considered the Russell mortgage a prior lien thereon, rather than that it had been wiped out by the delivery of
The judgment is affirmed.
Affirmed.
Chief Justice Gabbert and Mr. Justice Teller concur.