Matthews v. Porter

16 Fla. 466 | Fla. | 1878

Me. Justice Westcott

delivered the opinion of the court.

On the 25th day of March, A. D. 1869, articles of agreement were mutually signed by the' parties to this controversy, as follows:

“Articles of agreement made the 25th day of March, in the year eighteen hundred and sixty-nine, between William F. Porter, of Brighton, Massachusetts, of the first part, and John l). Matthews, of Marion county, Florida, of the second part: whereas, the party of the first part is negotiating for the purchase from one C. 0. Byrne of the following lands-, viz: Lots numbers one, two, three, four, six and seven, in section-twenty-two of township twelve south, of range twenty-two east, containing one hundred and ninety-eight 45-100 acres; also lots numbered one, two, three, four, five and six) in section twenty-one of township twelve south, of range twenty-two east, containing two hundred and eighty-seven 72-100 acres—all in Marion county, Florida. Now, if the said negotiation should be successful, and the party of the first part should effect the purchase of lands aforesaid, then and in that case only these parties contract and agree each with the other as follows, to-wit:

“ The party of the first part covenants and agrees to execute and deliver unto the party of the second part, his heirs, executors, administrators or assigns, (at any time, on demand, within twelve months from the delivery to the party of the first part, or his agent, of the deed for said land by said Byrne,) a good and^perfect conveyance in fee simple for the said lands, free and discharged from all claims for dower on the part of the wife of the party of the first part; provided and upon condition nevertheless, that the party of the second part, his executors, administrators or assigns, pay to the party of the first part, his executors, administrators or assigns, for the said lands, within the said twelve months, the sum of two thousand five hundred dollars, lawful money of the United States.

“ It is further agreed between these parties, that if the party of the second part should fail to make said payment within the said twelve months, that then and in that case the time tor such payment and the operation of this agreement shall be further extended, from year to year, for a period not exceeding two years, on condition that the party of the second part shall, before such extension be-made, pay to the party of the first part five hundred dollars for the *rent of said lands for the first year, after the expiration of the said twelve months, and at the end of that year the further sum of five hundred (500) dollars for the rent of the ■lands for the second year.

“ It is further agreed that the party of the second part shall, during the continuance and operation of this agreement, have the light to dig- up and remove from said land such wild orange trees and shrubs as he pleases, on the condition that he shall leave at reasonable distance for an .orange grove one hundred orange trees on each acre that .he removes trees from, and shall bud with sweet orange buds the said trees, and care for and cultivate them.

“ It is further agreed that the party of the first part shall .have the right at all times, within three years from the time this agreement takes effect and commences to operate, to remove for his own use, but not for sale, twenty thousand wild orange trees or shrubs from said land, provided he ■leaves standing at distance apart, suitable for an orange grove, one hundred trees on each acre from which he removes trees; and, provided further, that he shall pay to the .party of the second part twenty-five dollars for such trees in ease the party of the second part perfect the purchase of .said land.”

The other portion of the instrument is merely formal, except that Matthews subsequently covenants that he “shall, dialing the continuance of this agreement, pay all taxes and legal assessments now due or to become due on the lands ..hei'ein mentioned.”

On the 25th day of May, 1868, Charles C. Byrne, for himself and as attorney in fact for the other owners of the land, executed a deed of conveyance, reciting- ,a consideration of “ one thousand nine hundred and forty-four dollars to them in hand paid by William F. Porter, of Brighton, in the State of Massachusetts,” and conveyed all of their interest in the land to Porter. On the 2d day of January, A. B. 1871, Porter and his wife, in consideration of five"thousand dollars to them in hand paid by James A. Harris, executed a deed in fee simple to the property to him. After notice to quit by Porter to Matthews, Harris obtained possession.

The foregoing papers give the proper title to the land in-controversy, g,s well as the transactions between the parties,, so far -as they are shown by written evidence having any important bearing upon the subject. - It is admitted that Matthews, at the time of the notice to quit, and when the deed to Harris was executed, had failed- to comply with his covenants. Upon the face of these papers all the interest which Matthews had in the land was a conditional tenantry, with the right to purchase'for a given sum within a stated' time. Having failed to perform his covenants, his interest, which was conditional, ceased upon their non-performance, in accordance with the terms of the agreement. Upon the face of these papers he has no equity. The only absolute property which he was to have was conditional under this agreement, the conditions of which he failed to perform.

While this is the clear legal effect of these instruments, the plaintiff contends that under color of these deeds, and in fact and in truth, the true transaction was not as here disclosed. His position is that the money, which was the consideration for this land, was borrowed by him of the defendant ; that the deed was taken in defendant’s name to secure, the re-payment of the same; that the defendant took advantage of,his necessities and distresses taking an absolute deed; that' the true transaction was a mortgage; that in equity he had the right to redeem, and that upon the sale of the land lie is entitled to the difference between the mortgage debt and the purchase-money received by the defendant.

The general rule that parol evidence is admissible to show that what appears upon the written papers to have been an absolute sale of property by A. to B. was in truth and in fact a mortgage to secure a loan of money by B. to A., and where there is evidence of a loan, of distressed circumstances of the borrower, and of inadequacy of the consideration, courts of equity incline to consider the transaction a mortgage. This is the legal proposition which the citations of the appellant here established. Russell vs. Southard, 12 How., 145; Morris vs. Nixon, 1 How., 118; Babcock vs. Wyman, 19 How., 289; 2 Cowen, 321; 4 Mumf., 140 ; 2 Mumf., 10 ; 15 Wis., 666.

The difference, however, between all of these cases and the case under consideration is, to our minds, manifest and material, even'accepting the facts to be as stated by the plaintiff himself. At the time the articles of agreement were executed between these parties (March 25th, 1869,) neither the plaintiff nor the defendant had any interest, legal or equitable, in these lands. The property was then owned by Byrne and others, whom he represented. Byrne had offered to sell the land to the plaintiff for $1,941. The plaintiff had accepted the offer, and the agent of Byrne had advised him that unless the money agreed upon as a cash' price was paid the offer would be withdrawn.

In all of the cases above referred to the plaintiff-was dealing with property to which he had title, legal or equitable, which he could make the subject of a mortgage, and which he could tender as security for a loan. There is a manifest difference between Porter’s negotiating for an interest in the property of Matthews and an application of Matthews to Porter to loan him money to buy property belonging to some one else. This is the difference between the facts in the cases cited and the facts here.

There is another material difference. In all of the cases where an absolute deed was held to be a mortgage, there was a difference in the value of the property covered by the deed and the consideration which passed. Accepting the evidence of the plaintiff himself here, we find that the price paid was that fixed by the owner of the land at the time as the cash sum for which he was willing to sell his entire property in it, and that another party (Mr. Porter) had declined to take it as security for a loan for that amount. It is true that the . plaintiff testifies to a greatly enhanced value subsequently, as well as to subsequent offers of a much larger sum per acre than it cost; but admitting the truths of these statements, (and in one of them he is contradicted by Hall, a disinterested witness,) it is clear that the value, at the time of the contract, is the material fact.

There is still another difference. Matthews was not in enbarrassed or distressed circumstances; he was endeavor-' ing to borrow money to buy land; he was seeking to borrow money to enter into a speculation; he was not a debtor in jail wishing to borrow money upon a pledge of property; he was not threatened with legal proceedings looking to his imprisonment for debt or likely to result in any sacrifice of property; his position was not one of distress or embarrassment, within the meaning of the authorities controlling the subject.

In referring to the authorities cited by the appellant we have omitted two, because the points of difference between them and this case are not of a similar character to the points of difference between the cases referred to above and this. These cases are Rogan vs. Walker, 1 Wis., 568, and Walling vs. Aiken, McMullen’s Eq., 14. In the first case the court held that the deed and bond executed by the parties vested in Rogan a right of redemption. In disposing of the case, the Justice, delivering the opinion, says: “ The relations of the parties and their respective rights, as hereinbefore stated, result inevitably from the deed and bond recited in it. I have been ■ unable to put any other construction upon it. The view taken of it by the counsel for the defendant, it seems to me, is in direct conflict with the very terms of the instrument, and there is nothing in the transaction as developed by the recitals or language of the deed that would authorize a different construction than that which the very words imply.” In addition to this, Rogan had a settler’s claim to the land, “ such as under the circumstances' was necessary to "Walker, such as he did recognize and profit by.” The release of such a claim has been held also by the Supreme Court of Iowa to be a sufficient consideration for an advance of the purchase-money and the creation of a trust. 3 Iowa, 527.

It certainly will not be contended in this case that upon the face of the deed of Byrne, and the agreement between the plaintiff and defendant, there was a right of redemption in Matthews. Nor can it be contended that upon the face of these papers there is anything to establish either a resulting or constructive trust.

In the other case, Walling vs. Aiken, the relation between the parties was determined by the nature of the written agreement and deed between them. Says Chancellor Harper for the court, “ the conveyance of the lands, connected with the written agreement between the complainant and the defendant, constitute a mortgage or security.” There is no pretence that this can be said of the written agreement and deed here.

Where there are such differences, the judgments of courts in the one case cannot control in the other, and this disposes of the theories and citations of the plaintiff.

Most of the citations of the defendant go to show in what eases a transaction is held to be a conditional sale and not a mortgage. As to this we remark that under no possible reasonable construction of the facts in this case is there a sale by defendant to plaintiff, either conditional or otherwise.

With these comments on the case, as presented by the parties, we consider the case as presented by the record. The basis of the claim of the plaintiff is his alleged purchase of Byrne, and the payment of the consideration for the deed. If there was in fact a loan of nineteen hundred and forty-four ($1944) dollars by defendant to the plaintiff in this case, and the conveyance for the land for which this money was the consideration was taken in the name of the defendant, these facts presented above, independent of the prior agreement of the parties and the other evidence, would constitute a resulting trust. The defendant would be a trustee, and would be subject to the liabilities, legal and equitable, of trustees in a like position, and if it was the intention of the parties, in view of all the evidence, that the defendant was to hold this land as security for the amount stated in the agreement, and as security for debt, we are inclined to the view that upon these facts the plaintiff would not be without equities. What these equities would be we do not propose to declare, unless the case presents that question, and we therefore inquire, does this record present that ease, and'if not, what case is.presented upon the pleadings and proofs ? The first question to be here determined is, what are the rules of evidence where, contrary to the express language of the deed and the denial of the defendant, the plaintiff seeks to prove the fact that the money was his, and thus establish a resulting trust for fifis benefit? Having fixed this rule, its application ends the consideration of this ease.

Such a trust is not within the statute of frauds, and may, under the circumstances stated, be proved by parol testimony, but the evidence is to be received with great caution.

In the case of Boyd vs. McLean, (1 John. Chy., 590,) Chancellor Kent, in discussing this question, says: “ The cases uniformly show that the courts have been deeply impressed with the danger of this kind of proof as tending to perjury and the insecurity of paper title, and they have required the payment by the cestui que trust to be clearly proved. In the ease of Lench vs. Lench, Sir William Grant did not deem the unassisted oath of a single witness to the mere declaration of the trustee admitting the trust as sufficient, and there were no corroborating circumstances in the case. He thought the evidence too uncertain and dangerous to be depended upon. It would be easy to multiply instances of the like caution and discretion, and the only inquiry is whether here is not convincing and satisfactory proof of the loan to the plaintiff's, and consequently the payment of the consideration in the deed with thei/r moneys.” It is unnecessary to multiply extracts from parallel cases establishing this rule. In the cases following it is held that in such a case as this, “ the clearest and the strongest testimony must be produced.” 2 Blackf., 198; ib., 440; 1 Dana, 536 ; 13 Mrld., 257 ; 3 Iowa, 371 ; 1 Wend., 625 ; 2 Wend., 570 ; 1 Barb. Chy., 499.

Controlled by this rule we ask, is the trust here established ? In the first place, it is not denied that the money which Byrne received was paid by defendant. Porter gave a draft upon his own money in favor of Byrne. Again, there is no note or obligation given by plaintiff to defendant making this sum a debt due to defendant. Just here we may remark that some of the courts hold that “if the party claing the resulting trust has paid no money, he cannot show by parol evidence that the purchase by absolute deed and for a valuable consideration was made for his benefit.” (T. & B. on Trusts, 447; 3 Ind., 308 ; 27 Penn. St., 180.) But it is insisted that the money thus paid by defendant was really lent by him to plaintiff; that it was a payment for plaintiff; and without reference to the distinction suggested in these cases, we examine the evidence and case. Looking to the pleadings, we find that the plaintiff in his bill alleges that the money ($1944) was lent to him by the defendant; that he made the purchase of the land with it and agreed to pay interest thereon. He then affirms, “ all of which will fully appear in and under the said agreement entered into between this complainant and the said defend-. ant, which was reduced to writing, which said writing is now in the custody, control, and possession of the said defendant, the said Win. F. Porter, which, if inspected by the court, will exhibit the same state of facts herein set up, and which is prayed the said defendant may be required to produce.” The plaintiff alleges further that he entered upon the land .under the agreement between him and Porter. The defendant answers that the plaintiff applied to him for a loan of $1944, but that it is not true that he ever effected such loan. He admits the execution of an agreement in writing with the plaintiff, wherein he agreed to sell the land to him upon his payment of the purchase-money therein .agreed upon. He further says that, plaintiff paid no part of -the p'urchase-money, and that he. has failed to perform his tcovenants. Defendant also alleges that he purchased the lands of Byrne through the agency of Matthews; that the • deed was .made to him as such purcháser, and that he paid .Matthews for his services as such agent the sum of $90. It thus appears from the plaintiff’s case, as stated by himself in his bill, that his contract and agreement with the defendant was reduced to writing, and he expressly, affirms that this instrument of writing “ will exhibit the same state of facts ” .that he sets up as the basis of his equities. This agreement -was not in his possession. He was here speaking from his recollection of its contents. He rested his case upon its •written stipulations and recital, and asked its production. The agreement was subsequently produced. It is inserted In the ¡beginning of this opinion. A reference to it will ■show that it does not recite these faets, but that on the contrary it recites a negotiation by the defendant with Byrne for the purchase of the land, and that the agreement is to sell the lands to plaintiff upon the terms stated, of one of which, the express condition is that the defendant should effect the purchase. Upon the bill and answer above, coupled with this agreement, therefore the plaintiff has no case. We-will, however, go further and examine the testimony. The-first witness is the plaintiff himseif. He states that he was introduced to the defendant as a gentleman who had money to loan; that he visited the land with him; that defendant agreed to lend him the money to purchase it, the defendant Insisting finally that the deed should be in his name, and that he would give an agreement so that' plaintiff’s rights-would be protected. He then states, “ I think this agreement was reduced to writing. I know an agreement was reduced to writing which embraces all the points already testified to.” Here then he rests his case upon the agreement not then before him. He speaks from memory. The agreement produced, his case vanishes. To say the least, he has made a great mistake in his own favor when in pursuit of property claimed by another. How forcibly does this case impress upon us the importance of strictness in the rule as to explaining written agreements by parol testimony. This witness, in stating the final agreement between himself and defendant, says : “ There was an agreement between us on the night before the papers were signed that the defendant should give me a bond for a title. When we went to the office’ of Sanderson & L’Engle, attorneys, the next morning, instead of what I regarded as a bond for title, the agreement I have testified to was drawn up.”

All of this occurred before Porter paid the money to Byrne, and before the plaintiff had any interest in the land. It is not seen how plaintiff could have expected a bond for title from the defendant, except upon the-hypothesis and understanding tlbat the defendant- wae ■.to acquire a title.' It certainly was not expected that Re would contract to give a bond fot a title that he was not ■to acquire. This clear admission is inconsistent with the idea that the plaintiff was to pay for the land with borrowed money, and is entirely consistent with the view that the final agreement and determination was for Porter to purchase the land for himself, availing himself of the offer of Byrne to Matthews. There are other matters which might be alluded to in the testimony of this witness, but enough has been said to show how entirely unreliable it is, as well .as to establish that there is nothing in it to clearly prove the fact that the consideration for the deed was money borrowed of the defendant by the plaintiff.

O. L. Robinson, the next witness for the plaintiff, testifies that he knew the plaintiff and defendant had transactions -as to real estate in Marion county, but that he did not know ■all of the details ; that much of the conversation was had in his office in regard to what he considered “ at first ” to be a loan between the parties; that before the delivery of the ■deed of Byrne to Porter, he understood the transaction was to be a loan ; that all of the conversation that he heard was to the effect that the place was purchased by Mr. Matthews, -or for his benefit, making it a loan ; that he kept the written contract between the parties in his office for many weeks, but never examined it thoroughly. This testimony is not inconsistent with the fact that the final transaction between •the parties was not a loan. This witness expressly states that he did not know all the details, and admits his ignorance of the terms of the written, agreement, which both parties agree was the final contract. The plaintiff himself ¡states that the final conclusion of the parties was not reached until the night before the day of the execution of the agreement or upon that day, and what this witness states is entirely consistent with a want of knowledge of what then transpired. Even the defendant himself does not deny that he was willing to loan the plaintiff money to buy the land,, but it was to be a loan, upon the condition that the plaintiff' would pay his own money, one-fourth or one:third of the-purchase money.

Again, even if the defendant consented to loan the whole-of the money, there was nothing to bind him, and a simple-consent in conversation to loan does not constitute a loan in-fact. There was a statement that he would loan unaccompanied by the fact of loan, and without any consideration passing. In addition to this, there is the admission of the-plaintiff that the final agreement and understanding was as it is written.

The other material testimony in. the cause bearing upon this question is that of the defendant. He denies any loan.. As to the whole transaction he says: “ Before the agreement was reduced to writing, Mr. Matthews wanted the land on better terms, but after the agreement was written, as that contained the only terms upon which I would buy the land,. Mr. Matthews did not object.” In view of this record can it be said that the consideration paid for this.land is “ clearly and fully established ” to have been the money of the plaintiff? The equities alleged in the bill are really disproved by the very paper which the plaintiff stated, under his oath-as a .witness, constituted conclusive evidence of them. The material allegations of the bill are expressly denied by the-answer. There is but one witness for the plaintiff who speaks to the loan. His own statements show that he was-not acquainted with the entire transaction; that he was-ignorant of, or had forgotten, the terms of the final written agreement, and in addition to all this, the deed between Byrne and Porter recites that the consideration was paid by Porter.

We cannot declare that a resulting trust is established by such testimony, or that the plaintiff was ever either a legal- or equitable mortgagor. On the contrary, the written agreernent measured plaintiff’s rights. Having failed to perform his covenants, he has no equitable right to the land, or to any part of the money for which it was sold. We think the decree of the Circuit Court dismissing the bill was correct, and, therefore, the decree is affirmed.