| Minn. | Aug 14, 1885
On the sixth day of August, 1878, the plaintiff held a bond for a deed, made to him by one Peter Brayley, by which the latter had bound himself to convey the 80-acre tract of land described in the complaint, and which included the town-site of Eliza-abeth, in the county of Otter Tail. The purchase price of the land, then amounting to upwards of $600, was overdue, and the plaintiff
1. Upon this issue the special verdict of the jury is conclusive for the purposes of this appeal. It finds that plaintiff’s deed was executed to defendant as security, and, not having been set aside or vacated, necessarily controlled the determination of that question in the trial court. Marvin v. Dutcher, 26 Minn. 391" court="Minn." date_filed="1880-03-05" href="https://app.midpage.ai/document/marvin-v-dutcher-7963679?utm_source=webapp" opinion_id="7963679">26 Minn. 391.
But it is proper to observe, while not considering the question of the preponderance of the evidence on this issue, that the record discloses sufficient evidence to support the finding. The testimony of the plaintiff in his own behalf tended to prove that the conveyance was intended as security. It shows that he informed defendant that he was anxious to hold the land as long as he could, and to raise money to enable him to do so, and that defendant thereupon offered
It was not necessary, in order to make tbe transaction a mortgage, that there should be any promise or personal covenant to repay tbe amount due Maurin. The mortgagee may rely wholly upon tbe security. Madigan v. Mead, 31 Minn. 94" court="Minn." date_filed="1883-09-05" href="https://app.midpage.ai/document/madigan-v-mead-7964315?utm_source=webapp" opinion_id="7964315">31 Minn. 94; Gen. St. 1878, c. 40, § 6; Fisk v. Stewart, 24 Minn. 97" court="Minn." date_filed="1877-08-13" href="https://app.midpage.ai/document/fisk-v-stewart-7963344?utm_source=webapp" opinion_id="7963344">24 Minn. 97; Matthews v. Sheehan, 69 N.Y. 585" court="NY" date_filed="1877-05-22" href="https://app.midpage.ai/document/matthews-v--sheehan-3609469?utm_source=webapp" opinion_id="3609469">69 N. Y. 585. It is an important circumstance to be considered in determining whether a mortgage or conditional sale is intended, but it is only one of tbe circumstances to be considered, and is not controlling. Horn v. Keteltas, 46 N.Y. 605" court="NY" date_filed="1871-12-05" href="https://app.midpage.ai/document/horn-v--keteltas-3630761?utm_source=webapp" opinion_id="3630761">46 N. Y. 605. If it was tbe intention of the parties that the land should be held as security by defendant, his advance to Brayley of the amount due him in pursuance of the understanding of the parties constituted a debt in equity sufficient to support the character of the transaction as a mortgage. It was not essential that the money should pass through plaintiff’s hands. Roach v. Cosine, 9 Wend. 227" court="N.Y. Sup. Ct." date_filed="1832-10-15" href="https://app.midpage.ai/document/roach-v-cosine-5513931?utm_source=webapp" opinion_id="5513931">9 Wend. 227; Hoile v. Bailey, 58 Wis. 434" court="Wis." date_filed="1883-11-20" href="https://app.midpage.ai/document/hoile-v-bailey-6604176?utm_source=webapp" opinion_id="6604176">58 Wis. 434, 448. Men in necessitous circumstances, with no personal responsibility apart from the security offered, and especially if unused to business, are not always care
In doubtful cases a contract will ordinarily be construed to be a mortgage, rather than a conditional sale, because in the former case the right of redemption remains, though the terms of the mortgage be not strictly complied with, .while in the latter strict compliance is required to save a forfeiture. Matthews v. Sheehan, 69 N.Y. 585" court="NY" date_filed="1877-05-22" href="https://app.midpage.ai/document/matthews-v--sheehan-3609469?utm_source=webapp" opinion_id="3609469">69 N. Y. 585; Locke v. Palmer, 26 Ala. 312" court="Ala." date_filed="1855-01-15" href="https://app.midpage.ai/document/lockes-v-palmer-6505484?utm_source=webapp" opinion_id="6505484">26 Ala. 312, 322; Horn v. Keteltas, 42 How. Pr. 138" court="NY" date_filed="1871-12-05" href="https://app.midpage.ai/document/horn-v--keteltas-3630761?utm_source=webapp" opinion_id="3630761">42 How. Pr. 138, and cases cited page 149; Brown v. Dewey, 2 Barb. 28" court="N.Y. Sup. Ct." date_filed="1847-10-11" href="https://app.midpage.ai/document/brown-v-dewey-5457230?utm_source=webapp" opinion_id="5457230">2 Barb. 28.
2. Plaintiff, being vested with the equitable title to the land, had an interest capable of being mortgaged, — Randall v. Constans, 33 Minn. 329" court="Minn." date_filed="1885-04-28" href="https://app.midpage.ai/document/randall-v-constans-7964699?utm_source=webapp" opinion_id="7964699">33 Minn. 329; Sons of Temperance v. Brown, 9 Minn. 144, (157,) — and if the relation of mortgagor and mortgagee was established between the parties, it continued and was not altered by the acquisition of the legal title from Brayley. It is entirely immaterial, under such circumstances, whether the trustee of the legal title should convey to the mortgagee directly by the arrangement of the parties, or that it should pass to him through the mortgagor. Stoddard v. Whiting, 46 N.Y. 627" court="NY" date_filed="1871-12-12" href="https://app.midpage.ai/document/stoddard-v--whiting-3617150?utm_source=webapp" opinion_id="3617150">46 N. Y. 627. Although not in entire harmony with the theory of the complaint, it is clear from the evidence and findings, as before indicated, that the arrangement between the parties contemplated the procurement of the legal title from Brayley, by defendant, as a part of the transaction. It was necessary to prevent a forfeiture of plaintiff’s rights, and at the same time to protect and fortify the interest acquired by defendant under the transfer from plaintiff. But it did not merge the agreement with plaintiff; it was rather in further-
3. Assuming, then, as we must from the verdict, that the relation of mortgagor and mortgagee was established between the parties, we are next to consider the question whether the equity of redemption has been barred or released by the plaintiff. As respects the interest of defendant Marcus Maurin in the premises in controversy, it is sufficient that it is found that he took with notice of the nature and circumstances of the transfer of plaintiff’s interest ttf the defendant Peter.
The court finds that on the 18th day of June, 1881, the defendants made a settlement with plaintiff of and concerning all his claims to the land in controversy, and in full satisfaction thereof conveyed to plaintiff’s wife, at his instance, a part of two blocks, parcel of the same land, in consideration of the sum of $50 paid by plaintiff. The value of the lots conveyed does not appear and is not found. No written release of his interest in the land was made by plaintiff. In this state a mortgagee has a lien only, and is not vested with the legal title, whatever the form of the instrument creating the security; and though the legal title appeared to be in Maurin, yet, being merely a mortgagee, he had no title, right, or remedy other than the law accords to mortgagees. Plaintiff’s interest in the premises could therefore only be divested or barred by release properly executed, unless the circumstances in the case were such as to constitute an equitable
There being no release, it remains simply to consider the finding of the court that the settlement was made in good faith, and fairly, and without oppression, and that the same was therefore an equitable bar to plaintiff’s title or equity of redemption. The court also finds that it was made at the suggestion of the plaintiff; that the defend, ants have since continued in possession, have made improvements and effected sales with the knowledge of plaintiff and without objection by him.
Upon a careful examination of the record, we do not think the evidence establishes a lawful and valid settlement sufficient to bar plaintiff’s interest in the premises as mortgagor. It was simply a parol agreement to surrender all his right, title, and interest in the entire mortgaged premises by a person in straitened circumstances, in consideration of the conveyance of a fraction of the property, a few village lots, presumptively of small value, actual or relative.
In Ford v. Olden, L. R. 3 Eq. Cas. 461, 463, it is said by the court: “A mortgagor may be a man of wealth, and in a situation to make any contract he pleases with the mortgagee; but the principle upon which the courts act is not that the mortgagor is unable to enter into a contract of this kind, but that the transaction ought to be looked upon with jealousy, especially where the mortgagor is a needy man, and when there is pressure and inequality of position, and the sale has been at an undervalue.” And, speaking of such cases, the chancellor says, in Holridge v. Gillespie, supra: “Contracts made with the mortgagor, to lessen or embarrass the right of redemption, are regarded with jealousy, as they are very apt to take their rise in un-conscientious advantages assumed over the necessities of the mortgagor; and though, no doubt, the equity of redemption may be released upon fair terms, yet the fairness and value must distinctly appear.” In Baugher v. Merry man, 32 Md. 185" court="Md." date_filed="1870-02-25" href="https://app.midpage.ai/document/baugher-v-merryman-7892953?utm_source=webapp" opinion_id="7892953">32 Md. 185, 192, the rule is stated as follows: “Unless the transaction appears to be fair, and unmixed
While we-do not deem it necessary in this case to formulate or adopt any abstract general rule in reference to the necessity for an adequate consideration to support a release made to a mortgagee, it-is manifest the amount or value of the consideration received must ordinarily be an important element in determining the question of the fairness and validity of the transaction; and where the debtor is unable to redeem, and is practically obliged to submit to such terms as the creditor may dictate or consent to, any arrangement will be liable-to be set aside or adjudged void under which the creditor would secure the property for himself at less than its value, through an advantage which his position as mortgagee thus enables him to take of the necessities of the mortgagor.
The circumstances of the alleged settlement, as made to appear by defendant’s own evidence, are not such as to entitle it to the favorable consideration of the court. It is not necessary that there should be actual fraud or deceit; it is sufficient that there is constructive-fraud, or an unconscientious advantage taken, which ought not to be retained. Russell v. Southard, supra. The plaintiff had reposed special confidence in the defendant in the arrangement made by which he became possessed of the property. The apparent legal title and actual possession were in the latter, and the former had no written obligation defining his rights. He was anxious to redeem and hold the-
The plaintiff in the mean time lived in the town of Breckenridge, in a neighboring county. Defendant had been making sales of lots which it seems had not been fully paid for, and it does not appear that plaintiff knew the value of the mortgaged property. The deed to plaintiff was made June 18, 1881, and it appears from the stipulation of the parties that between July 1, 1881, and September 1, 1882, the defendant realized from sales made of certain portions of the mortgaged property the sum of $3,379, and the sum total expended by him, including taxes and the amount paid Brayley to the last named date, is $809. In respect to the expenditures of defendant — improvements mentioned in the findings — to the amount of about $400, it is not found when they were made nor in what they consisted. But the evidence shows that they consisted chiefly of fencing built around pasture land. No buildings were erected, and it does not appear that the alleged improvements were made after the settlement. Sales were contemplated, and of course purchasers would be protected.
The facts in this case, we think, therefore, constitute no estoppel against plaintiff’s right to question the sufficiency of the settlement, and his alleged acquiescence and delay, under the circumstances, are not such as to bar him out of a court of equity. No doubt, as is not
Judgment reversed and cause remanded, with directions to render judgment for the plaintiff.