Null v. Fries

| Pa. | Nov 2, 1885

Mr. Justice Green

delivered the opinion of the court November 2d, 1885.

It is entirely undisputed that the conveyance by F. M. Null, Jr., to Jesse Fries of the tract of 190 acres of land was made in consideration of an indebtedness the amount of which as agreed upon by the parties at the time was $11,650.88. All of this but $1,059.17 was evidenced by judgment bonds and notes upon which judgments had been entered. When the deed for the land was executed and delivered Fries surrendered his securities and satisfied all the judgments of record. Undoubtedly he did by this act extinguish the indebtedness due to him by Null. This being so, it must be conceded that the debt previously due by Null to Fries did not survive the delivery of the deed; no executions could have been issued upon the judgments, nor any writs of scire facias to revive them. In this vital respect therefore the case differs widely from all the ordinary cases where, although the deed was absolute it was subject to a defeasance b\r the grantor’s subsequent payment to the grantee of the debt which formed the consideration of the deed. Of this class were the cases of Friedley v. Hamilton, 17 S. & R., 70; Jaques v. Weeks, 7 W., 201; Reitenbaugh v. Ludwick, 7 Cas., 131; Wilson v. Shoenberger, 7 Id., 295; Corpman v. Baccastow, 3 Nor., 363. In some of the cases the transaction was a present loan of money, to secure the repayment of which,a deed was made by the borrower to the lender in fee simple, and the_lender executed a contemporaneous agreement to re-eonvey upon payment back to him of the money and interest. In some similar cases this agreement to re-convey was in parol, but in all where the facts were of this character the transaction was pronounced a mortgage. Occasionally there has been some laxity of expression in stating the rule, predicating the conclusion of a mortgage upon two facts only,to-wit, the absolute deed and the simultaneous or shortly folio wing,agreement of the grantee to re-sell to the grantor. Those two facts alone are not always sufficient to characterize the transaction, and this is illustrated i,n several cases.

Thus in Todd v. Campbell, 8 Cas., 250, we said, “It is true that if land be conveyed in consideration of a pre-existing debt due from the grantor to the grantee, and it is the understanding of the parties that the debt shall survive, the deed is but a mortgage. 'Phis understanding may be proved by parol. But the debt must survive. That the written evidences of it remain in the grantee’s hands is not enough if the liability be gone.” In the foregoing case although there was parol testimony tending to show an agreement to reconvey, the evidence that the debt survived was held insufficient, and this circumstance was fatal to the attempt to treat the transaction as a mortgage. In Spering’s Appeal, 10 P. F. S., 199, there was a prior indebtedness, a written bill of sale of a number of securities, expressed to be in payment of the debt, for which they had been deposited as collateral security, and at the same time, another writing made by the vendees to the vendor agreeing to sell the same number of the same shares at any time within sixty clays for the same price named in the bill of sale. Yet we held the transaction must be regarded as a sale and not as a pledge, of the securities named. Agnew, J., said, “But I know of no rule of law or equity, if there be no loan of money on securitjq and the true character and intention of the transaction is to make an absolute sale, which frustrates the intention of the parties.”

In Allegheny R. R. & Coal Co. v. Casey, 29 P. F. S., 84, in a deed conveying large quantities of land in consideration of existing indebtedness due by the grantor to the grantee, a provision for a re-conveyance upon payment of the debt was contained, and yet it was held the transaction must be regarded as a sale and not as a mortgage. On p. 97 we said, “ But there is no principle of law or equity which forbids a conveyance of land in satisfaction of a debt, and the fact that the nature of the subject requires various provisions to protect their mutual interests does not clash with this right.”

“ In the case of a deed absolute on its face, or where it is very doubtful, when the attempt is to convert it into a mortgage by extrinsic facts, it is evident that all the circumstances should be given their full weight, as well those in favor of the absolute character of the conveyance as those of its defeasance.”

We are of opinion that the construction placed by the learned court below upon the two papers of 6th April, 1875, was correct, and that, so far as the papers are concerned, the transaction must be regarded as a sale and not as a mortgage. It was also claimed that the question of sale or mortgage should have been submitted to the jury, and the refusal to do so constitutes the substance of several assignments of error. If there were other facts in the case sufficient to control the conscience of a chancellor and require him to declare upon the whole of the testimony that the papers constituted a mortgage, this contention would be sustained. But it has long been the settled law of this Commonwealth that parol evidence in order to have this effect must be of the most clear and convincing character. In Plumer v. Guthrie, 26 P. F. S., 441, we said the evidence must be clear, explicit and unequivocal. In Burger v. Dankel, 4 Out., 113, the same language was repeated, and the present Chief Justice in delivering the opinion of the court, speaking of the facts and circumstances relied upon, said, they “ must not be of doubtful import. It is not sufficient that they be merely consistent with the instrument being a mortgage, they must be clearly inconsistent with its being an absolute conveyance. . Evidence less than this cannot establish a parol defeasance. Titles regular and legal on their face cannot be swept away by parol evidence of doubtful facts or ambiguous inferences.” It was further held that the judge must act as a chancellor and determine both the equity and the facts. We reversed the court below for submitting the facts to the jury, holding them to be uncertain and unsatisfactory in their character, and insufficient to defeat the deed. The same doctrine was held and applied with perhaps an increased rigor in Nicolls v. McDonald, 5 Out., 514. On p. 519 the present Chief Justice said, “If the parol evidence be insufficient to move a chancellor to decree a reconveyance it is insufficient to justify a recovery in ejectment. .....It is in the discretion of a chancellor whether he will send an issue to the jury. When sent, their province is to aid him in ascertaining the facts; but their verdict is advisory only. It is not conclusive on him. He is still judge both of the equity and of the facts......They must be proved to his satisfaction as well as to the satisfaction of the jury. If he be of opinion that the evidence does not make out a case which would induce a chancellor to decree a conveyance, it is liis duty to give the jury binding instructions to that effect.” In this case also, although the plaintiff swore positively that he refused to give a deed, and said he would give a mortgage, and that when he executed the deed he was told it would be for security only, and there was some other evidence indicative of a mortgage, the court below was reversed without a venire for submitting the whole case to the jury.

In the present case the facts outside of the papers of 6th April, 1875, are more consistent with the theory of an absolute sale than with the theory of a mortgage. Null, the grantor in the deed, testified that at the time of the conveyance all of the judgments held by Fries against him were satisfied of record. He also admitted that he subsequently brought an action against Fries to recover part of the sum which entered into the consideration of the deed, as interest, on the ground .that it was usurious interest paid by him in the ti’ansaction. He also admitted that on the trial of that action this very deed was put in evidence on his behalf as proof that he had sold the land to Fries, and in that way had paid the usury. Null remained in possession of the land, but that was accounted for by his accepting a lease from Fries. The papers were all prepared by, and executed in the presence of, experienced counsel who knew perfectly well the difference between an absolute deed and a deed with a defeasance. No person testified to an understanding that there was to be a privilege of redemption but Null, and he was flatly contradicted by Fries. One witness testified to a subsequent admission by Fries, but it was of so feeble and uncertain a character as proof that the transaction was a mortgage, that even the positive contradiction given to it by Fries was unnecessary to destroy its efficiency to disturb the character of the deed. It was also in evidence that Fries had brought an ejeetmeut against Null on the agreement of sale and recovered a conditional verdict, to be released by payment of the money, and that the defence that the paper was a mortgage was not made, or ever asserted until on the trial of the present case. A letter written by Fries to Null in September, 1875, was given in evidence in which. Fries said “I think I have a buyer for your farm.” But as this is language which any landlord might use in similar circumstances in writing to a tenant occupying a farm which he contemplated selling, it is manifest that no weight can be given to it as evidence divesting a title by deed.

A careful review of the testimony convinces us that it is utterly insufficient, in any possible aspect, to defeat the plaintiffs title under the deed of April 6th, 1875, and therefore the learned court below was entirely justified in withholding it from the jury.

Judgment affirmed.