3 Chand. 265 | Wis. | 1851
The appellant claims as a purchaser, under Isaac C. Owen ; and admitting, for the purpose of the decision, that their rights are identical, it becomes necessary to inquire what was the original transaction between Owen and the ap-pellee. In my judgment, the transaction must be resolved into one of three forms; which may be stated as follows:
1. Ayer purchased the land in controversy, from the United States, absolutely and unconditionally for his own benefit, and
2. Ayer loaned to Owen $400, to enter the land, and after-wards entered the land for him, and took and held the title as a security, by way of mortgage, for the repayment of the principal and a sum exceeding lawful interest, or,
3. Ayer acted as the agent of Owen, in advancing the money, entering the land and taking the title, and now holds the land in trust, to be conveyed to Owen on the terms and conditions mentioned in their written contract. Let us examine these positions in their order. Excluding the parol evidence, Owen undoubtedly appears a simple purchaser by contract ; and inasmuch as the time limited for the payment of the entire purchase money has elapsed long before the filing of the bill, and as payment or legal tender of the amount due on the contract is not shown, his rights, upon this hypothesis, must be regarded as forfeited and lost; and the decree of the circuit court, for that reason, must be affirmed. But a majority of the court do not take this view of the case, and I will not consume time by discussing the principles which lead to the suggested conclusion.
Can the transaction be resolved into a loan of money and a security for its payment ?
This position was strenuously and ably contended for by the appellant’s counsel, who maintained not only that there was a mortgage to which the right of redemption attached, but a usurious loan, and that Owen, the mortgagor, was entitled to redeem on payment of the actual sum advanced (ten shillings per acre for the land), and interest at seven per cent, per annum. If the loan of money and security for its repayment were admitted, it cannot be denied that the alleged results would follow; lapse of time and failure to comply with the terms of the contract would create no change in the relations of the parties. The rule, once a mortgage always a mortgage; would apply; and the court would have no doubt of the right
The usurious agreement for a loan is by no means clearly established. The evidence shows that Owen made application for a loan of money to enter his land, to which Ayer replied in substance, that he was willing to enter it in his own way; and then states the terms, which were the same finally agreed upon and carried out by the parties. He made no agreement, except to enter the land “for Owen,” in his “own way.” This indeed presents a case, where senses, keen on the scent of usury, might track out a “ contrivance to evade the statute,” but even if we could venture to assume (for it must be assumption at least) that there was an “ agreement for a loan,” there is yet more difficulty in finding that there was a security executed by the borrower to the lender in the nature of a mortgage.
A mortgage is a contract of sale executed with power to redeem. Powell on Mortgages, ch. 2, p. 24. The particular form of the transaction is not material, provided there is a conveyance executed, or procured to be executed, by the borrower to the lender, to secure the payment of the money. “ To constitute a valid mortgage,” says the same learned author, “ there must be a mortgagor, who must be a person capable of granting, conveying or assigning the land or thing mortgaged; a mortgagee, who must be capable of a grant, conveyance or assignment to him; and a thing mortgaged, which must be granted or assigned in that order or manner which the law requires.” Id., ch. S, p. 77. Now if we assume upon the evidence that Ayer agreed to advance money and purchase the
This case differs essentially from that of Rogan v. Walker, 2 Pin., 463; but the court there carefully avoid saying there was a mortgage or a security of that nature. Walker, who entered the land in pursuance of a previous agreement, after-wards actually conveyed it to Rogan; and it was claimed that the deed was conditional and had been absolutely forfeited.
Did Ayer act as the agent of Owen in advancing the money and effecting the purchase? and does he hold tbe land, under their agreement, in trust ? It is said a trust cannot be established by farol. This is undoubtedly true. Steere v. Steere, 5 Johns. Ch., 1; Letcher v. Letcher's Heirs, 4 J. J. Marsh., 598. And here, I conceive, lies the chief difficulty in the view taken by the majority of the court in this case. But the existence of a trust need not be declared in express terms. It may be proved by any proper written evidence, by an answer, or by a note, letter, or memorandum in writing, disclosing facts which create a fiduciary relation. McGubbin v. Cromwell, 7 Grill & J., 157; Forster v. Hale, 8 Ves., 696; Jackson v. Moore, 6 Cowen, 706; Steere v. Steere, supra. The written contract executed between Ayer and Owen disclosed the essential particulars of the present trust sufficiently to take the case out of the statute of frauds. The parol proof was properly admitted to show the circumstances out of which the contract grew. They all tend to the affirmance of the contract. If there had been no written contract, the circumstances alone, however strong, could not be shown to establish the trust relation. And hence it is true, that had Ayer, after entering the land, refused to execute the contract, though the relations of the parties would have been the same, Owen might have been deprived of a remedy by the statute of frauds. But the agreement was fulfilled — the written contract executed; and it is no new doctrine that courts of chancery will look into the circumstances to see why a deed, bond, contract or other written instrument was executed. Such
But congress has recognized the rights of the settler, by passing frequent preémption laws for his benefit; and it is only in the abstract and upon principles more nice than wise, that the courts can hold occupancy and actual cultivation of the public lands as a trespass; or the transfer of such a possession as without consideration.
Were it material in this case, it would be difficult to say that
This is the view which a majority of the court, after a very careful consideration, have taken of this transaction. Against it, the appellant’s counsel have strongly urged, 1. That the alleged commission of the trustee is unreasonable, extortionate
It is not a little singular that a contract of this character is now, for the first time, brought before the supreme court of Wisconsin. It would relieve the case of some embarrassment, if contemporaneous courts had passed upon the transaction, at the time of its occurrence. Principles of equity, always flexible, and to be applied according to the actual state and condition of communities and their established business relations, might not have seemed strained by being made to conform to the then actual condition of things.
The history of the times shows that the present transaction was but one of thousands, which spring from necessity, out of the circumstances of the early settlers, and the condition and price of the public_lands. Money was scarce, land was cheap. Settlers and capitalists made such arrangements as suited their respective circumstances and interests; and the result was unquestionably, a mere division of profits. That these agreements were entered into fairly and voluntarily, is evinced by the fact that they have been so uniformly held inviolable. The peculiar circumstances which induces them, probably never existed in the older states of the Union, or in England, and hence the absence of like cases in their courts. Shall we now impeach the validity of a contract, mutually advantageous and voluntarily entered into, simply because other courts, adjudicating under widely different circumstances, might have held it unreasonable, and therefore void ? Shall we say that the amount of the commission in this case is evidence of a design to cover usury, when we can see clearly, and the parties themselves believed, that the amount agreed upon was an equitable division of profits, in proportion to their respective undertakings and risks.?”
Those who operated in the purchase of lands at an early day may have avoided or evaded the usury law of the territory. But was that the prominent design of the parties ? Was it the controlling purpose of the present arrangement? It seems to me gratuitous and unjust to draw such a conclusion when other and abundantly good reasons existed for the very arrangement that was made. The trust character which we attach to the transaction not only secures actual justice, but it seems to me the only construction which will carry out the actual intention of the parties themselves. Ayer undertook to act-in a fiduciary capacity; and it would be an unwelcome necessity which would force us to give his contract a different construction, and allow other parties to take the benefit of its fulfillment on paying-one-half only of the stipulated sum and interest.. Hot less unjust would it be to allow him to disclaim the trust and hold the land absolutely, on forfeiture of the contract.
There is no sufficient ground, either in reason or authority, for disturbing the decree of the circuit court; and it must be affirmed with costs.