1 Wis. 527 | Wis. | 1853
By the Court,
[The Chief Justice and Mr. Justice Crawford having been concerned in some way as counsel, in some former stage of litigation upon the subject matter of the suit, a stipulation was entered into between the counsel for the respective parties, to have the case heard before Mr. Justice Smith, and hy him decided, which was accordingly done.]
What are the rights of the parties, derived from the bond of Roganto Walter, and Walker’s deed to Rogan ?
It is contended on the part of the complainant, that the deed, on its face, is in its legal effect, a mortgage, and under it the complainant has a right to redeem. But if not, the parol proof submitted by him, shows the original transaction to have been a loan of money, and that the deed and bond were executed in the manner and form they were, to secure the payment of the sum loaned, and interest.
On the contrary, it is insisted by the defendant, Walker, by his counsel, that the deed is not by its terms, its legal effect, or in consequence of any of the facts or circumstances recited therein, in law a mortgage ; that it does not show on its face to have been executed, with the bond recited, to secure the payment of a loan of money and interest, but that it is a deed with a condition precedent; that by its effect no estate passed until the performance of the condition in full; that this condition must be punctually and literally performed by the grantee before any estate could, by its terms, vest; and that parol proof is inadmissible to prove any'facts or circumstances which would vary the terms of legal effect or control the operation of the deed.
That this deed is a strictly technical mortgage, I apprehend no one will contend. It wants many of the essential elements of a mortgage. Who is the mortgager ? Not Rogan, for he makes no deed, passing an estate to Walker. Not Walker, for he is placed by
It is not, however, indispensable to apply an approved technical term to an instrument or transaction, in order to perceive and administer the equities which, it may disclose. Nor should it be demanded, that all the various transactions and forms of agreement, to which modern improvement and advanced civilization and progress have given rise, should be reduced within the scope of nomenclature, adopted in the early stages of legal science. Nor is it wonderful that in the pursuit of substance, names have been left in the rear. It is sufficient that the established principles of equitable jurisprudence are found competent to the substantial and equal administration of justice. According to such principles, we shall preceed to examine the deed in question, and to give to it its proper construction and legal effect.
“ An estate upon conditionH' says Black-stone, 2 Com. 153 ; “is one whose existence depends upon the happening of some uncertain event, whereby the estate
Again, page 154 : “An estate on condition expressed in the grant itself, is where an estate is granted, either in fee simple or otherwise, with an express qualification annexed, whereby the estate granted shall either commence, be enlarged, or be defeated, npon performance or breach of such qualification or condition. These conditions are there!ore either precedent or subsequent. Precedent, are such as must happen or be performed before the estate can vest or be enlarged ; subsequent are such, by the failure or non-performance of which an estate already vested may be defeated. Thus, if an estate for life be limited to A. upon his marriage with B., the marriage is a precedent condition, and until that happens, no estate is vested in A. Or, if a man grant to his lessee for years, that upon the payment of a hundred marks within the term he shall have the fee, this also is a condition precedent, and the fee simple passeth not till the hundred marks be paid. But, if a man grant an estate in fee simple, reserving to himself and his heirs a certain rent; and that if such rent be not paid at the times limited, it shall be lawful for him and his heirs to re-enter and avoid the estate ; in this case, the grantee and his heirs have an estate upon condition subsequent, which is defeasible if the condition be not strictly performed.”
Kent, in his Commentaries, vol. 4, page 125, says : “ These conditions are also either precedent or subsequent, and, as there are no technical words to distinguish them, it follows, that whether they be the one or the other, is matter of construction, and depends upon the intention of the party creating the estate.
Again, page 125, the same author says: “Subsequent conditions are those which operate upon estates already vested, and render them liable to he defeated. Of this kind are most of the estates upon condition in law, and which are liable to he defeated on breach of the condition,'or on failure of payment of the rent, or performance of other services annexed to the estate. So long as these estates upon subsequent condition continue unbroken, they remain in the same situation as if no qualification had been annexed.” See also Wood's Inst. 142.
“ Conditions in deed may he subdivided into conditions precedent, which must he performed before the estate can take effect, and conditions subsequent to the estate, or to he executed after it.” Wood's Iust. 235.
“ Conditions precedent are such as must he punctually performed before the estate can vest; hut on a condition , subsequent, the estate is immediately executed ; yet the continuance of such estate dependeth on the breach or performance of the condition.” 1 Bacon's Abr. 640.
It is also certain that this is a conditional deed. But the important question to be settled is, whether the condition expressed in the deed be precedent or sub-suquent, for chancery may relieve against the latter, but perhaps not against the former. The language of the deed is as follows: “ This indenture made this 2lth day of February, A. D., 1839, between Martin O. Walker, of the city of Troy, in the State of New York, party of the first part, and James Rogan, of &c., of the second part; witnesseth, that the said party of the first part, fai* and in consideration of the conditions of a certain bond, hereinafter named, and of one dollar in hand paid by the said party of the second part <fec., hath granted, bargained, sold, and by these presents, do grant, bargain, sell and confirm, unto the said party of the second party, his heirs and assigns, all those certain pieces or parcels of land, &c., together with all and singular, the appurtenances thereunto belonging, and all the estate, right, title, interest, claim or demand, whatsoever, of the said party of the first part, either in law or equity, of, in, and to the above bargained premises ; to have and to hold the said premises above described, with the appurtenances unto the said,party of the second part, and his heirs and assigns,” * * here follow covenants for quiet enjoyment, &g., “ against all and every person or persons lawfully claiming or to claim the whole or
This is the whole of the substance of the deed and the conditions annexed.
In the argument, it seemed to have been assumed by the counsel for the defendant, that the condition expressed in this deed is a condition precedent, and that no estate vested until the performance of the conditions recited in the bond named ; which conditions are, to pay Walker and Baker $829.58 on the 18th day of February, A. D. 1843, and to pay annually $29.04 as interest on said sum, to pay all taxes, assessments or impositions that might be legally imposed on the premises, and to save him and them harmless. But if such was the intention of the party in making the deed, he was certainly very unfortunate in his selection of terms, by which such intention was sought to be expressed. The words of grant are full and ample, and are nowhere in the deed limited, or sought to be limited in their effective force, or postponed to,
It is true that when a condition precedent is expressed in the deed, no estate can vest until the condition be performed. But in all deeds containing a condition precedent, it is expressly declared, that the grant is upon such a condition, or the estate is to be enlarged upon the happening of the event. As in the case put in Blackstone, “If a man grant to'his lessee for years, that upon the payment of 100 marks within the term he shall have the fee.” Here the existing state, for years is to be enlarged to the fee, by the performance of a precedent condition, within the term ; very different from the case where, if a man grant to A. the fee simple of an estate, which should cease and determine at the end of a term of years, in case A. should .fail to pay the 100 marks within the term. In the one case an estate is to be enlarged upon the performance of a condition, in the other the estate is to be defeated upon failure to perform the condition, or, in other words, in the one case the condition is precedent, and in the other it is subsequent. But in the deed before us, the defendant does not grant and confirm the premises unto the complainant upon the performance of the condi
But again, the deed further provides that if the party of the second part faded to comply with the conditions of his bond, the paxty of the first part should have the right to re-enter and take possession, &c. This provision certainly implies an estate accom
Again, the very words of the grant indicate the intention of the grantor to pass the estate on delivery The party of the first part “hath granted, bargained and sold; and by these presents does grant, bargain, sell and confirm unto the said party of the second part.” ' These words, unless modified and restricted by the inevitable force of other words following, create an estate m presentí, and the following modifying words mnst be construed so as to support the estate, unless they are repugnant to such idea. The terms of the condition in this deed are not only not repugnant to, but, it would seem, were selected for their harmony, with the idea of the creation of a present estate ; for in case of failure to comply with the conditions of the bond, “ the estate hereby created" (that is, the estate now made and passed to the grantee) “shall cease, determine,, and be of no effect.” This language is wholly irreconcileable with the idea contended for by the counsel for the defendant, that, until performance, no estate could or should be created, for then the words “cease and determine” would be without meaning.
“A testator gave a large amount of lands to his wife” for life, and all her real estate at her death to A., on condition of his marrying a daughter of B. and 0., who, at the making of the will, had n’o child. Held the making of the gift being in presentí, “ I give,” &c., imported an immediate interest. “ it would have been otherwise, it seems, if the devise had been,£ I devise my land to A. on his marrying BP' Finley vs. King, 9 Pet. 374; Taylor vs. Mason, 9 Wheat. 325. Conveyance in fee, reserving a life. estate in part of the land, “ this deed to take effect on the following condi
Enough has been said, it is believed, to satisfy every one that the condition expressed in this deed is a condition subsequent. That an estate vested in presentí, and breach of condition was to defeat the estate, and not that performance was to vest it.
But there are other considerations which present themselves upon the full examination of all the circumstances referred to and expressed in the deed. Had it been the intention of the party grantor, to make and execute a simple deed, with a condition precedent to the vesting or creating an estate, that intention would have been fulfilled by the expression of the condition, and that the estate was to vest upon the performance. If the intention was to hold the fee in himself, and not to part with it, except upon compliance with the conditions by the grantee, it would have been quite sufficient to have made such a deed, and to have stopped there. But there is more of the transaction than this. It was not enough to affix to his deed a condition for the payment of money, leaving it optional with the grantee to fulfil the condition or not; but the grantor goes further, and takes a penal bond from the grantee, by which the latter is bound to the performance of the condition at all events; thus showing that the grantor himself did not choose to rest the transaction upon a mere condition in his deed, by which the estate might either vest or be defeated, but that he chose rather to pass the estate with a condition of defeasance, and to superadd the personal obligation of the grantee.
It is impossible not to regard the bond recited as a
The execution and delivery of the bond on the part
Without, therefore, looking to the parol proof introduced, but discovering the character of the deed, and trasactions between the parties, from the deed itself and the conditions of the bond recited in it, it is sufficiently apparent, that the bond was for the purchase money for the land, that it was made prior to or at the same time as the deed, that instead of conveying the land by deed absolute, and taking back a mortgage collateral to the bond, Walker inserted in his deed a condition of defeasance on non-compliance with the conditions of the bond.
It is impossible for me, otherwise to construe the deed, and the bond therein recited, and if this construction be correct, equitable relations between the parties are established, and it only remains to ascertain and determine their nature, character and extent
But before proceeding to define the existing equi-. ties between the parties, we will endeavor to examine some of the other questions, or points made by the counsel, as bearing materially upon the case, if not to control its determination.
It is contended by the complainant, that “ If a conveyance of real estate be made as security, whatever be the form, equity will hold it a mortgage,” and to this point he cites Flagg vs. Mann, 2 Sumner, 487; Parks vs. Hale, 2 Pick. 211; Barton vs. May, 3 Sanford, 450.
# , R will be recollected, that hitherto we have considered this case solely upon the proofs furnished by the deed and the bond recited therein. We shall continue to do so for the present, not intending, however, to evade the points made by the counsel in relation to the admissibility and effect of the parol proof taken in the case, but, designing to test this instrument, by the rules of equity jurisprudence, without aid from collateral proofs or circumstances. Hence we have not sought to inquire after the source of Walker’s title. We have not sought to find out what pre-exist-ing title or equities, if any, Hogan may have had in the land. It will hereafter be proper to do so, but not now.
Is there, then, a conveyance here made by any body, or in any form as a security ?
To answer this question, let us look again to the evidence furnished by the deed of Walker to Kogan. Was there an indebtedness by Hogan to Walker ? This is evidenced by his bond to Walker. Now if Kogan had conveyed this or any other land to Walker to 'secure the payment of the bond, such conveyance, whatever may have been its form, equity, would hold it a mortgage. But Hogan makes no conveyance. Yet here is a conveyance made by Walker to Kogan. If the indebtedness evidenced by the bond had subsisted independent of any other transaction between the parties, than one having reference to the land, Walker would not have made a conveyance of the land to Kogan to be absolute upon its payment. The bond was evidently the sole consideration of the conveyance. If A. owes me $500,1 certainly will not
In the one case, the condition of defeasance expressed in my deed would be avoided by the payment of the bond, and in the other, the condition of de. feasance expressed in A.’s mortgage would be kept and performed. In both cases, the two grand results aimed at by both parties are accomplished, viz : the payment of the purchase money by A., and the vesting of an absolute estate in him. The equitable relations between the parties are precisely the same in both cases, and the energies of a court of equity are not to be paralyzed by the mere change of forms, nor
Upon the proposition made by the complainant’s counsel, and assented to by the counsel for the defendant, it would seem that the equitable relations of the parties are similar in their character to those of a mortgagor and mortgagee, for the purchase money of an estate. It has already been shown that the bond of Kogan was for the purchase money of the land in question; that Walker was not content to rest the transaction upon a precedent condition, that the deed was not to take effect, or the estate to vest, until the payment of a certain sum of money ; but that he chose rather to bind Rogan, under his hand and seal,
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 languuge of the deed, that
Keeping out of view every impression suggested by the testimony, dehors the deed ; it is to my mind cleai', that the condition of defeasance expressed in the deed, the consideration thereof, and especially the taking of the bond, fix the character of the instrument. In Morris vs. Nixon, 17 Peters, 109, the taking of the bond for the money paid, was held to fix the character of the transaction, and to control the deed, which was absolute on its face. In the case of Conway's Ex'rs vs. Alexander, 7 Cranch, 218, it was held that the absence of any bond or note, or other evidence of debt, was strong evidence to show that none existed, and that the transaction was what it appeared to be, a conditional sale. ' C. J. Marshall, in delivering the opinion of the court, says : “In this, the form of the deed is not, in itself, conclusive either way. The want of a covenant to repay the money is not complete evidence that a conditional sale was intended, but is a circumstance of no inconsiderable importance. If the vendee must be restrained to his principal and interest, that principal and interest ought to be secure. It is, therefore, a necessary ingredient in a mortgage, that a mortgagee should have a remedy against the person of the debtor. If this remedy really exists, its not being reserved in terms will not affect the case. But it must exist, in order to justify a construction which overrules the express words of the instrument.” This language strongly implies, that the taking of a note, bond, or other per
In tbe case of Brown vs. Dewey, 2 Barb. S. C. Rep. 28, was a bill filed by Brown against Dewey, to decree an absolute deed a mortgage, as having been given to secure a loan of money, and also to decree it void on account of usury. Mr. Justice Harris, in delivering tbe opinion of tbe court, says : “ In form tbe conveyance is absolute, with an agreement to recon-vey upon certain conditions. But if it appears, either from tbe instrument executed by tbe parties, or by parol evidence, that tbe transaction was' originally intended as a security for money, no form of words used by tbe parties in executing their intent, will be allowed in a court of equity to defeat their object.” “Although it is true that courts of equity are strongly in favor of tbe right of redemption, and for this reason, in doubtful cases, contracts of this kind have frequently been construed as mortgages, rather than conditional sales; yet, when tbe aid of tbe court is sought, not to establish a right of redemption, but to have a conveyance declared a mortgage, for tbe pux*pose of avoiding it on tbe ground of usury, tbe reason why, in doubtful cases, tbe court should bold tbe conveyance to be a mortgage, seems to fail.” “ It is tbe right of redemption in favor of which tbe court leans, not to have tbe security avoided on tbe ground of usury.’’ “When tbe grantor, by virtue of tbe contract for resale, has .the privilege mérely of re-purchasing tbe property upon tbe terms stipulated, without any obli
So also in Russell vs. Southard et al. 12 Howard, 142, it seems to have been conceded that if Russell had made any bond or agreement to pay'the money, there would have been a clear case for redemption, and the circumstances of such agreement being wanting in that case, it was urged with force, that the case was one of a conditional sale, and not in the nature of a mortgage.
The doctrine established by these cases is by no means new. It springs naturally and necessarily from our first notions of equit}/. The condition without the bond would be as a proposition to sell, or a refusal of the premises at a stipulated price, within a prescribed time,'without any obligation on the part of the complainant to pay the price ; and so the courts have
In 2d Greenleaf's Cruise, the learned author, in a note to the text, says, “If a a deed be made, to be absolute on the payment of certain notes, but in default thereof, to be void, it is a mortgage,” and he cites Lincoln & Ken. Bank vs. Drummond, 5 Mass. 321, and Carr vs. Holbrook, 1 Miss. 240. The report of the former of the cases cited does not sustain the position; but the latter does, and is strictly in point here. In that case, the complainant Carr had sold to John Hol-brook certain lands, for which the latter had given his notes to the amount of $4,000, payable at future times, and Carr conveyed the premises by deed to Holbrook, conditioned to be void on the failure of Holbrook to pay the notes. The notes were not paid, and proceedings were instituted to foreclose, as in case of mortgage. The objection was made to the construction of the deed as a mortgage, and the point distinctly presented to the court, and the deed held to be a mortgage. This opinion of Mr. Greenleaf is also
Did I entertain a doubt that the construction I have given to the deed and bond recited therein, is correct, then according to the well established rules of equity jurisdiction, I should be bound to throw the doubt into the scale, in favor of the equity of redemption. The authorities on this point are conclusive. But I do not entertain the slightest doubt in this respect.
The decision of this case might therefore be rested upon the'deed itself and I need go no further than to inquire, whether the bill filed in this case is so framed as to permit the court to grant the relief ashed, and whether the equity of redemption that did subsist, has not been lost by the laches of Bogan, or his grantees. Dor it does not follow necessarily, that though there may have been an equity of redemption in this case, that such equity is precisely the same in kind, degree and duration, as in the case of a purely technical mortgage. I do not now say that it is, or is not the same.
. But other questions have arisen in the argument of this case, and have been discussed with great ability, after profound research. So far as those questions affect this case, I have no disposition to shrink from them.
It is contended by the counsel for the defendant, that the parol evidence taken and submitted in this case, is inadmissible that the rights of the parties are to be determined by the written instrument, and that its effect cannot be varied or controlled by parol evi
The counsel distinctly claims, that parol evidence of such kind is only admissible on a bill brought to reform the instrument, and the cases cited from Barbour’s Supreme Court reports, go far to sustain his position. But after a critical examination of the opinions delivered in those cases, and with great respect, I am compelled to withhold my assent to the correctness of the views there expressed. The case in 10 Barbour, 583, came before the court upon a motion to confirm the report of a referee, and for an order to distribute the monies arising from a sale under a decree of foreclosure. There were various and numerous claimants to the proceeds. One endeavored to defeat the claim of another, by attempting to show that the deed of the latter in fee which was the basis of his claim, was intended as, and was in fact a mortgage. The court in that case said, that the parties to. the deed and their privies, were estopped from alleging that it was not intended as an absolute deed, but that strangers to the deed were not estopped from showing by parol the true nature of the transaction out of which the deed arose. And in the course of the opinion, it is said that the parties and their privies, are not permitted to show by parol, the transaction to be different from what the deed imports, unless it be, where a bill is filed to reform the instrument, on the ground of accident, fraud or mistake in its formation.
It is said that fraud, accident and mistake are peculiar heads of equity jurisprudence, and therefore, a bill fled to reform a deed or contract on such grounds, opens the door to the admission of parol proof of the transactions and intent of the parties. This is true indeed; but is not an equity of redemption as much a subject of equity jurisdiction as fraud, accident or mistake ? Where there is a clear equity of redemption in fact, it is difficult to perceive why it may not be shown under a bill to redeem as well as under a bill to reform the deed. The object of the bill to reform the deed is, not to create an equity of redemption, but to establish and perpetuate the evidence of its existence ; and, having been proved sufficiently to reform the deed, and ihat being done, equity will lend its further aid in enforcing the right to redeem
In a case where there was really a right to redeem, and that had been omitted to be secured or evidenced in the deed through fraud, accident or mistake, can it be supposed that the holder of that equity must first file a bill to reform his deed, and then file another bill to enforce his right ?
If the party is entitled to redeem at the time of filing his bill, there is no necessity for a reformation of the instrument, but he may proceed at once with, his bill to redeem, without seeking to reform, for such a reformation can only be useful in preserving the evidence of the right until the party is in circumstances to claim and enforce it. And, accordingly we find, that in no case where a bill is filed to redeem, the right being claimed, based upon facts and circumstances dehors the deed, is the deed sought to be reformed. But this is only done in those cases in which the right to redeem is remote, or not susceptible of immediate enforcement; and I have yet to learn the case in which, on a bill to redeem, objection has been taken, that the bill was to redeem and not to reform. When the time for performance has not elapsed, and consequently the right of redemption is still incohate, a bill to reform is the proper remedy. But when the time has elapsed, and the right
The fraud spoken of is not connected with the original transaction. It is not complained that a clause giving the right of redemption was omitted to he inserted in the deed through fraud, accident or mistake, or through ignorance, or for purposes of oppression ; hut the fraud consisted in afterwards setting up a deed as absolute, which was given as a security, and thereby attempting to defeat that right of redemption which equity would attach to the transaction. It is the fraudulent use of the deed which equity interposes to detect and prevent, and for this purpose, parol proof is admissible, not to vary the deed, hut to maintain the equity which attaches to the transaction inherently, and which the deed or contract of the parties does not create and cannot destroy. If an equity of redemption really attaches to the transaction itself, any attempt to defeat that equity, hy setting up the deed as absolute, is fraudulent. To defeat such equity, the transaction itself must he varied, so that the equity will not attach. Maxwell vs. Mountacute, Prac. in Chancery, 526; 2 Atk. 99, 258; 3 Atk. 389; Powell on Mort. 104; Holbridge vs. Gillespie, 2 Johns. Ch. 29. The very early case of Newcomb vs. Bonham, (2 Vern. 7) has been followed hy courts of equity. In that case, “ a man being seized of lands in fee, makes
It may be fitting that the very recent case of Russell vs. Southard, 12 Howard, 138, should stand with the ancient case of Newcomb vs. Bonham. Both are bills to redeem, and both recognize the equity of redemption as attaching to the transaction and not to the deed of the parties, and both establish the competency of parol proof upon such bills, to show the real nature of the transaction ; and the chain of authority from the one to the other is unbroken.
It would seem, that this case of Russell vs. Southard., ties the parties down to a conditional sale, so explicitly, that all equity of redemption is cut off, if such were possible to be accomplished by the terms of their contract, and it seems that if it were possible to guard against the admission of parol evidence, to control the contract, it is accomplished here, for the skill of man could not make the stipulations more clear, distinct, and definitive. “ The said Russell binds himself, his heirs, <fcc., that if the said sum and interest be not paid to the said James Southard or his assigns, at the expiration of four months from this date, that
Yet the court say, “ It is insisted on behalf of the defendants, that this question (whether the transac.tion was a mortgage or a deed) is to be determined by inspection of the written, paper alone, oral evidence not being admissible to contradict, vary, or add to, their contents. But we have no doubt extxaneous evidence is admissible to inform the court of every material fact known to the parties when the deed and memorandum was executed. To insist on what was really a mortgrge, as a sale, is in equity a fraud, which cannot be successfully" practised under the shelter of any written papers, however precise and complete they may appear to be.” Numerous authorities are cited in support of the doctrine, which it is unnecessary to specify here. They are all to the point, and their current is uninterrupted.
Again: the court says, In respect to the written memorandum, it wras clearly intended to manifest a conditional sale. Very uncommon pains were taken
In the argument of this case, and in the opinion of the court, it seems to have been conceded, that if there had been any bond, note, or agieement, on the part of Russell to pay the money, that fact would have been conclusive of the mortgage character of the instrument. But the question was, whether in the absence of such agreement, and consequently want of mutuality, it could be held a mortgage, and it was held that such want of agreement to pay on the part of the plaintiff, was not conclusive that it was a sale and not a mortgage.
It is indeed true, that there are some cases which might seem to call in question the correctness of the doctrine established by the foregoing decisions. In Thomas vs. McCormick, 9 Dana, 109, it was held that oral evidence was not admissible in opposition to the legal import of the deed., and the positive denial in the answer, unless a foundation for such evidence had been first laid by an allegation, and some proof of fraud or mistake in the execution of the’ conveyance, or some vice in the consideration. But the adjudged cases do not sustain this position, the evidence being- equally
Thus supported by authority, were it necessary to go beyond the deed and the bond recited in it, in order to pronounce upon the rights of these parties, we would be called upon to throw open the door to the extraneous evidence here offered, and adjudicate upon the rights of the parties, in the light of all the facts and circumstances which surrounded the parties at the time, and gave character to the transactions between them. We will do so in this case, for it is a relief to know that the construction we have given to the conveyance, and the equities arising out of it, are in harmony with the clear and manifest intention of the parties at the time, and that the same rights and equities flow from the transaction itself, as result from our construction of their written agreement.
From the evidence, it appears that the lands in question are situated near to the village of Water-town. That the government land sale was expected to come on in the month of November, A. D., 1838, but that it did not, in fact,- take place until February, A. D., 1849. That about the year 1836, James Bo-gan “ claimed” the lands in question, and so continued to “ claim!'1 them, up to the time of the government land sale, and that he had made such improvements thereon as to entitle him to the award of the “ claim committee” of the lands.
It appears, therefore, that James Rogan had such a claim to the land now in controversy, and that his claim, as well as all the lands in that precinct was "bid off, by one John Richards, who was appointed by the settlers for that purpose. James Rogan’s claim was bid off by Richards in the name of Martin O. Walker.
It further appears, from the evidence, that Walker came to the Territory some time previous to the land sale in 1839. That he then made known his business to be, to buy the lands for the settlers. He said that he had money for that purpose. He stated that he required his money doubled in four years, and seven per cent, interest per annum. He requested several persons to send him customers from among the settlers at that rate. He declared, that he did not wish to buy unimproved lands, such as would be likely to be deserted and left on his hands. He said there was land enough unoccupied, that he could purchase, if he wished to buy land for the sake of the land, that it was the interest that he wished to make on his money, and that he was not after the land. He stated at the Finch’s that his terms were to double his money in four years, with seven per cent, interest, that he was to take the title to the lands in his own name, as security for his money and interest. These facts are testified to by two witnesses. Mr. Dennis saw Walker at the land sale, when he informed Dennis that his business was to loan money to the settlers, or rather that he entered land for them, giving them a term of years to pay the money back. That he had a large amount of money to invest in that way. In addition
From this evidence, it seems to me, that no one can doubt, as to the real nature of the original transaction. That Walker’s intention was to invest his money, by advancing to or for, it matters not which, the settlers upon improved public lands, money to purchase their respective claims, at a rate of interest which should double the principal sum in four years, with seven per cent per annum, in addition, and take the title to the lands in his own name, as security, there can be no manner of doubt. He distinctly declares to Finch that that is his object. Fie repudiates the
But it is said that James Bogan had no interest or estate in the land, prior to its sale; that he had nothing to convey to Walker, and hence he could not stand in the relation of a mortgagor. Perhaps not. Technically speaking, certainly not. But is it true, that James Bogan had no interest in the land prior to government sale ? Are we prepared to say that the possession, and improvements, of advance pioneer settlers on the public lands, shall be altogether alien to our jurisdiction ? So long as these claims are encouraged by the general government, and so long as settlement and occupation continues to outstrip survey and sale, it would seem that the good order and peace of society requires, that the arm of the law be not altogether withdrawn from their protection. Be that as it may, Walker in this case did recognize, in February, 1839, and in November, 1838, some interest of Bogan in these tracts of lands. He recognized also the “ claims ” of other settlers. His proposition was' to buy their lands for them, “if he were permitted” to
If Walker had set up in his answer, an illegal and unjust combination, by which he was prevented from free bidding at the sale, the case might have been different. But it whs that very community of interest which Walker sought to render available-to his own purposes, It was the claims of the settlers which he sought out, as an investment affording ample security and a large return by way of interest or usury for the money advanced for them by him, and, as if to mark indelibly the character of the transaction, as a monied, one, as an advance, or loan of money for a given purpose, the bond for the repayment of the money is made the initiatory contract, and the consideration of the deed.
It is objected to the matters recited in the bill, and the evidence offered to sustain them, that it “ is an attempt to establish a resulting trust by parol, contrary to the statutes of the Territory in force at the time.” Statutes of Territory, 1839, 162, § 6 ; 164, § 2.
The Revised Statutes of the Territory did not prohibit resulting trusts, or trusts by implication of law, but did prohibit the creating of any trusts in lands or real estate, except by writing, signed by the parties or their lawful agents, or by operation of law.
Express trusts, or such as are created by agreement of the parties, must be in writing, and parol proof is inadmissible to establish them ; but trusts which result from operation of law do not require to be in writing, and parol proof is competent to establish the facts and circumstances out of which they arise.
The case of Getman vs. Getman, 1 Barb. Ch. Rep. 499, is clearly a case of express trust, attempted to be proved by parol, and the court very properly held to the statute of frauds, and dismissed the bill.
When real estate is purchased with the money of one person, and the title is taken in the name of another, there is a resulting trust in favor of him whose money is paid, and parol proof is competent to show these facts. Authorities need not be cited to sustain this position. The question is fully discussed in Boyd vs. McLean, 1 Johns. Ch. Rep. 582, and authorities are there numerously cited and ably discussed, and the principje fully settled.
But the case of Boyd vs. McLean establishes another doctrine in relation to trusts which cannot be disre
# that case, the title to the premises was not m the plaintiffs. They alleged that they had obtained a loan of the defendant to pay the contract price for the land which had become dne ; that the land was purchased with the money loaned, the title taken in the name of the defendant, the money, with interest, to be repaid in four years. The loan was explicitly denied by the answer, the want of title or interest of the plaintiff in the lands set up, and the statute'of frauds insisted upon. Here was no bond given for repayment of the money, no written conveyance or agreement to convey by the defendants ; yet the Chancellor admitted the parol proof to establish the fact of the loan, and held that there was a resulting trust in favor of the plaintiffs.
From this it seems, that if A. borrows money of B. to purchase land, and land is purchased with the money, and the title taken in the name of B. as security for the payment of the money within a given time, there is a resulting trust in B. in favor of A., and that parol proof is admissible to show the fact of the loan. When the money is borrowed by A. it then becomes his, and its investment in lands, it seems, may be followed.
How, then, in view of these authorities, stands the present case ? Bogan was in possession of the land by a claim which Walker desired to render available to his own purposes. The time for payment for the land had arrived. Bogan applied to Walker for money to buy the land. Walker did not want the land for the sake of the land, but wanted to invest his money so as to bring him in an annual interest of
I recollect that it was said that the bill does not set out the loan according to the proof, and that the sum
And here let me remark that this case differs in its essential characteristics from those cited from Barbour, inasmuch that the trust here established is a resulting-trust, arising by operation of law, and in those the attempt was to set up an express trust, arising from the agreement of the parties resting altogether in pa-rol. In neither of those cases, was a bond or obligation taken for the money, nor was there any written conveyance or contract for a conveyance to the complainant. See the cases of Hoyt & Lathrop vs. Bundel & Snyder, before cited.
But although under the proofs this case might be sustained on the ground of a resulting trust, I prefer to place it where the parties themselves placed it by their written agreements, and the equity of redemption arising out of the transaction which gave rise to that equity which we have found to be, paramount to their contracts and agreements.
Though an equity of redemption did arise here out of the transactions of the parties, similar in kind to
In the case of a common mortgage, the equity of redemption continues, as a general rule twenty years, unless sooner foreclosed. In an early case, a bill to redeem was dismissed as stale, 17 years having elapsed, and no claim to any right to redemption having been set up or intimated, though the parties had been in a situation to assert their right all the while. We might find analogies perhaps, in cases of bills brought for specific performance, but in this case it is not deemed necessary to do so.
The rule in equity is to relieve against conditions subsequent, whenever compensation can be made. It is a general rule in equity that interest is a compensation, when the payment of money only is the condition to be performed. But though this latter rule does not so perfectly accord with our notions of equal and exact justice, we are relieved here, by the motive of the defendant, apparent as well from the written instruments as from other proof in the case, which indubitably was, to secure to himself the repayment of his money and interest ’at a rate of more than 25 per cent, per annum. Such he declared to be his object at or about the time, stating that he dicl not want to purchase land for the sake of the lands, but it was his money and interest only that he wanted
The bond became due in February, 1843. Walker instituted an action of ejectment to recover possession in 1847, and in 1849 this bill was filed. Under all the circumstances of the case, and in view of the rights claimed and attempted to be enforced, I am of the opinion that the bill was filed in time, and that the equity of redemption did not cease either by lapse of time or the laches of the parties.
The question of usury is not raised in the case, and therefore nothing is said about it.
I have commented but little upon the answer of the defendant, because, in all material respects, it is overborne by the proof, and because it is unpleasant to remark upon it as perhaps it deserves.
I should not discharge my whole duty in this case,, did I fail to'acknowledge the aid I have had from the surpassing ability and research which have been
The complainant is entitled to the relief sought by his bill, and it will be decreed accordingly.