Wallace v. Smith

155 Pa. 78 | Pa. | 1893

Opinion by

Mr. Justice Sterrett,

This case originated in transactions between the plaintiff and John Ilynd, one of the defendants, prior to June 3, 1881, and hence it is not affected by provisions of the act approved on that day. Nothing was then better settled by a long line of decisions than that a conveyance of land, intended to operate mereiy as a security for money, was, in effect, a mortgage, not only as between the parties themselves, but also as to those who had notice of the transaction: Guthrie v. Kahle, 46 Pa. 331; MeClurkan v. Thompson, 69 Pa. 305. The reason why such a deed, absolute on its face, might be treated in equity as a mortgage, was because it would be a fraud on the part of the grantee, for example, to hold and use, as indefeasible, an instrument which was delivered to and accepted by him as a defeasible instrument or mortgage. The plaintiff in such cases, seeking to reform the instrument, must invoke the equity power of the court, and upon that he must stand or fall. The burden of proof is upon him; and it is only upon clear, precise, and indubitable evidence of the fact that the deed was intended by both parties thereto to operate only as a mortgage, that he can succeed in having it so declared by a chancellor: Rowand v. Finney, 96 Pa. 192; Hartley’s Ap., 103 Pa. 23. If the party setting up the defeasance is able to prove the fact by evidence that is not only clear and precise, but at the same time carries with it a conviction of its truth, he is entitled to succeed, notwithstanding there may be rebutting testimony tending to prove the contrary. Full credence may be given to the testimony on one side, while that on the other may be rejected as unworthy of belief, or, at best, insufficient to create even a serious doubt: Hartley’s Ap., supra. As was said by our late brother Clark: “ Each case must, of course, to a great extent depend upon the circumstances peculiar to itself; but there are certain indicia of intention which frequently occur, and, when they do exist, are always looked to. Among these are the sufficiency of the price paid; whether or not existing securities or evidences of indebtedness were given up or canceled; whether there was any obligation to repay the purchase money, and whether the grantee entered into immediate possession,” etc.: Huoncker v. Merkey, 102 Pa. 462, and authorities there cited.

One of the tests by which to determine whether the conveyance of land in consideration of grantor’s indebtedness to grantee is to be deemed an absolute sale or a mortgage, is the effect which the parties intend the conveyance shall have on the indebtedness itself. In 1 Jones on Mortgages, § 267, the subject is discussed thus: “If the indebtedness be not canceled, equity will regard the conveyance as a mortgage, whether the grantee has so regarded it or not. He cannot at the same time hold the land absolutely and retain the right to enforce payment of the debt on account of which the conveyance was made. The test, therefore, in cases of this sort. . . . is to be found in the question whether the debt was discharged or not by the conveyance.” To the same effect is Null v. Fries, 110 Pa. 521, in which it was held that an absolute conveyance, in consideration of grantor’s indebtedness, etc., may be shown to have been a mortgage if the debt survived. If, however, (as in that case,) the judgments and securities which constituted the consideration for the conveyance are satisfied and canceled, the mere fact that the grantee executed articles of agreement giving the grantor an option to repurchase the property within a certain time will not make the transaction a mortgage.

The substance of the bill and answer and the principal facts of the case sufficiently appear in the report and supplemental report of the learned master. It is therefore unnecessary to restate them here. His inferences of fact and conclusions of law being in favor of plaintiff, he accordingly recommended a decree substantially as prayed for. Sixteen exceptions to the report were filed by defendants. These were fully heard by the learned court, who, upon consideration thereof, sustained five of them, and dismissed the bill, with costs to be paid by plaintiff. The exceptions thus sustained are fully recited in the second to sixth specifications, inclusive. In substance, they are to the effect that the case, upon the pleadings and the proofs, was insufficient to warrant the master in finding that the deed in question was intended by the parties thereto to operate as a mortgage, and in so treating it in the decree he recommended. After an examination of the record, including the pleadings and the testimony, and due consideration of the same, in the light of the principles applicable to such cases, especially the character and degree of the proof required, we are constrained to the same conclusion that was reached by the learned court below. While there are some indicia of an intention to consider the deed in question as merely security for the money advanced by Rynd, one of the defendants, to pay plaintiff’s mortgage debt to the Dollar Savings Bank, the proof is not of that clear, precise and convincing character that is required to move the conscience of a chancellor to reform a deed, absolute on its face, and declare by his decree that the parties thereto intended that it should operate merely as a mortgage. Referring to Ryud’s assumption and payment of said mortgage debt, amounting, with interest, to nearly $4,400, plaintiff was asked whether he then or thereafter gave Rynd any obligation or written evidence of indebtedness for the amount thus advanced, or for other money, and his reply was, “No, not that I remember.”

The substance of plaintiff’s testimony as to his understanding at the time the land was conveyed to Rynd is that the latter would reconvey the same “ at any time I could see my way clear to give back his money; ” “ that was the only promise that was made.” In slightly varied forms of expression ho repeated this several times. His wife’s testimony was to the same effect. In his affidavit of defence filed, in No. 141, October term, 1891, lie stated the arrangement thus: “ If said affiant should elect to redeem said realty, at any time, that affiant would have the privilege or right so to do, by repaying the amount he, affiant, would owe the said John Rynd. That on the-day of May, 1890, affiant elected to redeem said realty, and tendered a certain sum of money for that purpose to both Rynd and Smith.”

It is even more than doubtful whether ever such election would have been attempted or tender made if it had not been for the advance in prices of land in the neighborhood, stimu lated by developments for oil purposes. It does not appear that, during the more than nine years preceding, plaintiff had ever seen his “ way clear ” to give back to Rynd the money he paid or advanced in consideration of the conveyance in April, 1880. Nor does it appear that he was ever under any obligation to repay the same, however clearly he might have seen his way to do so. On the theor3r of indebtedness, the amount which Rynd would have -been entitled to receive, when suit was brought, including money advanced to pa31' the mortgage, the judgment, etc., with interest, would b¿ nearly $10,000.

When Mr. Smith accepted the trust under Mr. Rynd’s deed of May 18, 1885, and assumed charge of the farm, plaintiff never suggested that he had any interest therein, or any right to redeem the same; nor did he ever intimate anything of the kind for nearly five years thereafter. On the contrary, after the death of his mother, in 1888, for whom provision was made in the trust deed, plaintiff leased the farm from the trustee, and at one time spoke of buying it. It was not until shortly before this suit was brought, in 1890, that the trustee received any intimation of plaintiff’s claim, either from him or from any other source. Plaintiff’s equity, if he ever had any, is very stale.

There are other facts and circumstances tending to cast doubt on plaintiff’s claim, but it is unnecessary to specify them. It is sufficient to say that his contention is not sustained by that clear, precise and indubitable proof which alone should move a chancellor to declare b3r his decree that the deed in question was intended by the parties thereto to operate merety as security for the money advanced. We therefore think there was no error in sustaining the five exceptions referred to, and in dismissing the bill at plaintiff’s costs.

Decree affirmed, and appeal dismissed, with costs, including costs in the court below, to be paid by appellant.