91 W. Va. 106 | W. Va. | 1922
At May 1918 rules John F. York, administrator of the personal estate of John Y. York, deceased, filed his bill against Ernest Meek, Kentucky National Bank and others for the purpose of having a deed made by the decedent to Ernest Meek, conveying to him decedent’s home farm of 162 acres, situate in Lincoln District, Wayne County, and dated May 3, 1917, declared to be a mortgage, the bill further alleging that decedent’s personal estate is insufficient to pay his debts and asking that the debts and priorities may be ascertained and the real estate sold to satisfy them. The bill alleges that on May 3, 1917, the decedent, owing a debt to the Kentucky National Bank, evidenced by certain notes executed by the decedent in the sum of from $2500 to $3000, executed and delivered to the defendant, Ernest Meek, the chief executive officer of the bank, a deed purporting to convey the 162 acres for the purported consideration of $3736.95; that the land conveyed was the home place of the decedent upon which a large dwelling house stands, with outbuildings, and that portions of the land are covered with valuable timber and underlaid with coal and other valuable minerals and is worth at least $8000; that while the deed appears to be an absolute deed upon its face, yet it was expressly agreed between the
At May 1919 rules an amended hill was filed by plaintiff against the same parties and others, (it appearing that some of the heirs at law were not made parties to the original bill)- in which it is averred that the grantor, John Y. York, was, at the time of his death and for a long time prior thereto and at the time the deed was made, wholly unfit to transact business of any kind or character by reason of mental and physical incapacity; that while he was suffering from such mental and physical incapacity,- ills and infirmities he was improperly and unduly influenced to execute and deliver the deed to the said Ernest Meek and that the defendants, Kentucky National Bank and Ernest Meek, knew at the time of
The Kentucky National Bank and Ernest Meek answering the amended bill, denied that John Y. York was incompetent to make the deed. The court by decree entered November 12, 1920, denied plaintiff any of the relief sought, dismissed his original and amended bills, and directed plaintiff .to pay to Ernest Meek all the rents .collected by him from the real estate in controversy. Prom' that decree plaintiff obtained an appeal to this court.
Voluminous depositions were taken on behalf of both plaintiff and the two principal defendants. But two questions are presented, — First, whether the grantor was competent to make the deed, and second, whether it was the intention of the parties to it that it should be an absolute conveyance in fee or a mortgage.
The circuit court found that the grantor was competent and that the deed was not a mortgage but an absolute fee simple conveyance.
We can not say, from the record, that the grantor was incompetent. Upon that question the evidence is highly conflicting and this court will follow the finding of the circuit court thereon.
For about twenty years John Y. York was engaged in the lumber business with John L. Billups, under the firm name of Billups and York. The firm transacted considerable banking business during this period at the Big Sandy National Bank of Catlettsburg; this bank’s charter expired and its business was taken over by or merged into the Kentucky National Bank, and the firm continued to transact its banking business there, and was in debt to the bank. About 1912 or 1914, Billups and York met at the bank for a settlement of their affairs. The partnership was dissolved and each made some arrangement to take care of his part of the debt. The amount of this firm debt is not shown, nor does the amount that each was to pay appear; but whatever their debt was they severed their liability, and by arrangement with the bank each assumed payment of his part. York’s note for his portion was carried by the bank for some time, when in 1916 it began pressing him for payment. The bank wrote him a number of letters, insisting on his making some arrangements about this debt, either by paying or securing it. This correspondence was carried on for some months. During this period the grantor executed and delivered a deed for the farm to his son, Dr. William York, of Williamson, who, it appears, was to take care of the debts in some way, but he failed to pay. On January 31, 1917, the bank wrote William York that after cheeking up the past due notes endorsed by his father it seemed useless for it to take part security and release the balance, and as the matter seemed doomed for delay it had written his father to that effect. That same day the bank wrote his father “After you were here to-day and noting the notes still not arranged for by Dr. William York, we believe it best to ask you to arrange all the notes at once. We can not delay the matter any longer and all must have attention.” Ernest 'Meek was
On May 3, 1917, John Y. York, accompanied by his wife, went to Catlettsburg, where they met Meek, president, and Frank C. Gibbs, cashier, of the Kentucky National Bank. It was found that York owed the bank, either as maker or endorser on five notes, all past due, $2996.95, in addition to a note of $624. This note of John Y. York was secured by a note of Dr. William York for $750. The bank claims that the decedent did not desire to pay the $624 note but instructed it to enforce payment of the collateral security. It appears that the original negotiations between John Y. York and Meek only contemplated that Meek would furnish him sufficient funds to pay his debt at the bank, but when they closed the transaction, York insisted on receiving about $3500, and on further calculation this was raised to $3761.95. His wife, who was a young woman about thirty years of age, at his instance,
“This agrément made and entered into this the 3d day of May 1917 by and between John Y. York and Ernest Meek, Witnesseth, that it is agreed that Ernest Meek will at any time within one year after the date hereof, convey to the said John Y. York or his order certain pieces of property this day conveyed to him by the said John Y. York and Ida York, his wife provided that- said,York pay to him the principal and interest, taxes and all and any costs he my have .paid out on said property during the said year and to reimburse him for any and all judgments that may now or hereafter become a lien thereon. This agreement is only good until May 3d 1918 upon which date it shall become null and void.’’.
At'the time the deed was made John Y. York did not live on the farm, 'but he retained possession of it until the -day of his death, some seven months later, and collected the rents thereon. Meek testifies York was to have the use of the farm, without charge, for a year, and that' for that period •he had the option of buying"it back at the same price, plus 'interest, taxes and'costs; but that-it was only, an option, and since York did not pay the amount within the year, the option became void according to the letter of the contráct. .His chief claim seems to be that the 'relation- of debtor and creditor between York and Meek did not exist after the conveyance; that if he could not require York to repay him any part of the money as paid out by him, then the relation of debtor and creditor did hot exist and the deed is not a:
What are the undisputed facts in this case ?
First: The grantor was in debt and hard pressed for money. He owed this money to the Kentucky National Bank, of which the grantee was president. The grantee was fully aware of the bank’s effort to collect its debt.
Second: The farm conveyed is some thirty miles distant from where Meek lived and where the transaction was closed, yet Meek took title to it, without ever seeing it, and so far as the record discloses, without making the kind of an investigation that business men usually make of property values before a purchase of that kind is consummated.
Third: In connection with this transaction, on March 22, 1917, just seven weeks before the deed was made, York had written to the bank that some men were there prospecting for his coal and that if he could make a fair sale he would receive about $6000 for it. While this may not be evidence of its value, yet it shows what York thought the value of the coal was; and if he were of the opinion that the coal alone was worth $6000, it is not likely that within seven weeks thereafter he would sell the land, including the coal, for $3761.95. This letter has an important bearing as evidence of the intent of the parties at the time the deed was made. Meek admits that when he acquired the deed he thought he could make from $1000 to $1500 by the transaction.
Fourth: While Meek himself as an individual is not shown to be a known money-lender, yet he was president of the Kentucky National Bank,- the bank to which the grantor owed the debt.
Fifth: The note he executed for the $3761.95 was made to his bank, payable on demand, yet when his deposition was
Sixth: Meek never took possession of the farm notwith
Seventh: The agreement, executed by the parties, while in point of time written after the deed was delivered, yet it was executed so soon afterward, — within an hour or so,— that it maj»- properly be considered as contemporaneous with it. When we look to that we see that York was not only required to repay to Meek the principal and interest for the .amount he advanced, but taxes and any costs he may have paid out on the property during the year; and more, to reimburse him for any and all judgments that may then or thereafter become a lien thereon.. Why this last provision? Why provide for repayment of £<any costs”? Wat suit threatened from any quarter ? The record shows that the First National Bank of Huntington obtained a judgment against York on May 8, 1917, five days after the deed was made and three days after it was recorded, for $339.65 and costs. Meek doubtless thought he would have to defend his right; this would mean the incurring of costs, which he might have to pay. He knew there were other creditors. Had the bank taken a deed of trust to secure its debt, instead of a deed absolute on its face, it doubtless would have been attacked immediately as a preference. But having the deed made to Meek, not to the bank, gave it the appearance oh its face of being a regular business-like transaction, with the bank’s name left out. We do not mean to say that there was any dishonesty on the part of the bank officials, but do think that the paper took the form of a deed rather than a deed of trust in order to give the bank a preference of its claim, and that this was the real reason why Meek was willing to back York’s debt. He was anxious to have his bank secured and took this means to effect it.
That the farm was worth more than $3761.95 when the deed
This position is fully sustained by cases of this character heretofore decided by this court, among which may be mentioned: Davis v. Demming, 12 W. Va. 246; Hoffman v. Ryan, 21 W. Va. 415; Hursey v. Hursey, 56 W. Va. 148, 49 S. E. 367; Froidevaux v. Jordon, 64 W. Va. 388, 62 S. E. 686; Sadler v. Taylor, 49 W. Va. 104, 38 S. E. 583; Liskey v. Snyder, 56 W. Va. 610, 49 S. E. 515. According to our view, therefore, the circuit court erred in holding that the deed was an absolute conveyance of the land and in dismissing plaintiff’s original and amended bills. We will reverse the decree and remand the cause, with direction that the circuit court declare the deed to be a mortgage, and the lands to be assets in the hands of the administrator for the payment of the decedent’s -debts, to be administered according to equity and the principles herein announced.
Reversed and remanded.