Fredericks v. Corcoran

2 Colo. L. Rep. 565

• Court: U.S. Circuit Court for the District of Colorado
• Decided: May 22, 1882
• Status: Published

Opinion

Opinion by

Gordon, J.

This was an action of ejectment brought by Corcoran and Richards, the plaintiffs below, against Joseph R. Fredericks and the Lewisburg Building Association, for the recovery of the possession of certain property, in the writ described, situated in the township of Wayne, county of Clinton. The common grantor under whom both parties claim title, was Joel Karstetter, who, it seems, by articles agreement, dated July 14, 1869, bound himself to convey to Fredericks the land in controversy on payment by him of eight hundred dollars. The plaintiffs’ claim is founded upon a sheriff’s deed executed to them, in pursuance of a sale o f this property, regularly made on the 7th of May, 1880, upon a judgment of Corcoran, Bubb & Co. against Fredericks, entered to No. 314, February Term, 1874. The Building Association claimed under a deed made by Karstetter to it, dated April 11, 1874. To rebute the force of this defense the plaintiffs contended, that this deed had been executed to the Association, but as a trustee for Fredericks, and that was held by the company only as a pledge for money loaned by it to him, and that it thus held but a parol mortgage, which was of no force as against a subsequent judgment creditor. Undoubtedly if this be a correct statement of the facts of the case, the judgment now before us was well rendered.

In Guthrie v. Kohle, 10 Wr., 331, it was said by Mr. Justice Thompson, that it had been so often ruled, that the conveyance ofdand for purposes merely of securing the payment of money, was but a mortgage, that it had passed into an elementary principle, and no longer required the citation of authority to. give it force. But that the Association did so hold the Karstetter deed, is, from the evidence, not a matter of doubt. On payment of the loan, Fredericks was entitled to a re-conveyance. This loan altogether amounted to two thousand dollars, and as part security, the articles of agreement with Karstetter were assigned to the lender of this money. Part of the sum thus borrowed was used to pay off the amount due on the articles, and the deed, which took their place, was executed to the Association. But this deed was held, as was the previous security, subject to the borrower’s right of redemption. Now, will anyone tell me what material difference it would have made in this transaction, had Fredericks taken the deed in his own name, and afterwards, for the same purpose of security, transferred it to the Building Association? Yet, beyond doubt, this would have been but a mortgage; a deed absolute on its face with a parol defeasance.

The important question is, how did the Association hold? As absolute owner? Certainly not; but merely as a pledgee. Just as soon as Fredericks paid, not the purchase money for the land, but the whole amount of the loan, out of which that purchase money was paid, he entitled himself to a return of his pledge. If this is not a mortgage it is hard to tell what would constitute one.

The learned counsel for the defense has contended with great earnestness, that, at all events, the Association was entitled to a verdict conditioned for the payment of the money which it paid to Karstetter for the legal title. And so, indeed, it would have been entitled, had it paid its own money to Karstetter; but it did nothing of the kind. It had in its hands two thousand dollars belonging to Fredericks, and out of that it paid the purchase money due to his vendor, and that the money thus in its hands was the proceeds of a loan made by itself to him, did not alter the legal status of the parties; the money was none the less Fredericks than if he had received it elsewhere, and put it into the hands of the company for payment to Karstetter.

As what we have said disposes of the principal contention of the defense, as apparent in all the assignments of error, we are relieved of the labor of treating them seriatim.

Judgment affirmed. —Legal Intelligencer.