Smith v. Crosby

47 Wis. 160

• Court: Wisconsin Supreme Court
• Decided: August 15, 1879
• Status: Published

Opinion

Tayloe, J.

It is insisted by the learned counsel for the appellant, that the conveyances and contracts above described, unexplained by any parol evidence, show that the transaction was a loan of the sum of $1,200 by the said Crosby to the said Ann M. C. Smith, to be paid in two years from the date of such loan; and that, instead of receiving interest on the money loaned, he was to have the use of the property, discharged of the rent secured to her by the lease, the surrender of which was accepted by her at the time of making the loan. On the other hand, the learned counsel for the respondents insists that the writings show an absolute sale of the property — which was a right to the use of certain water taken from the Mon-terey dam in the city of Janesville — by the plaintiff to Crosby, accompanied by an agreement on his part that, in case the appellant would pay him the sum of the purchase money punctually in two years from the sale thereof, he would reconvey the same property to her; he, in the meantime, to have the possession and use of the property purchased by him. Independent of any evidence explanatory of the transaction, and relying only upon the legal effect of the written instruments offered in evidence, we are compelled to concur in the view of the case taken by the counsel for the respondents. The deed and contract, which are the material papers in the case, do not show the transaction to be a mortgage. The deed is absolute on its face, and does not indicate anything but a sale on the part of the appellant, and a purchase on the part of Crosby. It certainly does not tend to show that there was the relation of debtor and creditor existing between the appellant and Crosby. If it raises a presumption of indebtedness at all, it is the presumption that Crosby might he indebted to the appellant for the purchase money; certainly not that she was indebted to him. The contract made at the same time for the conditional reconveyance of - the property to the appellant does not contain any covenant or agreement on the part of the appellant to pay the sum of $1,200, or any part of it. It is simply an agreement to convey, on condition of the payment of a fixed sum at a specified date, and does not create the relation of debtor and creditor between the parties. The surrender of the lease under which the property was formerly held by the grantee with others, is entirely consistent with the theory that he was a purchaser of the property absolutely in fee; and such surrender would be inconsistent with the theory that the deed was given as security for a loan. The possession by the grantee in the deed under it is consistent with the theory of a purchase, and inconsistent with the theory of a mortgage, The making of the quit-claim deed was a proper precaution to cut off any possible right which the vendee in the contract might claim in equity, to have the contract enforced in her favor, notwithstanding she might not pay the purchase price in accordance with the terms of the contract. The giving of the conditional lease, and the acceptance of the same by the same parties who held the lease at the time of the purchase, was a proper precaution in case the appellant repurchased the property under her contract with Crosby. None of the written evidence is inconsistent with the legal effect of the warranty deed from the appellant and her husband to Crosby. Standing alone, they show an absolute conveyance from the appellant to the defendant Crosby, and not a conveyance by way of mortgage as a security for money loaned. It is said that the intention of the parties is the real criterion by which courts must be guided in determining whether in a given case the tranaction is a sale or a mortgage. Jones on Mortgages, § 258. In this case, so far as the intention of the parties can be ascertained from the written contracts between them, there is nothing to show anything in the character of a mortgage. They do not evidence a loan, or in any way show a liability on the part of the appellant to repay the $1,200 which was the consideration for the deed-.

This case, upon the papers alone, is a much stronger case than that of Conway's Ex'rs v. Alexander, 7 Cranch, 218. In that case the supreme court of the United States held, that when land had been conveyed to a third person in trust to reconvey to the grantor if he should repay the purchase money before a day named, and if not, then to convey to the purchaser, in the absence of a bond, or note, or other evidence of indebtedness, the transaction must be regarded as a conditional sale. Chief Justice Maesiiall, who delivered the opinion of the court, said: “ To deny the power of two individuals, capable of acting for themselves, to make a contract for the purchase and sale of lands defeasible by the payment of money at a future day, or, in other words, to make a sale with a reservation to the vendor of a right to repurchase the same land at a fixed price and at a specified time, would be to transfer to the courts of chancery, in a considerable degree, the guardianship of adults as well as infants.. Such contracts are not prohibited either by the letter or the policy of the law. ... In this case 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 it 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 the 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. Its existence in this case is certainly not to be collected from the deed. There is no acknowledgment of a preexisting debt, nor any covenant for repayment.” The foregoing remarks of the late learned chief justice of the supreme court of the United States will apply with much greater force to the case made upon the face of the written evidence in the case at bar, than they did to the case then under consideration. For a further illustration of the difference between a mortgage and a sale with a condition or agreement that the grantor may repurchase the property at a future time for a specified sum, see Jones on Mortgages, §§ 257-261, and cases cited in his notes; Wilcox v. Bates, 26 Wis., 465; Glendenning v. Johnston, 33 Wis., 347.

It being clear that upon the written evidence the appellant failed to make out any light to redeem the premises upon the ground that the defendants held the possession of them by virtue of a mortgage and not by virtue of a deed, the only remaining question is, whether the parol evidence introduced by the respective parties changed the rights of the parties as they appeared from the writings introduced, and satisfactorily showed that, notwithstanding the absolute nature of the conveyance made, the transaction was in fact a loan of money by the defendant Crosby to the appellant, and these writings were given to secure such loan, and not with the intention of passing the absolute title to the said defendant.

Upon this point, after a full hearing of the case by the learned circuit judge, he has found against the appellant. After a careful examination of the whole evidence, we are satisfied that this finding is sustained by the evidence, and that there certainly is not any such preponderance of the evidence against such finding as would justify this court in reversing the judgment on the ground that such finding is clearly against the weight of evidence. On the contrary, looking simply at the evidence as it appears in the record, without the advantage of seeing the witnesses in court, and witnessing their appearance ahd’the manner of giving their testimony, we think'the 'clear preponderance of the evidence is in favor of the finding of the learned circuit judge. Upon the whole record, we are satisfied that the judgment of the court below is fully sustained by the evidence, and that no errors have intervened which entitle the appellant to a reversal of the same. •

By the Court. — The judgment of the circuit court is affirmed.