Wagg v. Herbert

1907 OK 156, 92 P. 250, 19 Okla. 525, 1907 Okla. LEXIS 231

• Court: Supreme Court of Oklahoma
• Decided: October 12, 1907
• Status: Published

Opinion

Opinion of the court by

Hainer, J..:

It is the contention of the plaintiff in error that the petition, if all the facts were admitted, does not state facts sufficient to constitute any right to relief. It is further contended that the evidence does not sustain the allegations of the petition fairly construing the most adverse testimony and taking it as uncontradicted. Plaintiff in error further contends that, even if plaintiff below had made out a case on her petition and evidence, the unquestioned and undisputed facts show a complete defense. These contentions in oúr opinion are clearly untenable. The evidence in this case discloses that after some extended negotiations between W. H. Herbert and his wife, Mary B. Herbert, and the plaintiff in error, S. E. Wagg, the plaintiff secured a loan from Wagg for $1,000, and as evidence of such indebtedness executed to Wagg a promissory note dated October 24, 1898, payable 5 years after date, with interest payable annually in advance. Wagg deducted $100 from the principal sum loaned, being one year’s interest. To secure the payment of said note, W. H. Herbert and his wife, Mary B. Herbert, executed a mortgage upon 80 acres of land adjoining the town of Cleveland. At the time of the execution of the mortgage, and as further security therefor, and in accordance with the previous negotiations, Herbert and his wife executed a warranty deed to the premises, said deed to be deposited in escrow with the Bank of Cleveland, and to be delivered to Wagg upon breach of the terms of the mortgage.

The following letters from S. E. Wagg to W. H. Herbert and Mary B. Herbert will shed some light upon these transactions, and .are, we think, very material to the determination of the rights of the parties. One of these, dated Appleton, Wis., September 25, 1898, appears upon page 55 of the record, and'reads as follows:

“Appleton, Wis., Sept. 25, 1898.

“W. H. Herbert, Cleveland, Okla.

“My dear Sir:

“Yours of the 15th at hand and it’s satisfactory as a fair declaration to do, and I have began to see something of the drift of things. If you was in Wisconsin I would not hesitate a moment. I have no love for such men as you describe and would not. I have been made to hesitate on account of the possible future contingencies. I wrote Mr. Drown about a deed held in escrow against the possible interference or injunction proceedings that scheming men and lawyers trump up. I will bring t.he matter to a focus at once and make the loan or quit and call it off.

“You execute a warranty deed to me to be placed in escrow and held by the Bank of Cleveland or A. A. Drown in trust'for the fulfillment of the terms of the mortgage in pase you fail to fulfill the terms.and are in default of interest or other terms for 6 months; then the deed is to be delivered to me or my order. The mortgage is for $1,000.00. I will deduct the first years interest. $100 and send $900.00 to the bank with instructions. This pays one year’s interest. The second year’s interest is not due until the end of the second year and six months grace on the-end of this makes a full 2 & % years before you allow or I can ask •for the deed in case of default of contract.

“I do this solely in the interest of protecting myself against -injunctional and interference proceedings from interlopers and 'blackmailers — in case such an unpleasant thing as foreclosure proceedings should ever be necessary. I do not expect such a thing -will ever occur. If I did no loan would be made, but I am now looking to the extreme of the case, and its easiest protection for me. You can ask Mr. Drown how I deal with men. I never knowingly distress a man and am not inclined that way but want contracts lived up to.

“The papers you executed have not arrived here as yet to my knowledge. They will be all right when completed and I have examined them and all that will be necessary is to execute the deed in connection with them and place in the hands of trustees as indicated above for the purpose named. I trust this will meet jurar views. On execution of papers you can have money.

“S. E. Wagg.”

On page 56 of the record appears the following letter from Wagg to the Bank of Cleveland:

“Appleton, Wis., Sept. 30, 1898.

“Bank of Cleveland, Oklahoma.

“Gentlemen:

“Beferring to your letter of Sept. 9, 1898, on the Herbert loan; I enclose you -$900.00 to perfect the loan after clearing the title perfectly as stated you are willing to do and you are only allowed to pay any money until all liens are paid and the mortgage is recorded wrote and sent; and not until then. This apply money in payment of prior mortgages or liens and clear and perfect title to me so I am first lien and have the money applied as purchase money on the records in liquidating prior claims. There must be also attached to this mortgage the abstract of title under recorder’s seal. Map references by name where 80 is located, meets and bounds inserted in the mortgage locating the land so you know it is the identical 80 near Mr. Drown’s store, also register’s certificate that my mortgage is first lien the title having been cleared'and now rests on my mortgage. You are instructed-to consult with Mr. Eagleton, Pawnee my paid attorney in this matter; let this in no way affect you in carrying out instructions except to work harmoniously to protect my interests. You also to write me the strongest form of promissory note suitable to attach to the mortgage and payable to my order at your bank. I have also asked Mr. Drown to look over the papers and description of land and locate in my interest and to ask you to let him read this letter. A waiver clause on foreclosure is also inserted in the mortgage, written on the Wisconsin form asking that you carefully protect my interests in the transaction and anything I have omitted to do to notify me before acting further. Charge Herbert for the work in getting ready the papers for delivery to me with'clear title. Eor handling the money and paying him send the bill to me. I shall want you to collect interest when due with him and future loans.

“All done pay balance to Herbert. Mrs. W. H. have witness to the note.

“Yours truly,

“S. R. Wagg.

“To Bank of Cleveland, Oklahoma. You. hold the deed in escrow.”

And on page 60 of the record appears the following letter from Wagg to the Bank of Cleveland:

“Appleton, Wis., Nov. 8, 1898.

“Bank of Cleveland, Oklahoma.

“Gentlemen:

“You are herewith instructed to deduct your bill of $3.45 from the $900.00 sent you on account of Herbert loan and return balance $896.55 to me, unless Mr. Herbert and wife at once properly executed the mortgage deed (warranty) I sent you; and deposit a warranty deed in escrow with you as trustee; further securing the loan; all as instructed in my prior letters, you to see a clear and full description- of the land on limits and boundaries is inserted in mortgage fixing the identity of the land lived on together with an insurance on the house assigned as additional security. All former instruction not in accordance with the above is hereby withdrawn. Your action is requested with bill of services.

“Yours truly,

“S. R. Wagg.”

It seems from the evidence that a misunderstanding arose between Wagg and the Herberts with reference to the time of the payment of the second installment of interest. It will be observed that Wagg in his letter dated September 25, 1898, stated as follows : “The mortgage is for $1,000.00. I will deduct the first year’s interest, $100, and send $900.00 to the bank with instructions. This pays one year’s interest. The second year’s interest is not due until the end of the second year and six months grace on the end of this makes a full 2 & y2 years before you allow or I can ask for the deed in case of default of cohtract.” Notwithstanding this letter, Wagg insisted that the interest was .due and payable on the 24th of October, 1899, and in response to his letter demanding the second installment of interest, W. H. Herbert writes the following letter, dated October 25, 1899, to Wagg, and which appears on page 64 of the record:

“Cleveland, O. T., Oct. 25, 1899.

“Mr. S. R. Wagg,

“My dear Sir:

“I received an order from you to pay Mr. L. M. Drown $100.00 due, as interest, by the terms of your last letter to me, I have been led to suppose I had considerable time yet, and it caught me by surprise. I can usually furnish $100.00 at short notice.

“The deal from which I can spare the money will not be consummated for two weeks. I ask extension for that time. I send you copy of the letter that I have been governed by, and which I presume has misled me.

“ Letter from you, after some preliminaries you write, the mortgage is for $1,000.00. I will deduct the first year’s interest $100.00, send $900 to the bank with instructions. This pays first year’s interest. The second year’s interest is not due until the end of the second year, and six months grace on the end of this makes a full two and one-half years before you allow, or I can ask for the deed in case of default of contract.’

“This is a copy of your letter that I have been governed by and it seems it has misled me.

“I am, Very truly yours, '

' “W. H. Hebbert.”

It will be observed that in this letter Herbert calls the attention of Wagg to the contents of his letter dated September 25, 1898, in reference to the time of the payment of interest. On November 1, 1899, Wagg wrote Herbert the following letter, which appears on page 65 of the record:

“Appleton, Wis., Nov. 1, 1899.

“W. H. Herbert, Cleveland, Okla.

“My dear Sir:

“Your letter of recent date at hand, and noted. We had con siderable correspondence prior to the mortgage contract. When the contract is completed and signed that is the agreement. It would he convenient to have the money to use; but if you are hard pressed for money I shall not think of distressing you, for about all I want is security that is safe and does not worry me. When you'get it pay Mr. Drown with deferred interest and get the receipt sent. With best wishes,

“Yours truly,

“S. R. Wagg.”

The Herberts, not having paid the second year’s interest at the time Wagg demanded the same, Wagg procured the deed from the Bank of Cleveland, and caused it to be placed on record on December 26, 1899, in the office of the register of deeds of said county, and thereafter Wagg claimed to be the owner of said property by virtue of said deed. And on February 17, 1900, he wrote his agent, Drown, the following letter, appearing on page 78 of record, authorizing his agent to collect the rents, etc.:

“Appleton, Wis., Feb. 17, 1900.

‘Mr. Leroy Drown,

“Cleveland, Okla.

“You are hereby authorized to act as my agent in looking-after my lands and tenants on the Herbert property at Cleveland, Okla. Collect rents monthly; sell the hay crop standing if possible and report to me once in three months and keep me advised of any change of interest from time to time.

“Deposit all proceeds in bank to ,my credit.

“Yours truly,

• “S. R. Wagg.”

And again on February 27, 1900, Wagg authorizes his agent, Drown, to take possession of the premises in accordance with the following letter, which appears on page 79 of the record:

“You take possession of all vacant houses, or have it done for me, on the Herbert place, and rent them as best you can. Don’t let any squatters get back. They are easy rid of now. Keep rid of them, and don’t let a person in except on a good lease, so you can get him out without expense. Herbert we will treat generously. I wish him well.

“Yours,

“S. R. Wagg.”

On April 14, 1900, Wagg wrote Herbert and his wife the following letter:

“Appleton, Wis., April 14, 1900.

“W. H. Herbert and wife,

“Cleveland, Oklahoma.

“I expect to be in your city or town'in the near future and inasmuch as the loan of October 1898, is in default of payment of interest, and the 6 months allowed you as grace in which to make it good expires during the month of April, 1900, I ask that you make up all payments due to date either to me or place to my credit in Bank of Pawnee subject only to delivery of my receipt for same, otherwise the title to the Cleveland homestead will by virtue of our agreement and papers of record, pass to my ownership and control. I hope you will pay up past dues and. notify me of action you take in the matter. I am,

“Yours truly,

“S. E. Wagg."

And on April 30, 1900, Wagg wr<- Herbert as follows:

“Appleton, Wis., April 30, 1900.

“W. H. Herbert,

“Wichita, Kansas.

“My dear Sir:

“Your letter of the 27th at hand. I was obliged by circum» stances you made, to put my deed on record, allowing the property to be offered at tax sale. I sent mrney to pay them.

“I do not propose to be hasty or unfair, if you want to pay the interest up, you can do so, I have not asked for any full payment of principal, the interest will do — I had not intended to foreclose or turn you out of the house, and shall not unless you fail to do anything. I expect the hay crop will help pay the interest. I shall trust you for it. I shall expect to be in Cleveland but do not go to the expense to see me. If yoú are there. I shall be glad to see you.

“Yours truly,

“S. E. Wagg."

On July 12, 1900, Mrs. Herbert wrote Wagg the following letter, which appears on pages 85 and 86 of the record:

“Cleveland, Okla., July 12, 1900.

“Mr. S. R. Wagg,

“Appleton, Wis.

“Dear Sir:

“I write believing you will see the justice of the request I am about to make. The anxiety I suffer in regard to my home is undermining my health. The condition o'f the land precludes the possibility of my using it to the benefit of myself and children. I wish you to have the equivalent of the rent in land if I do not' get the money to pay you, but I. do not wish to give double, and since you have seen the land you must recognize it is more valuable than the amount you have in it. I wish to know if you would take half the land for the debt? The half next to Cleveland, which is the more valuable, I presume. I wish to have the other free from incumbrance to cultivate for a living for my children. If you are not willing to do this, would you allow me to sell forty acres, which I can do, to cancel the indebtedness; that is to obtain a purchaser, the money to be paid to you? When you was here you said you did not want the land, you only wanted your money which I am anxious for you to have. I write this knowing you could not possibly in justice to your ideas of right, take all the land for the debt, especially as I am not responsible for it and I would necessarily be the chief sufferer. If 3'ou accede to this request you will remove a great burden from me and I can proceed to arrange to have forty acres broken this fall in readiness for cultivation in the spring. The home is so much more to me than the money can possibly be to you; however, I am sure you will understand I desire to settle the affair in justice to us both. I wish you to have your money or its equivalent in land, but I do not want to lose my home. Half of the land means a home to me and support for myself and family, to lose it means to us to be homeless. I present the matter thus plainly that you may realize what is involved in it to me, hence it seems to me the only just way to us both, to settle the affair, under the circumstances, is to divide the land. I mean, of course, if we should be disappointed and be unable to get the money for you before the expiration of the time you have extended. I think I will have it, but as there are few things absolutely certain in life and desiring so much for my health’s sake, to be relieved of the strain in connection with the matter, I appeal to you, be lieving you will be disposed to show tbe same mercy you would, like shown to yourself or loved ones.

“Hoping to be favored with an early reply, I am,

“Very respectfully,

“(Mrs.) W. H. Herbert."

To this letter Wagg replied as follows, on July 18, 1900:

“Appleton, Wis., July 18, 1900.

“Mrs. W. H. Herbert,

“Cleveland, Okla.'

‘My dear Madam:

“■Your favor of the 12th is before me, in reply will say I do not incline to a division of the land; but under the condition I will deed back to you the land for $1,300.00 October or November next as you can arrange, the back interest, taxes, expenses incurred and holding the principal five months before loan was closed amounts in all to $1,280.00 and as the loan is for five years, it is a concession I would not make with a business man and only do it to you as your situation merits some consideration, so I do this for immediate action and acceptance on your part — notify me of your intention in the matter.

“Yours resp’y,

“S. E. Wagg."

And again on August 11, 1900, Wagg wrote Mrs. Herbert as follows:

“Appleton, Wis., Aug. 11, 1900.

“Mrs. W. H. Herbert,

“Cleveland, Okla.

“Dear Madam:

“Your favor of some weeks ago, asking for a reconsideration of my declining to divide the land came to hand and is noted. On payment of $1,300.00 October or November 1st, 1900, I will quitclaim deed to you or your purchaser one-half the Herbert homestead deed to me and deed the remaining half farthest from or west of Cleveland to your two boys jointly reserving to you a life interest in the same; provided you explain clearly and satisfactorily to me how and by what means W. D- Eagleton obtained title to the house located on the said homestead and is now renting and claims the rights of a property holder to do so and collect rents. If anything is done would like to close it up entirely. I never had thought of turning you out and do not expect ever to do such a thing. Awaiting your further communication, I am,

“Yours truly,

“S. R. Wagg.”

'■ On August 19, 1900, Mrs. Herbert wrote Wagg in part as follows:

“Your letter of the 11th inst. has been received. I thank you for your consent to a division of the land. The way 3nu propose to deed it is an advantage in some respects and a disadvantage in others from my point of view. I have not yet decided which outweighs the other, however we can speak of this later if desired. I was hoping you would not only agree to a division, but that you .would decide to retain the forty acres, because if 3nu would hold it for a year or two T could redeem it with interest on the investment; in other words buy it back from 3'ou if you wished to sell it, whereas if it is sold to another party would possibly not have an opportunity to redeem it.”

September 15, 1900, Wagg wrote Mrs. Herbert as follows:

“Appleton, Wis., Sept. 15, 1900.

“Mrs. W. H. Herbert,

“Cleveland, Obla.

“Dear Madam:

“I am in receipt of a letter from L. M. Drown regarding an answer to your last letter reptying to mine of August 11th, I did not think an answer necessary. However you can go ahead and find a purchaser at $1,300.00 for the east (half) and I will deed the other half jointly to your two boys, giving you the first right to the income from the same in form of a life interst. This places it beyond the power of any one to scheme you out of it. I make this offer solely in the interest of yourself and your boys. I reserve the right of one acre on the east side, near Mr. Drown’s store for warehouse purposes, same to be located when deed is made.

“I hope you may be able to realize your wishes in securing á home for yourself and boys. If you cannot make this sale, I will devise another plan later.

“Yours respectfully,

“S. R. Wagg.”

On December 24, 1900, Wagg wrote Mrs. Herbert the following letter, which appears on pages 95 and 96 of the record:

“Appleton, Wis., December 24, 1900.

“Mrs. Mary B. Herbert,

“My dear Madam:

“Referring to your last communication, wherein you wanted time to sell extended to Jan. 1901.

“I hope you have been able to find a buyer. However, you can have until March 1st next if you need such time.

“If you should feel like making a division of the land as a final settlement of the matter and passing deeds although I hold a deed of it all and under our agreement it all is now conveyed to me, yet I shall not use any rights I may have harshly but shall deed to you and your boys a piece of the land preferably on which the house is located so you may still live there and have the land to cultivate for your support. You talk it over with Mr. L. M. Drown and have him write me.

“I remain, Yours respectfully,

“S. R. Wagg."

Another question which we must briefly notice in connection with this transaction is, whether the consideration was adequate io induce a fair sale and settlement of the indebtedness existing between the parties. There was evidence offered on behalf of the plaintiff that there was gross inadequacy of consideration, and. .that the reasonable value of the property was several times in excess of the amount of indebtedness at the date of the execution of the deed dated May 28, 1901. The witness Lytton testified, on page 135 of the record, that .the reasonable market value of the land was about $100 per acre at that time. The witness Skinner testified, on page 248 of the record, that the fair value of the land would be from $50 to $100 per acre; and the witness Crismon, on page 257 of the record, testified that the reasonable market value of the land would be $100 per acre at the date of the execution of said deed. On the other hand, the witnesses on behalf of the defendant testify that the land was worth at that time about $25 per- acre. . So, upon this question the evidence was clearly contradictory.

It appears from all the evidence introduced, and it is conceded in the brief and argument of counsel for plaintiff in error, that the escrow deed was merely a mortgage given as additional security for the payment of the debt. It further clearly appears that the first year’s interest was deducted from the loan, and that, according to Wagg’s letter to the Herberts, the second installment of interest would not be due until the end of the second year. But this was in contravention of the express terms of the note and mortgage, hence the note and mortgage must govern in that respect. However, we think it sufficient to mislead the Herberts in respect to the time the interest became due, and that it was but fair and reasonable that extended negotiations would follow in respect thereto. But, upon the undisputed testimony, Wagg committed a fraud upon the rights of the Herberts when he procured the escrow deed from the bank and had it placed on record on December 26, 1899, and when he claimed title thereunder. Assuming that the second installment of interest was due on October 24, 1899, and that there was a default in the payment of the interest on December 26, 1899, yet under the express terms of the escrow deed it could not be withdrawn and placed upon record until six months had expired from the date of the default in interest on October 24, 1899. But, even if he had a right to place the escrow deed on record, it could only amount to a mortgage and ’ as additional security for the payment of the indebtedness existing between Wagg and the Herberts. He had no right to claim title thereunder, and he was not entitled to take possession of the premises and collect the rents, etc., as the evidence clearly establishes in this case. To insist that the escrow deed was an absolute conveyance which divested all plaintiffs’ title and interest in the property, and to take possession of the property and collect the rents, clearly constitute in equity a fraud upon the rights of the Herberts; and the taking of possession of the premises, collecting the rents, claiming title to the land, and the securing of the deed dated May 28, 1901, was not only taking undue advantage of the mortgagors, but was an unfair and unconscionable transaction which cannot be upheld by a court of equity. It must, therefore, follow as an irresistible conclusion that the allegations in the petition of fraud, oppression, undue influence, and inadequate consideration were fully sustained by the evidence, and we are unable to perceive how the trial court could have reached any other fair, just, and rational conclusion upon the entire evidence as disclosed by this record.

It is a settled rule of this court, and one which we have reiterated and reiterated time and again, that where the evidence reasonably sustains the finding and judgment of the court, or where the evidence is conflicting, it will not be disturbed by this court. The law of this case is so well settled by the authorities that we deem it necessary to refer to only a few of the leading cases, yhich we regard as peculiarly applicable to the facts of this case and as decisive of every question arising herein. The leading decision on this class of cases is Russell v. Southard, 12 Howard 139, decided by the supreme court of the United States as early as 1851. In this case it was held that: “To insist on what was really a mortgage, 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. In Conway v. Alexander, 7 Cranch 238, C. J. Marshall says: ‘Having made these observations on the deed itself, the court will proceed to examine those extrinsic circumstances, which are to determine whether it was a sale or a mortgage.' And in Morris v. Nixon, 1 How. 126, it is stated: ‘The charge against Nixon is, substantially, a fraudulent attempt to convert that into an absolute sale, which was originally meant to be a security for a loan. It is in this view of the case that the evidence is admitted to ascertain the truth of the transaction, though the deed be absolute on its face.' These views are supported by many authorities. Maxwell v. Montacute, Precedents in Ch. 526; Dixon v. Parker, 2 Ves. Sen. 225; Prince v. Bearden, 1 A. K. Marsh. (Ky.) 170; Oldham v. Halley, 2 J. J. Marsh (Ky.) 114; Whittick v. Kane, 1 Paige (N. Y.) 202; Taylor v. Luther, 2 Sumner (U. S.) 232; Flagg v. Mann, ibid. 538; Overton v. Bigelow, 3 Yerg. (Tenn.) 513; Brainerd v. Brainerd, 15 Conn. 575; Wright v. Bates, 13 Verm. 341; McIntyre v. Humphries, I Hoff. Ch. (N. Y.) 331; 4 Kent, 143, note A; and 2 Greenl. Cruise, 85, note.” And, again, in this case it is stated: “But the inquiry still remains: What amounts to an allegation of fraud, or of some vice in the consideration? And it is the doctrine of this court that when it is alleged and proved that a loan on security was really intended, and the defendant sets up the loan as a payment of purchase money, and the conveyance as a sale, both fraud and a vice in the consideration are sufficiently averred and proved to require a court of equity to hold the transaction to be a mortgage; and we know of no court which has stated, this doctrine with more distinctness than the court of appeals of the state of Kentucky. In Edrington v. Harper, 3 J. J. Marshall, 355, that court declared: ‘The fact that the real transaction between the parties was a borrowing and lending, will, whenever or however it may appear, show that a deed absolute on its face was intended as a security for money; and whenever it can be ascertained to be a security for money, it is only a mortgage, however artfully it may be disguised/ ” Upon the question of consideration, this doctrine is announced in this opinion: “In examining this question, it is of great importance to inquire whether the consideration-was adequate to induce a sale. When no fraud is practised, and no inequitable advantages taken of pressing wants, owners of property do not sell it for a consideration manifestly inadequate, and, therefore, in the cases on this subject, great stress is justly laid upon the fact that what is alleged to have been the price bore no proportion to the value of the thing said to have been sold. Conway v. Alexander, 7 Cranch (U. S.) 241. Morris v. Nixon, 1 How. (U. S.) 126; Vernon v. Bethell, 2 Eden 110; Oldham v. Halley, 2 J. J. Maresh (Ky.) 114; Edrington v. Harper, 3 ibid. 354.” Upon the question of assent to the sale, the learned court says: “It is true, Russell must have given his assent to this form of the memorandum; but the distress for money under which he then was places him in the same condition as other borrowers, in numerous cases reported in the books, who have submitted to the dictation of the lender under the pressure of their wants; and a court of equity does not consider a consent, thus obtained, to be sufficient to fix the rights of the parties. Necessitous men/ says the Lord Chancellor, in Vernon v. Bethell, 2 Eden 113, ‘are not, truly speaking, free men; but, to answer a present emergency, will submit to any terms that the crafty • may impose upon them/ ” In conclusion, the learned court says:. “The conclusion at which we have arrived on this part of the case is, that the transaction was, in substance, a loan of money, upon the security of the farm, and, being so, a court of equity is bound to look through the forms in which the contrivance of the lender has enveloped it, and declare the conveyance of the land to be a mortgage.” And again, in speaking of the rights of the mortgagee with reference to the ex-tinguishment of the equity of redemption of the mortgagor, the •court says: “A mortgagee in possession may take a release of equity of redemption. Hicks v. Cook, 4 Dow, P. C. 16; Hicks v. Hicks et al., 5 Gill & Johns (Md.) 85. But such a transaction is to be scrutinized, to see whether any undue advantage has been taken of the mortgagor. Especially is this necessary when the mortgagee, in the inception and throughout the whole conduct of the business, has shown himself ready and skillful to take advantage of the necessities of the borrower. Strong language is used in some of the eases on this subject. It was declared by Lord Redesdale, in Webb v. Rorke, 2 Sch. & Lef. 673, that: ‘Courts view transactions of that sort between mortgagor and mortgagee with considerable jealousy, and will set aside sales of the equity of redemption, where, by the influence of his incumbrance, the mortgagee has purchased for less than others would have given.' And Chancellor Kent, in Holdridge v. Gillespie, 2 Johns. Ch. (N. Y.) 34, says: ‘The fairness and the value must distinctly ap pear.' Wrixon v. Cotter, 1 Ridg. 295; St. John v. Turner, 2 Verm. 418. But strong expressions, used with reference to the particular facts under consideration, however often repeated by subsequent writers, cannot safely be taken as fixing an abstract rule. We think that, in as much as the mortgagee in possession may exercise an undue influence over the mortgagor, especially if the latter be in needy circumstances, the purchase by the former of the equity of redemption is to be carefully scrutinized, when fraud is charged; and that only constructive fraud, or an unconscientious advantage which ought not to be retained, need be shown, to avoid such a purchase.”

It will thus be seen that it is not necessary to establish actual fraud, but only constructive fraud, and that an unconscientious advantage was taken of the borrower. We think that in this case the evidence not only clearly proves constructive fraud, but it also clearly proves actual fraud, oppression, undue influence, and unconscientious advantage, and in addition thereto inadequate consideration. But the plaintiff in error, on page 51 of his brief, makes the following remarkable statement: TBut the claim of plaintiff in error was right, as a matter of law, or else the supreme court of California, on a statute identical with ours, did not know the rights it was attempting to adjudicate, in Bradbury v. Davenport et al., 52 Pac. 301.” We have examined this authority, and an examination of the same discloses the following sentence, immediately following the quotation in the brief of counsel for plaintiff in error: “But, under the facts found, we are unable to perceive wherein the transaction is to be distinguished in any materia] respect from that sustained in Watson v. Edwards, 105 Cal. 70, 75, 38 Pac. 527, and in McDonald v. Huff, 77 Cal. 279, 19 Pac. 499, nor in fact why the question is not in effect concluded by what is said on the same subject on the former appeal. Bradbury v. Davenport, 114 Cal. 593, 46 Pac. 1062. In Watson v. Edwards it was held that section 2889 of the civil code does not affect or refer to a subsequent contract between the mortgagor and mort giigee in respect to .the title to the mortgaged premises, and it is said: ‘A mortgagor may sell and convey all his right and interest in the mortgaged premises to the mortgagee, where the transaction is fair, honest, and without fraud, and where no unconscionable advantage has been talcen of his position by the mortgagee.1 11 The italics are ours. We concur with this doctrine announced by the California court, which counsel states is based upon a statute identical with ours. It will thus be seen that the doctrine announced by the California courts is in full harmony with the doctrine announced by the supreme court of the United States in the case of Russell v. Southard, supra, and in harmony with the views herein stated. It holds, as all the courts hold, that a mortgagee may purchase from the mortgagor if the transaction is fair, honest, and without fraud or undue influence, and where no unconscionable advantage is taken by virtue of the relation existing between the mortgagor and mortgagee. But upon the issue of fraud, undue influence and unconscionable advantage, the trial court found the issues in favor of the plaintiff and against the defendant, and such finding and judgment of the court upon the evidence adduced is conclusive upon this court, there being ample evidence to sustain such finding and judgment.

In Vance v. Anderson, 45 Pac. 818, the supreme court of California has stated the doctrine as follows. “A deed absolute on its face may be shown by parol to be intended as a mortgage. It may be stated as a general proposition that in this state, at least, every conveyance of real property made as security for the performance of an obligation is in equity a mortgage, irrespective of the form in which it is made. Equity looks beyond the mere form in which the transaction is clothed, and shapes its relief in such way as to carry out the true intent of the parties to the agreement; and to this end all the facts and circumstances of the transaction, the conduct of the parties thereto, and their declarations against their own interests, their relations to one another and to the subject-matter, are subjects for consideration. Campbell v. Freeman, 99 Cal. 546, 34 Pac. 113; Pierce v. Robinson, 13 Cal. 116; Locke v. Moulton, 96 Cal. 21, 30 Pac. 957; Ross v. Bruisie, 64 Cal. 245, 30 Pac. 811; Taylor v. McLain, 64 Cal. 513, 2 Pac. 399.”

In Bradbury v. Davenport et al., 46 Pac. 1062, on appeal to the supreme court of California for the ñrst time, the following doctrine is announced: “A conveyance of the mortgaged premises by the mortgagor to the mortgagee, by delivery of deed in escrow, to be delivered in case of the non-payment of the mortgage deed within a certain time, will be set aside where the property is of double the value of the indebtedness.” The plaintiff’s evidence in this case discloses that the value of the property at the time the last deed was executed on May 28, 1901, was at least three or four times the value of the total indebtedness of the mortgagor. And further in the same opinion it is stated: “In relation to such subsequent agreement, Jones, in his valuable work on Mortgages (Section 251), says: A subsequent agreement that what was originally a mortgage shall be regarded as an absolute conveyance is open to the same objection (that is, the objection to such agreement in the mortgage itself), and will not be sustained unless fairly made, and no undue advantage is taken by the creditor. The burden is therefore upon the creditor to show that the right of redemption was given up deliberately, and for an. adequate consideration.’ In support of this proposition, the author cites, among many other cases, Villa v. Rodriguez, 12 Wall. (U. S.) 323, from which we quote the following passage: ‘The law upon the subject of the right to redeem, where the mortgagor has conveyed to the mortgagee the equity of redemption, is well settled. It is characterized by a jealous and salutary policy. Principles almost as stern are applied as those which govern where a sale by a cestui que trust to his trustee is drawn in question. To give validity to such a sale by a mortgagor, it must be shown that the conduct of the mortgagee was, in all things, fair and frank, and that he paid for the property what it was worth. He must hold out no delusive hopes. He must exercise no undue influence. He must take no advantage of the fears and poverty of the other party. Any indirection or obliquity of conduct is fatal to his title. Every doubt will be resolved against him. Where confidential relations and the means of oppression exist, the scrutiny is severer than in cases of a different character. The form of the instruments employed is immaterial. That the mortgagor knowingly surrendered and never intended to reclaim is of no consequence. • If there is vice in the transaction, the law, while it will secure to the mortgagee his debt, with interest, will compel him to give back that which he has taken with unclean hands. Public policy, sound morals, and the protection due to those whose property is thus involved, require that such should be the law/” The supreme court of California also quotes with approval the doctrine announced in Russell v. Southard, supra.

But it is contended by the plaintiff in error that the plaintiffs were guilty of laches. There is no merit to this contention. This suit was commenced in the district court on June 12, 1903, about two years after the execution of the last deed dated May 28, 1901. The note evidencing the indebtedness was dated October 24, 1898, and the mortgage and escrow deed securing the payment of the same were executed at the same time. The escrow deed of October 24, 1898, contains the following stipulation: “This deed is. given to be held, m escrow as additional security to grantee for loan of $1,000 This day loaned to the grantors, and for which they ha-ve this .-day given the grantee a mortgage on the same land.” In. Russell v. Southard, supra, this same question was raised, and the court-in that case said: “This bill was filed after the lapse of ■nineteen years and eight months from the- time the loan became payable. James Southard, the original mortgagee, had then been dead many years. More than sixteen years had elapsed since the defeasance was surrendered; and though we are satisfied Eussell was under great embarrassments, and though we are of opinion he himself believed his right to redeem was probably extinguished by the terms of the defeasance, and its surrender, yet his neglect to look into and assert his rights must not be allowed to subject the defendants to the risk of injustice.” So we think that, under the evidence and circumstances of this case, it would be inequitable and unjust for the court to hold that the plaintiff: was guilty of such laches as would preclude her from maintaining this action.

What, then, is the status of the plaintiff in error and -the defendant in error? The answer to this question we think is clear. It is that of borrower and lender, of debtor and creditor, mortgagor and mortgagee in possession. Equitable principles must control a full and complete settlement of the rights of the parties to this action. Wagg is entitled to be paid for the principal indebtedness, together with interest at the rate specified in the note and mortgage, for all taxes, assessments, and other proper charges and expenses necessary for the management and protection of the estate, and he is responsible to Mrs. Herbert for rents and profits to be applied upon the indebtedness. And the rights of all subsequent purchasers in good faith for a valuable consideration, without notice of the rights of the defendants in error, should be fully protected according to recognized principles of equity. Romig v. Gillette, 187 U. S. 111; Gillette v. Romig et al., 17 Okla. 324, 87 Pac. 325.

But it is contended by the plaintiff in error- that Pl-rs. Herbert is estopped from claiming or setting up an interest in th^ prop szty adverse .to Wagg. Tlie'doetrine of estoppel has no application to this case, under the well-settled doctrine that a party canpot take advantage of his own wrong. In vol. 2, sec. 917, of Pomeroy\S Equity Jurisprudence, it is said: "Promptness. Delay through Ignorance of the Fraud — The most important practical consequence \ of the two principles above mentioned is the requisite of promptness. The injured party must assert his remedial rights with diligence and without delay, upon becoming aware of fraud. After he has obtained knowledge -of the fraud, or has been informed of facts and circumstances from which such knowledge would be imputed to him, a delay in instituting judicial proceedings for relief, although for a less period than that prescribed by the statute of limitations, may be, and generally will be, regarded as an acquiescence, and this may be, and generally will be, a bar to any equitable remedy. To this rule there is one limitation. It applies only when the fraud is known, or ought to have been known. No lapse of time, no delay in bringing a suit, however long, will defeat the remedy, provided the injured party was, during all this interval, ignorant of the fraud. The duty to commence proceedings can arise only upon his discovery of the fraud; and the possible effect of his laches will begin to operate only from that time.” And in section 918 of the same work, it is said: "Persons against whom Belief is Granted. The remedy which equity gives to the defrauded person is most extensive. It reaches all those who were actually concerned in the fraud, all who directly and knowingly participated in its fruits, and all those who derive title from them voluntarily or with notice. ‘A court of .equity will wrest property fraudulently acquired, not only from the perpetrator of the fraud, but, to use Lord Cottenham’s language, from his children and his children’s children, or, as elsewhere said, from any persons amongst whom he may have parceled out the fruits of his fraud.’ ” In discussing the question of acquiescence and lapse of time, Mr. Pomeroy, in section 965, lays down the following doctrine: ‘'‘A second mode by which the remedial right may be destroyed, and the transaction rendered unimpeachable, is acquiescence. The term ‘acquiescence’ is sometimes used improperly. It differs from confirmation on the one side, and from mere delay on the other. While confirmation implies a deliberate act, intended to renew and ratify a transaction known to be voidable, acquiescence is some act, not deliberately intended to ratify a former transaction known to be voidable, but recognizing the transaction as existing and intended, in some extent at least, to carry it into effect, and to obtain or claim the benefits resulting from it. The theory of the doctrine is that a party, having .thus recognized a contract as existing, and having done something to carry it into effect and to obtain or claim its benefits, although perhaps only to a partial extent, and having thus taken his chances, cannot afterwards be suffered to repudiate the transaction and allege its voidable nature. It follows that mere delay, mere suffering time to elapse without doing anjdhing, is not acquiescence, although it may be, and often is, strong evidence of an acquiescence; and it may be, and often is a distinct ground for refusing equitable relief either affirmative or defensive. An acquiescence is thus a recognition of and consent to the contract or other transaction as existing; the requisites to its being effective as a bar are knowledge or notice of the transaction itself, knowledge of the party’s own rights, absence of all undue influence or restraint, and consequent freedom of action. A conscious intention to ratify the transaction, however, is not an essential element. When a party with full knowledge, or at least with sufficient notice or means of knowledge, of his rights, and of all the material facts, freely does what amounts to a recognition of the transaction as existing, or acts in a manner inconsistent with its repudiation, or lies by for a considerable time and knowingly permits the other party to deal with the subject-matter under the belief that the transaction has been recognized, or freely abstains for a considerable length of time from impeaching it, so that the other party is thereby reasonably induced to suppose that it is recognized, there is acquiescence, and the transaction, although originally impeachable, becomes unimpeachable in equity.”

It will thus be seen that the question of laches, acquiescence, and estoppel are dependent upon its own circumstances, and whether they must exist we must determine that question from all the facts and circumstances involved in the controversy; and, again, upon this issue the court having found in favor of the plaintiffs and against the defendant, and such finding being sustained by sufficient evidence and in harmony with the settled doctrines of equity jurisprudence, such findings of fact are conclusive upon this court. Nor do we think there was any error in admitting or excluding any material or competent testimony in the course of the trial. If it was error to admit the memorandum on page 58 of the record, it was clearly harmless and could not have affected the result of this case, and it is to be presumed that the court, sitting as a chancellor, only considered material, competent, and relevant testimony in making up its findings and rendering the decree in this case. Nor was there any error in rendering the decree in the case.

It follows that the court, upon the evidence and laws of this case, rightfully found the issue in favor of the plaintiffs and, against the defendant, and decreeing that the deed executed on May 28, 1901, was a mortgage. The judgment of the district court of Pawnee county is affirmed.

Burford, C. J., who presided in the court below, not sitting; Pancoast and Garber, JJ., absent; all the other Justices concurring.