Mason v. Finley
| Decision Date | 14 October 1924 |
| Docket Number | 11578. |
| Citation | 124 S.E. 780,129 S.C. 367 |
| Parties | MASON v. FINLEY ET AL. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Spartanburg County; T. S Sease, Judge.
Action by Melissa M. Mason against S. G. Finley and W. W. Murph. From judgment of dismissal, plaintiff and last-named defendant appeal. Reversed and remanded, with directions.
Sanders & Sanders, John C. Lanham, and Perrin & Tinsley, all of Spartanburg, for appellants.
Phifer & Brice, of Spartanburg, for respondent.
This is an action to have the court declare that a certain deed absolute on its face, but accompanied by a contemporaneous agreement to reconvey the property to the grantor upon the payment of a certain sum of money at a given time, should be construed as a mortgage, with the incidental right of redemption, and not as it appears on its face, an absolute deed; the condition for a reconveyance not having been performed.
The facts appear to be as follows:
On January 20, 1910, the plaintiff Mrs. Mason, the owner at that time of an undivided one-fourth interest in a tract of land containing 110 acres, worth from $50 to $75 per acre, which had belonged to her deceased father, applied, as she had frequently done before, to the defendant Finley, a member of the Spartanburg Bar, for a loan of $100, $60 of which she proposed to apply to past-due notes held by Mr. Finley, and offered her interest in the land as security for the desired loan. The transaction appears to have been concluded at once. Mr. Finley testified that he positively declined to lend her the money upon a mortgage of the property, for the reason that he had had a great deal of trouble in collecting previous loans from her, and for the further reason that the value of the property was not sufficient to secure the loan with the added costs of foreclosure. It does not appear that Mrs. Mason desired to make a sale of her interest, or that Mr. Finley desired to acquire it; she made no proposition to sell and he made none to buy; the value of the property was not discussed except with reference to the security for the money. Mr. Finley testified that "I thought it was worth that and a good deal more," and in answer to the question, "If you hadn't, you wouldn't have advanced her the money?" he replied, "No, I wouldn't." No particular reason appears for him to have desired to buy the land, which he admits that he had never seen except in passing along the road, or to become a tenant in common with those who owned the other three-fourths. The negotiations then promptly culminated in the execution and delivery of a deed from Mrs. Mason to Mr. Finley, absolute in form, conveying her interest in the land in consideration of the sum of $100. Contemporaneously, and as a part of the transaction, Mr. Finley executed and delivered to Mrs. Mason the following instrument of writing:
Mr. Finley exercised no acts of ownership over the interest thus conveyed; the possession continued as before, the place being occupied by Mrs. Mason's mother and she with her husband living there.
On March 8, 1911, Mr. Finley conveyed his interest in the property under the deed aforesaid to the defendant Murph for $350. This deed contained expressions strongly significant of Mr. Finley's fear, at least, that the deed might not be construed as an absolute deed conveying full title to him; expressions in guarded terms, evidently intended to protect him from an adverse construction. "It being the intention and purpose of this deed to convey just what titles I get from Melissa Mason above referred to and no other." The warranty contains this: "just so far as I am able to do under the title passed by the Mason deed aforesaid and not further"--expressions entirely unnecessary, if he had been sure that the transaction would stand the test of a complete and unquestioned sale.
It seems to be assumed that the mother of Mrs. Mason had a life estate in the 110 acres, although that fact does not appear in the record for appeal. If so, her life estate fell in with her death in 1912. In the following year the defendant Murph and one Tinsley, they having acquired the other interests in the land, rented the place to Mrs. Mason's husband, and in the fall of that year, 1913, the Masons moved off, and Murph and Tinsley have had possession ever since, collecting the rents and using it as their property. Some six or eight months after Finley conveyed to Murph, Mrs. Mason, through an attorney, made a feeble demand upon Murph to be allowed to redeem; but nothing came of it, and she took no further steps about the matter until December, 1920, when the present action was commenced, seeking to have the deed declared a mortgage and to be allowed to redeem, alleging that Murph was not a purchaser for value, but that, if he should be so adjudged, Finley be required to account for the difference between what he received as purchase money from Murph and the amount of the debt, with interest.
The defendant Finley in his answer contends that the collateral agreement was simply an option to repurchase, that he refused to take a mortgage for the reasons above stated, and that the deed had become absolute by failure of the plaintiff to comply with the payment on November 15, 1910.
The case was referred to the master, who held that Murph was a bona fide purchaser and should be protected, but that as between Mrs. Mason and Mr. Finley the transaction was a mortgage, and that he was accountable to her for $433.75, the difference of $250 with interest from November 8, 1911, the approximate date of Mrs. Mason's assertion of her right to redeem the land.
Upon exceptions to the master's report, his honor Judge Sease reversed his findings and dismissed the complaint. His decree contains the unnecessary finding (after concluding that the transaction did not constitute a mortgage) that Murph was not a bona fide purchaser.
We may at once dispose of Murph's appeal by sustaining the conclusion of the master as to him, and reversing the circuit decree holding the contrary. There is no evidence tending to show that Murph had any notice of the collateral agreement.
We may also remark that no point has been made by the respondent, either in the pleadings or in the argument, of laches on the part of Mrs. Mason, and we have not felt called upon to consider that feature of the case one way or the other.
The main question in the case is whether the transaction detailed constitutes a mortgage or a valid sale with a contract to reconvey upon payment of the $100 with interest on November 15, 1910.
The question whether a deed absolute upon its face should be construed a mortgage arises under three conditions:
(1) Where it is not accompanied by a contemporaneously executed defeasance or contract to reconvey.
(2) Where it is accompanied by a contemporaneously executed defeasance.
(3) Where it is accompanied by a contemporaneously executed contract to reconvey.
The distinction between a "defeasance" and a "contract to reconvey" does not appear to have been generally recognized by the authorities upon the subject. They appear both to be treated as defeasances. It is apparent, we think, that there is a marked difference between them. In the one case, the deed is annulled upon the performance of the condition upon which the defeasance depends; it is then as if the deed had never existed. In the other, the deed is not anulled but is recognized as valid, necessarily so in order to support a reconveyance, and becomes a link in the original grantor's title upon a reconveyance to him.
It is not necessary in this case to so declare, and we are not to be understood as doing so, but logically it would appear that where an absolute deed is accompanied by a formal defeasance, contemporaneously executed and as a part of the transaction, as a matter of law, independent of the intention of the parties, the two instruments must be read together, as if the defeasance had been incorporated in the deed, and constitutes a legal mortgage, against which legal construction neither party should be allowed to aver.
In 1 Jones Mtg. (6th Ed.) § 250, it is said:
In the first class of cases, where the deed absolute on its face is unaccompanied by any collateral agreement, either in the nature of a formal defeasance or of a contract to reconvey, the question whether such deed shall be construed as a mortgage or as an absolute deed depends upon the question of fact whether it was the intention of the parties that it should operate as simply a security for the debt incurred, or as an absolute deed.
And so in the third class of cases, where the deed is accompanied by collateral contemporaneous agreement on the...
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Stackhouse v. Stanton
...the good faith of the offer, but I am convinced that the proposition was made in good faith. Defendant relies strongly on the case of Mason v. Finley, supra. As view the facts, I am of the opinion that the legal principles set forth in that case are not applicable to this. There, there was ......