Niggeler v. Maurin

• Decision Date: 14 August 1885
• Parties: Rudolph Niggeler v. Peter Maurin and another
• Court: Minnesota Supreme Court

24 N.W. 369

34 Minn. 118

Rudolph Niggeler v. Peter Maurin and another

Supreme Court of Minnesota

August 14, 1885

Appeal by plaintiff from a judgment of the district court for Otter Tail county, where the action was tried before Collins, J.

Judgment reversed and cause remanded, with directions to render judgment for the plaintiff.

Baxter & Rawson, for appellant.

Chas D. Kerr, John W. Mason and Williams & Chapman, for respondents.

OPINION

Vanderburgh, J.

On the sixth day of August, 1878, the plaintiff held a bond for a deed, made to him by one Peter Brayley, by which the latter had bound himself to convey the 80-acre tract of land described in the complaint, and which included the town-site of Elizaabeth, in the county of Otter Tail. The purchase price of the land, then amounting to upwards of $ 600, was overdue, and the plaintiff was unable to raise money to pay the same, but was desirous of making some arrangement by which he might be enabled to hold the land and ultimately pay therefor by sales of lots or otherwise. For that purpose he had previously been in negotiation with the defendant Peter Maurin in respect to the claim of Brayley, which at that date resulted in a transfer of plaintiff's equitable title to him, in the form of an absolute deed of quitclaim, and in the payment by the defendant of the debt to Brayley. The latter thereafter conveyed the legal title to the defendant, who thereupon went into possession of the premises, with plaintiff's knowledge and consent, and still occupies the same. This transfer by plaintiff, though absolute in form, it is claimed was in fact made as security for the money so advanced by Maurin to pay the debt to Brayley, and that the transaction was in the nature of a mortgage, and not a sale. It is clear enough that the object of such transfer by the plaintiff was to raise money to satisfy the debt due Brayley, according to the conditions of his bond, and that the deed from the latter to Maurin followed as a part of the transaction. The defendants deny that the transaction was a mortgage, but allege that it was a conditional sale, the terms of which plaintiff failed to comply with, and, being unable to do so, prior to this action fully settled with the defendants the controversy in relation to his equity in the land by accepting a deed of certain lots in the same town-site. This presents substantially the issue between the parties.

1. Upon this issue the special verdict of the jury is conclusive for the purposes of this appeal. It finds that plaintiff's deed was executed to defendant as security, and, not having been set aside or vacated, necessarily controlled the determination of that question in the trial court. Marvin v. Dutcher, 26 Minn. 391.

But it is proper to observe, while not considering the question of the preponderance of the evidence on this issue, that the record discloses sufficient evidence to support the finding. The testimony of the plaintiff in his own behalf tended to prove that the conveyance was intended as security. It shows that he informed defendant that he was anxious to hold the land as long as he could, and to raise money to enable him to do so, and that defendant thereupon offered to take the land into his own hands and pay the debt due upon it, and whenever plaintiff paid the money so advanced, and a store bill amounting to about $ 100, the plaintiff could redeem it. Also that he (the defendant) offered him very favorable terms of payment. "He said he would do by me just as he would by his father, and that he would give me back the property any time I wanted it, by paying him what money he had in it, and he would collect the money that was standing out on lots that had been sold, and would give me credit for it, and as soon as he got his money out of it he would deed the land back to me. He said he would attend to it just the same as if I was his own father." His evidence tends to show that defendant proceeded to make sales and collections accordingly; that he consulted plaintiff in reference to sales; and that two years afterwards he notified plaintiff that the balance then due, everything included, was $ 358. Under all the circumstances the question was fairly for the jury whether the arrangement between the parties was not intended to be in the nature of a mortgage, rather than a sale and an agreement for a resale. See Morris v. Budlong, 78 N.Y. 543, 552; Roach v. Cosine, 9 Wend. 227.

It was not necessary, in order to make the transaction a mortgage, that there should be any promise or personal covenant to repay the amount due Maurin. The mortgagee may rely wholly upon the security. Madigan v. Mead, 31 Minn. 94, 16 N.W. 539; Gen. St. 1878, c. 40, § 6; Fisk v. Stewart, 24 Minn. 97; Matthews v. Sheehan , 69 N.Y. 585. It is an important circumstance to be considered in determining whether a mortgage or conditional sale is intended, but it is only one of the circumstances to be considered, and is not controlling. Horn v. Keteltas, 46 N.Y. 605. If it was the intention of the parties that the land should be held as security by defendant, his advance to Brayley of the amount due him in pursuance of the understanding of the parties constituted a debt in equity sufficient to support the character of the transaction as a mortgage. It was not essential that the money should pass through plaintiff's hands. Roach v. Cosine, 9 Wend. 227; Hoile v. Bailey, 58 Wis. 434, 448, 17 N.W. 322. Men in necessitous circumstances, with no personal responsibility apart from the security offered, and especially if unused to business, are not always careful as to the form of the security or terms imposed, particularly where confidence is reposed in the creditor. And the latter may choose, for reasons of his own, to exact a title absolute in form, without any personal obligation from an impecunious debtor. Russell v. Southard, 53 U.S. 139, 12 HOW 139, 152, 13 L.Ed. 927. In Holmes v. Grant, 8 Paige 243, 251, Denio, V. C., says: "It is not essential that the personal remedy against the mortgagor be preserved. There is a debt quoad the redemption, but not in respect to the personal remedy." There is mutuality of remedy in this: the one can redeem by paying or discharging the debt or obligation for which the security is given; the other can foreclose, and appropriate the property or proceeds to the same end.

In doubtful cases a contract will ordinarily be construed to be a mortgage, rather than a conditional sale, because in the former case the right of redemption remains, though the terms of the mortgage be not strictly complied with, while in the latter strict compliance is required to save a forfeiture. Matthews v. Sheehan, 69 N.Y. 585; Locke v. Palmer, 26 Ala. 312, 322; Horn v. Keteltas, 42 How. Pr. 138, and cases cited page 149; Brown v. Dewey, 2 Barb. 28.

2. Plaintiff, being vested with the equitable title to the land, had an interest capable of being mortgaged, -- Randall v. Constans, 33 Minn. 329, 23 N.W. 530; Sons of Temperance v. Brown, 9 Minn. 144, (157,) -- and if the relation of mortgagor and mortgagee was established between the parties, it continued and was not altered by the acquisition of the legal title from Brayley. It is entirely immaterial, under such circumstances, whether the trustee of the legal title should convey to the mortgagee directly by the arrangement of the parties, or that it should pass to him through the mortgagor. Stoddard v. Whiting, 46 N.Y. 627. Although not in entire harmony with the theory of the complaint, it is clear from the evidence and findings, as before indicated, that the arrangement between the parties contemplated the procurement of the legal title from Brayley, by defendant, as a part of the transaction. It was necessary to prevent a forfeiture of plaintiff's rights, and at the same time to protect and fortify the interest acquired by defendant under the transfer from plaintiff. But it did not merge the agreement with plaintiff; it was rather in furtherance of it, and was necessary to its fulfilment. If the contract between them was a mortgage, it remained such; if it was a conditional sale, such continued to be its character; and this, as we have seen, is the real issue. The groundwork of the redemption or repurchase by plaintiff would be the reimbursement of the amount paid Brayley, and the acquisition of a perfect title. A second or further conveyance, which springs out of or is connected with a prior mortgage, cannot be used to prevent a redemption. Holridge v. Gillespie, 2 John. Ch. 30. See Murray v. Walker, 31 N.Y. 399. An arrangement between the parties that the defendant, having the apparent or formal legal title, should make sale and apply the proceeds on his claim, was of course entirely consistent with the mortgage relation between the parties. And where a portion has been sold, the mortgagor may bring his bill to redeem the balance.

3. Assuming, then, as we must from the verdict, that the relation of mortgagor and mortgagee was established between the parties, we are next to consider the question whether the equity of redemption has been barred or released by the plaintiff. As respects the interest of defendant Marcus Maurin in the premises in controversy, it is sufficient that it is found that he took with notice of the nature and circumstances of the transfer of plaintiff's interest to the defendant Peter.

The...