Adams v. Pilcher

• Decision Date: 08 January 1891
• Citation: 8 So. 757,92 Ala. 474
• Parties: ADAMS ET AL. v. PILCHER ET AL.
• Court: Alabama Supreme Court

8 So. 757

92 Ala. 474

ADAMS ET AL. v. PILCHER ET AL.

Supreme Court of Alabama

January 8, 1891

Appeal from chancery court, Henry county; JOHN A. FOSTER Chancellor.

The bill in this case was filed by the appellees, W. C. and B. R Pilcher, against the appellants, Lucy Adams, her husband, one Brooks, and one Farley, and sought to have a conveyance absolute in form declared a mortgage, and that they be let in to redeem the lands therein conveyed. The facts, as disclosed by the bill and answers and interrogatories, may be summarized as follows: The said complainants were indebted to the respondent Lucy Adams, as evidenced by three promissory notes,-one for $500, due February, 1, 1888; one due January 1, 1889, for $600; one due January 1, 1890, for $600. These notes had been secured by a mortgage on certain property belonging to the complainants. On the 14th day of January 1889, the first two notes above mentioned being due and unpaid, the respondent Lucy Adams, through her husband sought the payment of them. The makers, complainants in this suit, sought an extension of time. Upon the mortgagee refusing to give them the desired extension, they thereupon, on that day, made a deed, absolute in form, conveying to them two lots in the town of Dothan, upon the recited consideration of $1,150; one of the lots-the "Pilcher Hotel lot"-being estimated to be worth $1,000, and the other $150. At the time of the execution of this conveyance there was a parol agreement, in which it was agreed that if the complainants paid the said Lucy Adams the sum of $1,000, with 15 per cent. interest from the date of the deed to the day of repurchase, within, complainants contend, 60 days, defendants aver within 30 days, they would have the right to repurchase the property. This payment was not made within 30 days; but a tender of the amount was made before the expiration of the 60 days; and the said Lucy Adams sold the lot in controversy-the "Pilcher Hotel lot"-to the defendant Brooks for $1,150; and afterwards transferred the other note, before its maturity, together with the mortgage, to the defendant Farley; and this last note was subsequently paid by the complainants, and the note and mortgage turned over to them. It was shown by the defendants that at the time the deed conveying the property above mentioned was made they indorsed a credit on the mortgage of complainants of $1,100, the balance of the purchase money being applied as a credit on another note, separate from those involved here. The complainants contend that at the time of the execution of the deed it was agreed that the said deed should be considered as a mortgage, so far as concerned the "Pilcher Hotel lot;" and therefore pray that the said deed, though absolute in form, be declared a mortgage, and that they be allowed to redeem. On final hearing of the proof and pleadings the chancellor decreed that the complainants were entitled to the relief prayed, and it is from this decree the present appeal is taken, and the same is assigned as error.

J. G. Cowan, for appellants.

J. W. Foster, for appellees.

COLEMAN J.

A conveyance absolute in terms may be shown by parol evidence to have been intended as a security for a debt. A sale absolute, with the right to repurchase for a given sum within a specified time, may also be shown by parol to have been intended by the parties as a mortgage. It matters not what form the transaction may have taken, if in fact it was intended as a security for a debt, in a court of equity it must be so considered. Robinson v. Farrelly, 16 Ala 476. In either case, to have such an instrument declared a mortgage, the proof must be clear and convincing that at the time of the execution of the instrument such was the understanding of both parties. If the parties intended...