Babcock v. Wells

• Citation: 54 A. 596,25 R.I. 23
• Parties: BABCOCK v. WELLS et al.
• Decision Date: 06 February 1903
• Court: United States State Supreme Court of Rhode Island

54 A. 596

25 R.I. 23

BABCOCK

v. WELLS et al.

Supreme Court of Rhode Island.

Feb. 6, 1903.

Bill by John J. Babcock against William R. Wells and others to redeem certain property. Heard on bill, answers, and proofs. Continued for further evidence.

Argued before STINESS, C. J., and TIL LINGHAST and ROGERS, JJ.

A. B. Crafts, for complainant.

Dexter B. Potter, for respondents.

STINESS, C. J. It appears from the pleadings that Jacob D. Babcock, deceased, left three children, John J. Babcock, Harriet E. B. Cundall, and Sarah A. Humphrey, who became tenants in common of the property involved in this suit, and so occupied it up to January 30, 1877. At that date a suit for partition brought by Mrs. Humphrey was pending. It is claimed that she was indebted to her brother and sister for repairs and other expenses, on account of which she agreed to transfer her third to them for the sum of $2,500, said suit to be discontinued without costs; that Babcock applied to Thomas R. Wells for said sum, who agreed to furnish it upon a mortgage of the Humphrey share as security; that Wells went to Providence to meet Mrs. Humphrey, to arrange the matter, on January 30, 1877, and took a quitclaim deed from her to himself, representing that he took it as security for the $2,500 paid to her, according to his arrangement with Babcock, because it was more convenient than to get a mortgage. The suit for partition was thereupon discontinued. This bill was filed December 9, 1881, and on December 10, 1881, a restraining order against alienating or incumbering the property was entered, which is still in force. In 1898, upon conveyance by Mrs. Cundall to John J. Babcock of all her interest in the property, a decree was entered to amend the bill by making said Babcock sole complainant. This bill is brought to redeem the one-third share transferred from Mrs. Humphrey to Thomas it. Wells by the deed of January 30, 1877, upon the ground that it operated only as a mortgage, by reason of the trust under which said Wells took the title.

The title is too voluminous to refer to in detail, and, the question being one of fact, it is sufficient to say that, both from preponderance of testimony and corroboration in conduct of the parties, we find that the deed from Mrs. Humphrey to Thomas K. Wells was taken as security, in lieu of a mortgage, for the sum of $2,500, as alleged in the bill. This being so, Thomas R. Wells held the one-third interest as trustee for Babcock and Mrs. Cundall, to be conveyed to them upon payment of the debt thereby secured. Jenckes v. Cook, 9 R. I. 526; Aborn v. Padelford, 17 R. I. 143, 20 Atl. 297; Whiting v. Dyer, 21 R. I. 86, 41 Atl. 895.

The complainant testifies that the arrangement was recognized as a loan of $2,500, on which interest was to be paid at the rate of 7 per cent.

After the deed from Mrs. Humphrey to Thomas R. Wells, January 30, 1877, Babcock and his sister remained in possession of the property, as owners, and collected all that was paid for rents thereof, a portion of which was leased and occupied by firms of which Thomas R. Wells was a member; Wells neither demanding nor collecting rent for the one-third share which he held by said deed. August 1, 1877, Thomas R. Wells gave a quitclaim deed of the property conveyed to him by Mrs. Humphrey to Sylvia B. Salisbury and William R. Wells, to whom he was indebted, reciting a consideration of $2,500, although no money was in fact paid; the deed being taken on account of the indebtedness. At the same time they gave a bond to said Wells to sell the property described in said deed to him on or before April 1, 1878, for the sum of $2,500; Wells to occupy said property in the meantime, and to pay as rental therefor at the rate of 7 per cent. per annum on said sum. The firms occupying the property, in which said Wells was a partner, failed and made assignments January 12, 1878, and the assignee paid rent up to about April 1, 1878, to Babcock, after which time the premises were unoccupied. William R. Wells claims to have taken possession April 1, 1878; that being the time named in his bond for a reconveyance. As to William R. Wells and Sylvia E. Salisbury, the grantees under the quitclaim deed from Thomas R. Wells, the question of fact arises whether they took the conveyance with notice of the equitable title of Babcock, on the ground that the deed was held simply as security.

Upon this point Babcock testifies positively to admissions made by William R. Wells of his knowledge of the transaction. Mrs. Cundall testifies less positively to the language, but to a general admission of their right to redeem. William R. Wells denies any such admissions, but says that, preferring the money to the property, he made a voluntary offer to allow them to redeem for the sum of $2,500 and interest. Looking further to the conduct of the parties, it is quite significant, and, we think, corroborative of the complainant's testimony, that the bond was for the reconveyance upon payment of the same sum at the same rate of interest for which it is claimed as security, as though William R. Wells had knowledge of such fact. It would be a remarkable coincidence, if, taking the deed to settle up their own estate, they made it subject to exactly the same terms as to Thomas R. Wells that existed between said Wells and Babcock. It is also remarkable, if William was endeavoring to make a settlement and an end of the matter, he should have made the same offer to Babcock after he (William) supposed he had got an absolute title. His conduct is more compatible with the complainant's claim than with his own. Moreover, if he and his sister had an absolute title as against Babcock, they would have been entitled to a share of the rents, but they did not claim it. Still further, the assignee sold the assets of Thomas R. Wells on March 29, 1878, among which was this bond, with only two more days to run, according to its terms. William R. Wells bought the bond at the auction, and then claimed that he owned the equity of redemption under the deed from Thomas R. Wells. He therefore very clearly recognized his deed as an equitable mortgage as to Thomas, and, although the evidence is not so clear that he and his sister knew of the relation of Thomas to the complainant as it is that Thomas knew it, still we think it fairly shows that they knew of the complainant's equitable claim. Taking the deed with notice, the property was subject to redemption in the hands of William R. Wells and Mrs. Salisbury.

November 8, 1875, J. J. Babcock and Mr. and Mrs. Cundall executed a mortgage to Thomas R. Wells on their two-thirds interest in a part of the property in question, to secure a note for $5,000 dated October 25, 1875, and a second mortgage, dated October 24, 1876, on the same interest in other parts of the property, to secure the same note; and on the same day they executed...