Bearss v. Thomas P. Ford.

• Decision Date: 20 November 1883
• Citation: 108 Ill. 16,1883 WL 10351
• Parties: CHARLES BEARSS et al.v.THOMAS P. FORD.
• Court: Illinois Supreme Court

108 Ill. 16

1883 WL 10351 (Ill.)

CHARLES BEARSS et al.

v.THOMAS P. FORD.

Supreme Court of Illinois.

Filed at Ottawa Nov. 20, 1883.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the Second District;--heard in that court on appeal from the Circuit Court of Will county; the Hon. JOSIAH MCROBERTS, Judge, presiding.

Mr. C. W. BROWN, for the appellants:

Any material alteration of an instrument, made without the assent of the party having executed it, will have the effect of avoiding it. Gardner v. Harback, 21 Ill. 129; Prettyman v. Goodrich, 23 Id. 330; Kelly v. Trumbull, 74 Id. 428; Wyman v. Youmans, 84 Id. 403; People v. Organ, 27 Id. 27,

A party who receives a paper interlined in a material part must assume the responsibility of explaining it afterward, when claiming the benefit of the paper, the presumption of law being that the interlineation was made after its execution. Hodge v. Gilman, 20 Ill. 437.

A sale with an agreement for a repurchase comes very near in form and substance with a mortgage, but the rights of the parties under these instruments are very different. A mortgage may be redeemed at any time before foreclosure, while there can be no redemption from a conditional sale after the day appointed. 1 Jones on Mortgages, sec. 262, note 4.

An absolute deed delivered in payment of a debt is not converted into a mortgage merely because the grantee therein gives a contemporaneous stipulation binding him to reconvey on being reimbursed, within an agreed period, an amount equal to the debt and the interest thereon. If the conveyance extinguishes the debt, and the parties so intend, so that a plea of payment would bar an action thereon, the transaction will be held an absolute sale notwithstanding. 1 Jones on Mortgages, sec. 267; Turner v. Kerr, 44 Mo. 429; Farmer v. Grose, 42 Cal. 169; Baugher v. Merryman, 32 Md. 185; Weathersly v. Weathersly, 40 Miss. 462; Morrison v. Brand, 5 Daly, (N. Y.) 40.

The agreement to reconvey the lands is not necessarily, either in law or in equity, a defeasance. 1 Jones on Mortgages, sec. 260, 261, and cases cited in note.

If an absolute conveyance be made and accepted in payment of an existing debt, and not merely as security for it, an agreement by the grantee to reconvey the land to the grantor upon receiving a certain sum within a specified time, does not create a mortgage, but a conditional sale, and the grantee holds the premises subject only to the right of the grantor to demand a reconveyance according to the terms of the agreement. 1 Jones on Mortgages, sec. 265, and cases cited in note; Pitts v. Cable, 44 Ill. 103.

Although the securities are not surrendered, if the debt is extinguished a simple right to repurchase does not make the conveyance a mortgage. West v. Hendrix, 28 Ala. 226; Baxter v. Wiley, 9 Vt. 276; Todd v. Campbell, 32 Pa. St. 250; 1 Jones on Mortgages, sec. 326.

Messrs. HILL & DIBELL, for the appellee:

A mortgage is a conveyance of land as a security for the repayment of money borrowed, with a proviso that such conveyance shall be void on payment of the money, etc., as stipulated. 2 Bouvier's Law Dict. “Mortgage,” 3; 1 Jones on Mortgages, sec. 241.

A deed with a bond or agreement to reconvey the estate upon payment of a certain sum of money, has always been held to constitute a legal mortgage. 1 Jones on Mortgages, sec. 244. If a conveyance of land be made in fee, and the grantee gives back a bond to reconvey upon repayment of the consideration money, and to permit the grantor to occupy the premises at a rent equal to the interest on the consideration, these are parts of one and the same transaction, and constitute a mortgage. 1 Jones on Mortgages, sec. 273; Preschbaker v. Feaman, 32 Ill. 482; Ewart v. Walling, 42 Id. 453; Woodward v. Pickett, 8 Gray, 617; Wright v. Bates, 13 Vt. 341.

The fact that the evidences of the indebtedness are not given up or cancelled on the debtor's making a conveyance, is strong evidence that the conveyance is a mortgage. Jarvis v. Frink, 14 Ill. 396; Dunphy v. Riddle, 86 Id. 28; Sutphen v. Cushman, 35 Id. 196; Rue v. Dole, 108 Ill., p. 275.

The taking of a second mortgage on the same land is no waiver of the original mortgage. 2 Jones on Mortgages, sec. 929; Gregory v. Thomas, 20 Wend. 17; Hill v. Beebee, 3 Kern. 562.

A conveyance by mortgagor to mortgagee of the mortgaged premises, even in payment of the mortgage debt, extinguishes and releases, or does not extinguish and release, the mortgage lien, according to the intention of the mortgagee, if that is shown, and if not, then as may be for the interest of the mortgagee. 4 Kent's Commentaries, 102; 2 Washburn on Real Prop. 180-182, secs. 1, 2; 1 Jones on Mortgages, secs. 857, 870; Campbell v. Carter, 14 Ill. 286; Weiner v. Heintz, 17 Id. 262; Fitts v. Davis, 42 Id. 391; Edgerton v. Young, 43 Id. 468; Huebsch v. Scheel, 81 Id. 285; Richardson v. Hockenhull, 85 Id. 124; Shaver v. Williams, 87 Id. 470; Worcester National Bank v. Cheney, Id. 614; Ætna Life Ins. Co. v. Corn, Id. 170; Young v. Morgan, 89 Id. 199; Meacham v. Steele, 93 Id. 143; Campbell v. Trotter, 100 Id. 281.

There is no presumption, from inspection, when, or by whom, or for what purpose, the instrument has been altered. Reed v. Kemp, 16 Ill. 449; Gillett v. Sweet, 1 Gilm. 489; 1 Greenleaf on Evidence, sec. 564, note, sec. 566, note 1. Mr. JUSTICE MULKEY delivered the opinion of the Court:

On May 22, 1874, the appellant Charles Bearss borrowed of Thomas P. Ford, the appellee, $1200, giving his note therefor, and to secure the payment thereof executed a deed of trust to T. H. Hutchins upon a tract of land in Will county, this State, the same being Bearss' homestead. On the 28th of December following, Ford made another loan of $290.36 to Bearss, for which he and his wife executed to Ford their promissory note, and a deed of trust to Elbert T. Chase, on the same property, to secure the loan. Both the above notes bear interest at the rate of ten per cent per annum, payable semi-annually, and by their terms matured on the 22d of May, 1879. These trust deeds contained the usual clause that if default was made in the payment of the interest, or any part of it, according to the terms of the note the whole of the principal and interest should thereupon become due and payable. In April, 1878, a part of the interest and taxes on the premises being in arrears, Ford was threatening to foreclose, when negotiations opened between him and Bearss, resulting, after some delay, in the following arrangement: Bearss and wife were to execute a conveyance of the premises to Ford, with a proviso in it that if Bearss should, on or before the first of July, 1879, pay the amount of the two trust deeds, interest, back taxes, etc., the conveyance was to be void, and Ford was to reconvey to Bearss. On the other hand, Ford was to execute to Bearss a lease of the premises from the first day of July, 1878, to the first of July, 1879, at an annual rental of $161.88, to be paid in equal monthly installments, being $13.49 per month. These papers were accordingly made out, and placed in the hands of C. W. Brown, the attorney of Bearss, with the understanding he was to hold them until the first of July, 1878, so as to afford Bearss an opportunity, in the meantime, of paying Ford the amount of interest and back taxes due under the trust deeds, in which event Brown was not to deliver them at all, but if Bearss failed to make such payment, then the lease and deed were to be delivered to Ford. Bearss having failed to make payment by the first of July, as contemplated by the above arrangement, Ford sent Hutchins for the deed and lease, and they were delivered to him by Brown about five o'clock in the evening. On examination Ford found there was no release of the homestead in the body of the deed, and for that reason returned the papers next morning to Brown's office, from whence they had been taken the evening before, and were left there for Bearss, who declined to receive them or to execute a new deed with waiver of homestead, and thereupon Ford filed the present bill to foreclose the two deeds of trust. There was a hearing of the cause upon the merits in the circuit court of Will county, resulting in a decree in favor of appellee, which, on appeal to the Appellate Court for the First District, was affirmed, and the case comes here from the latter court for review.

The most important question presented by this record relates to the legal effect of the deed executed by Bearss and wife, in pursuance of the arrangement entered into between him and Ford in April, 1878, as heretofore stated. It is contended by appellee that the facts proven do not show a valid delivery of that instrument, but that, conceding a sufficient delivery is shown, it is in legal effect nothing more than another mortgage to secure the same debt. Appellants maintain the negative of both these propositions, and insist the deed in question was, and is, an absolute sale and transfer of the estate, and not a mere security for a prior debt, and that the condition contained in it is simply an undertaking or covenant on the part of the grantee to resell to the grantor, upon specified terms, within a limited time.

Assuming, for the purposes of the argument, the evidence shows a sufficient delivery of the instrument in question, (a matter about which we express no opinion,) we shall proceed at once to the consideration of the inquiry, was the deed in question an absolute sale and conveyance with an agreement for a repurchase by the grantor, or was it a mortgage? The answer to this question, of course, depends upon what was intended by the parties to it at the time of its execution. In arriving at the intention of the parties the instrument itself must be first looked to, for, as a general rule, where there is nothing equivocal or ambiguous in the terms of a written instrument it should be given effect according to the plain and obvious import of the language used, unless to do...