Beatty v. Brummett

• Decision Date: 11 January 1884
• Docket Number: 10,638
• Parties: Beatty v. Brummett
• Court: Indiana Supreme Court

94 Ind. 76

Beatty v. Brummett

No. 10,638

Supreme Court of Indiana

January 11, 1884

Petition for a Rehearing Overruled March 8, 1884.

From the Brown Circuit Court.

F. T Hord and W. B. Hord, for appellant.

G. W Cooper, for appellee.

OPINION

Black, C.

The appellee sued the appellant. A demurrer to the complaint, for want of sufficient facts, was overruled.

The complaint showed, in substance, that the appellee, on the 1st of September, 1874, intermarried with one Martin Beatty; that she then owned eighty acres of land in Brown county, which, subject to a mortgage thereon to one Dubois, she held in virtue of a previous marriage; that on the 1st of November, 1875, said Dubois took a judgment of foreclosure of said mortgage, in the sum of $ 261.25, with costs, in the Brown Circuit Court, and on the 3d of June, 1876, said land was sold by the sheriff, under the decree of foreclosure, for $ 305.81; that the appellant was the son of said Martin Beatty and step-son of the appellee; that she reposed great confidence in him; that on the day of said sale she had not the money to pay said debt; that the land was worth $ 1,000; that she was able to raise all the money necessary to pay the debt except $ 80, and she did raise said money, the sum of $ 225.81, and gave it to the appellant for the purpose of bidding in said land for her benefit; that it was agreed between the appellee and the appellant, that he would take her said sum of $ 225.81, and supply said sum of $ 80 necessary to make the full amount of the debt out of his own moneys; that he would attend said sale and bid the full amount of said debt, and that, to secure him for the repayment of his said $ 80, the certificate of purchase should be made to him, but that it should only be held by him as such security.

It was alleged that he advanced said money, as agreed that she did not attend the sale, but relied solely on her agreement with him; that he, intending to buy said land for himself, and to defraud and cheat her out of said land, attended the sale, bid in said land, paid said $ 80 of his own money and said money provided by her, and took the certificate in his own name; that she continued to live on said land, and he agreed with her to hold said certificate as security merely for the money so advanced by him, and that she might continue to occupy said premises as her own until she could sell the same and thus raise the money to repay him; that, "under said agreement," she failed to redeem said land within the time provided by law, and he, with her agreement, at the expiration of one year from said sale, received a sheriff's deed for said land in his own name, he agreeing with her to hold the land for sale, and that when a purchaser should be found therefor the appellant should have his $ 80, with interest, and she should have the residue; that afterward, while she was so in possession of said land, he sold it to Peter Isenogle and Charles E. Long, for the sum of $ 800; that at the time of said sale, on the 9th of March, 1880, she was still in possession of the land, and owned it subject to said lien for $ 80, with interest thereon due the appellant; that she refused to surrender said premises to the appellant or to his said grantees, and claimed the same, subject to the appellant's said lien; that, to settle and compromise her claim and interest held at the time of appellant's said sale, he agreed with her that if she would surrender her claim and interest in the land and the possession thereof to his said grantees, he would pay her the sum of $ 500; that she consented to said sale, surrendered her right and interest in and to said property, and gave up the possession thereof to said grantees; but that appellant had failed and refused, and still failed and refused, to pay said sum of $ 500, for which she demanded judgment.

It is insisted in argument that the agreement for the payment of $ 500 was without consideration, because, as is supposed by counsel, the appellee at the time of the appellant's promise to pay that sum had no interest in the land or right of possession, but was a mere tenant at sufferance, it being contended that the verbal agreement in relation to the sheriff's sale could not create a trust in her favor or confer on her any interest in the land.

The averments of the complaint show that the land sold by the sheriff was the property of the appellee, and that she, through the appellant, paid the purchase-money, a portion thereof being provided by the appellant by way of loan, and that he took the title in his name, under an agreement to hold it as security for the payment of the debt thus created. The allegation in regard to a fraudulent purpose on the part of the appellant was not necessary. The doctrine is well established in this and a majority of the other States, that a deed of conveyance of land absolute on its face, without any other written agreement, may in equity, without showing any fraud, mistake or accident in its execution, be shown by parol evidence to have been intended as a security for the payment of a debt, and thus be proved to be, in truth, a mortgage, as between the parties, and as against those who have derived title through the grantee who are not purchasers in good faith, for value and without notice; and such persons have the rights, liabilities and remedies incident to the relation of mortgagor and mortgagee. This doctrine has long been recognized in this State. See Hayworth v. Worthington, 5 Blackf. 361 (35 Am. Dec. 126); Butcher v. Stultz, 60 Ind. 170; Smith v. Brand, 64 Ind. 427.

In such cases the grantee holds the title as a mortgagee in equity.

Upon the principle that the statute of frauds can not be invoked to protect a party in the perpetration of a fraud, on which is based the doctrine of specific performance in equity, it was said in Levy v. Brush, 45 N.Y. 589, that when a party whose lands were about to be sold by judicial sale has agreed with another to loan him money and bid off and hold the land as a security for the money, and the agreement has been consummated, the party so acquiring the title has been regarded as holding it as a mortgagee in equity. And it was said that upon these grounds Ryan v. Dox, 34 N.Y. 307, was decided.

In Ryan v. Dox, supra, it was held admissible to prove that the defendant purchased, under a foreclosure sale, upon a verbal agreement that the purchase should be for the benefit of the plaintiff, the mortgagor, and that the defendant should take the deed of the master and hold the premises in his own name by way of security for what money he should advance and pay on the purchase, and that whenever the...