Bergen v. Johnson

• Decision Date: 08 April 1912
• Citation: 123 P. 484,21 Idaho 619
• Parties: HERMAN BERGEN and SOPHIA ANN BERGEN, Respondents, v. JOHN JOHNSON, Appellant
• Court: Idaho Supreme Court

123 P. 484

21 Idaho 619

HERMAN BERGEN and SOPHIA ANN BERGEN, Respondents, v. JOHN JOHNSON, Appellant

Supreme Court of Idaho

April 8, 1912

DEED-WHEN A MORTGAGE-INTENT OF PARTIES-LACHES-STATUTE OF LIMITATIONS.

(Syllabus by the court.)

1. Where an instrument in writing in the form of a deed of conveyance is executed and delivered as security for a debt such instrument becomes a mortgage and not a deed notwithstanding the form of the instrument.

2. In an action brought for the purpose of declaring a deed a mortgage, the evidence to support the claim of the plaintiff must be clear and satisfactory and show the intent of the parties to be that the instrument delivered is security for a debt, and not a conveyance of absolute title.

3. Evidence in this case examined and held to support the finding and judgment of the trial court holding that a deed in form is in fact a mortgage.

4. Where B. and wife apply to J. to borrow money and an agreement is entered into whereby J. agrees to loan to B $75, payable on demand, on condition that B. and wife execute a deed to certain real property as security for such indebtedness, and B. and wife agree to such condition and execute such conveyance, and J. thereupon pays to B. the said sum of $75, less expenses of preparing and recording said instrument and the cost of an abstract, and after deducting six months' interest on said principal at eight per cent and such agreement is proven by the evidence of B. and wife and denied by J., and the evidence further shows that J. made no improvements upon said land or expended any money thereon or asserted any rights as owner of said land or paid any taxes upon said land, or did any act by reason of his belief that the conveyance was a deed, and also the great difference between the money loaned and the value of the land, held that such evidence will support a finding of the trial court that such conveyance was in fact a mortgage.

5. Where laches is plead as a defense, the facts and circumstances of each case must govern the court in determining the sufficiency of the laches to constitute a defense to the cause of action. Lapse of time may be considered as an important element, but is not controlling, and the court should give proper and due regard to the surrounding circumstances and the acts of the parties and their relationship to the property involved in the controversy.

6. Held, that the statute of limitations does not apply as a defense under the facts shown in this case.

APPEAL from the District Court of the Eighth Judicial District for Kootenai County. Hon. R. N. Dunn, Judge.

An action to declare a deed a mortgage. Judgment for plaintiff. Affirmed.

Judgment affirmed. Costs awarded to the respondent.

John P. Gray, Chas. P. Lund, and F. M. McCarthy, for Appellant.

In order to justify a finding that a deed absolute on its face was given to secure a debt, the proof must clearly show a mutual understanding on the part of the grantor and the grantee that the instrument was executed, delivered and accepted as a mortgage. (Tilden v. Streeter, 45 Mich. 533, 8 N.W. 502; Jasper v. Hazen, 4 N.D. 1, 58 N.W. 454, 23 L. R. A. 58; Rue v. Dole, 107 Ill. 275; Henley v. Hotaling, 41 Cal. 22.)

The question whether or not a deed absolute on its face is a mortgage depends entirely upon the intention of the parties to the transaction; this intention can only be determined from their conduct and expression of intention. (Felland v. Vollmer Milling & Merc. Co., 6 Idaho 120, 53 P. 268; Winters v. Swift, 2 Idaho 61, 3 P. 15; Vance v. Anderson, 113 Cal. 532, 45 P. 816; Cornell v. Hall, 22 Mich. 377; Horbach v. Hill, 112 U.S. 144, 5 S.Ct. 81, 28 L.Ed. 670.)

No conveyance absolute on its face can be a mortgage unless made to secure the payment of a debt or the performance of a duty existing at the time the conveyance was made or to be credited or to arise in the future. (Morrison v. Jones, 31 Mont. 154, 77 P. 507; Gassert v. Bogk, 7 Mont. 585, 19 P. 281, 1 L. R. A. 240.)

"Where there is no debt or loan, an agreement to resell does not change an absolute conveyance into a mortgage." (Holmes v. Grant, 8 Paige, 243.)

The courts will not lend their aid to declare a deed absolute upon its face to be a mortgage except upon clear, certain and conclusive testimony. (Goodbar v. Bloom, 43 Tex. Civ. App. 434, 96 S.W. 657.)

Respondents are not entitled to relief because of laches. (5 Pom. Eq., sec. 21; 18 Am. & Eng. Ency. of Law, 105; Idaho Gold Mining Co. v. Union Min. etc. Co., 5 Idaho 107, 47 P. 95; Ryan v. Woodin, 9 Idaho 525, 75 P. 261.)

Black & Wernette, for Respondents.

"It is the settled rule that if a deed absolute in form was made merely to secure an indebtedness to the grantee, it is a mere mortgage, and does not pass the title." (Kelley v. Leachman, 3 Idaho 392, 29 P. 849.)

Every instrument intended to secure the payment of money or the performance of some collateral act is a mortgage. (Brown v. Ryan, 6 Idaho 1, 51 P. 995.)

The question of whether an absolute deed is, in fact, a mortgage is one of intention of the parties. (Workman v. Greening, 115 Ill. 477, 4 N.E. 385; Kelley v. Leachman, supra.)

"In deciding whether any deed or other written instrument constitutes an equitable mortgage, the principal test is whether the relation of debtor and creditor between the parties has continued after the execution and delivery." (Nelson v. Smith, 47 Wash. 386, 92 P. 131; Plummer v. Ilse, 41 Wash. 5, 82 P. 1009, 2 L. R. A., N. S., 627; Boyer v. Paine, 60 Wash. 56, 110 P. 682.)

"Every person having an interest in property subject to a lien has a right to redeem it from the lien any time after the claim is due, and before his right of redemption is foreclosed." (Sec. 3385, Rev. Codes; Hannah v. Vensel, 19 Idaho 796, 116 P. 115; Brown v. Bryan, supra.)

In this state there can be but one action on a debt secured by a mortgage, and this is the foreclosure of the mortgage. No judgment can be obtained by the mortgagee against the mortgagor without foreclosure of the mortgage, except where the mortgaged property becomes valueless. (Rein v. Calloway, 7 Idaho 634, 65 P. 63; First National Bank v. Williams, 2 Idaho 670, 23 P. 552.)

"This statute makes the right of redemption absolute, provided the redemption is sought after the debt becomes due and before the period of redemption on foreclosure expires." (Barnes v. Pitts Agr. Works, 6 Idaho 259, 55 P. 237.)

STEWART, C. J. Ailshie and Sullivan, JJ., concur.

OPINION

STEWART, C. J.

This is an action brought by the plaintiffs against the defendant for the purpose of having a deed declared a mortgage and to compel the release of said mortgage upon the payment of the amount found due.

The answer puts in issue the material allegations of the complaint and alleges that the deed set forth in the complaint was in fact a deed and not a mortgage, and that the grantee entered into possession of said land and has remained in possession since the execution and has improved the property.

Upon the issues made by the pleadings the cause was tried to the court and findings of fact and conclusions of law made and judgment rendered in favor of plaintiffs. A motion for a new trial was made and overruled, and this appeal is from the judgment and from the order overruling the motion for a new trial.

The only question presented upon this appeal is the sufficiency of the evidence to sustain the findings and judgment. The trial court finds that the plaintiffs, respondents here, have been since May 25, 1898, owners in fee, except as to a lease given to Erick Peterson and Anna M. Peterson, of the property described in the complaint; that on the 25th day of May 1898, the plaintiffs borrowed of the defendant Johnson $ 75 at eight per cent interest per annum on an oral agreement made with the defendant to pay the sum with interest on demand, and that plaintiffs received said sum, less $ 3 retained by the defendant for interest for six months, the cost of making out papers, and the making of an abstract, and that the whole sum retained from said loan of $ 75 was about $ 10; and thereafter there was paid to the defendant on said loan the sum of $ 10 as interest; and that to secure said loan the plaintiffs executed and delivered the deed described in the complaint, dated May 25, 1898; that it was agreed between the plaintiffs and the defendant that upon the payment of the sum borrowed the defendant would release his claim against said premises by proper writings, and turn over to the plaintiffs the title papers given in security; that such title papers were deposited with the defendant with that understanding; that since the borrowing of said money and making said indenture the defendant has never been in possession of any part of the above-described premises and has not paid any taxes thereon and has made no improvements thereon of any nature or kind whatsoever; that there have been several conversations had between the plaintiffs and defendant since said money was borrowed about the transaction, and that in such conversations the transaction was referred to as a loan of money, and that the indenture given was as security for the payment thereof, and that the plaintiffs were never notified of the contrary until the month of August, 1909, when the plaintiffs offered to pay and settle said indebtedness; that in the month of August, 1909, the plaintiffs offered to settle with the defendant and pay him on the contract of loan $ 75 with interest thereon at eight per cent from May 25, 1898, less the sum of $ 13 repaid, and that the defendant refused to settle with the plaintiffs or to accept said sum and refused to release the claim against said premises; that the value of the property conveyed by said security at the time...