Beverly v. Davis

• Decision Date: 08 May 1914
• Docket Number: 11,487.
• Citation: 79 Wash. 537,140 P. 696
• Court: Washington Supreme Court
• Parties: BEVERLY v. DAVIS et ux.

140 P. 696

79 Wash. 537

BEVERLY v. DAVIS et ux.

No. 11,487.

Supreme Court of Washington

May 8, 1914

Department 1. Appeal from Superior Court, Okanogan County; C. H. Neal Judge pro tem.

Action by Martha E. Beverly, née Martha E. Hull, against E. R. Davis and wife. From a judgment for plaintiff, defendants appeal. Affirmed.

Page Smith & Gresham, of Conconully, for appellants.

Whitney & Hughes, of Wenatchee, and Burton & Jennings, of Twisp, for respondent.

GOSE, J.

The purpose of this action is to have a transaction, evidenced by a deed and option, declared a mortgage. The court found that the instruments were intended as a mortgage, directed the defendants by an interlocutory order to state the amount of the indebtedness within 30 days, or, in case of failure to do so, left them to seek their remedy in an independent action to foreclose the mortgage. The defendants filed a statement of the amount advanced to the plaintiffs within the time fixed, and the court thereafter, upon notice to the plaintiffs, determined the amount due. Whereupon a judgment was entered in favor of the defendants, and against the plaintiff wife, for $3,298.02, with interest. It was also adjudged that the mortgage be foreclosed, and that the property be sold in the manner provided by law for the sale of real estate on mortgage foreclosure. The defendants have appealed.

The essential facts are these: The respondent wife, hereafter called the respondent, then a widow, on the 13th day of January, 1912, conveyed to the appellant husband, hereafter called the appellant, by a deed of general warranty, 160 acres of land in the Methow Valley in Okanogan county. She also assigned him 483 shares of water stock. On the same day and as a part of the same transaction, the respondent and the appellant executed a contract which is in form an option. The contract recites the execution of the deed, acknowledges that the respondent has received $100 in cash, and recites that the appellant has agreed to pay certain of her obligations which are enumerated, and which aggregate $2,125. It provides that the appellant shall pay the enumerated items, and that 'If at any time on or prior to May 1, 1912, the said Martha E. Hull [the respondent] desires to and shall pay to said E. R. Davis the aggregate of the amount so paid, together with cash payments, with interest thereon at the rate of twelve per cent. per annum from this date, then the said E. R. Davis shall reconvey said premises to said Martha E. Hull; but, if such payments shall not be made strictly as herein provided for, it shall be optional with the said E. R. Davis to reconvey said premises. This to be considered merely as an option to purchase, expiring on said date.' The appellant paid the enumerated items. On the 23d day of April following they extended the option to the 1st day of November; the appellant then advancing to the respondent $150, and agreeing to advance $350 additional, the entire sum to be used by the respondent in improving the property. This agreement provides that the advances are subject to the same terms and conditions as those made under the first agreement, and that they should draw the same rate of interest. The respondents were married on the 29th day of April. On the 5th day of June the appellant and both respondents entered into another contract, which recites that the appellant 'has agreed to loan' to the respondent $500, of which $275 has been paid; that, in consideration of respondent's waiving any right to a lien against the land for 'work and labor' while in possession of the land, the appellant agrees to advance the remaining $225 upon the execution of the contract. The respondent remained in possession of the land.

The respondent testified, in substance, that the money was advanced as a loan at interest at the rate of 12 per cent. per annum, and that she thought the papers evidenced a mortgage, until a short time before the April extension. The theory of the appellant is that there was an absolute sale and conveyance of the land, with an option to repurchase, and that there was no loan and no debt, either express or implied. The action was commenced within six weeks after the last option expired.

The controlling legal principles are simple and well settled in this state. The character of the transaction is fixed at its inception, and the intention of the parties, when properly ascertained, must determine its nature. The action is grounded in fraud, and equity permits the fullest inquiry, to the end that the intention of the parties may be ascertained and enforced. The presumption is that the transaction is what it purports, and the one asserting that the written instrument masked the real transaction must prove his case by clear and convincing evidence.

Johnson v. National Bank of Commerce, 65 Wash. 261, 118 P. 21; Kegley v. Skillman, 68 Wash. 637, 123 P. 1081; Hoover v. Bouffleur, 74 Wash. 382, 133 P. 602.

But it is argued that there was no debt; hence there could, in the very nature of things, be no mortgage. Upon this phase of the case it is sufficient to say that, if the respondent's version of the...