Boudreau v. Holzer, 1258-A

• Decision Date: 06 August 1971
• Docket Number: No. 1258-A,1258-A
• Citation: 280 A.2d 88,109 R.I. 81
• Parties: Dorothy M. BOUDREAU v. William R. HOLZER et al. ppeal.
• Court: Rhode Island Supreme Court

Page 88

280 A.2d 88

109 R.I. 81

Dorothy M. BOUDREAU v. William R. HOLZER et al.

No. 1258-Appeal.

Supreme Court of Rhode Island.

Aug. 6, 1971.

[109 R.I. 89]

Eugene J. Laferriere, West Warwick, for plaintiff

Archambault & Archambault, Raoul Archambault, Jr., West Warwick, for defendants.

OPINION

JOSLIN, Justice.

In this civil action the plaintiff asks that her warranty deed conveying to the defendants a fee simple interest in a parcel of real estate be declared a mortgage. The case was tried to a justice of the Superior Court sitting without a jury, and, after he found for the plaintiff, the defendants appealed.

Following arguments in this case and preparatory to rendering our decision, we examined the record and then for the first time learned that no judgment had been entered, and that defendants had taken their appeal from the trial justice's decision rather than from a written order or judgment as required by Super.R.Civ.P. 73. The case, therefore, was not properly here inasmuch as an appeal lies only from a judgment that is set forth in a separate document. East Providence Credit Union v. Brown, 104 R.I. 92, 242 A.2d 428. To avoid the delay which would have resulted had we rejected the appeal for noncompliance with the jurisdictional requirement, we adopted the practice followed in Metts v. B.B. Realty Co., R.I., 271 A.2d 811, 812 and sua sponte remanded the papers to the Superior Court for the entry of a nunc pro tunc judgment incorporating the trial justice's written decision. That judgment having been duly entered and the papers having been returned to this court, the case is now in order for disposition.

On the view we take of the case an extensive review of the evidence is unnecessary. Suffice it to say that in February, 1970 plaintiff was in financial difficulties. Her then current obligations exceeded $2,000, and in addition she owed $851.51 for past due taxes on the home which she owned and where she resided with her children. Located in the Town of Coventry, that home, apparently her only substantial asset, had an appraised value of $13,900, and was subject to a mortgage of record to The Connecticut Bank and Trust Company, on which the balance then due was about $5,800.

When defendants, her long-time neighbors and friends, learned of plaintiff's difficulties, they offered to assist with a loan. After some preliminary discussions it was agreed that they would lend her $2,000, and on February 26, 1970 she gave them her promissory note in that amount. It provided for repayment of the amount borrowed 'At A Monthly Rate Of $20.00 Per Mo. at 8% Int. Per Year. Starting March 26, 1970 And Balance Is To Be Paid Monthly At Rate Above Or On Demand.'

In conflict is what amount of money was actually advanced by defendants and, whatever that amount may have been, whether or not plaintiff received it on February 26, when she executed and delivered the note. The defendants testified that the note and the sum of $2,000 changed hands on the 26th. The plaintiff offered a different version. Her testimony was that she received nothing until the following day. Then, she was given a check for approximately $1,090.00 which she retained, and a second check for $851.51 which she endorsed so that it could be used to pay the overdue taxes on her home. The remainder of the $2,000 loan was retained by defendants and paid by them to The Connecticut Bank and Trust Company on account of the mortgage on plaintiff's residence.

In dispute, also, are the circumstances attendant upon plaintiff's conveyance of her real estate to defendants. While the parties agree that a warranty deed conveying a fee simple interest was delivered on February 27, 1970, the testimony as to what interest was intended to pass by that transfer is conflicting. The defendants, at trial, attempted to prove that the conveyance to them was in no way related to and was separate and distinct from the note transaction, and that the consideration for that transfer was their payment of the $851.51 for overdue property taxes and their assumption of the mortgage balance of about $5,800. Parenthetically, it should be observed, that following the delivery of the deed defendants and the mortgageebank entered into an agreement modifying the interest and the payment terms on the mortgage. Significantly, that modification although binding on defendants, in no way released plaintiff from her mortgage obligations.

The plaintiff disputes defendants' version of what happened. She claims, in substance, that the loan and the conveyance were a single transaction, and that it was intended and understood by the parties that she was conveying the property as collateral for the $2,000 loan.

In deciding for plaintiff, the trial justice accepted her story, and specifically rejected the evidence favorable to defendants. In substance, he found it highly improbable that the parties could have contemplated that plaintiff would convey the home in which she had an equity of approximately $7,000 for the limited consideration testified to by defendants, and it was his judgment that defendants 'overreached and took advantage of plaintiff's poverty, inexperience and pressing financial conditions.' These, in the main, were the circumstances which convinced the trial justice that plaintiff had satisfied her burden of establishing that the warranty deed which she executed and delivered, although absolute on its face, was intended as collateral for the $2,000 loan rather than as an unconditional conveyance of the fee.

Based substantially upon the foregoing findings, the defendants were directed to reconvey the real estate to plaintiff by a deed with quitclaim covenants, and plaintiff was ordered to execute and deliver to defendants a suitable mortgage of those premises as security for the loan. The legal doctrine upon which that kind of relief is predicated has long been established here as well as elsewhere. It permits the use of parol evidence in a court of equity to show that a conveyance of real estate, although absolute on its face, was intended as collateral for the payment of a debt and was in fact a mortgage. Bevan v. Brooks (R.I.), 115 A. 923; Nichols v. Reynolds, 1 R.I. 30; 1 Glenn, Mortgages § 11 at 53 (1943); 5 Tiffany, Real Property § 1395 at 253 (3d ed. 1939); 4 Williston, Constracts § 635 at 1029 (Jaeger 3d ed. 1961).

The defendants in no way dispute the legal doctrine invoked by the trial justice. What they in effect argue is that the trial justice improperly evaluated the evidence and that the doctrine does not for that reason apply. We cannot accept that argument. Basically, it rests upon the contention that defendants' witnesses and their version of what happened, rather than plaintiff's, should have been accepted as the more credible. That argument, while appropriate if addressed to a trier of facts, has no place in appellate proceedings. Marstan Corp. v. Centreville Realty Co., 106 R.I. 36, 256 A.2d 26.

Additionally, defendants, as part of the same general contention, charge the trial justice with having misconceived the evidence. But the misconceptions to which they call our attention are on unimportant matters such as, for example, the trial justice's reference to plaintiff as a 'widow,' whereas, in fact, she was divorced from her husband; and his statement that the mortgage on plaintiff's house was not in default, whereas there was some evidence that it was one month in arrears.

In our judgment the trial justice...