Bybee v. Stuart

• Court: Utah Supreme Court
• Writing for the Court: WOLFE, Justice.
• Citation: Bybee v. Stuart, 112 Utah 462, 189 P.2d 118 (Utah 1948)
• Decision Date: 29 January 1948
• Docket Number: 6981
• Parties: BYBEE et al. v. STUART

189 P.2d 118

112 Utah 462

BYBEE et al. v. STUART

No. 6981

Supreme Court of Utah

January 29, 1948

Appeal From District Court, Second District, Weber County; Charles G Cowley, Judge

Action by Byron L. Bybee, Sr., and another against Claude E. Stuart to compel conveyance of certain lands to plaintiffs by defendant, who filed a counterclaim against plaintiffs and a cross-claim against Oni Douglas Stuart and another interpleaded as plaintiffs and cross-defendants, to quiet title to the lands in defendant. From a judgment ordering defendant to convey the lands to plaintiffs and quieting plaintiffs' title thereto, defendant appeals.

Affirmed.

David J. Wilson, of Ogden, for defendant and appellant.

Thatcher & Young, of Ogden, for plaintiffs and respondents.

Thatcher & Young, of Ogden, for interpleaded plaintiffs cross-defendants and respondents

McDONOUGH C. J., and PRATT, WADE, and LATIMER, JJ., concur.

OPINION

WOLFE, Justice.

Appeal by the defendant from a judgment and decree of the second district court, ordering defendant to execute a conveyance of certain lands to plaintiffs, and quieting plaintiffs' title thereto.

The facts out of which this case arises are these:

In 1936 the wife of cross-defendant Oni Douglas Stuart died, and defendant (Dlaude Stuart) took Oni's son, David, to live with him and his family. Oni and Claude were brothers. It is fairly inferable from the record that defendant took the boy, David, as an acknowledged family obligation, and without expectation of recompense. There was no contract between the brothers that defendant should receive any pay or other consideration for performance of this duty. Oni, at all times, paid for his son's clothing, schooling, and other expenses. The boy, David, assisted with the household chores around defendant's place, and apparently was treated very much the same as defendant's own sons.

The trial court found the facts substantially as follows:

On May 11, 1942, and for a long time prior thereto, Oni Stuart owned a tract of land in Weber County. The land was heavily mortgaged, and the mortgages were then in the process of foreclosure. Oni was in straitened financial circumstances and was about to lose his land. Oni being unable to get credit from outside sources, his brother, the defendant, agreed to advance the money necessary to pay off the mortgages in order that he would not lose his land. As security for the money advanced, Oni executed to defendant a warranty deed, absolute in form, to his land. Contemporaneous with the deed, and as part of the same transaction, the parties also had drawn the following agreement:

'Statement

'This Memorandum of Agreement witnesseth:

'That Oni Douglas Stuart has this day conveyed by warranty deed to the undersigned, Claude E. Stuart, the following described real property * * * [description omitted]

'The conveyance of said property was made to enable the undersigned, Claude E. Stuart, to obtain a loan on said premises for eleven hundred ($ 1100.00) Dollars, to be used in paying an existing mortgage against said property, together with delinquent taxes and certain expenses incurred in connection with adjusting foreclosure proceedings instituted against said property amounting to the sum of approximately eleven hundred ($ 1100.00) Dollars.

'It is understood and agreed on the part of the said Claude E. Stuart that he will reconvey said premises to Oni Douglas Stuart upon the repayment to him of the amount of mortgage which he has executed against said premises, together with all interest and other expenses, including taxes, that said Claude E. Stuart may have incurred or may incur in paying off the mortgage executed against said premises, and any other expenses connected with the same, said payment to be made within _____, years from this date.

'It is further agreed on the part of the said Claude E. Stuart that should Oni Douglas Stuart desire to sell this property, that he, the said Claude E. Stuart, will convey to such purchaser the title to said property upon the payment to him of the amount hereinbefore provided.

'This agreement or understanding is to be binding upon the heirs, successors, and assigns of the parties hereto.

'This, the 11th day of May, A. D., 1942.

'(Signed) Claude E. Stuart'

(Italics added)

During June, 1942, Oni Stuart was ill in the hospital. When he was well enough to leave the hospital, he went to defendant's home to stay during his convalescence. Defendant testified that about a week after Oni left the hospital, the two brothers had a conversation as follows:

'A. We were sitting in the living room and Oni turned to me and he said: 'You have been mighty nice to me. Have me come and live here. I want to stay here until I get over my illness I got.' I said: 'That is perfectly alright.' He said: 'You have been good to me and good to the boy, and have given the boy a good home. We will just let the title stay in your name, and leave the title just as it is, and you can have the use of the land, and the title will be yours, and the land is yours. We will let the title stay just as it is at the present time.'

'Q. Was anything said about the care of the boy? A. Yes.

'Q. What? A. He said: 'If you continue to take care of the boy and give him a good home until he gets of age, why, you have the land.'

'Q. Alright, what did you say? A. I told him: 'I said, 'That is perfectly alright with me. When the time came when the boy was of age, if he wants the land then I will give him title to the land in reimbursement of what I got in the land myself, without interest.'

'Q. Was anything further said by your brother Oni? A. Oni said: 'That is alright. We will let the matter stand as it is.'

Defendant's wife, who was present at the time the conversation was supposed to have taken place, was called to corroborate defendant's testimony but was unable to do so. Oni categorically denied that any such conversation ever took place.

On July 13, 1942, about two weeks after the purported conversation above quoted, Oni listed the land for sale with cross-defendant Cook, a real estate broker. In September, 1944, plaintiffs contracted to purchase the land from Oni, and he executed a deed to them in October, 1944.

When defendant learned of the deal between plaintiffs and Oni, he called upon Cook, and claimed to be owner of the premises.

Plaintiffs commenced this action against defendant to compel him to execute and deliver to them a conveyance to the premises, upon receiving the amount expended by defendant in preserving the property. Defendant answered, and by way of counterclaim against plaintiffs and cross-claim against Cook and Oni Stuart who were interpleaded as 'cross-defendants,' asserted title in himself and prayed that title be quieted in him.

The trial court concluded from the facts as outlined above that plaintiffs were the owners of the premises and entitled to immediate possession of the premises, and rendered judgment accordingly. From that judgment defendant prosecutes this appeal.

Defendant has assigned numerous errors, all of which go to the correctness of the court's construction of the original transaction between Oni and defendant, and the effect, if any, upon this transaction, of the subsequent oral conversation between the two brothers. This being an equity case, we may review the facts as well as the law.

The first question presented for our determination is as to the nature of the original transaction between the brothers Stuart. Although it is not clear in the briefs, it appears to be defendant's contention that the original transaction was an absolute conveyance of the land in question to defendant. This position is without support in fact or law. It is true, of course, that a warranty deed, absolute in form, is presumed to convey a fee simple title, or at least whatever title the grantor has. But where, as here, there is a written agreement between the parties, contemporaneous with the deed, which shows the deed to have been given for security purposes, the court will look to the real transaction, and treat it as a mortgage. Brown v. Skeen, 89 Utah 568, 58 P.2d 24. The fact that by the terms of the contract, Oni Stuart had the right to sell the land to a third person, clearly indicates the intention of the parties that title should not pass to the defendant.

Our statute (Sec. 78-1-13 U. C. A. 1943) furnishes a form for real estate mortgages. However, it is not necessary that an instrument follow the statutory form to be a mortgage. No particular form is necessary so long as the intention of the parties is shown. Nor is it necessary that the mortgage be contained in one writing -- it may consist of a warranty deed and a separate contract in writing. Brown v. Skeen, supra. See also 1 Jones on Mortgages, 8th Edition, Chapter 2. And in equity a deed absolute upon its face may be shown by parol evidence to have been given for security purposes only, and when such a showing has been made, equity will give effect to the intention of the parties. Such security transactions, lacking the requisites of a formal mortgage, are termed equitable mortgages. 1 Jones on Mortgages, Chapter 5; Wasatch Min. Co. v. Jennings, 5 Utah 243, 251, 15 P. 65; Duerden v. Solomon, 33 Utah 468, 94 P. 978; Hess v. Anger, 53 Utah 186, 177 P. 232. See also 3 Jones, Commentaries on Evidence, 2d Edition, page 2793, Section 1531.

The deed and contract here show all the requisites of a formal mortgage -- a conveyance of particular land as security for a debt with the necessary defeasance clause. This was not merely an equitable mortgage -- a security transaction resting partially in parol and cognizable only in equity. The two instruments, taken together, constitute a formal mortgage,...