Clontz v. Fortner

• Decision Date: 12 March 1965
• Docket Number: No. 9438,9438
• Citation: 399 P.2d 949,88 Idaho 355
• Parties: Paul F. CLONTZ and Betty Gean Clontz, husband and wife, Plaintiffs-Appellants, v. H. O. FORTNER and Dorothy Fortner, husband and wife, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 949

399 P.2d 949

88 Idaho 355

Paul F. CLONTZ and Betty Gean Clontz, husband and wife, Plaintiffs-Appellants, v. H. O. FORTNER and Dorothy Fortner, husband and wife, Defendants-Respondents.

No. 9438.

Supreme Court of Idaho.

March 12, 1965.

Racine, Huntley & Olson, Pocatello, for appellants.

Parry, Robertson & Daly, Twin Falls, for respondents.

TAYLOR, Justice.

February 4, 1952, Rolland J. Hawes and wife and John P. Hawes and wife, as vendors, entered into a written contract for the sale of the real property involved, to O. S. Butler, as purchaser. March 15, 1954, the purchaser, O. S. Butler, and wife assigned the contract to the plaintiffs (appellants) herein.

The original purchase price was $90,000. Annual payments of $4,333 of principal, plus interest, were due and payable February 4th of each year. Plaintiffs failed to make the payment due in February, 1957, and were advised by Hawes that, if the payment was not made within sixty days, action would be commenced upon the contract. Plaintiffs thereafter obtained the money necessary to make the payment from one Cecil Brim, and in April, 1957, gave Brim and assignment of their interest in the Hawes-Butler contract.

Thereafter, plaintiffs brought an action against Brim to have the assignment declared a mortgage so that plaintiffs could repay Brim and be revested with their rights under the contract. Judgment in that action, entered pursuant to stipulation declared the assignment to be a mortgage, and allowed plaintiffs, sixty days from the date of judgment, October 10, 1957, to redate by paying the amount owing to Brim, which amount was determined to be $9,692.90.

Immediately after the entry of the judgment, plaintiff Paul Clontz listed the property for sale and began contacting prospective buyers in an effort to make a sale. His purpose was to raise the money to pay Brim and to realize some part of his own equity in the property. Among others, Clontz talked to defendant (respondent) H. O. Fortner. In his deposition Clontz testified that defendant Fortner approached him and offered to lend him the money necessary to pay Brim, and offered to act as attorney for Clontz (defendant was a licensed attorney).

Defendant in his deposition testified that Clontz approached him and advised him that he was trying to sell the property in order to pay Brim; that he had a prospective buyer in Utah to whom he thought he would be able to sell the property for more than the amount required, but that he could not conclude such a sale within the time remaining of the period allowed for redemption from the Brim obligation.

December 8th, the day before the expiration of the redemption period, the parties went to the office of E. L. Rayborn, attorney in Twin Falls, to have documents prepared to effectuate an agreement they had reached. Rayborn had acted as one of plaintiff's attorneys in the action brought by them against Brim. In his deposition, Rayborn testified that the parties advised him they had agreed upon a sale of the property by plaintiffs to defendant Fortner, and an option from Fortner to plaintiffs to buy the property back within sixty days for the sum of $9,853.22, plus $2,000, and plus any other sum or expenses Fortner might incur in protecting his interest in the property in the interim. Rayborn further testified that he accordingly prepared an assignment of the Hawes contract, and a deed, conveying the property from plaintiffs to defendants, also an option from defendants to plaintiffs, as directed; that a loan from defendants to plaintiffs, or interest on such, was never mentioned by either party; and that the documents prepared by him were duly executed and delivered.

Plaintiffs paid the Brim judgment and remained in possession of the property, by their lessee, during the sixty-day period allowed by their option. At the end of that period--the option not having been exercised--plaintiffs' tenant surrendered possession to defendants on or about February 9, 1958. Defendants thereafter continued in possession of the property until early in 1963, when they sold the property to a third person.

January 16, 1963, plaintiffs brought this action, seeking to have the assignment and deed declared a mortgage, and seeking the right to redeem the property therefrom by paying the amount due defendants thereon. Defendants answered April 9, 1963; admitted the execution and delivery of the documents prepared by Rayborn; denied that a loan was made by them to plaintiffs; alleged the defenses of estoppel, laches, and limitations. Thereafter, defendants moved the court for summary judgment. Their motion was supported by the depositions of plaintiff Paul Clontz, defendant H. O. Fortner, and attorney E. L. Rayborn, and by the affidavit of their counsel, John H. Daly. Plaintiffs filed no countershowing and offered no evidence in opposition to the motion, apparently resting their resistance upon the deposition of plaintiff Clontz. The motion was granted and judgment was entered dismissing plaintiffs' action. Plaintiffs brought this appeal from the judgment.

IRCP 56(e), after providing the procedure for supporting or opposing a motion for summary judgment, further provides:

'* * * When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon mere allegations or denials of his pleading, but must answer in detail as specific as that of the moving papers, setting forth the material facts as he believes and intends to prove them to be. If he does not so answer under oath, summary judgment shall be entered against him.'

The only error assigned is that the court erred in granting the motion for the reason that genuine issues of material fact were shown to exist, which required a trial.

Defendants acknowledged that Clontz, in his deposition, testified as follows:

'A I don't know that I approached Fortner, John. He approached me. He got the news around town some-place. Where he got it I don't know, but Fortner approached me to help me out, to represent me as an attorney and loan me this money. I never went to Fortner and asked him for the money.'

'A I told Fortner that I was trying to sell the ranch, and I though I had it sold.

'Q Did you tell him to whom you thought you had it sold?

'A No.

'Q Do you remember anything else that was said?

'A No, I don't.

'Q Did you tell him you wanted him to loan you money?

'A I told him I would borrow it if I couldn't do something else with the ranch.'

'Q At the time that this money was paid to Brimm, or to the court for Brimm, which I guess is more accurate, it was paid here in court, you wanted more time in which to try to sell the property for a better price, didn't you.

'A Yes.

'Q And you wanted an additional sixty days?

'Q Yes.

'Q And you got that through your dealings with Mr. Fortner?

'A It was the only way I could borrow the money from Fortner was to repay it in sixty days.

'Q You say that was the only reason?

'A I say the only way I could borrow the money. The only way he would let me have the money is if I could repay it in sixty days.'

Clontz further testified that the foregoing conversation between Fortner and himself was immediately after the judgment was entered in his action against Brim. Clontz did not remember what was said between them in the several conversations had during the sixty days between this first conversation and their appearance in the office of attorney Rayborn on or about December 8, 1957.

Defendants contend that Clontz's testimony was not sufficient to present a genuine issue as to any material fact. The assignment and deed given by plaintiffs to Fortners were absolute and indefeasible on their face. The burden was upon plaintiffs to show by clear and convincing evidence that a mortgage, and not a sale with right to repurchase, was intended. Gray v. Fraser, 63 Idaho 552, 123 P.2d 711 (1942); Morrison v. Pierce, 47 Idaho 430, 276 P. 306 (1929); Clinton v. Utah Construction Co., 40 Idaho 659, 237 P. 427 (1925); Shaner v. Rathdrum State Bank, 29 Idaho 576, 161 P. 90 (1916).

In Shaner v. Rathdrum State Bank, supra, this court said:

'It is a well-settled rule of law that where one asserts that a deed shall be given a different construction from that clearly appearing on its face, claiming that it is a mortgage, he must show by clear and convincing evidence that a mortgage, and not a sale with the right to repurchase, was intended. Johnson v. National Bank of Commerce, 65 Wash. 261, 118 Pac. 21, L.R.A.1916B, 4.)' 29 Idaho at 583, 161 P. at 92.

'A mortgage is an incident of the debt, and without a debt, obligation, or liability there is nothing to secure, consequently there can be no mortgage.

'* * * 'Under the law there can be no question that a party can make a purchase of lands, either in satisfaction of a precedent debt or for a consideration then paid, and may at the same time contract to reconvey the land upon the payment of a certain sum, without any intention on the part of either party that the transaction should be in effect a mortgage. There is no absolute rule that the covenant to reconvey shall be regarded, either in law or in equity, as a defeasance.' 29 Idaho at 585, 161 P. at 92.

In Clinton v. Utah Construction Co., supra, this court said:

'* * * Under the agreement, upon the failure of Hoag, as trustee, to exercise the option to purchase and make the payment of $35,000 within the stipulated time (and it will be noted that in this respect time is of the essence of the contract), defendant retained the property, and all rights of Hoag and the parties represented by him terminated and ended. They were under no obligation to exercise this option, and no liability would attach upon their failure so to do. If they failed to exercise it, all their rights terminated and they had no other claim to the property. If they did exercise it, and made the specified payment, they were entitled to a deed from defendant...