Cobb v. Day

• Decision Date: 30 June 1891
• Parties: COBB et al. v. DAY.
• Court: Missouri Supreme Court

17 S.W. 323

106 Mo. 278

COBB et al. v. DAY.

Supreme Court of Missouri, Division No. 2.

June 30, 1891.

MORTGAGES — DEED ABSOLUTE ON ITS FACE — AUTHORITY OF AGENT — EVIDENCE.

1. In an action to declare a conveyance absolute in form a mortgage, the testimony of the parties was conflicting, but it appeared that plaintiffs had applied to defendant for a loan to pay the purchase money on the property; that one of plaintiffs refused, in the presence of defendant's wife, to sell the property for double the amount due on it, saying that she wished to keep it for a home; that the female plaintiff and defendant's wife were sisters; the former was poor and the latter rich; that plaintiffs remained in possession of the land, and placed improvements thereon of the value of $200; that the value of the land at the making of the deed was $700, and the amount advanced by defendant $330; and that the value of the land had suddenly increased to $5,000. Held, that the deed to defendant must be considered a mortgage.

2. Defendant was applied to for a loan to complete the payment of the purchase money of land, and in response intrusted a check to his wife for the amount desired, instructing her not to use it unless the proposed borrower should consent to an absolute sale of the land, with the privilege to him of remaining on the land by sufferance. Plaintiff refused to accept the loan on those terms, whereupon defendant's wife loaned the money, without insisting upon such condition, but took an absolute conveyance of the land to plaintiff instead of a mortgage. Held, in an action to declare the conveyance a mortgage, that defendant was bound by the action of his wife in transgressing her authority in making the loan.

3. The fact that a person to whom money has been advanced to pay off a lien on lands, which lands he immediately conveys to the lender, regards the money so advanced as a loan, is a fact entitled to weight, in determining whether such conveyance is an absolute conveyance or a mortgage only.

Appeal from circuit court, Jackson county; J. A. SLOVER, Judge.

Action by Emma and Henry C. Cobb against Lewis H. Day to declare a deed absolute in form a mortgage. Judgment for defendant, and plaintiffs appeal.

R. O. Boggess, Milton Moore, and E. G. Vaughan, for appellants. John S. Blackwell and Withers & Shother, for respondent.

THOMAS, J.

This is a bill in equity to have a deed absolute on its face declared a mortgage and to redeem. The deed covers five and a half acres of land lying within half a mile of Kansas City. The bill alleges that on the 29th day of September, 1881, defendant loaned Emma Cobb, the wife of her co-plaintiff, the sum of $330, which sum she and her husband agreed to repay to defendant with 10 per cent. interest per annum; that to secure the payment of said sum and interest they, on that day, conveyed the property to defendant by a deed of general warranty; that this deed, though absolute in form, was intended by the parties as a mortgage to secure to defendant the repayment of said sum and interest. Plaintiffs offer to pay into court the amount the court may find to be due defendant, and pray to be permitted to redeem. Defendant answered, denying that the deed was intended as a mortgage, and averred that it was what it purported to be, an absolute conveyance. A trial resulted in the dismissal of the bill, and plaintiffs have appealed. We think the evidence in this record shows that the deed in question was intended as a mortgage, and plaintiffs ought to be permitted to redeem. We will consider the evidence in its order. Emma Cobb and defendant's wife are sisters. Cobb and his wife are what we ordinarily term "bad managers." They were very poor, and had a large family of children. Day seems to be a very prosperous business man, and was and is in easy circumstances. He lived in 1881 at Wellington, in La Fayette county, but did business in St. Louis. In March, 1878, Henry C. Cobb bought the land in dispute from H. H. Ratliff for $330, and the latter signed a written contract giving the former three years in which to pay this sum. Cobb took possession of the land, and made some improvements on it, but at the expiration of three years, in March, 1881, he had not been able to do more than pay the interest on the sum he agreed to pay and the taxes on the land. The written contract was destroyed, but Ratliff verbally gave Cobb another year to pay for the land. Plaintiffs began to make exertions to raise the money, and Mrs. Cobb applied to her sister, Mrs. Day, to induce her husband to advance, and finally he did advance it, and it was paid to Ratliff, September 29, 1881; and thereupon the latter conveyed the property to Emma Cobb, who, with her husband, immediately conveyed it by warranty deed to defendant. Plaintiff Henry C. Cobb took both deeds, and had them filed for record, paying the recorder's fees for both himself; and plaintiffs continued to live, and still live, on the property. The controversy is over the deed made by plaintiffs to defendant dated September 29, 1881. Plaintiffs contend that defendant advanced the money as a loan, and that this deed was intended as a mortgage to secure it, while defendant's contention is that he bought the land, and the deed was what it purports to be, an absolute conveyance. There is a conflict in the evidence as to the nature of the transaction, and what the intention of the parties was. Defendant's wife attended to the matter for her husband. Her authority in the premises is evidenced by the following letter. "St. Louis, Sept. 24th, 1881. Dear Sallie: I just received your letter, and was glad to hear from you, and that you are all well. I am enjoying first rate health. I am doing tolerably well here. In your letter you still ask me to help Emma buy her place; in Em's letter inclosed also asking you to get me to let her have the money, and stating she would be turned out in the big road in a few days if she didn't get help; and that she had tried so hard to get help, but failed; and in her letter she says, if you can't get me to let her have the money, to get me to buy the place, and let them live on it, and they will keep the place up in good repair and improve it. Now, in reply, you have been after me for the last five or six months to let them have the money, and I have refused repeatedly, and every time you have asked me I have told you I wouldn't let them have the money, and I don't think you ought to ask me any more, for I have already done enough for them; but for your sake I will buy the place, and let them live on it, if they will keep the place up, if they are perfectly satisfied for me to buy it; and inclosed I send you Morrison Wentworth Bank check, with my name signed to it, and you can go to Kansas City, and if they are perfectly satisfied for me to buy the place, and let them live on it, you can fill up this check for the amount that is needed; and if they are not satisfied to do this, don't use the check, and come back home, for I haven't hardly the money to spare out of my business, anyway. I don't know when I will be at home. Love to all. Yours affectionately, LEWIS H. DAY. Don't pay over $350 for the place."

After receiving this letter she went to plaintiffs' home on the land in dispute. She and plaintiffs testify as to what occurred there. That Mrs. Day did not read the above letter to the Cobbs is conceded. She says she told them, however, explicitly what it contained, but they deny this. Mrs. Cobb testified as follows: "Mrs. Day came and told me that she come to let me have the money for the place. I told her I was mighty glad. She said she wanted a deed to secure it. I told her I would give it, — I would give a mortgage; and she said: `Why, you are not afraid to trust us; why not give a deed?' I said, `No;' and she said: `That is the only way that Mr. Day is willing to let you have it.' Question. What did you do? Go on and state the conversation. Answer. I told her no, I was not afraid to trust her; and I certainly was not. That I didn't think, as well off as they were, that they would try to rob me, and my house full of little children; and I told her that, if that was the only way she was willing to loan it, I supposed I would have to make a deed to her; and when my husband came I asked him what he thought about it, and he said to leave it with me; that if that suited me it was all right. Q. She required a deed to the land in Mr. Day's name? A. Yes, sir; just to stand as security. She said I could pay it back whenever I could. But she advised me to pay it as soon as I could, for Mr. Day required ten per cent. interest on his money. Q. Then she told you that Mr. Day would not take a mortgage? A. She said, `You are not afraid to trust us?' `Why,' she said, `we would not have this little place; we have five fine farms.' I told her no, I would not make a deed. I says, `If you will take a mortgage, I will make it.' Those were my exact words. Q. She didn't change her opinion about making a mortgage? A. No; she said it would be just the same as a mortgage, and I could pay it whenever I could. I told her then, `I am going to pay for it as soon as I can;' and she said, `That will be all the better for you.' Q. How long was it understood between you and Mrs. Day that you had to pay for the place? A. Well, I told her, `I am going to pay you as much as $100 a year, if possible.' She says, `The sooner you pay for it the better for you.' That is all the agreement there was. Q. There was no other agreement? A. No, sir. She says then to me, she says, `Now, if this property — If the interest on the money on the loan made runs up, would you be willing to give it up at the end of the time?' I told her, `Yes, if the interest and the money you loan me eats it up, I will give it up without a word.' Q. She would not let you have the money until you did agree to do that? A. Yes, sir; she said to make her a deed in place of a mortgage, and she would loan...