Cobb v. Day
| Decision Date | 30 June 1891 |
| Parties | Cobb et al., Appellants, v. Day |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. J. A. Slover, Judge.
Reversed and remanded.
R. O Boggess, Milton Moore and E. G. Vaughan for appellants.
(1) The doctrine is well established in this state that a deed absolute in form may be shown to be a mortgage. Worley v Dryden, 57 Mo. 226; Turner v. Kerr, 44 Mo. 429; Sharkey v. Sharkey, 47 Mo. 543; Newel v Keeler, 13 Mo.App. 189; O'Neill v. Capelle, 62 Mo. 202. (2) The transactions out of which this suit grew commenced with an application for a loan, and terminated in the execution of an absolute deed. It should be scrutinized closely, and if there be any doubt as to the intent of the parties, this doubt should be resolved in favor of the plaintiffs. McDonald v. McLeod, 1 Iredell Eq. 221; Fiedler v. Darin, 50 N.Y. 437; Owen v. Blake, 44 Ill. 135; Philips v. Hulsizer, 20 N.J.Eq. 308; 1 Jones on Mortgages, sec. 266. (3) The amount advanced -- not half the value of the property at the time of the execution of the deed to Day -- proves that a loan was intended and not a sale of the property. Campbell v. Dearborn, 109 Mass. 130; Freeman v. Wilson, 51 Mo. 329; Steel v. Black, 3 Jones' Eq. 427; 1 Jones on Mortgages, sec. 275; Sweet v. Parker, 22 N.J.Eq. 453; Peugh v. Davis, 96 U.S. 332; Devlin on Deeds, sec. 1133. (4) The plaintiff retained possession of the property, paid taxes, and made improvements thereon. These things were inconsistent with the idea of an absolute conveyance. Cousins v. Wall, 3 Jones' Eq. 43; 1 Jones on Mortgages, sec. 274; Bennett v. Holt, 2 Yerg. 6; Clark v. Finlon, 90 Ill. 245; Hoffman v. Ryan, 21 W.Va. 415. (5) The property involved in this action belonged to the plaintiff, Emma Cobb, and her intention upon the delivery of the deed must govern. Davis v. Brewster, 59 Tex. 93. (6) It is immaterial what the purpose of Day was, or what instructions he gave his agent, if the minds of the parties did not meet; that is to say, if the plaintiffs delivered the instrument to stand in the place of a mortgage, and not as an absolute deed, then the plaintiffs are entitled to redeem. Mr. Parsons says in his work on contracts, volume 1, seventh edition, top page 475: "There is no contract unless the parties thereto assent; and they must assent to the same thing in the same sense." (7) The relation of the parties and their financial circumstances, with other evidence introduced at the trial, should be considered. (8) The court erred in allowing the letter from Day to his wife, of date September 24, 1881, to be read in evidence. The evidence shows that it was not seen by the plaintiffs. They are not bound by the secret instructions of the defendant to his agent. Minter v. Railroad, 41 Mo. 503; Garretzen v. Duenckel, 50 Mo. 104; Kinealy v. Burd, 9 Mo.App. 359; Crews v. Garneau, 14 Mo.App. 505. (9) Assuming that Mrs. Day was a special agent, and that she exceeded her authority in permitting the deed in question to be taken as a mortgage instead of an absolute and unconditional conveyance, the defendant cannot reap the fruits of the acts of his agent and reject their burdens. Palmerton v. Huxford, 4 Denio, 166; Menkens v. Watson, 27 Mo. 163; Kinealy v. Burd, 9 Mo.App. 359. The defendant cannot repudiate the act of his agent without restoring plaintiffs to their original situation. Norton v. Bull, 43 Mo. 113-16.
John S. Blackwell and Withers & Strother for respondent.
(1) In order to have a deed, absolute upon its face, declared a mortgage, the proof must be so clear, strong and unequivocal as to banish every reasonable doubt from the mind of the chancellor as to the facts relied on. Worley v. Dryden, 57 Mo. 226; Ringo v. Richardson, 53 Mo. 385; Rogers v. Rogers, 87 Mo. 257; Philpot v. Penn, 91 Mo. 38; Schradski v. Albright, 93 Mo. 42; Allen v. Logan, 96 Mo. 591; Adams v. Burns, 96 Mo. 361; Burdett v. May, 100 Mo. 13. (2) The deed is always the best evidence of the intention of the parties, and is prima facie evidence of the verity of its contents. Ringo v. Richardson, 53 Mo. 385, 396; Worley v. Dryden, 57 Mo. 226, 232; Allen v. Logan, 96 Mo. 591, 601. (3) The burden of proof is upon the party who alleges the absolute deed to be a mortgage; and a mere preponderance of the evidence is not enough. Worley v. Dryden, 57 Mo. 226, 232; Ringo v. Richardson, 53 Mo. 385, 395; Rogers v. Rogers, 87 Mo. 257. (4) Evidence of defendant's verbal admissions is to be received with great caution. Johnson v. Quarles, 46 Mo. 423; Ringo v. Richardson, 53 Mo. 385; Worley v. Dryden, 57 Mo. 226; Burdett v. May, 100 Mo. 13. (5) The payment of the taxes for the years 1881 and 1882 by plaintiff is nothing more than was his duty under the covenants of his deed and the provisions of the law. 2 R. S. 1879, sec. 6685, p. 1310, Acts of 1881, sec. 1, p. 178; 2 R. S. 1879, sec. 6705, p. 1315, Acts of 1881, sec. 5, p. 180; Blossom v. Van Court, 34 Mo. 390. (6) The evidence as to the value of the land at the date of the execution of the deed was conflicting, running all the way from $ 40 an acre to $ 150 an acre. And, even at the latter figure, there was no such gross inadequacy of price as would authorize the granting of the relief prayed for, or warrant the presumption that the deed was a mortgage, against the form of the deed and the answer of defendant. Phillips v. Stewart, 59 Mo. 491; Worley v. Dryden, 57 Mo. 226, 233. (7) Mrs. Day was the special agent of her husband, and as such had limited authority, and plaintiffs were bound to take notice of the extent of her authority. Story on Agency [5 Ed.] sec. 71, p. 18; sec. 19, p. 19; sec. 126, p. 146, note 3; sec. 127, p. 147, note 1; sec. 133, pp. 153-155; Smith's Mercantile Law [3 Ed.] p. 173, and cases cited in note c. (8) Mrs. Day's paying the money to plaintiffs did not warrant any inference that she was an agent for any other purpose. Anderson v. Volmer, 83 Mo. 403. (9) Plaintiffs brought their bill setting up an agreement with defendant that the deed should be regarded as a mortgage. That they have failed to establish such agreement is clear. They, therefore, seek to rely upon a ratification without having pleaded it. This could not be done, even had there been a ratification. Bank v. Armstrong, 62 Mo. 59; Wade v. Hardy, 75 Mo. 394, 399; Noble v. Blount, 77 Mo. 235, 242; Webb v. Allington, 27 Mo.App. 559, 571. (10) There can be no ratification without full knowledge of all the material facts on the part of the party sought to be charged. Middleton v. Railroad, 62 Mo. 579; Cravens v. Gillilan, 63 Mo. 28; Bank v. Gay, 63 Mo. 33; Holmes v. Board of Trade, 81 Mo. 137; Nichols v. Burns, 37 N.W. 752.
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 twenty-ninth day of September, 1881, defendant loaned Emma Cobb, the wife of her coplaintiff, the sum of $ 330, which sum she and her husband agreed to repay to defendant, with ten-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 LaFayette 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...
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