Cornell v. Hall

• Decision Date: 05 April 1871
• Court: Michigan Supreme Court
• Parties: Alanson R. Cornell v. Joshua S. Hall

22 Mich. 377

Alanson R. Cornell v. Joshua S. Hall

Supreme Court of Michigan

April 5, 1871

Heard January 11, 1871; January 12, 1871. [Syllabus Material] [Syllabus Material] [Syllabus Material]

Appeal in chancery from Ionia circuit.

The bill in this case was filed by Alanson R. Cornell, in the circuit court for the county of Ionia, in chancery, to redeem two parcels of land, which the complainant, on the 5th day of December, 1860, conveyed by a warranty deed to the defendant, Joshua S. Hall, which deed, the complainant avers, was intended as a security for a loan of seven hundred and fifty dollars, at that time paid by Hall to complainant, a part of it being paid in cash, and the balance by surrender of two mortgages on the same premises, at that time held by Hall. The defendant denies, in his answer, that the transaction was intended as a loan, but insists that he made an absolute purchase of the property, and at the same time entered into an agreement with the complainant to reconvey the property to him at the end of a year, on being paid at the expiration of the year the sum of nine hundred dollars. Complainant was to be allowed to occupy the premises during the year, and to take off the crops then on it. The repurchase, on the part of complainant, to be entirely at his option. At the end of the year the complainant voluntarily surrendered the possession to defendant, who continued in possession until the time of filing the bill. The only written evidence found in the record bearing upon the intention of the parties was an instrument in the form of a bond, drawn by the complainant and signed by the defendant, and a letter written by the complainant addressed to the defendant, which are as follows:

"Know all men by these presents: That I, Joshua S. Hall, of Orleans, Ionia county, Michigan, am held and firmly bound unto Alanson R. Cornell, of said county, in the penal sum of twelve hundred dollars, lawful money of the United States, which sum, well and truly to be paid, I bind myself, my heirs, executors and administrators, firmly by these presents. Signed with my hand, and sealed with seal this 5th day of December, 1860. Whereas, I, the said Hall, have this day sold to said Cornell the following described lands in said county, to wit: The northwest fractional quarter of the southwest fractional quarter of section six, town seven north of range six west, forty-four and twenty-eight one-hundredths acres; and the northeast quarter of the southeast quarter of section one, town seven north of range seven west, for the sum of nine hundred dollars, which said sum the said Cornell hereby agrees to pay to me, the said Hall, within one year from this date. Now, therefore, if I, the said Hall, shall, upon the payment of the said sum of nine hundred dollars, above specified, make, execute and deliver to said Cornell, or his heirs or assigns, a good and sufficient warranty deed, clear of incumbrance, of the lands above described, then this bond shall cease and be null and void, otherwise of full force and effect. And it is expressly agreed, that in case said Cornell shall not pay said sum of nine hundred dollars within one year from this date, that then, and in such case, said bond shall cease and be null and void. Joshua S. Hall. [l. s."]

"New Orleans, Louisiana, November 19, 1866.

"J. S. Hall--Sir: You probably are not aware that the deed I gave you for that land was, under the circumstances, neither more nor less than a mortgage. I have counseled with one of the best law firms in Ionia, and am told that I can redeem the land at any time, by paying you the money you paid in and seven per cent interest on it, and that the use of the land, after deducting the cost of working it, could be taken from the amount. I should have redeemed it before now, but have not had the money to do so, and have not now; and should not have said anything to you about it at present had I not been told that you intended to build a house on the place next summer, and I did not want you to make any such expensive improvements without knowing just how the matter stood. You will, of course, take such course as you think best. However, I will make you a proposition. I calculate that the use of the farm will pay for all improvements you have made. I will, if you choose to do so, give you $ 1,200.00 (twelve hundred dollars) for a deed of the farm, giving a mortgage for that amount, due in five years, with ten per cent interest, annually. If you do not choose to accept this offer you will, of course, take your own course, foreclose or go on as heretofore. Should you accept you can notify me by letter, directed to A. R. Cornell, New Orleans, Louisiana, care of Freedmen's Bureau."

The cause was heard upon pleadings and proofs. The circuit judge held the transaction to be a sale of the premises by the complainant to defendant; that the condition of the bond, by the defendant to complainant, not having been performed, no rights could be claimed under it, and dismissed the bill. The complainant appeals to this court.

Decree affirmed, with costs.

L. B. Soule, for complainant:

From the facts, it is clear that the deed in this case is a mortgage, and "once a mortgage always a mortgage:" Batty v. Snook, 5 Mich. 231; 11 Mich. 538. And if there is a doubt as to the fact whether the transaction was in the nature of a mortgage, the presumption, in order to avoid a forfeiture, is always in favor of a permission to redeem: 4 Pick. 349; 12 Howard, 139; 14 Ill. 428; 8 Paige Chan., 231; 3 Mich. 482.

The complainant, Cornell, brings his suit to redeem this deed as a mortgage, any time within twenty years from the time the said deed was made: Story's Equity Jur., §§ 1028, 1520; Morse v. Cobill, 1 Johns. Ch., 385; Demarest v. Winkoop, 3 Johns. Ch., 129. The complainant was not required to tender the amount of the mortgage before suit brought; a tender in the bill is sufficient.

A. Williams and W. W. Mitchell, for defendant:

The question in this case is: "Was the instrument of conveyance from Cornell to Hall, in equity, when delivered, a deed or a mortgage?" To determine it, this court will look into the whole history of the transaction prior to the commencement of this suit, not being confined to mere written instruments, to learn the intention of the parties; for, if they intended said conveyance to be a deed, as we claim, it can only be so construed: Swetland v. Swetland, 3 Mich. 482; Holmes v. Grant, 8 Paige 243, 260; Brewster v. Baker, 20 Barb., N. Y., 364-9; Paddack v. Pardee, 1 Mich. 421; Norris v. Showerman, 2 Doug. 16; Facey v. Otis, 11 Mich. 213; Robinson v. Cropsey, 2 Edw. Ch., 138; Glover v. Payne, 19 Wend. 518, 522; 4 Kent 144, and notes e, 1 and 2; 2 Pick. 512-15; Walk. Ch., 110-11.

I. It is conceded that if it were a mortgage at its delivery it is so now. But it is no less true that if it were a deed then it is so still: Holmes v. Grant, 8 Paige 243; 3 Mich. 489, 490.

II. The law sanctions conditional sales: Brewster v. Baker, 20 Barb., N. Y., 370; 4 Kent 144, and notes, and cases cited; 2 Pick. 516.

Cornell's possession of the premises for one year is fully explained: 2 Hill N. Y., 328. It is only when a deed appears to have been intended by the parties as a mortgage, and not as a deed, that courts so construe it: Holmes v. Grant, 8 Paige 243; Glover v. Payne, 19 Wend. 518; 2 Pick. 515; 2 Edw. Ch., 142. And this, though the deed and defeasance constituted one transaction: Holmes v. Grant, 8 Paige 243; Glover v. Payne, 19 Wend. 518, 520-1-2; Robinson v. Cropsey, 2 Edw. Ch., 138. The consideration of said deed being a fair and adequate one for the premises, at its date, is a strong circumstance tending to show it a sale: Holmes v. Grant, 8 Paige 243, 258; Swetland v. Swetland, 3 Mich. 482; Glover v. Payne, 19 Wend. 520; 2 Edw. Ch., 147. The bond was not signed by Cornell, or executed in duplicate; but, at most, gave Cornell the privilege therein prescribed, he being also, of right, the exclusive custodian of it. The defendant, as indicated, had no bond or other evidence of subsisting debt, and no choice in the premises or power to control the course or election of Cornell therein--the liabilities of said parties not being reciprocal on said bond. There was no verbal or written agreement that Hall was to sell the premises and account for the proceeds, or to foreclose as upon a mortgage, or do otherwise than retain the premises absolutely, if Cornell failed to perform the condition of the bond, as in the case of Palmer v. Gurnsey, 7 Wend. 248-9, 250; Walk. Ch., 110. Nor has Cornell complained of any fraud, accident, mistake, or surprise in negotiating, making or fulfilling the contract, as a ground of relief: 2 Edw. Ch., 147-8; 2 Pick. 516. The situation of the parties and the subject matter of the transaction may be taken into consideration in construing the conveyance or deed: Paddack v. Pardee, 1 Mich. 421; Norris v. Showerman, 2 Doug. 16, 25; Facey v. Otis, 11 Mich. 213. So, also, the intention of the parties: Brewster v. Baker, 20 Barb. N. Y., 369; 2 Pick. 515; 1 Mich. 424; 2 Doug. 16.

OPINION

Graves, J.

This was a bill praying that a deed from complainant to defendant and a bond of even date from the latter to the former, providing for a reconveyance on certain terms, should be declared a mortgage, and that complainant should be allowed to redeem. The bill was sworn to, and required the defendant to answer under oath, and he answered accordingly. A general replication being filed, the proofs were taken; which, on the part of complainant, aside from his brief and unimportant note of the 3d of December, 1860, his letter from New Orleans, and the bond, consisted only of his own deposition; and on the part of the defendant, consisted of his...