Cumps v. Kiyo

• Decision Date: 24 November 1899
• Citation: 80 N.W. 937,104 Wis. 656
• Parties: CUMPS v. KIYO ET UX.
• Court: Wisconsin Supreme Court

104 Wis. 656

80 N.W. 937

CUMPS

v.KIYO ET UX.

Supreme Court of Wisconsin.

Nov. 24, 1899.

Appeal from circuit court, Brown county; Samuel D. Hastings, Jr., Judge.

Action by Frank Cumps against Denis Kiyo and wife. Judgment for defendants. Plaintiff appeals. Affirmed.

Action of ejectment. Defendants, who are husband and wife, occupied the disputed premises as a homestead during all the times hereinafter mentioned. They conveyed such premisesby deed, absolute on its face, to one Dieterville to secure a loan of $125 and interest thereon, payable in one year, taking back a land contract in the ordinary form, specifying the purchase price as $125, payable in one year with interest. Before the debt became due, defendant Denis Kiyo, his wife consenting, agreed to sell the premises to Peter April for $575. The latter borrowed the money of the plaintiff to pay for the property. For the purpose of consummating the agreement mentioned, Denis Kiyo indorsed a satisfaction of the land contract on the record thereof, and Dieterville, at the request of Kiyo and of April, made a deed of the premises to plaintiff, the latter advancing the purchase money, sufficient of which was paid to Dieterville to satisfy his claim, and the balance to Kiyo, who paid $160 thereof to his wife upon returning home. Mrs. Kiyo was not present when the transaction took place, but consented thereto in advance. Plaintiff based his right to recover possession of the premises on the deed made to him by Dieterville, as before stated. Judgment was rendered for the defendants.

Wigman & Martin, for appellant.

Phillips, Sheridan & Evans, for respondents.

MARSHALL, J. (after stating the facts).

The points relied upon by appellant for reversal of the judgment are as follows: (1) Dieterville held the legal title to the land, therefore, though the purpose of the conveyance to him was to secure the payment of the debt owing by the grantor to him, he could convey the legal title to the premises to another by the direction of Kiyo; (2) when the debt to Dieterville was paid, Kiyo was entitled to a conveyance back of the property, hence could legally authorize its conveyance to a third person; (3) plaintiff dealt with Kiyo as the equitable owner without notice of the precise title held by Dieterville, and is therefore entitled to protection as an innocent purchaser relying on the record title; (4) even if the conveyance to Dieterville was intended as a mortgage, it was competent for Kiyo and Dieterville to cancel the mortgage feature, leaving the legal title in the latter free from such feature; (5) defendants are estopped from claiming that the interest of Dieterville was less than the full legal title, because all parties acted on that theory and defendants have received and retained the purchase money. The several points indicated will be briefly discussed.

1. There is no question on the record but that the conveyance to Dieterville and contract back were executed for the sole purpose of securing the latter for money loaned by him to the former. Therefore, his interest was that of a mortgagee. The legal title did not pass by the Kiyo deed. It remained in Denis Kiyo the same as if the conveyance had been in form what it was in fact, a mere mortgage. In determining whether an instrument, or several instruments forming a single transaction affecting the title to real estate, constitute a mortgage, reference must always be had to their purpose, not their form. If such purpose be that of security merely, no matter what the form adopted to effect it, in law the relation between the parties, created by the transaction, is that of mortgagor and mortgagee, the legal title remaining in the former and a mere mortgage lien vesting in the latter. Therefore, the idea that Dieterville, by his deed to appellant, conveyed the legal title to the property in dispute because such was the character of his interest, cannot be sustained. Brinkman v. Jones, 44 Wis. 515;Phelan v. Fitzpatrick, 84 Wis. 240, 54 N. W. 614;Bank v. Lovejoy, 84 Wis. 601, 55 N. W. 108.

2. When the debt to Dieterville was paid, no conveyance of the legal title by him back to Kiyo was necessary, because such title never passed from the latter to the former, as before indicated. All that Kiyo was entitled to demand was a satisfaction of Dieterville's mortgage lien of record and the execution of such an instrument as was necessary to accomplish it. The payment of the debt per se extinguished the mortgage lien, leaving Dieterville with no greater interest than he would have had if his lien had been created by a mortgage in the usual form. The relation between the parties being that of mortgagor and mortgagee, the mere form by which that relation was created did not in any way affect the result of the payment of the mortgage debt. It was governed by the familiar rule that the payment of the debt extinguishes the lien, and that the making of a satisfaction of record is required solely for the purpose of having such record exhibit truly the facts. Brinkman v. Jones, supra; Slaughter v. Bernards, 97 Wis. 184, 72 N. W. 977. So the idea that after the payment of the debt to Dieterville he...