Darst v. Murphy.

• Decision Date: 25 January 1887
• Citation: 9 N.E. 887,119 Ill. 343
• Parties: DARST v. MURPHY.
• Court: Illinois Supreme Court

119 Ill. 343

9 N.E. 887

DARST

v.MURPHY.

Supreme Court of Illinois.

January 25, 1887.

Error to Peoria.

Foster & Kellogg, for plaintiff in error.

Hopkins & Hammond, for defendants in error.

SHOPE, J.

The principal question presented by this record is whether the deed of September 3, 1869, from Murphy to Darst, was intended as security for the money advanced by Darst to take up the note of Murphy to Mrs. Stewartson, or was intended to be an absolute conveyance. The instrument purports convey an absolute title to the grantee, and must be regarded as fixing the rights of the parties, unless some equity is shown that will defeat that effect, and from which the court may grant the relief sought by the bill. The law is well settled that the true character of the transaction may be shown by parol, and if, upon consideration of the facts, it clearly appears that the deed, though absolute in its form, was taken as security for the payment of money, it will in equity be held a mortgage. Ordinarily the intent of the parties is to be drawn from a consideration of the deed itself; therefore, to change the character of the instrument by parol, by attaching to it a condition of defeasance, the evidence should be clear and satisfactory. The gist of the inquiry in cases of this class is, what was the purpose for which the deed was executed? and it will be found, by reference to the cases, that every fact or circumstance tending to illustrate the purpose and intent of the parties is receivable as evidence.

The fact of an existing indebtedness in respect to which the deed was executed; the retention of the evidence of such indebtedness by the grantee in the deed; that the deed was procured by fraud or oppression, or undue advantage; that there was a loan of money; the subsequent conduct of the parties in respect to the land, as that the grantor had retained possession and the like; and, indeed, almost every conceivable state of facts legitimately illustrative of the transaction,-have been held competent evidence. In some of the cases, as in Brown v. Gaffney, 28 Ill. 149, evidence of oppression and undue advantage, in connection with the peculiar facts of that case, is made prominent and controlling; and in that and other cases, as in Miller v. Thomas, 14 Ill. 428, the inadequacy of the price paid is made, under the circumstances there proven, a prominent element in the solution of the question involved.

The declarations and statements of the parties contemporaneous with the execution of the deed are admissible, not for the purpose of altering or varying the written instrument, but as tending to illustrate whether a condition of defeasance should be added thereto in equity. Such declarations, while admissible, may or may not be controlling. It may be held that the declarations are but a device to cover usury, or to conceal hard and unconscionable bargains, driven by a relentless or sharp and designing creditor; or the debtor may be misled into the execution of the deed; or, from the peculiar circumstances shown, incapable of understanding his relations to his creditor thereunder.In all such and kindred cases equity will, if necessary to the ends of justice, look beyond the statements of the parties and written instrument into the facts and attending circumstances, and give to the transaction its true character.

An application of these principles to this case will relieve it of any considerable difficulty.

Murphy was old and illiterate; unfamiliar with the methods of business; scarcely able to read or write; and, as the evidence tends strongly to show, much below the average mentally, and incapable of comprehending the difference between a deed of trust and an absolute conveyance. The evidence also shows, and we think the facts of the case demonstrate, that he confided in whose with whom he dealt to take care of his interest as well as their own. Mr. Darst, on the contrary, was a sharp and successful business man, possessed of a high order of business ability, those with whom he dealt to take care real estate transactions.

In 1859, Murphy, who was then living in Peoria, received money from Ireland, and with it purchased the 160-acre farm in controversy, and some years afterwards moved upon it. Murphy testifies that he had implicit confidence in Darst, and their course of dealing tends strongly to corroborate him. It appears that on the eleventh day of June, A. D. 1867, Murphy was indebted to Gardner T. Barker in the sum of $120, and applied to Darst to borrow money with which to pay it. Darst declined to make the loan, but told Murphy to would take him where he could get it. On the way he advised Murphy to borrow $300 and pay his debts. Murphy at that time owned Darst $50. They applied to Mr. Julius Starr, and he loaned Murphy $300, took his note therefor to Mrs. Stewartson, with a trust deed on this same land to secure it. There is some conflict as to where all this money went to, but it is clearly shown that $30 of the $300 was deducted out by Starr, and credited on the back of the note as one year's interest, at 10 per cent. The second year's interest, $30, fell due January[119 Ill. 347]11, 1869. On the third day of September, 1869, the interest and principal being due and unpaid, Murphy came to Peoria, and endeavored to arrange the matter with Mr. Starr, but was unable to do so. Starr had either advertised a sale of the land under the trust deed, or was about to do so. He testifies: ‘The old man [Murphy] was there [Starr's office] crying, and made a terrible ado because I was going to sell him out, and I got out of patience with him.’

Darst and Murphy met at Starr's office, and Murphy applied to Darst for the loan of money to take up the Stewartson note, which all agreed in saying amounted then to about $330. Murphy testifies that Darst agreed to loan him the money, and did so, and that the paper he signed was drawn by Starr, and he signed it at Darst and Starr's request, without it being read to him, and he supposed it was in some way a receipt showing he had received the money of Darst. It is, however, shown by both Darst and Starr that he is mistaken in reference to the deed being read over to him. Mr. Darst's version, taken from the abstract prepared by his counsel, is as follows: ‘I bought the land from complainant,-it is described in the deed, [of September 3, 1869,]-or his interest in it. He came into Mr. Starr's office. I was sitting there, and he wanted to borrow some money. I told him I would not loan him any money; that if he had any real estate to sell I would buy it, if he sold it right; and then he said he would sell what interest he had in this same property that he put this deed of trust on. He said he did not want me to let his wife or his family know that he had sold it. He said he wanted to keep it from them. He would rather I would have it than his family, because they used him so mean; that he did not expect to live long, and wanted me to let him stay there as long as he lived. This was about all that was said at that...