Davis v. Absent

• Decision Date: 12 December 1877
• Citation: 12 W.Va. 246
• Court: West Virginia Supreme Court
• Parties: Davis, Committee, v. Demmixg et al*( Absent, Johnson, Judge).

12 W.Va. 246

Davis, Committee,

v.Demmixg et al

^*(Absent, Johnson, Judge).

Supreme Court of Appeals of West Virginia.

Decided December 12, 1877.

1. The 10th section of chapter 141 of the Code of Va. of 1860, is

applicable only to bills to prevent the sale of property conveyed by a deed of trust to secure a usurious debt.

2. All other bills in equity for relief against a usurious debt un-

paid, excepting those brought under said 10th section, must be regarded as brought under the 7th section of said act; and whether the usury be confessed in the answer or proved by evidence, the plaintiff is entitled to the relief provided for by the 7th section of said act, that is, to be relieved on the payment of the principal justly due, without any interest; and to entitle the plaintiff to this measure of relief, he need not specially pray therefor in his bill, nor need he offer to return the principal money borrowed.

3. A bill in equity for relief on account of money already paid on

usurious contract, is not a bill under said 7th section, but such a bill as a party has a right to file, independent of the statute; and the relief therefor, to be afforded in such a case, is the relief which is afforded on the general principles of a court of equity; and the measure of this relief, in such case, is the excess paid above the principal and legal interest, with interest on such excess from the time of its payment.

4. A conveyance of land by a debtor to a creditor for the payment

of a debt, with a proviso that such conveyance shall be void on the payment of the debt on a certain day, is a mortgage and not an absolute conveyance; and a defeasance rendering it void, if the debt to be secured is paid on a day certain, is also a mortgage; and if instead of a provision or such defeasance there be a covenant by the grantee to re-convey the land on a certain day, if the debt is paid, such deed and covenant will equally constitute a mortgage.

5. Though the relation of creditor and debtor must always exist,

yet there need not be any obligation to pay the debt express-ed on the face of the deed, to constitute a mortgage. Such relation between the parties may always be proved by parol.

6. The distinction between a mortgage and a conditional sale is,

that where money is not loaned, but is advanced with an agreement, that if it be repaid at a given time, the vendee will re-convey the land, and the whole transaction shows clearly, that no debt really remained after the execution of the deed, such transaction is a conditional sale; but if, no matter in what form the papers may be drawn, the whole transaction shows that after the execution of the deed a debt still remained, such transaction will be held to be a mortgage.

7. Though the deed be absolute on its face, or though it be drawn

as an absolute deed, and an obligation to re-sell at a given future day for a certain price, the real nature of the transaction can be proven by parol testimony, or by surrounding circumstances.

8. The following circumstances have great weight in determining

that an absolute deed, or a paper drawn up in the form of a conditional sale, is in reality a mortgage: First, if the alleged price given for the property is grossly inadequate. Secondly, if the vendor remains in the possession of the property. And lastly, the fact that there were or had been, when the deed was executed, negotiations pending for a loan.

9. After the close of the term of the court, at which a decree is

rendered settling any of the principles of a cause, though such decree be interlocutory as a general rule, the court cannot set it aside or disregard it in any future decree, unless there be a petition for a rehearing.

Appeal from a decree of the circuit court of the county of Wood, rendered on the 10th day of July 1874, in a cause in chancery in said court then pending, wherein John W. Davis, committee of William H. Woodyard, was plaintiff, and Charles T. Demming, John S. Burdett and J. E. Sharp were defendants, allowed upon the petition of said plaintiff.

The Hon. C. S. Lewis, late judge of the second judicial circuit, pronounced the decree complained of.

John A. Hutchinson and James Hutchinson, for appellant.

J. H. Ferguson and Ohey Johnson, for appellees.

Green, President, who delivered the opinion of the Court, prepared the following statement of the case:

On the first Monday in June 1869 William H. Woodyard filed his bill in chancery against Charles T. Demurring, John S. Burdett and J. E. Sharp in the circuit court of Wood county. He alleges therein, that he conveyed his farm in said county, consisting of four tracts of land, in 1863 by a deed of trust to secure a certain debt; and in 1864 he again conveyed his said farm by another deed of trust to secure another debt to same party. In May 1867 the creditor demanded payment of said debts; and they not being paid, his farm was advertised for sale; that being thus pressed he borrowed of Charles T. Demming $2,000.00 to pay those debts, and he and his wife executed to said Demming therefor on June 10, 1868, a deed for his said farm, which was absolute on its face; and at the same time Demming executed to him a contract to re-sell and re-convey to him said farm, on condition that he would pay Demming therefor $2,500.00 on June 10, 1868; that this farm was worth three times the amount Demming loaned him; that at the end of the year for which this $2,000.00 was loaned, and for the use of which for one year he was to pay $500.00, Demming insisted on the payment of this money, or otherwise he would take steps to dispossess him of his farm, which by his agreement with Demming was to remain in his possession, till this $2,500.00 was due; being thus pressed he borrowed of Burdett and Sharp $2500.00 for three months, wherewith t6 pay Demming, agreeing to pay them $500.00 for the use of this $2,500.00 for three months; that thereupon Demming and his wife and Woodyard made an absolute deed for this farm to Burdett and Sharp, dated July 10, 1868, and at same time Burdett and Sharp, signed a paper whereby they agreed to re-sell and convey this farm to him for] $3,000.00, provided he paid the $3,000.00 on September 10, 1868. The bill charges that these transactions were really loans, and these deeds and conveyances were really but mortgages, that the loans were at usurious interest, and that his said deeds were therefore null and void. The prayer of the bill is as follows:

"In tender consideration and for as much, that your orator is remediless by the strict rules of the common law, and relievable only in a court of equity, where matters of the kind are properly cognizable under the statute, to the end therefore that the said Charles T. Demming, John S. Burdett and J. E. Sharp, and their confederates may be made parties to this suit and required to answer the charges herein set forth upon their corporal oath, your orator prays that an issue may be directed out of chancery in accordance with the provisions of section 10 of chapter 141 of Code of Virginia, second edition, and upon it being determined or found by a jury that the said deeds dated the 10th day of June 1867, executed by your orator and wife to Charles T. Demming, and the deed dated the 10th June 1868 executed by Demming and wife and your orator and wife to said Burdett and Sharp, were usurious, the same may be declared null and void and set aside, and that the contract made on the 10th of June 1868, between your orator and the said Demming, and the contract of the 10th of June 1868, between your orator and the said Burdett and Sharp, may be declare usurious and set aside, and held for naught; and the further prayer of your orator is, that the said Charles T. Demming, John S. Burdett and J. E. Sharp may be forever enjoined by this honorable court from instituting any suit at law or other proceedings, to evict or dispossess your orator of his property, and that your orator may be quieted and secured in the peaceable possession of his property aforesaid, and as in duty bound he will ever pray."

32 With the bill are filed, as exhibits, the deeds and defeasances or contracts to re-convey conditionally, referred to in the bill. The answer to this bill filed by Demming says, that Woodyard's farm being about to be sold to pay the debts secured by the deed of trust amounting to about $2,000.00, he applied to him to buy his farm at that price; that he did with great reluctance consent to do so, and did do so, paying him therefor $2,000.00 in cash. He says, "he admits he sold the said farm to the plaintiff for $2,500.00 afterwards, when he was not bound to do so, and gave him a year in which to pay the same; and that after the year had expired, the plaintiff sold the same to Burdett & Sharp, and at his request he united in the deed to them." He denies that he loaned any money to the plaintiff. He denies that the farm is worth what the plaintiff claims it is worth, and it would not, if sold at auction under favorable circumstances, bring more than from $2,000.00 to $2,500.00. He insists that if the transaction was usurious, the plaintiff could not claim relief under the 10th section of chapter 141 of the Code of 1860, but only under the 7th section of this chapter.

Though the answer of Demming states thathesold the farm to plaintiff when he was not bound to do so, and after he had purchased it, yet the exhibit filed with the bill shows that the deed and agreement for the re-sale were simultaneous acts, both being of the same date. The answer of Sharp states, that he never heard of any borrowing and lending between Woodyard and Demming till after the institution of this suit, but only of a sale of the land by Woodyard to Demming, as evidenced by the deed. He states, that Woodyard annoyed him for a period of two months to purchase his farm; that there never was a proposition made by either of them to borrow or lend money; that Woodyard offered to sell the farm at $2,500.00, and the agreement to re-sell...