Dickens v. Heston

• Citation: 21 P.2d 905,53 Idaho 91
• Decision Date: 26 April 1933
• Docket Number: 5924
• Parties: JOSEPH DICKENS and MARTHA DICKENS, Husband and Wife, Appellants, v. NATHAN E. HESTON and CORA M. HESTON, Husband and Wife, Respondents
• Court: United States State Supreme Court of Idaho

21 P.2d 905

53 Idaho 91

JOSEPH DICKENS and MARTHA DICKENS, Husband and Wife, Appellants, v. NATHAN E. HESTON and CORA M. HESTON, Husband and Wife, Respondents

No. 5924

Supreme Court of Idaho

April 26, 1933

MORTGAGES-DEED WHEN A MORTGAGE-EVIDENCE.

1. In ejectment, evidence supported finding that rents and profits of land were worth $800 per annum.

2. In ejectment, evidence supported finding that land which plaintiffs claimed was sold to them for $10,000 was worth $12,000.

3. Evidence supported finding that deed and contract of sale should be construed to be mortgage.

4. In determining whether deed is mortgage, controlling test is whether at time of execution grantor sustained relation of debtor to grantee.

5. On issue whether deed from debtor was intended as mortgage, test is whether there was subsisting debt after conveyance.

6. That grantee retains in possession without cancelation written evidence of debt raises strong presumption that conveyance given did not extinguish debt, and that mortgage was intended.

7. In determining whether deed was intended as mortgage, it is proper to consider previous negotiations of parties, their agreements, conversations and course of dealings.

8. Value of property may be considered in determining whether deed was intended as mortgage.

9. Necessitous condition of grantor, especially in connection with inadequacy of price, will go far to show that deed was intended as mortgage.

10. Conveyance of mortgaged premises by mortgagor to mortgagee will be regarded as mere change in form of security unless it clearly appears that both parties intended it as absolute conveyance.

11. Where deed absolute in form given by mortgagor to mortgagee was in fact mortgage, mortgagee was not deprived of right to recover indebtedness nor of liens, but remedy was not in ejectment.

12. Mortgagor sued in ejectment and claiming his deed absolute in form to mortgagee was in fact mortgage, need not tender amount of debt in making such claim, where debt was not yet due.

APPEAL from the District Court of the Seventh Judicial District, for Canyon County. Hon. John C. Rice, Judge.

Action in ejectment. Judgment for defendants. Affirmed.

Judgment affirmed. Costs awarded to respondents.

Thomas E. Buckner and Charles F. Reddoch, for Appellants.

In determining whether an instrument is a conveyance or a mortgage the controlling question is whether or not the debt is paid on the execution and delivery of the deed. ( Investors' Mtg. Secur. Co. v. Hamilton, 51 Idaho 113, 4 P.2d 347; Jameson v. Diggs, 47 Idaho 478, 276 P. 969; Clinton v. Utah Construction Co., 40 Idaho 659, 237 P. 427; Shaner v. Rathdrum State Bank, 29 Idaho 576, 161 P. 90; 41 C. J., sec. 99, p. 335.)

Cleve Groome, for Respondents.

Under all the facts and circumstances in this case the deed given by the defendants, Hestons, to Dickens and the contract in question constituted a mortgage and not a contract of sale and purchase, and the plaintiffs are not in a position to maintain this action in ejectment. (Russell v Southard, 12 How. 139, 13 L.Ed. 927; Alexander v. Rodriguez, 12 Wall. 323, 20 L.Ed. 406; Peugh v. Davis, 96 U.S. 332, 24 L.Ed. 775; Wagg v. Herbert, 215 U.S. 546, 30 S.Ct. 218, 54 L.Ed. 321; Largilliere v. Zavala, 39 Idaho 759, 230 P. 774; Clinton v. Utah Construction Co., 40 Idaho 659, 237 P. 427; Bergen v. Johnson, 21 Idaho 619, 123 P. 484; Investors' Mtg. Secur. Co. v. Hamilton, 51 Idaho 113, 4 P.2d 347.)

BUDGE, C. J. Givens, Morgan, Holden and Wernette, JJ., concur.

OPINION

BUDGE, C. J.

This is an action in ejectment. The record discloses the following facts: On December 22, 1924, respondents were the owners and in possession of eighty acres of land in Canyon county and on that date they executed and delivered to appellants their promissory note in the principal sum of $ 10,000 due five years after date, bearing interest at six per cent per annum, and to secure the payment thereof executed and delivered to appellants a real estate mortgage covering the land in question. On December 26, 1929, the following transactions took place:

1. Respondents executed and delivered to appellant, Joseph Dickens, a warranty deed covering said land.

2. Appellants and respondent, Nathan E. Heston, executed a written contract whereby the former agreed to sell said land to the latter for $ 10,000, payable on or before three years after date, with interest at six per cent per annum, interest payable annually, and providing that the latter should pay all state, county and irrigation district taxes or assessments from and including the year 1929, and keep the buildings on the premises insured against fire and pay the premiums on such insurance policies. It was further provided that appellants should concurrently execute a warranty deed conveying the premises to respondents, subject to 1929 taxes and water assessments, and that such deed with copy of the contract and abstract of title should be deposited with First National Bank of Caldwell as escrow-holder, which was authorized to receive the payments to be made under the contract and to deliver the deed upon compliance therewith. Provision was also made for forfeiture and return to appellants of the deed, abstract of title and insurance policies, upon failure of respondent, Nathan E. Heston, to make the payments of principal, interest, taxes, water assessments and insurance premiums as specified in the contract, within ten days after written notice to him specifying such defaults.

3. Appellants executed a warranty deed to respondents covering said premises, subject to all state, county and irrigation district taxes and assessments for 1929.

4. Appellants executed a satisfaction of the mortgage dated December 22, 1924.

On the same day, December 26, 1929, the warranty deed from respondents to Joseph Dickens and the satisfaction of the mortgage were recorded at the request of Joseph Dickens, according to the indorsement thereon; and the warranty deed from appellants to respondents, a copy of the contract and abstract of title to the land were deposited with the escrow-holder. Respondents continued in possession of the premises.

On January 4, 1932, written notice was served upon respondents, signed by Joseph Dickens, specifying the following defaults under the contract: nonpayment of interest; nonpayment and delinquency of state and county taxes and irrigation district assessments; and nonpayment of insurance premiums; and notifying respondents that if such defaults were not cured within ten days after service of notice the contract would be forfeited and the escrow-holder required to return to appellants the papers deposited in escrow. The defaults were not cured within the specified time and on January 20, 1932, appellants commenced this action to recover possession of the premises.

In the complaint appellants allege their ownership of said land since December 26, 1929; the execution of the contract and the provisions thereof; the deposit of the copy of the contract, the deed and abstract of title in escrow; the various defaults; the giving of the notice above referred to; and the failure of respondents to cure the defaults within the specified time. It is also alleged that appellants are entitled to possession of the premises, which respondents refuse to surrender; that appellants have duly performed the terms and conditions of the contract on their part; that $ 75 per month is the reasonable rental value of the premises; and that by reason of respondents' unlawful withholding thereof appellants have been deprived of its rental since January 16, 1932, and by the continuance thereof will be deprived of its use and occupation for the farming season of 1932 to their damage in the sum of $ 900. Appellants prayed judgment for the restitution of the premises, $ 75 damages for the value of the rents and profits, and $ 900 damages for wrongful withholding of possession.

By their answer, respondents deny generally the allegations of the complaint, allege they are rightfully in possession of the premises, and admit the execution of the instruments described in the complaint. By way of affirmative answer respondents allege that on December 26, 1929, they were indebted to appellant, Joseph Dickens, on the note and mortgage dated December 22, 1924, in the sum of $ 10,000; that it was agreed between the parties that said note and mortgage should be extended and renewed for a term of three years at the same rate of interest, and that a new note and mortgage in the place of the old should be executed; that on December 26, 1929, the value of the real property and improvements was $ 16,000; that at the time of the execution of the contract a deed was given by respondents to appellant Joseph Dickens, which deed and contract were intended to be and constituted a mortgage; that respondents objected to the execution of the deed and contract, and the same were not executed on their part as their own voluntary act or of their own free will and accord, but were executed without additional or adequate consideration and by reason of oppressive threats of Joseph Dickens that he would foreclose the mortgage if they did not do so, and by reason of his representations that such was the method customarily and generally used for the extension and renewal of mortgages; that respondents are entitled to redemption rights, and have continuously remained in possession. Respondents prayed that the deed and contract be construed together and declared a mortgage, and not a contract for the sale and purchase of real property, and for general relief.

An answer to the affirmative defense, denying generally the allegations thereof, was filed by appellants.

Upon the issues thus framed, the cause was tried to the...