Donovan v. Boeck

• Decision Date: 25 February 1909
• Parties: DONOVAN v. BOECK.
• Court: Missouri Supreme Court

116 S.W. 543

217 Mo. 70

DONOVAN v. BOECK.

Supreme Court of Missouri, Division No. 1.

February 25, 1909.

1. CONTRACTS (§ 176) — CONSTRUCTION — JUDICIAL QUESTION.

The construction of a valid contract, inaccurately drawn but unambiguous and complete in itself, set out in a pleading as the basis of the cause of action, is for the court.

2. PLEADING (§ 214) — DEMURRER — ADMISSIONS.

A demurrer to a pleading admits facts well pleaded, but not conclusions of law, nor conclusions of the pleader on the facts of the cause of action, nor the correctness of averments as to the meaning of an instrument pleaded.

3. PLEADING (§ 214) — DEMURRER — ADMISSIONS.

A demurrer to a bill, founded on an instrument set out, does not admit the allegations in the bill that the instrument is a mortgage and not a conditional sale, but the construction of the instrument is for the court.

4. PLEADING (§ 214) — DEMURRER — ADMISSIONS — SCOPE.

A demurrer to a bill does not admit the facts in a sense that the admission can be used as such on the trial on the merits.

5. MORTGAGES (§ 38) — EVIDENCE AS TO CHARACTER OF INSTRUMENT — INADEQUACY OF CONSIDERATION.

Inadequacy of consideration is to be considered in determining whether a contract evidences a conditional sale or a mortgage, but inadequacy, though gross, is not conclusive.

6. MORTGAGES (§ 38) — EVIDENCE AS TO CHARACTER OF INSTRUMENT — INADEQUACY OF CONSIDERATION.

Where a bill, founded on an instrument set forth and alleged to be a mortgage and not a conditional sale, showed the inadequacy of the consideration, but did not allege the amount of accrued taxes, nor the condition of repair of the property or the outlays necessary to put and keep it in repair and preserve it, the allegation as to inadequacy of consideration in determining whether the instrument was a conditional sale or a mortgage must be considered in connection with the vagueness of the bill in the particulars enumerated.

7. MORTGAGES (§ 6) — EVIDENCE AS TO CHARACTER OF INSTRUMENT — INADEQUACY OF CONSIDERATION.

Where a contract is plainly ambiguous, and the question is whether it evidences a conditional sale or a mortgage, the court will lean towards the construction of a mortgage if a fair resolving of the ambiguities can be made in favor of that view.

8. CONTRACTS (§ 169) — CONSTRUCTION.

Where the court can determine the meaning of the language of a contract, though inaccurate, without any other guide than a knowledge of the simple facts on which from the nature of language in general its meaning depends, the language is not ambiguous.

9. CONTRACTS (§ 169) — CONSTRUCTION — INTENTION OF PARTIES.

The court in construing a contract must seek its meaning from its terms, considering its subject-matter, the relation of the parties thereto, and the ordinary meaning of the language used.

10. MORTGAGES (§ 1) — REQUISITES.

A mortgage cannot exist without an existing debt enforceable at law, and the relation of debtor and creditor must be found before a mortgage can exist.

11. RELEASE (§ 39) — CANCELLATION OF DEBT.

A written agreement between debtor and creditor, supported by a valid consideration, may provide for the cancellation of a debt, though the evidence of the debt may remain in the possession of the creditor.

12. MORTGAGES (§ 6) — CHARACTER OF INSTRUMENT.

Where the mortgagor by quitclaim deed, absolute on its face, conveys property to the mortgagee, who enters into a concurrent agreement to reconvey on condition, and there is nothing either in the deed or in the concurrent agreement or in the circumstances to indicate that the deed was given as a mere security for the debt, it will not be held as such.

13. MORTGAGES (§ 6) — CHARACTER OF INSTRUMENT.

An agreement between the mortgagor and the holder of the mortgage and the note secured thereby recited that the mortgagor was indebted on the note secured by the mortgage, that default had been made in the payment of the note and taxes on the mortgaged property, that the mortgagor by warranty deed had conveyed the premises to the holder in consideration of the cancellation of the debt, and in consideration of a settlement to avoid a foreclosure, and provided that the holder on payment of the amount of the debt within a specified time would reconvey the property to the mortgagor, that the purpose of the agreement and conveyance was to avoid the expense of foreclosure proceedings, that it was expressly understood that the agreement should not be construed to be a mortgage, and that on the payment by the mortgagor of the "said indebtedness," the mortgagor should be entitled to an accounting, etc. Held, that the instrument was a conditional sale and not a mortgage, though the mortgage was not satisfied and though the holder retained possession of the note and mortgage.

Appeal from St. Louis Circuit Court; Warwick Hough, Judge.

Action by Joseph T. Donovan against Adam Boeck. From a judgment for defendant, plaintiff appeals. Affirmed.

R. M. Nichols, for appellant. Wm. E. Smith, for respondent.

LAMM, P. J.

Cast on demurrer to his amended bill and refusing to plead over, judgment went against him, and plaintiff appeals.

On November 19, 1904, plaintiff brought his suit in equity, the object and general nature of which was to recover damages for the sale of certain real estate in alleged violation of an alleged agreement, and for an accounting of rents and profits, etc. It is not necessary to reproduce the bill — a synopsis will serve, viz.:

It is charged that on December 6, 1897, plaintiff, a resident of St. Louis, owned a certain lot in East St. Louis, Ill., an opera house, and the appurtenant fixtures. That on July 13, 1898, the J. T. Donovan Real Estate Company loaned plaintiff $10,000, and to secure the same took a mortgage "in the ordinary and customary form" on said lot, opera house, furniture, and fixtures, which mortgage was duly put of record. That afterwards the mortgage became the property of one Natille Patte. That afterwards it passed by assignment to defendant, a resident of St. Louis, and became his property. That the mortgage debt maturing, afterwards on August 5, 1901, plaintiff and defendant had an accounting on the mortgage and agreed there was due defendant $7,780, principal and interest, on said date, and thereupon they entered into a written agreement anent the subject-matter. The bill sets forth, by way of allegation, the supposed terms of this agreement, and puts the pleader's construction on the meaning of those terms. But as the agreement is also pleaded, totidem verbis, it will speak for itself, viz.:

"Whereas Joseph T. Donovan, of the city of St. Louis, state of Missouri, is indebted to Adam Boeck, of the same place, in the sum of seven thousand seven hundred and eighty dollars ($7,780.00) under and by virtue of a certain note, secured by mortgage, dated July 13, 1898, and recorded in the recorder's office of St. Clair county, Illinois, in book 263, page 588; said Adam Boeck having become the owner of the said note and mortgage, and whereas default has been made by the said Jos. T. Donovan in the payment of the principal note and mortgage and taxes upon the property described in the mortgage, said Jos. T. Donovan has this day conveyed by warranty deed to said Adam Boeck (in consideration of the cancellation of the said debt of said Jos. T. Donovan to said Adam Boeck in the said sum of seven thousand seven hundred and eighty dollars; and in consideration of an amicable settlement and to avoid a foreclosure suit) the property known as the `McCasland Opera House' in the city of East St. Louis, Illinois, described as follows:

"Lots numbered one (1) and two (2) in block one (1) of Pecan Grove Addition to East St. Louis, as per plat recorded in the recorder's office of St. Clair county, in book `D' on page 108, having a front of sixty (60) feet on Broadway by a depth of one hundred and twenty (120) feet to an alley, together with all the furniture, fixtures, scenery and appurtenances to said opera house belonging.

"And said Adam Boeck shall immediately have the possession of said property and is entitled to all the rents, issues and profits thereof.

"Now therefore, these presents witnesseth: That the said Adam Boeck, or his legal representatives, upon payment to him or his legal representatives, of the sum of seven thousand seven hundred and eighty dollars, with interest on that sum at the rate of seven per cent. per annum from the 5th day of August, 1901, including expense of repairs, taxes and insurance in said property, will reconvey to said Jos. T. Donovan by quitclaim deed, free of any incumbrance thereon (incurred by said Adam Boeck), provided: Said Jos. T. Donovan pays said amount within eighteen (18) months from August 5th, 1901, viz.: on or before February 5, 1903; otherwise this agreement is void.

"The purpose of this contract and the conveyance of this date to Adam Boeck, is to avoid the expense of foreclosure proceedings to said Jos. T. Donovan, and it is expressly understood between the parties hereto that this instrument shall not be construed to be a mortgage.

"And it is further agreed that upon the payment by said Jos. T. Donovan to the said Adam Boeck of the said indebtedness as aforesaid, at the time and in the manner aforesaid, the said Jos. T. Donovan shall be entitled to an accounting of said Adam Boeck and the payment to him said Jos. T. Donovan of any balance which may be due him from such rents collected.

"This agreement shall be binding upon the heirs, executors, administrators and assigns of the parties hereto.

"In witness whereof the said parties have hereunto set their hands and seals, in duplicate, this 5th day of August, 1901."

It is next alleged that, "pursuant to and as an incident to the said agreement," on the same date plaintiff conveyed the property to defendant by a warranty deed, absolute on its face, but which was intended to be and is a mortgage, and was for the purpose of holding the...