First Nat. Bank of David City v. Sargent

• Decision Date: 22 July 1902
• Citation: 91 N.W. 595,65 Neb. 594
• Parties: FIRST NAT. BANK OF DAVID CITY v. SARGENT.
• Court: Nebraska Supreme Court

65 Neb. 594

91 N.W. 595

FIRST NAT. BANK OF DAVID CITY

v.SARGENT.

Supreme Court of Nebraska.

July 22, 1902.

Syllabus by the Court.

1. Where the pleadings raise an issue of fact, and under the evidence but one finding can be justified, it is not error for the trial court to assume the existence of the fact so established, and instruct the jury accordingly.

2. A deed absolute in form will be treated as a mortgage when it is given to secure payment of a debt, although the parties may have agreed that upon default of payment the deed should become absolute. Bank v. Mathews, 63 N. W. 930, 45 Neb. 659, 50 Am. St. Rep. 565.

3. Instruction copied in the opinion as to what constitutes duress examined, and held the giving thereof not erroneous.

4. Petition examined, and held to state a cause of action, and evidence held sufficient to support the verdict of the jury.

5. One S. had conveyed by a warranty deed absolute in form to a bank certain real estate as security for an indebtedness owing by S. to the bank. S. was in financial distress, and had no means of meeting his indebtedness save by a sale of the real estate. The bank thereafter assumed to be the absolute owner of the property, and denied to S. any right, interest, or equity therein, and by injunction proceedings undertook to dispossess him of a portion of such land. S. procured a purchaser at an advantageous price, and endeavored to adjust his differences with the bank, so as to effectuate a sale of the property and meet pressing demands against him. The bank refused to consent to a sale or release its interest or reconvey the premises to S., so that a sale might be consummated without the payment by S. of a large sum of money in excess of the amount justly due. Held, under the facts and circumstances as disclosed by the record, that the payment of the excess over and above the amount justly due was made under duress and compulsion, and might be recovered back in an action brought for that purpose.

6. At the time of making the arrangements for the payment of the sum demanded, a written agreement was entered into in the nature of a compromise or settlement of the differences existing between the parties, which was accepted and acquiesced in by S. so as to regain control of the land, be able to effectuate a sale of the property, and extricate himself from his financial difficulties. Held, that the jury was justified, under the evidence, in finding that the agreement was vitiated, because of duress, for the same reason and to the same extent as the overpayment was the result of legal duress.

7. Instructions of the court in stating the substance of the pleadings and the issues of fact to the jury examined, and found the issues were submitted fairly to both parties, and that no error was committed by such instructions.

8. Other alleged errors examined, and found to be without merit.

Error to district court, Butler county; Sornborger, Judge.

Action by Charles H. Sargent against the First National Bank of David City. Judgment for plaintiff, and defendant brings error. Affirmed.Matt Miller and A. J. Evans, for plaintiff in error.

A. M. Walling and W. M. Cain, for defendant in error.

HOLCOMB, J.

An action was brought in the lower court by the plaintiff, who is now the defendant in error, against the defendant, plaintiff in error, to recover a sum of money alleged to have been paid under compulsion and duress. The trial resulted in a verdict and judgment in favor of the plaintiff for the sum of $640. The defendant prosecutes error.

The petition in error contains 112 assignments of error. With the thermometer registering well up to the same mark, we can scarcely be expected to note and consider each assignment at length and in detail. If we generalize in our treatment and discussion of the case, it is for the sake of brevity, and not because of a lack of investigation and consideration of each and every question presented in briefs of counsel. There are, as it appears to us, a few questions of a controlling character, which, when considered and disposed of, properly must determine the whole case as presented by the record. The controversy arises out of a transaction wherein the defendant by warranty deed obtained the legal title to 154 acres of land theretofore belonging to the plaintiff, and one of the controverted questions is whether by the transaction referred to the defendant obtained the absolute title and ownership of the said real estate, or whether it held the conveyance as security only by way of mortgage. The plaintiff's action is grounded on the theory that the defendant although having a deed absolute on its face for the property included therein, the instrument was but a mortgage, and that in the adjustment and payment of the amount due thereunder the defendant by reason of the circumstances then surrounding the parties and the relations existing between them by threats and duress extorted from the plaintiff a much larger sum than was actually due on such indebtedness. The defendant denied that it held the deed as a mortgage, and alleged that it had become the absolute owner of the property by such conveyance, and it also pleaded as a defense that by way of compromise and settlement the parties had adjusted their differences, and that such settlement so made was a bar to any recovery on the cause of action pleaded in plaintiff's petition. On the submission of the cause to the jury, the court assumed and by an instruction told the jury that the deed by which the defendant acquired title to the property, and under which it claimed to be the owner of the real estate, although absolute in form, was in fact a mortgage to secure an indebtedness owing by the plaintiff to the defendant. The giving of this instruction is assigned as error, it being the contention of the defendant that whether or not the deed was to be regarded as an absolute conveyance or only intended as a mortgage was, under the issues and the evidence, a question of fact to be determined by the jury, and that the court could not properly withdraw such question from the jury as triers of fact. If there was any evidence upon which a finding that the defendant acquired the absolute ownership of the property by means of the conveyance could be sustained, then we apprehend the question ought to have been submitted to the jury as contended for. It appears from the record that prior to the execution of the deed the plaintiff was indebted to the defendant, a national bank, for some $600 or $700, and to secure such indebtedness had executed a second mortgage on the real estate over which the controversy arose. A first mortgage to secure the sum of $2,500 for a loan made thereon was held by a third party at the time the defendant obtained its second mortgage, and about the 1st of January, 1897, and shortly before the deed in controversy was executed, default having been made in the payment of interest due on the first mortgage, and also taxes assessed against the land, foreclosure proceedings were about to be instituted by the owner thereof. To protect its own interest as second mortgagee, the bank, on learning of the prospective foreclosure proceedings on the first mortgage, was anxious that the plaintiff should take some action which would forestall any further proceedings looking toward a foreclosure of the first mortgage. The plaintiff found himself unable to pay the defaulted interest and the back taxes upon the payment of which it appears the first mortgagee was willing to allow the principal to run until some future time. This condition of affairs existed for some little time, and after considerable negotiations it was agreed between the plaintiff and defendant that the bank should pay the back interest due on the first mortgage and taxes past due, and agree to pay the principal sum on the 1st of January following, cancel its own indebtedness, and the second mortgage securing the same, the total of the indebtedness and costs aggregating $3,830.67, and that the plaintiff would execute a warranty deed for the real estate covered by the two mortgages mentioned. At the time of the execution of the deed to the bank it executed back to the plaintiff a formal lease of the premises for the year 1897, and also a formal contract of sale, agreeing to reconvey the premises upon the payment of the said sum of $3,830.67 on or before January 1, 1898, with interest thereon at 10 per cent. per annum after the last-mentioned date. The plaintiff testifies, in substance, that the deed was given and accepted as a mortgage only, while the president of the bank says it was an absolute conveyance, and that the bank became the purchaser outright of the land by virtue of such conveyance. The negotiations leading up to the execution of the deed and the accompanying instruments appear to have been by correspondence, the letters of the bank relating to the matter being introduced in evidence. We look in vain for any act or words of the parties outside of the formal documents they at the time executed, evidencing an intention on the part of the plaintiff to sell the land and the bank to become the purchaser thereof by the execution and delivery of the deed of conveyance. We think the language and the conduct of the officers of the bank negative the idea that it was at the time purchasing the property or accepted the conveyance otherwise than as security for its indebtedness owing by the plaintiff and the advancements made and to be made by it on the first mortgage. No other consideration entered into the transaction, and by its own testimony we think it is firmly established that the conveyance, although an unconditional warranty deed, was in fact and in contemplation of law but a mortgage to secure the plaintiff's indebtedness secured by the two mortgages hereinbefore referred to. In urging the plaintiff to take some action regarding the matter, it is stated by the president of the bank in one of his...