Fountain v. Lewiston Nat. Bank

• Citation: 11 Idaho 451,83 P. 505
• Parties: FOUNTAIN v. LEWISTON NATIONAL BANK
• Decision Date: 25 November 1905
• Court: Idaho Supreme Court

83 P. 505

11 Idaho 451

FOUNTAIN v. LEWISTON NATIONAL BANK

Supreme Court of Idaho

November 25, 1905

SUIT TO DECLARE A DEED A MORTGAGE AND TO REDEEM-TRUST AND FIDUCIARY RELATION-ADVERSE POSSESSION-POSSESSION UNDER COLOR OF TITLE-STATUTE OF LIMITATIONS.

1. Where the plaintiff sought to establish a trust and fiduciary relation as having existed between her ancestor and one of the defendants, and the evidence shows that the dealings and business transactions which took place between the parties were at arm's length, and in the ordinary course of dealings in business transactions of the character involved and no special, peculiar, or extraordinary degree of trust or confidence appears to have been reposed by the one party in the other, and a fair market price has been paid and the transaction has been made in the open and with the full knowledge of the nature thereof, and all the facts surrounding the same, and the transaction appears upon its face to have been equitable and just, the finding of the court that no trust or fiduciary relation existed between the parties cannot be disturbed on appeal.

2. Where M. owed to the bank the principal and interest on an overdue mortgage previously executed, and on October 18 1889, executed to the bank a warranty deed of conveyance of the premises covered by the mortgage for the stipulated consideration of the amount of principal and interest then due, and on the same date took a written agreement and contract from the bank giving M. the option until June 18, 1890, to repurchase the premises for the amount of principal and interest named as the consideration for the deed, and thereafter and on March 28, 1890, in consideration of the further sum of more than $1,700 executed what purported to be a release of the agreement and contract for purchase of date October 18, 1889, and all the parties to these several transactions understood and believed that the conveyance and purported release amounted to a transfer of both the legal and equitable title from M. to the bank, and thereupon the bank and its successors in interest with full knowledge and consent of M., entered into the sole exclusive and open possession of the premises and continued such possession uninterruptedly and with the knowledge and consent of and without objection from M., held, that the possession by the bank and its successors was adverse and hostile to any and all claim of title or possession by M. and her heirs, and that such adverse possession did, upon the lapse of the statutory period of five years, constitute a complete bar to an action by M. 's heirs to redeem the property.

3. Where the full purchase price agreed upon was at the time paid and the purchaser took possession under written instruments which both the vendor and vendee at the time thought sufficient to pass both the legal and equitable title to the premises, the possession so taken and maintained will be held to have been adverse to the vendor, although it should thereafter appear that the writings under which the possession was taken did not amount to the transfer of title but was in law only a mortgage.

4. In such case, even though it should be conceded that the entry was not made under an absolute title, it is clear that it was done under color of title and without any purpose of ever restoring possession to the vendor and is therefore sufficient to initiate an adverse possession.

5. Under the facts of this case, held, that the defendants have maintained an adverse possession for about ten years prior to the commencement of the plaintiff's action, and that the same constituted a bar to the prosecution of plaintiff's action under the provisions of sections 4036 and 4037 of the Revised Statutes.

(Syllabus by the court.)

APPEAL from District Court in and for Nez Perce County. Honorable Edgar C. Steele, Judge.

Judgment affirmed with costs in favor of the respondents.

Bender & Lingenfelter, for Appellant.

Where a warranty deed and the agreement to reconvey were given at the same time upon said date between the same parties for the same consideration and upon the same land, they constitute a mortgage. (Kelly v. Leachman, 3 Idaho 392, 29 P. 849; Pritchard v. Butler, 4 Idaho 518, 43 P. 73; Wilson v. Thompson, 4 Idaho 678, 43 P. 557.) The authorities are uniform in holding that in those states where the title remains in the mortgagor, a mortgage cannot be converted into a conveyance by the parties canceling and delivering over the conveyance of indebtedness. We cite and quote from the following authorities upon this subject: O'Dell v. Montrose, 68 N.Y. 499; Dupont v. Wertheman, 10 Cal. 368; Brown v. Bryan, 6 Idaho 1, 51 P. 995; Peugh v. Davis, 96 U.S. 332, 24 L.Ed. 775; Keller v. Kirby, 34 Tex. Civ. App. 404, 79 S.W. 82. A national bank cannot acquire title to real property by equitable estoppel in violation of the national banking statute. Nor will a court of equity reform the release of March 28, 1890 (the executory agreement), to conform with the intentions of the parties to specifically enforce it in contravention of the United States statute. (U.S. Rev. Stats., sec. 5137; Case v. Kelly, 133 U.S. 21, 10 S.Ct. 216, 33 L.Ed. 513; Dickinson v. Glenney, 27 Conn. 104; Thomas v. Railroad Co., 101 U.S. 71, 25 L.Ed. 950; M'Cutcheon v. Merz Capsule Co., 71 F. 795, 19 C. C. A. 108, 31 L. R. A. 415; St. Louis etc. R. Co. v. Terre Haute etc. R. Co., 145 U.S. 393, 12 S.Ct. 953, 36 L.Ed. 748; Union P. R. Co. v. Chicago etc. R. Co., 163 U.S. 597, 16 S.Ct. 1173, 41 L.Ed. 277; Central Transp. Co. v. Pullman Palace Car Co., 139 U.S. 24, 11 S.Ct. 478, 35 L.Ed. 55; Reed v. Johnson, 27 Wash. 42, 67 P. 381, 57 L. R. A. 404.) There must have been knowledge on the part of the plaintiff of the existence of the right of redemption, for there can be no laches in failing to assert rights of which a party is wholly ignorant, and whose existence he had no reason to apprehend. (Halstead v. Grinnan, 152 U.S. 416, 14 S.Ct. 641, 38 L.Ed. 495; Ritchie v. Sayers, 100 F. 537; Godkin v. Cohn, 80 F. 465, 25 C. C. A. 557.) Laches is not a defense in action to redeem a mortgage under the statute which provides that adverse possession alone is a defense. (Idaho Rev. Stats., sec. 4062; Murphy v. Crowley, 140 Cal. 141, 73 P. 820; Goodnow v. Parker, 112 Cal. 437, 44 P. 740; Kenney v. Parks, 137 Cal. 527, 70 P. 556; Stewart v. Thompson, 32 Cal. 263; City of Oakland v. Carpenter, 13 Cal. 540; Hager v. Shindler, 29 Cal. 48; Clausen v. Meister, 93 Cal. 555, 29 P. 232; Brown v. Cloud Co. Bank, 2 Kan. App. 352, 42 P. 593; Missouri Sav. etc. Co. v. Rice, 84 F. 133, 28 C. C. A. 305; Hall v. Arnott, 80 Cal. 348, 22 P. 200; McPherson v. Hayward, 81 Me. 329, 17 A. 164; Knowlton v. Walker, 13 Wis. 305; Chapin v. Wright, 41 N.J. Eq. 438, 5 A. 576; Cohen v. Mitchell (Cal.), 9 P. 649; Wardner v. Enslen, 73 Cal. 291, 14 P. 874; Raynor v. Drew, 72 Cal. 307, 13 P. 866; Houston v. National etc. Assn., 80 Miss. 31, 92 Am. St. Rep. 565, 31 So. 540; Hill v. Nash, 73 Miss. 849, 19 So. 710; Moore v. Dick, 187 Mass. 207, 72 N.E. 967.) Adverse possession must be in opposition to the title and not under the title pursuant to an agreement. (Farish v. Coon, 40 Cal. 33; Kerns v. Dean, 77 Cal. 555, 19 P. 817; Kerns v. McKean, 65 Cal. 411, 4 P. 404; Rev. Stats. 1887, sec. 4039; 1 Ency. of Law, p. 978; 4 Rose's Notes on U.S. Supreme Court Reports, p. 505; Davis v. Devanney, 7 Idaho 742, 65 P. 500; Southern Cal. R. Co. v. Slauson (Cal.), 68 P. 108; Kirk v. Smith, 9 Wheat. 288, 6 L ed. 92; Alexander v. Wheeler, 69 Ala. 341; Allen v. Smith, 6 Blackf. 528; Armstrong v. Risteau. 5 Md. 256, 59 Am. Dec. 115; Clarke v. McClure, 10 Gratt. 310; Potts v. Coleman, 67 Ala. 228.) The further authorities cited by the appellant are quoted and considered in the opinion.

James E. Babb, for Respondent.

The findings cover all issues. If they did not, appellant's record not showing any objections below on that score, no objection can be urged now. (Parker v. Beagle, 4 Idaho 453, 40 P. 61; Bunnell & Eno Inv. Co. v Curtis, 5 Idaho 652. 51 P. 767; McCormick v. Friedman, 7 Idaho 686, 65 P. 441.) The plaintiff in a court of equity cannot have relief based on invalidity of oral contract because it should have been in writing under statute of frauds. (Denver etc. R. R. Co. v. Ristine, 77 F. 58, 23 C. C. A. 13; Jarrett v. Johnston, 11 Gratt. 327; Stowell v. Tucker, 7 Idaho 312, 62 P. 1033; Grumley v. Webb, 48 Mo. 562; Culligan v. Wingerter, 57 Mo. 241; Curtis v. Hulbird, 46 Ill.App. 419; Browne on Statute of Frauds, 5th ed., sec. 123; Grice v. Woodworth, 10 Idaho 459, 80 P. 912, 69 L. R. A. 584; Rowland v. Garman, 1 J. J. Marsh. (Ky.) 76, 19 Am. Dec. 54; Nelson v. Forgey, 4 J. J. Marsh, 569; Barnes v. Wise, 3 T. B. Mon. (Ky.) 167.) Payment of purchase price and change of possession will take case out of statute of frauds. (2 Warvelle on Vendors, secs. 767, 768; Arguello v. Edinger, 10 Cal. 150; Willis v. Wozencraft, 22 Cal. 607; Calanchini v. Branstetter, 84 Cal. 249, 24 P. 149; Metropolitan Lumber Co. v. Lake Superior Ship-Canal etc. Co., 101 Mich. 577, 60 N.W. 278; 20 Am. & Eng. Ency. of Law, p. 942.) The voluntary surrender or cancellation of a defeasance or an instrument in the nature of one, as a general rule, renders the conveyance absolute and vests complete title in the grantee therein. Such a case is an exception to the maxim, "Once a mortgage, always a mortgage." (Green v. Bulter, 26 Cal. 595; West v. Reed, 55 Ill. 242; Trull v. Skinner, 17 Pick. 213; Vennum v. Babcock, 13 Iowa 194; Marshal v. Stewart, 17 Ohio 356; Seawell v. Hendricks, 4 Okla. 435, 46 P. 557; Stall v. Jones, 47 Neb. 706, 66 N.W. 653; Carpenter v. Carpenter, 70 Ill. 457; Shubert v. Stanley, 52 Ind. 46; Niggeler v. Maurin, 34 Minn. 118, 24 N.W. 369; Bazemore v. Mullins, 52 Ark....