Gibbons v. Gibbons

• Decision Date: 24 March 1943
• Docket Number: 6571
• Citation: 135 P.2d 105,103 Utah 266
• Court: Utah Supreme Court
• Parties: GIBBONS v. GIBBONS et al

135 P.2d 105

103 Utah 266

GIBBONS v. GIBBONS et al

No. 6571

Supreme Court of Utah

March 24, 1943

Appeal from District Court, First District, Cache County; Marriner M. Morrison, Judge.

Action by Edward J. Gibbons as administrator with the will annexed of the estate of Mercy W. Gibbons, deceased, against William S. Gibbons and another, to have a deed from deceased to named defendant declared a mortgage. Judgment for defendants, and plaintiff appeals.

Affirmed.

Leon Fonnesbeck, of Logan, for appellant.

H. A Sjostrom, of Logan, for respondents.

LARSON Justice. MOFFAT and WADE, JJ., WOLFE, Chief Justice McDONOUGH, Justice, concurring.

OPINION

LARSON, Justice.

An appeal from the District Court of Cache County involving the construction of a written instrument. Plaintiff, as administrator of the estate of Mercy W. Gibbons deceased brought this action against defendants to have a warranty deed executed by deceased to defendant William S. Gibbons declared a mortgage. The deed, fair and regular on its face, and in proper form was executed by the deceased on February 27, 1933, conveying certain real property in Logan City, Cache County, Utah. This deed was delivered and recorded. At the time of the execution of the deed a written agreement was executed between the deceased and defendant William S. Gibbons. Thus, construction of this agreement, with the deed, presents the only questions involved in this action. Plaintiff argues that the agreements construed with the deed, constitutes a mortgage. Defendants contend the instruments show a sale. The trial court held the deed to be a conveyance, not a mortgage. Plaintiff appeals. For clarity of understanding we set out the agreement, omitting the description of the land:

"Agreement"

"This Agreement, Made and entered into at Logan, Cache County, State of Utah, this 27th day of February, 1933, by and between William S. Gibbons, of Logan, Cache County, State of Utah, hereinafter called the party of the first part, and Mercy W. Gibbons, of Logan, Cache County, State of Utah, hereinafter called the party of the second part, Witnesseth:

"That Whereas, The said party of the second part has this day conveyed to William S. Gibbons, the party of the first part, by warranty deed, for the consideration therein set forth, reserving therein a life estate to the party of the second part, for the following described property in Logan City, Cache County, State of Utah, to wit:

* * * *

"And Whereas, it is desirous to invest the title to the property above described in William S. Gibbons, party of the first part, subject to the life estate of the party of the second part for the following purposes, to wit:

"First. To pay the indebtedness incurred through the funeral expenses of Joseph Gibbons, Senior amounting to the sum of Two Hundred Four and 50-100 ($ 204.50) Dollars,

"Second. To pay the cost of preparing deed, agreement, revenue filing fees and abstract of title amounting to the sum of thirty-nine, and 50-100 ($ 39.50) Dollars, making a total indebtedness due said William S. Gibbons of the sum of Two Hundred Forty Four and no-100 ($ 244.00) Dollars, which said total amount shall bear interest at the rate of seven per cent per annum payable annually.

"It is mutually understood and agreed by and between the parties to this agreement that the said party of the second part is to remain in full possession of the premises during her lifetime and agrees to pay all taxes and assessments that may now be due or to become due against the said premises, and agrees that if the same are not paid when due the said party of the first part may at his option pay the same and add the amount thereof to the indebtedness against the said property and all such amounts with interest thereon at the rate of eight per cent per annum shall be deemed a valid lien against the said premises.

"It is further understood and agreed that any other amounts advanced by the party of the first part by mutual consent of both parties to this agreement shall be deemed a valid lien against the said property.

"It is further understood and agreed that within a period of sixty days after the death of the party of the second part the said property shall be advertised for sale at either public or private sale and any heir of the party of the second part shall have the right to bid on said property and the same shall be sold to the highest and best bidder for cash.

"It is further understood and agreed that upon the completion of said sale the said party of the first part shall be paid all amounts justly due him with interest thereon as herein provided, the remainder, if any, shall be distributed equally among all of the heirs of the part of the second part."

Does this agreement constitute the deed a mortgage? No evidence was taken on this question except the written agreement pleaded and admitted and its construction was submitted to the court as a matter of law.

The recitals in the agreement which it is contended show the deed a mortgage are: The title was invested in defendants "for the following purposes, to wit:" to pay certain indebtedness specified in paragraphs First and Second, amounting to two hundred forty four dollars, with interest and any subsequent amounts advanced by defendants to the grantor. Also the fact that the grantor was entitled to and did remain in possession, and was obligated to pay all taxes and assessments against the property. That these recitals are such as tend to indicate that the conveyance may have been intended as security and therefore a mortgage may be admitted. Continued possession by the grantor without paying rent is an element to be considered when it is sought to show a deed was in fact a mortgage. Ely v. Coreil, 166 La. 153, 116 So. 834; Ellis v. Purnell, 167 Md. 687, 176 A. 270; Selik v. Goldman Realty Co., 240 Mich. 612, 216 N.W. 422; Azzalia v. St. Claire, 23 Utah 401, 64 P. 1106; Prefumo v. Russell, 148 Cal. 451, 83 P. 810. Alone the fact is not conclusive, and may be rebutted. Likewise continued payment of taxes by the grantor is an element that with others may lead to the conclusion the deed was a mortgage. Wallace v. Greenman, 321 Ill. 423, 152 N.E. 137; Chicago Joint Stock Land Bank v. O'Connor, 354 Ill. 207, 187 N.E. 918; Mayberry v. Clark, 317 Mo. 442, 297 S.W. 39. But these provisions while by themselves tending to show a mortgage relationship must be construed in the light of, and in connection with the other provisions of the agreement.

The recital in the agreement tending to show the transaction was a conveyance subject to a trust and not security for a debt are: That the conveyance had been made by warranty deed for the consideration set forth in the deed; that the grantor had reserved to herself a life estate; a recital that title was invested in defendant "subject to the life estate" of the grantor; that the conveyance was made "to pay the indebtedness"; agreement recites that grantor was to remain in possession during her lifetime; the agreement provides that at expiration of life estate, grantee sell the property by advertised sale, and directs the disposition he must make of the proceeds. (Italics added.)

It seems clear the owner cannot create in himself a life estate while he also holds the fee simple title. The continued possession of the grantor is evidence tending to show a mortgage, but that inference does not stand where as here she by written agreement retains possession under a life estate which has implicit in it the thought that she is not in possession as equitable owner of the fee. It is well established that to be a mortgage, it must be given to secure the performance of an obligation, not in satisfaction of an obligation. 41 C. J. p. 287; also p. 333; also p. 335 and cases cited. Monagas v. Albertucci y Alvarez, 235 U.S. 81, 35 S.Ct. 95, 59 L.Ed. 139; Burke v. Murphy, 275 Mo. 397, 205 S.W. 32; Gassert v. Bogk, 7 Mont. 585, 19 P. 281, 1 L. R. A. 240. Wiltsie on Mortgage Foreclosure, 5th Ed., Vol. 1, p. 42. Dickens v. Heston, 53 Idaho 91, 21 P.2d 905, 90 A. L. R. 944; Gibson v. Morris State Bank, 49 Mont. 60, 140...