Hannah v. Vensel

• Decision Date: 15 May 1911
• Citation: 116 P. 115,19 Idaho 796
• Parties: DAVID HANNAH, Respondent, v. W. W. VENSEL, Appellant
• Court: Idaho Supreme Court

116 P. 115

19 Idaho 796

DAVID HANNAH, Respondent, v. W. W. VENSEL, Appellant

Supreme Court of Idaho

May 15, 1911

MORTGAGE ON REAL ESTATE-MORTGAGE CONSTRUED BY THE LAW OF THE SITUS OF THE PROPERTY-ORAL AGREEMENT AFFECTING MORTGAGE-RIGHT OF REDEMPTION-LACHES IN REDEMPTION.

(Syllabus by the court.)

1. Under the statute of this state (sec. 3391, Rev. Codes) every transfer of an interest in real property, other than in trust, made only as security for the performance of another act, is to be deemed a mortgage, and this is true although the conveyance be a deed absolute on its face without defeasance or condition therein expressed.

2. Under the statute of this state and the decisions of the court construing the same, a mortgage, or any contract or instrument made only as security for the payment of a debt merely creates a lien on the real property therein described and leaves the legal title in the mortgagor or grantor, which title can only be divested by judicial sale in a suit or action under and in conformity with the statute.

3. It is a well-established principle of law that every contract in the nature of a deed, mortgage or encumbrance affecting real property, is subject exclusively to the laws of the state or government within whose jurisdiction the real property is situated, and should be construed and interpreted in the light of the laws of the jurisdiction where the property is located.

4. Where a deed to real estate, absolute on its face, has been executed as security for the payment of a debt, and an action is thereafter instituted by the grantor to have the same declared a mortgage, a memorandum made by a third party as to the terms of a conversation had between the grantor and grantee subsequent to the maturity of the debt, whereby it is claimed that they mutually agreed that the debt should be canceled and that the conveyance should be held to pass the title to the property, is inadmissible to prove the passing of title.

5. Where a deed, absolute on its face, has been executed to secure the payment of a debt, and it is clearly and satisfactorily established that the instrument was intended only as security and that it is, therefore, only a mortgage the title to the property remained in the grantor, and under sec. 3385, Rev. Codes, every person having an interest in such property has a right to redeem it from the lien at any time after the claim is due and before his right of redemption is foreclosed.

6. Under the facts of this case and the law applicable thereto held that the plaintiff was not barred by his laches from prosecuting his action and obtaining the relief sought.

APPEAL from the District Court of the Seventh Judicial District, for Canyon County. Hon. Ed. L. Bryan, Judge.

Action praying for a decree declaring a deed absolute on its face to be a mortgage only, and as having been given as security for the payment of a debt. Judgment for the plaintiff and the defendant appealed. Modified and affirmed.

Judgment modified, and cause remanded, with direction. Costs of appeal awarded in favor of respondent.

Hawley, Puckett & Hawley, for Appellant.

The course of judicial proceedings or the time when the action must be commenced are covered by the lex fori. (F. Cases No. 10,260; Scudder v. Union Nat. Bank, 91 U.S. 414, 23 L.Ed. 245.)

The evidence in this case clearly shows that the transaction took place in the city of Pittsburg, Pennsylvania, where both of the parties hereto were residing and where the deed and alleged defeasance were made and executed, which makes it clearly a Pennsylvania contract and transaction, and especially the validity of the alleged defeasance must depend upon the laws of that state. (Andrews v. Torrey, 14 N.J. Eq. 357; De Wolf v. Johnson, 10 Wheat. (U.S.) 367, 6 L.Ed. 343; Cubbedge v. Napier, 62 Ala. 522; Goodrich v. Williams, 50 Ga. 425; Eastwood v. Kennedy, 44 Md. 572; Chase v. Dow, 47 N.H. 406; Shipman v. Bailey, 20 W.Va. 144; Newman v. Kershaw, 10 Wis. 343.)

The law of the place where the contract is entered into at the time of making the same is as much a part of the contract as though it were expressed therein. (Parsel v. Barnes, 25 Ark. 261; Sterrett v. Sweeney, 15 Idaho 424, 128 Am. St. 68, 98 P. 418, 20 L. R. A., N. S., 963; Mitchell v. Doggett, 1 Idaho 356; Talbot v. Merchants' Dispatch, 41 Iowa 247, 20 Am. Rep. 589; Collins v. Collins, 79 Ky. 88; Moale v. Baltimore, 56 Md. 496; Carter v. Cox, 44 Miss. 148; Parks v. Conn. Fire Ins. Co., 26 Mo.App. 511; 9 Cyc. 583; Pritchard v. Norton, 106 U.S. 124, 1 S.Ct. 102, 27 L.Ed. 104.)

Where plaintiff sets up that the deed was intended as a mortgage, he must show an offer to redeem before he can be entitled to ruling in equity, or deprive the defendant of his right of possession under the deed. (Hughes v. Davis, 40 Cal. 117.)

If the transaction is construed under the laws of Idaho and is held to be a mortgage, should the plaintiff prevail in this action in view of his laches, which are undisputed, by sitting quietly by and not asserting any right to redeem or to a reconveyance for a period of time of more than ten years? (Ryan v. Woodin, 9 Idaho 528, 75 P. 261; Bradley v. Johnson, 11 Idaho 689, 83 P. 927; Godden v. Kimmell, Admr., 99 U.S. 201, 25 L.Ed. 431; Badger v. Badger, 2 Wall. (U.S.) 87, 17 L.Ed. 836.)

Admitting for the sake of argument that the deed in this case amounts in all equity to a mortgage; yet, if afterward the parties agreed thereto, it may lose its character as an equitable mortgage and become what it purports to be--an unconditional conveyance. (Carpenter v. Carpenter, 70 Ill. 457.)

Rice, Thompson & Buckner, for Respondent.

The validity of a mortgage of real estate and its construction and effect are to be tested and determined by the laws of the state where the mortgaged property is situated, although the mortgage itself is executed and the parties reside in another state. (27 Cyc. 975; Post v. Bank, 138 Ill. 559, 28 N.E. 978; Commercial Bank etc. v. Jackson, 7 S.D. 135, 63 N.W. 548; 3 Am. & Eng. Enc. Law, 563, 567, 662; Jones, Mortg., secs. 661, 823; Otis v. Gregory, 111 Ind. 504, 13 N.E. 39; Brown v. Bank, 44 Ohio St. 269, 6 N.E. 648; Post v. Bank, 138 Ill. 559, 28 N.E. 978; U. S. v. Crosby, 7 Cranch (U.S.), 115, 3 L.Ed. 287; U. S. v. Fox, 94 U.S. 320, 24 L.Ed. 192; Bowdle v. Jencks, 18 S.D. 80, 99 N.W. 98; Morris v. Linton, 61 Neb. 537, 85 N.W. 565; McCormick v. Sullivant, 23 U.S. 192, 6 L.Ed. 300; Richardson v. DeGiverville, 107 Mo. 422, 28 Am. St. 426, 17 S.W. 974; Manton v. Seiberling & Co., 107 Iowa 534, 78 N.W. 194; Washburn v. Van Steenwyk, 32 Minn. 326, 20 N.W. 324; Brine v. Hartford Fire Ins. Co., 96 U.S. 627, 24 L.Ed. 859; Loving v. Pairo, 10 Iowa 282, 77 Am. Dec. 109; Fessenden v. Taft, 65 N.H. 39, 17 A. 713; Conradt v. Lepper, 13 Wyo. 473, 81 P. 307, 82 P. 2.)

If the laws of the state of Idaho apply in this case, and the evidence shows that the deed was given as security for a loan, the instrument is a mortgage. (Brown v. Bryan, 6 Idaho 1, 51 P. 995; Thompson v. Burns, 15 Idaho 572, 99 P. 111; 27 Cyc. 720, 991; Hall v. Arnott, 80 Cal. 348, 22 P. 200; 3 Pomeroy's Eq. Jur., sec. 1192; Kelly v. Leachman, 3 Idaho 392, 29 P. 849; Byrne v. Hudson, 127 Cal. 254, 59 P. 597; Smith v. Smith, 80 Cal. 323, 21 P. 4, 22 P. 186, 549; Reilly v. Cullen, 159 Mo. 322, 60 S.W. 126.)

If such an agreement as is alleged had ever been made, it would not, under our statutes, change the mortgage into a deed. The statutes provide the way to divest the mortgagor of his title, and he cannot be divested in any other way. (Ullman v. Devereux, 46 Tex. Civ. App. 459, 102 S.W. 1163; Keller v. Kirby, 34 Tex. Civ. App. 404, 79 S.W. 82; Lynch v. Ryan, 132 Wis. 271, 111 N.W. 707, 112 N.W. 427.)

AILSHIE, Presiding J. Sullivan, J., concurs.

OPINION

AILSHIE, Presiding J.

This action was instituted by the plaintiff to have a certain conveyance, appearing on its face as a deed, decreed to be a mortgage only. The conveyance was executed on or about the 25th of November, 1893, in the state of Pennsylvania, and it is admitted and conceded that it was given as security for the payment of a loan of $ 1,000. It was understood at the time of the execution of the deed of conveyance that upon payment of the principal and interest, the defendant would redeed the property to the plaintiff. The defeasance, however, was never reduced to writing as required by the laws of Pennsylvania. The property conveyed was situated in Canyon county in this state, and the deed was recorded in the recorder's office of that county on the 23d of April, 1894. The debt was never paid, and the matter was allowed to run along until about July 1, 1898, when the parties had a conversation over the matter, and the plaintiff advised defendant that he was unable to pay the debt at that time, and it is claimed by the defendant that it was then agreed and understood that the deed should be allowed to stand as an absolute and unqualified conveyance of the property and that the plaintiff would make no further claim to the property. The defendant paid the taxes on the property from about the year 1898 until the commencement of this action. The defendant pleaded the statute of Pennsylvania, and claimed that under that statute the title had vested absolutely and unqualifiedly in defendant and that the plaintiff had no right of redemption. The trial court heard the matter and rendered and entered judgment in favor of the plaintiff and against the defendant, and the defendant prosecutes this appeal.

The first question urged by appellant is that this contract should be tested and construed by the law of Pennsylvania the state where the contract was made and executed. The respondent, on the other hand, contends that the deed or mortgage must be tested...