Hill v. Daugherty, 6871

Decision Date18 July 1941
Docket Number6871
Citation115 P.2d 759,63 Idaho 12
PartiesLESTER HILL--formerly OTTO D. BURNS as Trustee for LESTER HILL, Appellant, v. L. H. DAUGHERTY, BERTHA B. KLOPHER, ANNA GERTRUDE JOHNSON, SARAH GRACE BLECK, JESSIE LEWIS DAUGHERTY, FRANK PAYNER DAUGHERTY, INEZ HESTER MACKAY and the FARMERS BANK OF KENDRICK, IDAHO, Respondents
CourtIdaho Supreme Court

MORTGAGES-ACTION TO DECLARE A DEED A MORTGAGE-PROOF.

1. A grantor seeking to show that an absolute conveyance is not what it naturally purports to be has the burden of making strict proof of that fact, and slight and indefinite evidence should not be permitted to change the character of a transaction given the form of a bargain and sale.

2. An instrument absolutely conveying realty stands as the clearly ascertained intention of the parties which must be enforced unless it is shown by convincing evidence that the instrument was delivered and accepted under a different mutual intention.

3. One who seeks to prove that an instrument which purports on its face to be an absolute conveyance of title is in fact a mortgage must do so by clear, satisfactory, and convincing proof.

4. Evidence supported trial court's finding that deed executed and delivered by plaintiff's deceased father conveying a farm to defendant was an absolute and unconditional deed of conveyance vesting fee-simple title in defendant, and was not made security for any indebtedness.

APPEAL from the District Court of the Tenth Judicial District, for Nez Perce County. Hon. A. L. Morgan, Judge.

Action to have a deed declared a mortgage; and for an accounting. Judgment for defendants. Plaintiff appeals. Affirmed.

Judgment affirmed. Costs to respondents.

Thomas A. Madden, for Appellant.

Appellant's exhibit 1 and 2, on their face, show and establish that exhibit 2 secures the payment on exhibit 1, and, being a mortgage in form and contractural obligation, cannot be changed or contradicted by parol testimony or by parol agreement. (Voss vs. Eller, 10 N.E. 74; Adams vs. Bateman, 29 S.W. 1124; Jones on Mortgages, 4th ed Sec. 277, p. 190; Keller vs. Kirby, 79 S.W. 82; Hannah vs. Vensel, 19 Idaho 796; Luse vs Rea, 207 S.W. 942; Pollock vs. Millsap, 122 So. 15.)

Verner R. Clements, for Respondents.

To justify a trial court in determining that a deed which purposes to convey land absolutely in fee simple was intended to be something different, as a mortgage, the authorities are uniform to the point that the evidence must be clear satisfactory and convincing and that it must appear to the court beyond reasonable controversy that it was the intention of the parties that the deed should be a mortgage. (Hagan v. Clyde, 60 Idaho 785; Shaner v. Rathdrum State Bank, 29 Idaho 576; Clinton v. Utah Construction Company, 40 Idaho 659; Brennan v. Lavendar, 41 Idaho 263; O'Regan v. Henderson, 46 Idaho 761; Morrison v. Pierce, 47 Idaho 430; Parks v. Mulledy, 49 Idaho 546.)

BUDGE, C.J. GIVENS, J., and REED, D.J., concur. HOLDEN and AILSHIE, J.J., dissent. MORGAN, J., deeming himself disqualified, REED, D.J., sat in his place.

OPINION

BUDGE, C.J.

This action was brought originally by Otto D. Burns as trustee for Lester Hill, the only heir of Charles Hill, deceased. Subsequent to the hearing in the lower court Otto D. Burns died and by permission of the trial court, Lester Hill, who is the real party in interest, was substituted as plaintiff. Appellant seeks to have a deed absolute on its face declared a mortgage; and for an accounting. The material facts as disclosed by the record are substantially as follows:

On November 17, 1928, Charles Hill, now deceased, father of appellant, executed a deed absolute on its face conveying a farm, then owned by Hill, consisting of 899.60 acres in Nez Perce County, to respondent L. H. Daugherty, which deed was duly recorded in the office of the county recorder of Nez Perce County on December 4, 1928. In consideration for the deed respondent L. H. Daugherty was to pay an indebtedness of Hill in the sum of $ 10,806.82 to one Thomas; also an indebtedness in the sum of $ 23,421 to Metropolitan Life Insurance Company. Said indebtedness being secured by mortgages upon the aforementioned real property. On December 11, 1928, respondent L. H. Daugherty paid Hill's indebtedness to the above mentioned Thomas, and on December 31, 1928, paid Hill's indebtedness to the Metropolitan Life Insurance Company.

On November 17, 1928, Charles Hill signed a promissory note for $ 33,500 in favor of respondent L. H. Daugherty. On the back of the note was written "Secured by a First Mortgage on 899.60 acres in Nez Perce County." This note, together with other papers hereafter referred to, was delivered to the Farmers Bank of Kendrick, Idaho, as escrow holder, sometime between November 17, 1928 and December 11, 1928, seven days subsequent to the recording of the warranty deed above referred to.

On December 10, 1928, respondent L. H. Daugherty and Charles Hill entered into a written agreement whereby respondent Daugherty agreed to sell the above mentioned real estate to Hill for the sum of $ 33,500 to be paid on or before December 1, 1933 together with interest thereon from November 17, 1928 at the rate of 7% per annum, payable annually on December first of each year during the term of the agreement, which provided, among other things, for a forfeiture of Hill's interest in and to the above mentioned property in the event of a default in its terms and conditions by Hill, and that "said purchase price and indebtedness is further evidenced by a certain promissory note dated at Kendrick, Idaho, on November 17, 1928, for $ 33,500.00 due and payable December 1st, 1933 and bearing interest at 7% per annum payable annually on December 1st of each year during the term of the said note * * * *," and "it is agreed between the parties hereto that possession of said above described real property shall be delivered to the second party (Hill) upon the execution and delivery of this agreement." Hill was to keep the premises insured and in case of loss, payments under the policies were to be made payable to respondent L. H. Daugherty as his interest might appear. Hill was to pay and discharge all taxes "now levied and assessed against said lands or which may hereafter during the term of this contract be levied and assessed against said lands, before delinquency, * * * *."

Time was to be of the essence of the agreement. It being further provided that default on the part of Hill in any of the conditions or covenants contained in the agreement would work a forfeiture thereof after 10 days notice in writing by respondent L. H. Daugherty pointing out such default and demanding performance thereof, and in case of failure on the part of Hill to cure such default within 10 days from the receipt of the notice pointing out such default, lawful possession of the premises was to be delivered to respondent L. H. Daugherty, his agents or attorneys with the right to reenter the same, and Hill was to surrender peaceful possession thereof. Under the terms of the agreement, a warranty deed conveying said lands to Hill, the note for $ 33,500 dated November 17, 1928, the agreement above referred to, together with an abstract of title to the premises above mentioned were to be placed in escrow with the Farmers Bank of Kendrick, Idaho, and upon the payment to the bank, as such escrow holder, by Hill of the principal and interest of the promissory note first above mentioned, "said bank shall deliver said deed, this agreement, said promissory note, and said abstract" to Hill and pay over to respondent L. H. Daugherty the money paid by Hill under the terms of the agreement, and in case of default in the payment of the note and interest or other defaults as provided in the agreement, the bank, as the escrow holder, on demand by respondent L. H. Daugherty was to deliver all of the instrument and papers to Daughterty.

It further appears from the record that Charles Hill and one J. C. Galloway entered into a certain contract on November 15, 1929, containing, among other things, the following recital: "that whereas said party of the first part (Hill) has a contract with one L. H. Daugherty of Leland, Idaho, said contract bearing date of December tenth, 1928, to purchase the following described real estate, * * * * (Then follows a description of the 899.60 acres of land now in controversy.) * * * *, said real estate to be purchased for the sum of $ 33,500 to be paid with interest according to the terms of a certain promissory note dated at Kendrick, Idaho, November seventeenth, 1928, and due December first, 1933; said contract also containing certain other stipulations * * * *."

By the terms of the above agreement Charles Hill during his lifetime and on the date recited in the agreement, acknowledged in writing that respondent L. H ...

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3 cases
  • Gem-Valley Ranches, Inc. v. Small
    • United States
    • Idaho Supreme Court
    • 8 Marzo 1966
    ...evidence in this case meets all such requirements. In its memorandum the court noted the applicable rules announced in Hill v. Daugherty, 63 Idaho 12, 115 P.2d 759 (1941), and in Morrison v. Pierce, 47 Idaho 430, 276 P. 306 (1929), that an instrument of conveyance will be construed and enfo......
  • Gray v. Fraser
    • United States
    • Idaho Supreme Court
    • 11 Marzo 1942
    ... ... (Clinton v. Utah ... Construction Company, 40 Idaho 659; Hagan v ... Clyde, 60 Idaho 785; Hill v. Daugherty,--Idaho--115 P.2d ... GIVENS, ... C. J. Budge, Morgan, Holden, and Ailshie, ... ...
  • Justus v. DeCoursey, 6946
    • United States
    • Idaho Supreme Court
    • 18 Julio 1941

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