Holmberg v. Hardee

• Decision Date: 09 December 1925
• Citation: 108 So. 211,90 Fla. 787
• Parties: HOLMBERG et al. v. HARDEE, Governor, et al.
• Court: Florida Supreme Court

108 So. 211

90 Fla. 787

HOLMBERG et al. v. HARDEE, Governor, et al.

Florida Supreme Court, Division B.

December 9, 1925

Rehearing Denied April 15, 1926.

En Banc.

Suit by J. L. Holmberg and others, executors and trustees of the estate of Richard J. Bolles, deceased, against Cary A Hardee, Governor, and others, Trustees of the Internal Improvement Fund, to have a conveyance declared a mortgage and for other relief. From a decree dismissing the bill complainants appeal.

Affirmed.

On Rehearing.

Syllabus by the Court

SYLLABUS

The question whether a deed which is absolute in form is to be taken as a mortgage depends upon the intention of the parties in regard to it at the time of its execution. This may be ascertained from the paper itself, or the instrument in connection with contemporaneous writings or agreements concerning the subject-matter, or by the aid of extraneous evidence which will determine the decision of the question. The attitude of the parties relative to the conveyance, after its execution, may also be considered.

In order to convert a deed, absolute in its terms, into a mortgage, it is necessary that the understanding and intention of both parties to that effect should be concurrent and the same.

In order for an agreement to reconvey to operate as a defeasance, there must be a debt or obligation secured by the conveyance.

'The existence or nonexistence of a debt is a distinguishing test as to whether a transaction is a conditional sale or a mortgage.' Franklin v. Ayer, 22 Fla. 654.

'A feature essential to a mortgage is an indebtedness which it is designed to secure. The existence of this is not implied in a provision that a bill of sale shall be void if the grantors shall 'pay' a certain sum of money by a certain day. Payment of money does not necessarily imply a previous binding obligation to pay, but may be made as the recompense or equivalent for some present benefit, the procurement of which is optional with the payer.' (Italics supplied.) Smith v. Hope, 35 So. 865, 47 Fla. 295.

'No conveyance can be a mortgage unless made for the purpose of securing a debt or the performance of a duty, either existing at the time of the execution or to be created or to arise in the future.'

'A deed absolute on its face will not be construed as a mortgage where, after its execution, there remains no indebtedness from the grantor to the grantee.' Doying v. Chesebrough brough (N. J. Ch.) 36 A. 893.

'If it is a debt which the grantor is bound to pay, which the grantee might collect by proper proceedings, and for which the deed of the land is to stand as security, the transaction is a mortgage; but if it is entirely optional with the grantor to pay the money and receive a reconveyance or not to do so, he has not the right of a mortgagor, but only a privilege of repurchasing the property.'

'If it appears that the deed was accepted in payment and satisfaction of an existing debt, the agreement for reconveyance on payment of a given sum, cannot convert it into a mortgage.'

'Though a conveyance of land contained a clause that the grantee was to reconvey the land to the grantor upon receiving a certain sum within a specified time, such fact will not affect the construction of the instrument as a deed with an option to purchase, it appearing that repurchase was optional with the grantor, and that the conveyance was made and accepted in payment of an existing debt.' Reed v. Bond, 55 N.W. 619, 96 Mich. 134.

'It is an essential ingredient to constitute a mortgage that both the right to foreclose and the right to redeem should exist they are correlative and inseparable.' Chaires v. Brady, 10 Fla. 133.

There is a test generally accepted as decisive, and this is the mutuality and reciprocity of the remedies of the parties; that is to say, if the grantee enjoys a right reciprocal to that of the grantor to demand reconveyance, personally to compel the latter to pay the consideration named in the stipulation for reconveyance, the transaction is a mortgage, while if he has no such right to compel payment, the transaction is a conditional sale.

Where a mortgagor, for the purpose of settling and canceling the mortgage indebtedness, executes and delivers to the mortgagee a deed conveying the fee-simple title to the mortgaged property, and the mortgagee in consideration thereof acknowledges payment of the indebtedness and cancels and surrenders the promissory notes evidencing the indebtedness, together with the mortgage securing their payment, the fact that in the same instrument, or in another instrument contemporaneous therewith, the vendee agreed that upon the payment of a stipulated sum, within a specified time, he would reconvey the property to the vendor, does not render such deed a mortgage; there being, under such circumstances, no debt or obligation for the payment of money secured by the deed.

Such a transaction as set up in foregoing headnote constitutes the instrument a deed absolute, with an option upon the part of the vendor to repurchase, for the consideration named, and within the time named, or a conditional sale.

Before the appellate court will consider objections to testimony taken before a master in a chancery case, the transcript of the record must show that the objections and the motions concerning the admissibility of the testimony were brought to the attention of the court, and it should also show the rulings of the court on the objections to a motion to strike testimony.

Testimony made incompetent by statute should be disregarded by the trial court and the appellate court.

In the absence of positive showing in the transcript of the record that the chancellor below considered the testimony objected to and claimed to be incompetent under statute, we will not presume that the court below did consider the same.

Where the competent evidence in the record is sufficient to sustain the decree of the court below, it will not be disturbed on appeal because incompetent evidence appears in the record.

Competent parties may establish and terminate mortgage or other contract relations as they desire to do, when no rule of law or of public policy is thereby violated; and neither the law nor public policy forbids competent parties to settle and discharge a pre-existing mortgage indebtedness and to determine the mortgage relation by a conveyance to the mortgagee of the mortgaged property or a part of it in adjustment and settlement of the debt.

The maxim, 'Once a mortgage always a mortgage,' has no application where competent parties have adjusted and settled the mortgage debt and have definitely terminated the mortgage relation.

Under the statutes of this state, a mortgage is a mere lien, and any instrument of writing conveying or selling property for the purpose or with the intention of securing the payment of money is a mortgage.

Where there is a purpose or an intent to secure the payment of money, any instrument conveying or selling property is in law a mortgage without reference to the terms of the instrument, and the purpose and intent to secure the payment of money may be shown by appropriate evidence.

Where an instrument conveying or selling property is executed with intent not to secure the payment of money but to adjust and settle a mortgage debt, which debt is canceled, the instrument is not as matter of law a mortgage, but the terms of the instrument determine its character and effect.

In this case the instrument executed in 'adjustment and settlement' of the mortgage debt was not 'itself a mortgage,' either by its terms and purpose or by operation of law, because the mortgage debt was thereby adjusted, settled, and canceled.

Appeal from Circuit Court, Leon County; E. C. Love, Judge.

COUNSEL

Baker & Baker, of Jacksonville, S. Bryan Jennings, of Sarasota, and George C. Bedell, of Jacksonville, for appellants.

J. B. Johnson, of Tallahassee, for appellees.

By virtue of the Treaty of Cession dated February 22, 1819 ratified by Spain October 24, 1820, and by the United States Senate February 19, 1821, and confirmed by President Monroe on February 22, 1821 (Territorial Laws 1823 pp. 1 to 4), ratifications being exchanged and proclaimed at Washington, D. C., February 22, 1821, the United States in July, 1821, assumed sovereignty of the territories known as East and West Florida (Apalachicola Land & Dev. Co. v. McRae, 98 So. 505, 86 Fla. 393, text 450), and the United States by the treaty received from Spain 'in full property and sovereignty' large areas of high lands and of swamp and overflowed lands in said territories, which lands were retained by the United States when the state of Florida was by act of Congress approved March 3, 1845 (5 Stat. 742) 'admitted into the Union on equal footing with the original states, in all respects whatsoever.' By act of Congress approved September 28, 1850 (9 Stat. 519), the United States granted to the state the whole of the swamp and overflowed lands within the state which then belonged to the United States; the proceeds of said lands, whether from sale or by direct appropriation in kind, to be applied, exclusively, as far as necessary, to the purpose of reclaiming said lands by means of levees and drains. The granting act of Congress made it the duty of the Secretary of Interior, as soon as may be practicable after the passage of the act, to make out accurate lists and plats of the granted lands, and transmit the same to the Governor of the state, and at the request of the Governor, cause a patent to be issued to the state therefor; 'and on that patent, the fee simple to said lands shall vest in the said State, subject to the disposal of the Legislature thereof.' Section 2. See Byrne Realty Co. v. South Florida Farms Co....