John Morrison v. McLeod

• Decision Date: 30 June 1839
• Citation: 2 Dev. 221,22 N.C. 221
• Parties: JOHN MORRISON et. al. Adm'rs. of BENJAMIN PERSON, v. NIEL McLEOD.NIEL McLEOD v. JOHN MORRISON et al. Adm'rs. of BENJAMIN PERSON.
• Court: North Carolina Supreme Court

2 Dev. & Bat.Eq. 221

22 N.C. 221

JOHN MORRISON et. al. Adm'rs. of BENJAMIN PERSON,

v.NIEL McLEOD.NIEL McLEOD

v.JOHN MORRISON et al. Adm'rs. of BENJAMIN PERSON.

Supreme Court of North Carolina.

June Term, 1839.

If one, in whom a drunken man confides, takes advantage of that confidence and obtains from him an absolute conveyance for land, at an undervalue, with a special engagement for a re-sale and re-conveyance, upon hard and unreasonable terms, the contract will be set aside, and a re-conveyance decreed, upon the re-payment of the amount really due from the vendor to the vendee.

Where an absolute conveyance was made of land worth $3,000, for the expressed consideration of $2,000 then paid, but in fact only $500 was paid in cash, and the vendee's note given for the payment of the balance in four annual instalments without interest, and at the same time the vendee executed to the vendor an instrument in the form of a bond in the penal sum of $500 only, for the re-conveyance of the land upon the payment by the vendor to the vendee of the said sum of $2,000, with interest thereon from the date, at any time with three years; and that the former and his family might retain possession during the three years of so much of said land as might be necessary for them to cultivate; and just before the expiration of the three years, the parties executed auother instrument in relation to said land, in which it was agreed, among other things, that the vendor might remain in possession one year longer, and that during that period, both parties, by mutual consent, would be permitted to sell saidl and; and if it should not be sold before the end of that time, “then one of the parties should sell his interest in said land to the other:” It was held, that the conveyance, though absolute in form, was intended by the parties to be but a security for the re-payment of money advanced, or to be advanced by the vendee to the vendor; and that the latter, upon the re-payment of the sum really due from him to the former, should be permitted to redeem the land.

John Morrison and Colin A. Munroe and wife, as the administrators of Benjamin Person, deceased, in March, 1832, filed their bill of complaint against Neil McLeod, setting forth that the latter had obtained a judgment against them for $1,000, principal money, besides interest, on bonds of their intestate; that they had obtained judgments against said McLeod for six or seven hundred dollars, and were then prosecuting a suit against him, in which they expected to obtain a judgment; alleging that it had been agreed between said McLeod and themselves, that they should mutually forbear from issuing executions on their respective judgments, until the pending suit should be decided; and that, when it should be decided, the parties should set off their respective judgments against each other, and only the balance then remaining due on either side should be collected; complaining that McLeod, in violation of this agreement, had sued out execution on his judgment; charging that the said McLeod was in embarrassed circumstances, and that if he should be permitted to collect his judgment, it was very doubtful whether the plaintiffs would be able to collect theirs; and praying for an injunction and for general relief. Upon the filing of this bill, an injunction was ordered as prayed for. The defendant, in September, 1832, answered the bill, and therein denied that he had ever made the agreement charged against him in the bill; and further set forth, that some time in the year 1823, he executed to the late Benjamin Person a deed for the conveyance of a tract of land, for the consideration of $2,000, and the said Person gave him a bond to operate as a defeazance, on re-payment of the purchase money; a copy of which bond was annexed and referred to in the answer; that in truth the consideration was not paid at all, but the said Person gave the defendant his two notes for $500 each, being the same which the defendant had prosecuted to judgment, and two others of $250 each, and promised to let the defendant have the balance of $500 in sums as he should need it; that the said Benjamin afterwards prevailed on the defendant to surrender the two notes of $250 each, on a vague allegation that the accounts and claims, which he had against the defendant, were more than sufficient to extinguish these, besides paying the $500, for which no note had been taken; that the defendant blindly confided in Person's representations and in his promises that defendant should be credited for the amount of these notes, and that, at a convenient time, a full settlement should be made of all their dealings. The defendant further stated, that he never could get Person to come to this settlement; and that, with a view to coerce it, he instituted his action against Person on the two $500 notes; which action, after Person's death, was carried on against his administrators; averred that the claims upon which the administrators of Person had sued him, all of which claims, at the time of rendering the answer, were reduced to judgments, were in truth discharged by the surrender of the two $250 notes, or covered by the promise of Person to advance $500, as the same might be wanted; alleged besides, that in conscience the land conveyed was but a security for the amount, whatever it might be, which Person had actually advanced to him; that nevertheless, Person had taken possession of the land in 1827, as absolutely his, and had held the same ever since, making large profits thereon; that the said land was worth $3,000 or $4,000, and declared the defendant's purpose to file a bill to redeem the land and to have a full settlement.

In August, 1833, McLeod filed his cross-bill against the administrators of Person, to which the heirs at law of Person were also made defendants. Therein it was charged, that on the 14th of May, 1823, the complainant was seized of a tract of land situate in the county of Moore, worth upwards of $3,000; that he had theretofore been in the habit, whenever he visited the village of Carthage, the county town of said county, of taking up his residence with Benjamin Person, who kept a tavern there; that the complainant had an unfortunate propensity for drinking to excess, which was greatly strengthened by the facilities thrown in the way of its indulgence by the said Benjamin; that the complainant's intellect had become enfeebled by age and drunkenness, and his confidence in the said Benjamin, who was a keen, shrewd man, had become almost unlimited; that he owed Person an account; that he wanted money to meet some exigency and to pay off sundry small debts to different persons, and applied to the said Benjamin therefor, who expressed a perfect readiness to make any advances needed, if the payment of his account, and the re-payment of the money to be advanced were secured by a mortgage on the said tract of land; that the complainant yielded his assent to whatever arrangements his supposed friend should think right for that purpose; and that, accordingly, certain instruments in writing, were, on the day aforesaid, executed between them, which had been devised by the said Benjamin, under the pretence of carrying that purpose into execution; but as complainant believed, with the design of cheating him out of the land. The instruments thus executed, were a deed of bargain and sale from the complainant to the said Person, whereby, in consideration of the sum of $2000 therein acknowledged to have been paid, by the said Person, the complainant conveyed the tract aforesaid to the said Benjamin, in fee simple. There was also an instrument of the same date, executed by Person, in the nature of a defeazance, whereby it was testified, that on re-payment of the said sum, with interest, at any time within three years thereafter, by the complainant, to the said Person, the land should be re-conveyed. It was charged, that in fact, and notwithstanding the declaration in the deed, no money whatever was actually paid to the complainant at the time, or ever afterwards; but it was understood, that he was to have a credit of five hundred dollars with Person, on account of what complainant then owed him, or might owe by reason of advances of money to or for the complainant; and Person executed four notes to the complainant, two for $500, and two for $250 each. The complainant further charged, that some time thereafter, Person prevailed on him to surrender the two latter notes, on an allegation that he had paid moneys for the complainant, to such an amount, as would, when added to his account, extinguish the said notes; and on a promise, to have the matters between them, fairly stated in his books, and to furnish the complainant with a full...