Johnson v. Johnson

• Decision Date: 23 April 1945
• Citation: 183 Va. 892,33 S.E.2d. 784
• Parties: JOHNSON. v. JOHNSON et al.
• Court: Virginia Supreme Court

33 S.E.2d. 784

183 Va. 892

JOHNSON.

v.JOHNSON et al.

Supreme Court of Appeals of Virginia.

April 23, 1945.

Appeal from Circuit Court, Accomack County; Jefferson F. Walter, Judge.

Proceeding by Virginia A. Johnson and others against Vernon L. Johnson to have a deed declared to be a mortgage, and for an accounting and other relief. From a decree for plaintiffs, defendant appeals.

Decree amended, and as amended, affirmed and remanded.

Before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, EGGLESTON, and SPRATLEY, J J.

Stewart K. Powell and George L. Doughty, both of Onancock, for appellant.

B. T. Gunter, Jr., of Accomac, and J. Brooks Mapp,. of Keller, for appellees.

SPRATLEY, Justice.

This is a proceeding to have a deed, absolute on its face, with contemporaneous agreement or option for re-purchase by grantors, declared to be a mortgage. From a decree in favor of the plaintiffs, the defendant, Vernon L. Johnson, appeals. The questions presented are purely legal, there being little or no conflict in the evidence.

On February 17, 1932, Sollie E. Johnson and Virginia A. Johnson, his wife, executed a deed of bargain and sale, absolute on its face, conveying three parcels of realestate situated in the town of Chincoteague, Virginia, to Vernon L. Johnson, in consideration of the recited sum of $15,000. On that same day, and contemporaneously therewith, the following agreement was made and executed between Sollie and his wife and Vernon and his wife:

"This Agreement made this 17th day of February, A.D, 1932, between Vernon L. Johnson and Rush E. Johnson, his wife, parties of the first part, and Sollie E. Johnson, party of the second part, all of the County of Accomack, State of Virginia.

"Witnesseth: That in consideration of certain conveyances this day made between Sollie E. Johnson and Vernon L. Johnson, the said Vernon L. Johnson, and Rush E. Johnson, his wife, agree to reconvey at any time within ten years from the date of this contract the real estate situate on Chincoteague Island, Virginia, this day conveyed to the said Vernon L. Johnson by Sollie E. Johnson and wife, upon the payment to the said Vernon L. Johnson of whatever sum or sums of money it has been necessary for the said Vernon L. Johnson to expend in and about the property, including any indebtedness of the said Sollie E. Johnson, paid by the said Vernon L. Johnson or which he is liable to pay.

"And it is further agreed that if within the ten years heretofore mentioned, the said Vernon L. Johnson and wife convey back to the said Sollie E. Johnson the property hereinbefore described, the said Vernon L. Johnson is to retain out of said conveyance one of the building lots in the rear of the filling station, free of all costs and charges to the said Vernon L. Johnson.

"This contract is executed in duplicate. "Witness the following signatures and seals:

"Vernon L. Johnson (Seal)

"Sollie E. Johnson (Seal)"

Sollie Johnson died intestate, November 21, 1936, leaving surviving him his widow, Virginia A. Johnson and three children. Mrs. Johnson qualified as administratrix of his estate. Mrs. Johnson, in her own right, and as administratrix, and her three daughters instituted this proceeding against Vernon Johnson, the Bank of Chincoteague, Inc., and George L. Doughty, trustee, defendants, on February 13, 1942.

The bill of the plaintiffs, after setting out the deed of bargain and sale and contract of February 17, 1932, alleged that Vernon held title to one of the parcels of real estate described in the deed; the other two parcels having been sold and conveyed by a special commissioner on October 26, 1932, by virtue of proceedings in a chancery suit which had been instituted prior to February 17, 1932, and was still pending in the Circuit Court of Accomack County, the proceeds from the sale having been applied on indebtedness of Sollie which was secured by a deed of trust on his property at the time it was conveyed to Vernon; that on February 17, 1932, Vernon and his wife conveyed to trustees the three parcels of real estate which had on that day been conveyed to Vernon by Sollie, along with two oilier parcels of real estate owned by Vernon, in trust to secure the Bank of Chincoteague, Inc., certain bonds of Vernon amounting to $13,068.99 with interest; that there was a balance due on said deed of trust of $1200; that on September 26, 1941, plaintiffs, by their counsel, made a written request of Vernon for an itemized statement of the amount due by them to Vernon, pursuant to the terms of the agreement of February 17, 1932, in order that they might pay to him the amount properly due him, and that he might, in turn, reconvey to them the specified real estate then standing in his name.

The bill further alleged, that after a lapse of considerable time, a "purported" itemized statement of the amount due Vernon was furnished by his counsel to the complainants, but that the statement did not correctly show the charges properly due by the estate of Sollie nor the credits to which that estate was entitled, and gave no credit for rents collected by Vernon from the real estate or credit for the use and occupation by Vernon of a portion of the property; that plaintiff's did not know and were unable to ascertain from Vernon, or from any other source, the amount necessary to redeem the real estate-pursuant to their contract, but that as soon as a correct amount was furnished them they were ready, willing and anxious to pay that amount and have the real estate conveyed to them; and that unless plaintiffs were given credit for all rents collected by Vernon and with a fair and reasonable allowance for the use and occupation by Vernon of a portion of the property, they were unable and unwilling to redeem the real estate because such rents amounted to more than it was then worth.

The plaintiffs prayed for an accounting to determine the amount properly due in order to redeem; that Vernon be required to give full credit for all rents and profits of the real estate; that the property be decreed to be conveyed to the plaintiffs upon the payment of the amount found by the court to be properly due; that all liens against the real estate be ascertained in the order of their priority, and for general relief.

The Bank of Chincoteague, Inc., answering, asserted a balance of $1200 due on its lien indebtedness.

Vernon Johnson demurred to the bill on the grounds that it failed to show in its face that the plaintiffs were ready, able and willing to comply with the terms and provisions of the contract, and did not contain a statement of facts which would entitle them to a credit for the rents and profits of the real estate.

The Chancellor, the.late John W. Nottingham, overruled the demurrer.

In this court it was further argued that the bill failed to specifically allege that the deed and agreement constituted a mortgage and showed that the plaintiffs made the exercise of the option in the agreement conditional upon the allowance of the rents claimed.

Vernon Johnson filed his answer, alleging that he had furnished a correct itemized statement to the plaintiffs, and denying that any of the rents collected by him should be credited against the expenditures made by him, or that he should be charged with any rent for his personal use and occupation of the property.

The trial court then referred the cause to a commissioner to ascertain and report the following matters:

"1. Whether or not all parties in interest are properly before the Court.

"2. The amount now properly due by complainants to the defendant, Vernon L. Johnson, in order to redeem the real estate, together with the buildings thereon described in the papers in this cause.

"3. The liens, including taxes against said real estate.

"4. All rents collected by said Vernon L. Johnson since February 17, 1932, from the real estate described in the papers in this cause, together with the parties from whom collected, and the dates and amounts of said collections.

"5. The rent, if any, due by said Vernon L. Johnson for any part of the real estate described in this cause occupied by him since February 17, 1932, together with a statement showing from what date said rent should draw interest.

"6. Whether or not the plaintiffs are entitled to be credited with all of the rents above referred to."

The following evidence was produced before the commissioner:

Early in 1932 Sollie E. Johnson found himself in straitened financial circumstances and unable to pay his debts. He owned three certain pieces or parcels of real estate situated in the town of Chincoteague, Virginia. This real estate was encumbered by a deed of trust securing $12,000 and a mechanic's lien for $1,100. In addition Sollie was largely indebted to his brother, Vernon, and to other creditors in various amounts. A suit was pending to subject his property to the mechanic's lien; default having been made in the payment of the $12,000 debt due the Bank of Chincoteague, Virginia, the bank requested the trustee in the deed of trust securing same to advertise and sell the property. The property was advertised to be sold at Chincoteague on February 17, 1932. When the trustee, on that day, arrived at that place for the purpose of making the sale he was advised that arrangements had been made to take care of the loan and to handle the property without exposing it to sale. On that same day, Sollie E. Johnson and wife conveyed the three parcels of land to Vernon and contemporaneously therewith the agreement hereinbefore set out was entered into.

There was due by Sollie Johnson to the Bank of Chincoteague on February 17, 1932, $12,000 and interest thereon of $1,068.99, a total of $13,168.99. On that day, Vernon Johnson and his wife conveyed to trustees the three parcels of land which he secured from Sollie and two parcels of his own land, one located in Accomack county, Virginia, and the other in Maryland, to secure to the Bank of Chincoteague the sum of $13,168.99 the exact amount of Sollie's...