Largilliere v. Zavala

• Decision Date: 07 October 1924
• Citation: 39 Idaho 759,230 P. 774
• Parties: AUGUST LARGILLIERE and EDGAR W. LARGILLIERE, Respondents, v. MODESTO ZAVALA and LEONA ZAVALA, Appellants
• Court: Idaho Supreme Court

230 P. 774

39 Idaho 759

AUGUST LARGILLIERE and EDGAR W. LARGILLIERE, Respondents, v. MODESTO ZAVALA and LEONA ZAVALA, Appellants

Supreme Court of Idaho

October 7, 1924

DEED-CONTRACT OF SALE-MORTGAGE.

A written instrument in the form of a deed will be held to be a mortgage where it was executed and delivered as security for a debt.

APPEAL from the District Court of the Fifth Judicial District, for Bear Lake County. Hon. O. R. Baum, Judge.

Action for the recovery of real property. Judgment for plaintiffs. Reversed.

Judgment reversed, with instructions. Costs to appellants. Petition for rehearing denied.

J. M Stevens, C. E. Melvin and N.E. Snell, for Appellants.

The form of the conveyance is not controlling and parol evidence is admissible to show what the real agreement was. The declarations of the parties at the time and subsequently are also admissible to determine what the real intention was. (Miller v. Smith, 20 N.D. 96, 126 N.W. 499.)

Where a deed absolute in form is accompanied by a contract or agreement by which the grantee undertakes to reconvey on specified conditions, and the agreement renders it doubtful whether a mortgage or conditional sale was intended, the court will hold the deed and contract a mortgage. (Fort v. Colby, 165 Iowa 95, 144 N.W. 393.)

An instrument purporting to be an absolute conveyance of real estate, but intended to be defeasible or as a security for the payment of money, is deemed a mortgage, and must be recorded and foreclosed as such. (Williams v Purcell, 45 Okla. 489, 145 P. 1151; Worley v. Carter, 30 Okla. 642, 121 P. 669.)

Whether a deed absolute on its face was intended as a mortgage depends on the intention of the parties as determined from a consideration of the circumstances, the pecuniary relation of the parties, their previous negotiations, their contemporaneous acts and declarations, and subsequent acts and admissions. (Elliott v. Bozorth, 52 Ore. 391, 97 P. 632; Abercrombie v. Carpenter, 150 Ala. 294, 43 So. 746; Sebree v. Thompson (Ky.), 104 S.W. 781.)

R. J Dygert, for Respondents.

The question whether the parties intended the deed to be a mortgage or absolute conveyance is a question of fact, and where there is a substantial conflict in the evidence and the question of fact is determined by the jury or by the court who tried the case the findings will not be disturbed. (Martin v. Dowd, 8 Idaho 453, 69 P. 276; Winters v. Swift, 2 Idaho 61, 3 P. 15.)

WM. E. LEE, J. McCarthy, C. J., and Dunn and William A. Lee, JJ., concur.

OPINION

WM. E. LEE, J.

Prior to and on January 3, 1921, appellants were indebted to respondents in the sum of $ 8,500, secured by a mortgage on the 240 acres of real property with respect to which this controversy relates. Not being able to pay the debt, appellant Modesto Zavala on January 3, 1921, made, executed and delivered to respondents his promissory note in the principal sum of $ 5,000 due August third thereafter and bearing interest at the rate of nine per cent per annum; and on the same day appellants made, executed and delivered to respondents their warranty deed to the real property. At the same time, and without doubt as a part of the same transaction, the respondents and appellant Modesto Zavala entered into a written agreement wherein and whereby respondents agreed to sell and appellant Modesto Zavala agreed to buy the identical real property. Appellants continued in possession of the real property. The original mortgage securing the indebtedness of $ 8,500 was not released. On July 21, 1921, respondents mailed to appellant Modesto Zavala a notice that his note of $ 5,000, together with the interest--not an installment of the contract for the repurchase of the land--would be due on a given future date. Within a very few days after the note became due respondents served upon appellants a notice to surrender possession of the real property. Upon the failure and refusal of appellants to surrender possession of the real property, respondents commenced this action to secure its possession. The appellants answered and, among other things, alleged that Modesto Zavala made, executed and delivered the note for $ 5,000; and that as a part of the same transaction they delivered to respondents a warranty deed to the real property, which was intended by the parties to be a mortgage of the real property to secure the payment of the note of $ 5,000; and that as a part of the same transaction they made and entered into the contract for the sale and purchase of the land; and that the note, the deed and the contract were all made, executed and delivered at the same time and as a part of the same transaction; and that the deed was intended as a mortgage to secure the indebtedness and not intended to be a deed of conveyance.

In addition to the foregoing, the evidence showed that respondents were bankers and merchants at Soda Springs; that appellant Modesto Zavala is a farmer and was formerly engaged in the sheep business;...