Liskey v. Snyder
| Decision Date | 20 December 1904 |
| Citation | 49 S.E. 515,56 W.Va. 610 |
| Parties | LISKEY et al. v. SNYDER et al. [a1] |
| Court | West Virginia Supreme Court |
Syllabus by the Court.
1. A purchase of real estate at a judicial sale by strangers to the proceeding, and contemporaneous resale thereof by them to the debtor by an executory contract in writing, whereby he is charged with a certain sum in addition to the amount for which it sold at the judicial sale, all in pursuance of a prior verbal contract, though in form a purchase of the land is regarded in equity as a loan of money on the land as security, and the rights of the parties are determined by the principles governing the relation of mortgagor and mortgagee.
2. Where a mortgagee has obtained from the mortgagor a release of his equity of redemption, the burden is upon him to show that, in obtaining it, his conduct was in all things fair and frank, and that he paid for the property what it was worth.
3. If in such case, it be shown that the mortgagee induced the act of conveyance or release by any indirection or obliquity of conduct, such as an assurance that it is desired for some purpose other than to bar redemption, and that it shall not do so, and that there was no consideration for it except the original debt, the release will be set aside in equity.
4. Reasonable expenses by the lender in making a loan, such as those incident to inspection of the land offered as security and examination of the title thereto, incurred at the instance and request of the borrower, and upon his promise and undertaking to pay the same, may, upon full and clear proof, be allowed him, and will not render the debt usurious.
5. Upon a bill by a mortgagor to redeem, the costs of the suit are to be decreed against him, unless he established a prior tender of the amount due on the mortgage.
Appeal from Circuit Court, Randolph County; John Homer Holt, Judge.
Bill by Robert Liskey and others against Sampson Snyder and others. Decree for plaintiffs, and defendant Sampson Snyder appeals. Reversed.
Scott Cobb & Maxwell, Mollohan, McClintic & Mathews, and L. Hansford, for appellant.
C. W. Dailey, Erskine & Allison, Winfield Leggett, W. B. Maxwell, and W. S. Lurty, for appellees.
POFFENBARGER, P.
Sampson Snyder, being the owner of a large amount of real estate, consisting of several tracts of land situate in Randolph county, and indebted in a sum exceeding $16,000, for which his lands had been decreed to be sold, applied to Robert Liskey, John W. Liskey, and W. H. Rickard, all of Harrisonburg, Va., for a loan of sufficient money to pay off the debts. This application was made in the latter part of the year 1898, and resulted in an arrangement whereby the land was to be permitted to go to sale, and be purchased by Rickard and the Liskeys, but to remain in the possession of Snyder under a contract of purchase from Rickard and the Liskeys at a price $3,000 in excess of the purchase money under the judicial sale, and to be paid by Snyder in four installments, to become due in 6, 12, 18, and 24 months, respectively. This arrangement was consummated on the 23d day of January, 1899, when the lands were sold to Rickard and the Liskeys under the decree of sale for the sum of $16,660, of which $1,666 was paid in cash, and for the residue of which four notes, of $3,748.50 each, payable in 6, 12, 18, and 24 months from date, were executed. On the same day Rickard and the Liskeys entered into a contract under seal whereby they sold the land to Snyder for the sum of $19,660, of which $6,164.50 was to be paid in 6 months from the date of the contract, and the residue in three equal installments, payable in 12, 18, and 24 months from date, all bearing interest. By this contract Snyder bound himself to pay, in addition to these notes, the expenses of Rickard and the Liskeys in coming to and returning from Beverly, and such attorney's fees as they had paid or agreed to pay in connection with the purchase; also to keep the buildings on the real estate fully insured, to commit no waste, and to pay off and discharge the taxes assessed on the land, and keep the taxes paid thereon until the contract of sale should be fully executed. It was further provided that upon the payment of all the purchase money the vendors should execute a deed to Snyder, with special warranty, and that the provision against waste should not prohibit Snyder from making sale of any of the timber on the land with the consent of the vendors, and applying the proceeds on the purchase money. At the same time a deed of trust was executed by Sampson Snyder and one John W. Snyder, conveying a lot of personal property to secure the payment of the notes executed by Sampson Snyder for the purchase money specified in the contract of sale; and in said contract it was agreed that, if Snyder should fail to comply with the terms of the contract of sale and the provisions of the deed of trust, then the vendors should have the right "to enter upon and take possession of the property" mentioned and described in the contract.
The record shows three letters written by Snyder to W. H. Rickard, bearing date December 28, 1898, and January 5 and 11, 1899, representing that $15,000 or $16,000 would relieve the land, and appealing to Rickard to obtain a loan of that amount for him, and offering the land as security. On the 11th day of January, 1899, Rickard wrote Snyder, saying he had seen several gentlemen whom he could interest in Snyder's behalf, and that he felt certain that if the property was worth what Snyder had said it was, and $15,000 would make the title clear, they would buy it at the price of $15,000, and resell it to him, and give him an extension of time for such an advance as was reasonable, but they would not go security or lend money out of the state of Virginia. Further on in the letter it is said, "Of course you would have to pay more for the property, say $3,000." There is no controversy as to the amount of the advance, but it is insisted by Snyder that this transaction, although an absolute sale on its face, was in fact a mere loan of money by Rickard and the Liskeys, and that the papers executed must be regarded as constituting, in equity, a mortgage securing the repayment of the money. Snyder insists that he paid off some debts, and reduced the amount charged upon the land to the sum of $16,600, for the express purpose of bringing the indebtedness within such limits as would induce the purchasers to take the land as a security for their advancement to him, and also that, in pursuance of an understanding with them, he on the day of sale represented to persons intending to become bidders that the purchase by Rickard and the Liskeys would be made for his benefit. These claims of Snyder's are controverted, but it is not denied that the purchase was made with intent to resell to Snyder at an advance of $3,000, nor that this intention was effectuated.
Snyder having failed to meet the payments as provided in the contract of sale, an agreement under seal was made on the 6th day of October, 1899, between Rickard and the Liskeys, on one side, and Snyder and his wife, on the other, whereby, in consideration of $1, and that Rickard and the Liskeys surrender unto Snyder the bonds and deed of trust aforesaid Snyder and his wife released all their right and title to said real estate, and also all claims and demands against the vendors or said property, as growing out of any transaction whatever, and it was further provided that "neither party hereto shall have any claim or demand against the other as growing out of the transactions of January 23, 1899." On the same day another contract under seal was executed, whereby Rickard and the Liskeys leased the real estate to Snyder for the period of one year; Snyder agreeing to pay them $600 as balance due on rent for the preceding year, and $1,200 as rent for the year expiring October 5, 1900, the receipt of all which rent was thereby acknowledged as having been paid by the sale by Snyder to the Liskeys of 20 two year old cattle, and 20 one year old cattle, and 10 steer calves, all on the premises, and stated to be in the possession of the Liskeys, and, in addition thereto, an open expense account of $78.76. By this contract, Snyder and wife obligated themselves to keep the above-named cattle on the premises free of charge for 12 months; to take care of the property; to pay all back taxes for the years 1897 and 1898, and the taxes for 1899--the latter to be paid by lessors at end of the year; to make such repairs to buildings and fencing, and to cut such brush, etc., as should be agreed upon by the parties, and keep a correct account for final settlement. The final clause of this agreement reads as follows: "It is further agreed by first parties that if second parties will take good care of premises as above mentioned that they shall on Oct. 5, 1900, by the repayment of $1,868.76, repurchase the personal property, cattle, herein described as having been sold to first parties Oct. 5th, 1899." On October 1, 1900, five days before the expiration of the lease, the following receipt and agreement was executed by Rickard, the Liskeys, and Snyder and his wife; W. H. Rickard signing for Robert Liskey, and Sampson Snyder for Mrs. Snyder: ...
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