O'Neill v. Capelle
| Decision Date | 31 January 1876 |
| Parties | ELLEN F. O'NEILL, et al., Respondents, v. JOHN P. CAPELLE, Appellant. |
| Court | Missouri Supreme Court |
Appeal from St. Louis Circuit Court.
H. Berry & A. Hamilton, for Appellant.
I. The court cannot, upon setting aside the report, entirely displace the referee by itself pronouncing the judgment which the referee should have given. (Walton vs. Walton, 17 Mo., 378; Rice vs. Benedict, 18 Mich., 76; Day vs. Hammond, 57 N. Y. App., 488; Griffin vs. Margmardt, 17 N. Y. App., 28; Milk vs. Moore, 39 Ill., 584; Patterson vs. Ackerson, 1st Edw. Ch., 102, and cases cited; 2 Daniels Ch. Pr., 3d Am. ed., 1115; Allen vs. Blunt, 3 Sto., 746.)
II. The decision of a referee upon a question of fact, when the evidence is conflicting, and the point is not entirely free from doubt, should not be disturbed. (Roberts vs. Curtis, 28 Barb., 462; Hale vs. Grant, 1 Sickles, 496; Terry vs. McNeil, 58 Barb., 241; Baker vs. Spencer, 58 Id., 248; Terry vs. Dietrick, 49 Mo., 96; Woodruff vs. McGrath, 32 N. J., 255.)
III. To establish that the deed from Ghio to defendant, on its face absolute, was intended as a mortgage, and to give it effect as such, the evidence must be clear, cogent and satisfactory. It should be so positive as to leave no doubt. .)
IV. There is very respectable authority for the position, that if a mortgagor comes in to redeem, he must pay not only the mortgage debt, but also all other debts due from him to the mortgagee. (Anthony vs. Anthony, 23 Ark., 479; Ogle vs. Ship, 1 A. K. Marsh., 287; Scripture vs. Johnson, 3 Conn., 211; Chamberlain vs. Thompson, 10 Id., 244; See vs. Stone, 5 Gil. & J., 1; Walling vs. Aiken, 1 McMullen's Eq., 1; Turner vs. King, 2 Tridle's Eq., 132.)
The testimony shows an agreement with defendant, after his purchase, that the property should be held for his advances to the Robbins family. He knew that they were insolvent, and his advances must have been made on the strength of that security. (See Haine vs. Thompson, 70 Penn. St., 442; Phillips vs. Seely, 27 Grat., 558; Horn vs. Kellsta, 46 N. J., 605; Stoddard vs. Whiting, 46 N. J., 623; Hill vs. Grantt, 46 N. J., 496; Rich vs. Doan, 35 Vt., 129.)
Bereman & Smith, for Respondents.
I. An oral agreement to extend the security of a mortgage so as to cover other and further debts and liabilities, is within the statute of frauds, and void.
II. The conveyance was not a conditional sale, but a mortgage. If the case were doubtful it would be so held. (16 Mo., 145; Turner vs. Kerr, 44 Mo., 431; Prince vs. Bearson, 1 A. K. Marsh., 170; Oldham vs. Halley, 2 J. J. Marsh., 114; King vs. Newman, 2 Munf., 40; Copeland vs. Yoakum's Adm'r, 38 Mo., 349; Sharkey vs. Sharkey, 47 Mo., 543.)
The referee's finding was properly set aside by the court.
This is a suit in the nature of a bill in equity brought by the daughter of the former owner of certain lands situate in St. Louis county, one S. H. Robbins. The object of the suit, in which the husband is joined as co-plaintiff, is to have the deed absolute, under which the defendant holds those lands, declared a mortgage and for permission to redeem, etc.
The petition charges in substance, that in 1872 Mrs. O'Neil became the owner of those lands; that in 1861 both the legal and equitable title of the lands in controversy were in Mrs. O'Neil's father, but that in May of that year the legal title thereof was transferred to the National Banking and Insurance Company as a security for certain indebtedness then owing to that company by her father, while the latter retained the equitable title under an agreement that he, on the payment of the debt, should be permitted to redeem, etc.; that in May of the year following, the property was transferred on like terms to one Ghio, who, possessed of full knowledge of all antecedent facts, loaned and advanced to Robbins the necessary amount to pay the debt due the company, and executed also an agreement in writing showing that the deed he had received was in the nature of a mortgage, from which incumbrance Robbins could redeem on payment of debt and interest, and receive thereupon a re-conveyance of the property thus held; that under a like arrangement the property was transferred in 1864 to the defendant, who being acquainted with all the attendant facts, and acceding to the request of Robbins, advanced a sum sufficient to pay the debt due to Ghio, and thereupon received a deed from the latter, in usual form, for the land, but with the agreement to hold the land on the same terms as it had been previously held; that, since the execution of the conveyance last named, Robbins had paid large sums of money on the indebtedness with the view and intent to redeem the lands thus encumbered, which sums, were so received and credited by defendant, as well as other large sums received by him in like manner for rents and profits of the real estate so conveyed, and that by these means the indebtedness was satisfied and discharged; that defendant claimed to have expended certain amounts for taxes and repairs on the premises, as to which claim plaintiffs ask an accounting, etc., etc. The answer of defendant, who is Robbins' son-in-law, was a sweeping denial of all the foregoing allegations.
The record in this cause is a voluminous one, but the matters at issue involved therein lie within a very small compass. In all proceedings like the present, the obvious and chief point for inquiry and determination is: Was the conveyance intended as a security for a debt? If this inquiry receives a reply in the affirmative, it will, in the eyes of equity, effectually and indelibly stamp the conveyance, however absolute in form, with the character, attributes and incidents of a mortgage. Ordinarily it is, perhaps, necessary in order to meet the requirements of the statute of frauds, that a defeasance in writing should pass between the parties; but this is not absolutely essential in all cases, for if the grantee deny the trust, equity on proof of the trust will treat such a denial as a fraud and will consequently hold the grantee as firmly bound by his verbal agreement as though the parol defeasance were a written one fortified and hedged about with all the formal solemnity known to the law. (Sto. Eq. Jur., 231, § 1.)
Were the rule otherwise, were a deed absolute in face absolute in fact, the statute for the prevention of frauds would become a monstrous misnomer, and, instead of preventing, would promote the creation of countless frauds.
And courts of equity, in enunciating the rule above stated, do but pursue the same enlightened policy in this regard as that which they invariably pursue in respect to parol contracts for the sale and conveyance of land, parol promises by a mortgagor and vendor of land to his vendee to pay off existing incumbrances (Chapman vs. Beardsley, 31 Conn., 115), and parol promises by parties exchanging lands to remove incumbrances. (Pratt vs. Clark, 57 Mo., 189.)
If, however, any given transaction should turn out, upon investigation, to be a conditional sale, and it should be satisfactorily established to be a real sale and not a thin disguise whereby a loan is concealed, as a matter of course such transaction will be held valid in accordance with the intention of the parties. But courts of equity watch transactions of this sort with such jealous and ever vigilant solicitude, that if the matter be in doubt, they will resolve that doubt in favor of the theory of a mortgage, and compel the transaction...
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