Nelson v. Wadsworth

• Decision Date: 19 April 1911
• Citation: 55 So. 120,171 Ala. 603
• Parties: NELSON ET AL. v. WADSWORTH ET AL.
• Court: Alabama Supreme Court

55 So. 120

171 Ala. 603

NELSON ET AL. v. WADSWORTH ET AL.

Supreme Court of Alabama

April 19, 1911

Appeal from Chancery Court, Autauga County; W. W. Whiteside Chancellor.

Suit by L. W. Nelson and others, heirs of J. H. Nelson, deceased against W. W. Wadsworth and another, to declare a deed a mortgage, and for an accounting, and to redeem. From a decree sustaining a demurrer to the bill, complainants appeal. Reversed and remanded.

The case made by the bill is that J. H. Nelson departed this life intestate in November, 1907, owing no debts, and no administrator had been appointed on his estate; that complainants are his only heirs at law; that on the 13th day of November, 1886, he owned a certain tract of land, which is described, and was in possession thereof, and on that day he and his wife executed to W. W. Wadsworth what purported to be on its face a deed (which is made an exhibit), but it is averred that said instrument was given to secure a debt and to operate as a mortgage only, and that the grantee so intended as well as the grantor. It is further averred that Wadsworth was claiming a debt of $154 against J. H. Nelson including usurious interest, which he had been charging the said J. H. Nelson, and that the instrument was made to secure said sum, and also a judgment which one W. F. Gulledge had secured against said Nelson of about $98.60, with the costs which the said Wadsworth agreed to, and did, pay to said Nelson, and that the balance of the consideration of $38.76 was to be paid by Wadsworth to Nelson, but was never paid. It is further alleged that at the time of the execution of the conveyance Wadsworth gave to the grantors an instrument in writing agreeing that they might pay off their indebtedness any time within 10 years and have the title of the land revert to them, and an allegation has been made that the written agreement was searched for, but has been lost. It is then averred that the land was worth greatly more than the amount of consideration expressed in the instrument, and that part of the consideration, with usurious interest, amounted to $100 or more, and that the debt has long since been paid to said Wadsworth. It is then alleged that the grantors were in possession of the land at the time of making the instrument, and that they continued to reside on it for two years as their home stead, and then rented the land to Wadsworth and others up to and including the year 1901, and that Wadsworth accounted to Nelson for said land, as a mortgagor in possession. It is then alleged that this money was taken in payment of the debt which the instrument was given to secure, and that, after Nelson became unable to look after his business, it was taken possession of by Wadsworth, who is now claiming it as his own, and has sold part of it to James Esco and part to Eddie Esco, who each had information as to complainants' rights and claims to said land when they purchased. It is then alleged that Wadsworth took possession of the land in 1902, and has been receiving the rents therefrom, and has cut valuable pine and other timber therefrom, and is still doing so. Answer and demurrers were filed to the bill, and the demurrers were sustained.

W. A. Gunter and C. E. O. Timmerman, for appellants.

McQ. Smith, for appellees.

ANDERSON J.

The bill in this case, as last amended, was filed to declare a deed a mortgage and to cancel same, or to redeem if said mortgage has not been satisfied. The bill avers that the instrument was given to secure, and not to discharge, a debt and that both parties understood and intended that the transaction was a mortgage to secure the payment of a debt then existing and a further sum to be advanced. "One of the distinguishing tests by which to determine whether an instrument is a mortgage, or a sale with the privilege of repurchasing, is the existence or nonexistence of a debt to be secured. If there be no debt due from the grantor to the grantee, there can be no mortgage....