Riley v. Starr
| Decision Date | 06 May 1896 |
| Docket Number | 6528 |
| Citation | 67 N.W. 187,48 Neb. 243 |
| Parties | MARY RILEY, APPELLEE, v. CLARENCE E. STARR ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court of Douglas county. Heard below before WALTON, J.
AFFIRMED.
Wharton & Baird, for appellants.
Mahoney & Smyth, contra.
This is an appeal from a decree of the district court for Douglas county, whereby a deed absolute in form, executed by the appellee, Mary Riley, to Clarence E. Starr, agent and manager of the Central Loan & Trust Company, was declared to be in equity a mortgage merely, requiring a reconveyance upon a finding that the debt thereby secured had been paid and satisfied from the sale of a portion of the property conveyed, and awarding judgment in favor of the appellee for the proceeds of the property so sold, less the amount of the debt secured.
The questions presented for determination will be readily understood without a statement in detail of the issue made by the pleadings, or of the facts disclosed by the record. It should, in justice to counsel for appellant, be observed that they concede the power of courts of equity to award proper relief against conveyances absolute in form, when intended as security only; but they deny the application of that rule to the facts of the case at bar, on the ground, as claimed, that the deed in question was given, not as security, but in satisfaction of the indebtedness due from the appellee; that the agreement to reconvey was a mere condition subsequent operating upon an estate already vested, and in no sense a defeasance essential to characterize the transaction as a mortgage. There is no doubt that the law recognizes a distinction between a deed intended as security only and one with a covenant to reconvey upon condition; but the failure of the courts to always observe such distinction has led to some confusion and apparent conflict of decision upon the subject. A safe and perhaps the most satisfactory test, in all such cases, is whether the relation of the parties to each other as debtor and creditor continues. If it does, the transaction will be treated as a mortgage, otherwise not (Robinson v Cropsey, 2 Edw. Ch. 138; Wilson v. Giddings, 28 Ohio St. 554; Jones, Mortgages, sec. 258); and if intended as a mortgage when executed, its character as such will not be changed by the mere effluence of time. (Tower v Fetz, 26 Neb. 706, 42 N.W. 884; Nelson v....
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