Riley v. Starr

• Decision Date: 06 May 1896
• Citation: 67 N.W. 187,48 Neb. 243
• Parties: RILEY v. STARR ET AL.
• Court: Nebraska Supreme Court

48 Neb. 243

67 N.W. 187

RILEY

v.STARR ET AL.

Supreme Court of Nebraska.

May 6, 1896.

Syllabus by the Court.

1. The true test, in determining whether a conveyance absolute in form should be treated as a sale or as a mortgage, is whether the relation of the parties towards each other, as debtor and creditor, continues. If it does so continue, the transaction will be treated as a mortgage, and the conveyance as a security only.

2. Evidence examined, and held to sustain the finding that a conveyance absolute in form was intended as a security only.

Appeal from district court, Douglas county; Walton, Judge.

Action by Mary Riley against Clarence A. Starr and others. Judgment for plaintiff. Defendants appeal. Affirmed.Wharton & Baird, for appellants.

Mahoney, Minahan & Smyth, for appellee.

POST, C. J.

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 appellants, 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 decisions, upon the subject. A safe, and perhaps the most satisfactory, test, in all...