Rose v. Gandy

• Decision Date: 23 April 1903
• Parties: ROSE v. GANDY.
• Court: Alabama Supreme Court

34 So. 239

137 Ala. 329

ROSE v. GANDY.

Supreme Court of Alabama

April 23, 1903

Appeal from Chancery Court, Butler County; W. L. Parks, Chancellor.

Bill by Felix Gandy against T. L. Rose. Decree for complainant, and defendant appeals. Affirmed.

Lane &amp Crenshaw, for appellant.

Powell & Hamilton, for appellee.

TYSON J.

The bill in this cause was filed to have two certain deeds absolute in form, executed by complainant to respondent declared mortgages, and to be allowed to redeem the lands conveyed by them. One of them was executed on the 5th day of December, 1892, and conveys a tract of land comprising 80 acres and 58/100 of an acre, for a recited consideration of $200. The other bears date the 28th day of January, 1893, and conveys 1 acre of land with all the improvements, buildings, etc., thereon, for the consideration of $50. The answer admits that the transaction resulting in the execution of the deeds originated in a loan of money, and that contemporaneously with their execution it was orally understood and agreed between the parties that the complainant, if he desired, at any time within three years, might repurchase said lands by paying the purchase money back, all taxes, and accrued interest. It is further alleged that the lands were conveyed by complainant to respondent in extinguishment of the debt due by the former to the latter, etc.

It will be observed that the case is not one involving the issue whether the conveyances were intended as mortgages or unconditional sales. It is whether, from the understanding between the parties, the complainant should have the right to repurchase or to redeem; in other words, whether the deeds were intended as mortgages or conditional sales. It is important that this distinction should not be lost sight of since the degree of proof required is different. For when the conveyance is absolute, and the controversy is whether the parties contemplated an unconditional sale or a mortgage, the party claiming that it was intended as a mortgage must show by clear and convincing evidence that at the time of its execution it was intended and understood by both parties that it should operate only as a security for a debt. But where the writings must be departed from in order to ascertain the true transaction between the parties, the rule is not so stringent. While the complainant in the latter case is not relieved of the burden of proving his case, yet the court will be inclined to favor the right of redemption, and therefore to consider the transaction as a mortgage. "For by this construction complete justice can be done to both parties; the mortgagee is secured in the payment of the money he may have loaned or advanced, with its accruing interest, and the mortgagor is protected in his equity of redemption; while, if the other construction was adopted, the time limited for the repurchase must be precisely observed, or the right to reclaim the property is irretrievably lost. Oppression could be exercised over the needy, and undue advantage taken of their distressed or embarrassed circumstances." Turner v. Wilkinson, 72 Ala. 361; Glass v. Hieronymus, 125 Ala. 140, 148, 28 So. 71, 82 Am. St. Rep. 225, and cases cited. "Although it is difficult to establish fixed rules by which to determine whether a particular transaction is a mortgage or a...