Shays v. Norton

• Decision Date: 30 September 1868
• Citation: 48 Ill. 100,1868 WL 5057
• Parties: MARY A. SHAYS et al.v.FAULKNER J. NORTON.
• Court: Illinois Supreme Court

48 Ill. 100

1868 WL 5057 (Ill.)

MARY A. SHAYS et al.

v.FAULKNER J. NORTON.

Supreme Court of Illinois.

September Term, 1868.

OPINION TEXT STARTS HERE

WRIT OF ERROR to the Superior Court of Chicago; the Hon. JOHN A. JAMESON, Judge, presiding.

The opinion states the case.

Messrs. DENT & BLACK, for the plaintiffs in error.

Messrs. MILLER, VAN ARMAN & LEWIS, for the defendant in error.

Mr. JUSTICE WALKER delivered the opinion of the Court:

This was a bill filed by defendant in error, in the Superior Court of Chicago, against plaintiffs in error, to quiet the title to certain lots in that city. It appears that Iglehart & Clayton, in November, 1857, were indebted to defendant in error, in the sum of $4,700, and gave to him their promissory note for that amount; and, to secure the payment of the same, Clayton executed a trust deed to Lucius B. Otis, for the premises in controversy; that in July, 1860, the makers being unable to pay, it was agreed that defendant in error should take a conveyance of the property in satisfaction of the note, and it should be surrendered; that, in the following August, this arrangement was consummated by the trustee, and the persons holding the title subject to the trust deed, conveying the lots to defendant in error, when he surrendered the note to the makers. It is insisted, that this transaction only amounts to a mortgage as security for the money due upon the note, and not to a conveyance of the title to defendant in error. While courts of equity always look to the nature of the transaction, as manifested by the intention of the parties, and if a deed, absolute on its face, was only intended as a security, it will be treated and enforced as a mortgage, still the courts have never gone the length of holding that the mortgagor may not sell the mortgaged premises to the creditor. Such a rule would be harsh and unreasonable; and the law has not prohibited such transactions, although the form that the transaction may assume will not be regarded, but the intention of the parties, if the transaction be otherwise unobjectionable, will be carried out. Hence, it has been long and uniformly held, that if the parties intend a deed but as a security for a sum of money, it will be treated as such, but if, on the other hand, it is designed as an absolute conveyance, it will be so enforced.

Was this, then, intended as a mortgage or an absolute conveyance? Defendant in error swears that it was a conveyance, and not as a security, and the two Otises testify that it was intended to be a satisfaction of the debt, and to vest the title absolutely in defendant in error. All of the evidence in the case, except that of Iglehart, tends strongly to stamp the transaction as an absolute sale, and not as a security. From the testimony of defendant in error, no other conclusion could be drawn. It is clear, full and consistent, and altogether satisfactory, and clearly sustains the decree, unless the testimony of Iglehart overcomes and destroys its weight.

He testifies that he only intended that the conveyance should operate as a security for the money; that he was to have a year, within which to sell the property and pay the debt. On his cross-examination, he says that, at the time the arrangement was made, he thought defendant in error supposed he had the absolute title in himself, and assigns that as the reason why he said nothing to Judge Otis about his having a year to redeem; that he was willing defendant in error should remain under the impression that he was acquiring an absolute title. He also says, the reason that he did not reserve the right, by the bond he executed, to redeem within the year, was, because he did not want Judge Otis to know it. Defendant in error testifies, that he did not make such an agreement, and James Otis swears that he was present when the arrangement was consummated, and that defendant said, in Iglehart's presence, “I have bought the lots of Iglehart, if he can make the title good.” To which the latter replied, he could. And L. B. Otis testifies, that it was understood that the title was to be conveyed to defendant in error, and the note canceled.

We regard it clear, not only from Iglehart's testimony, but from the other circumstances in the case, that defendant in error intended the conveyance should be, and that he supposed it was, absolute and wholly unconditional. And the witnesses cognizant of the facts disclosed by the parties in having it consummated, so understood it. The fact that defendant in error obtained no greater security, and was giving up the means of immediate sale and realization of his debt, if the property was worth that sum, for a security of another form, to run indefinitely, and have to be foreclosed by a bill in chancery, negatives the supposition that he intended to hold the premises simply as a security. By such an arrangement he would have gained nothing, but would have placed himself in a worse condition. Creditors and money lenders are not, it is believed, accustomed to voluntarily surrender such advantages. But if the evidence of defendant in error, on the one side, and Iglehart on the other, as to the extension of time, were of equal credit, still Iglehart must fail, as he must make out his case by a preponderance of...