Smith v. Hope

• Decision Date: 13 January 1904
• Citation: 35 So. 865,47 Fla. 295
• Parties: SMITH et al. v. HOPE et ux.
• Court: Florida Supreme Court

35 So. 865

47 Fla. 295

SMITH et al. v. HOPE et ux.

Florida Supreme Court, Division B.

January 13, 1904

Appeal from Circuit Court, Hernando County; William A. Hocker Judge.

Bill by William J. Smith and Larkin J. Edwards against Jordan W. Hope and Grace M. Hope, his wife. Decree for defendants, and complainants appeal. Reversed.

Taylor C.J., and Shackleford, J., dissenting.

Syllabus by the Court

SYLLABUS

1. Where parties intend a conditional sale, rather than a mortgage, the intention will be given effect.

2. An instrument in form a conditional bill of sale, and alleged in a bill seeking to enforce it, to be a conditional bill of sale, will not, upon demurrer to the bill, be held a mortgage. If the circumstances under which it was given are such that it will be held, in law, a mortgage, but these do not appear from the bill, they must be set up by plea or answer.

3. A feature essential to a mortgage is an indebtedness which it is designed to secure. The existence of this is not implied in a provision that a bill of sale shall be void if the grantors shall pay a certain sum of money by a certain day. Payment of money does not necessarily imply a previous binding obligation to pay, but may be made as the recompense or equivalent for some present benefit, the procurment of which is optional with the payor.

COUNSEL

J. C. Davant, for appellants.

Geo. C. Martin, for appellees.

The appellants filed a bill in the court below for the enforcement of the following instrument, i. e.:

'State of Florida, Hernando Co. Know all man by these presents, that we, J. W. Hope and wife, Grace M. Hope, for and in consideration of the sum of two hundred dollars ($200.00) received in hand this day, the receipt of which we hereby acknowledge, have bargained, sold and transferred, and by these presents do bargain, sell and transfer to W. J. Smith &amp Co. of Fitzgerald, State and county aforesaid, the following fifty (50) head good, likely stock cattle marked as follows: split and upper bit in each ear [here follows diagram] brand JH.

'The condition of this sale is that if the said J. W. Hope or Grace M. Hope, his wife, shall pay or cause to be paid to the said W. J. Smith & Co. or order the said sum of two hundred dollars ($200.00) on or before November 1st, A. D. 1900, this sale and transfer to be null and void, otherwise to be and remain good and effectual in law, in which event we agree to deliver to said W. J. Smith & Co. at Fitzgerald, without charge, the fifty head of cattle herein described.

'Witness our hands and seals this 23rd day of July, A. D. 1900. J. W. Hope. [Seal.] G. M. Hope. [Seal.]

'Witness: Thos. D. Duren, D. H. Sprecher.'

The bill alleged the instrument to be a deed of bargain and sale, with provision that it should be null and void if the defendants should pay to complainants the sum of $200 on or before November 1, 1900, and with special covenant or agreement for delivery of the cattle without charge in default of such payment. The prayer of the bill was for delivery of the cattle.

The defendants demurred to the bill; the fourth ground of demurrer being that 'complainants cannot obtain the relief sought, for the reason that the contract sued on is, in effect and in law, a mortgage.' This ground of the demurrer was sustained, and from this ruling the complainants appealed.

OPINION

MAXWELL, J. (after stating the facts).

The question presented by this appeal is whether the instrument in question, viewed in the light of the allegations of the bill, is a conditional sale or a mortgage. Upon its face it purports to be a conditional sale, the allegations of the bill are that it is a sale, and it is sought in the bill to enforce it as such. An essential feature to a mortgage is the existence of an indebtedness, payment of which it is designed to secure. There is no suggestion in either the bill of complaint or the instrument in question that any indebtedness, either already incurred or then created, existed on the part of the defendants, to secure which this instrument was given. No reference is made to the payment of interest--a usual thing if the intention is to create and secure a debt--nor is there anything to indicate that the intention of the parties was not what, from the face of the instrument, it would appear to have been. Neither party may have desired to make a mortgage. The makers of the instrument may have been unwilling to assume a personal liability to the other party, with a resulting risk of having to make good the deficit, if, from death, decline in values, low prices at forced sale, or other cause, the cattle conveyed should not prove sufficient to satisfy the debt; and the other parties may have been unwilling to risk the delays and expense of a foreclosure suit. So far as appears, this was the case. When a conditional sale is intended, the intention will be given effect. McGriff v. Porter, 5 Fla. 373; Hollingsworth v. Handcock, 7 Fla. 338; Franklin v. Ayer, 22 Fla. 654.

The fact that the condition which shall defeat the conveyance is that the grantors shall pay money to the other parties does not imply an existing indebtedness, and an obligation to pay, whether they so elect or not. A payment is not necessarily in discharge of a previous obligation, but may be the delivery of money as an equivalent or recompense for some present benefit, the procurement of which is optional with the payor. Thus one pays cash for goods which he purchases, or in consideration of a release which he procures. So, here, the payment, optional with the grantor, when made, is the recompense or equivalent which he pays for the resulting benefit obtained by the forfeiture of the conditional conveyance.

This question is disposed of by the decisions of this court above cited. In the two latter cases the condition in the instrument was that the grantor should pay money, as in this case. In Hollingsworth v. Handcock the court held the instrument to be a conditional sale, saying, 'There seems to have been no previous negotiations between the parties nor any loan or debt due, or mortgage spoken of to secure a previous debt.' And in that case the condition was the payment of a certain sum of money, and interest thereon, which contains an intimation of indebtedness not present in the instant case. In the case of Franklin v. Ayer, the court, while holding the instrument there involved to be shown by the evidence in the case to be a mortgage, says: 'Viewing the transaction upon the papers alone, and in the absence of evidence alluded to, we think it might be doubtful whether the parties intended to make a mortgage, or a conditional sale. The papers alone would clearly import a conditional sale, if it were not that the paper called in the record a 'bond for title' recites that there was an existing debt evidenced by a promissory note for the amount advanced by F. to A.' In the case at bar,...