Stuart v. Hauser

• Decision Date: 09 April 1903
• Citation: 72 P. 719,9 Idaho 53
• Parties: STUART v. HAUSER
• Court: Idaho Supreme Court

72 P. 719

9 Idaho 53

STUART v. HAUSER

Supreme Court of Idaho

April 9, 1903

CONFLICT IN EVIDENCE-ABSOLUTE DEED-MORTGAGE-EQUITY SUIT.

1. In an equity suit by a grantor to have a deed absolute on its face declared to be a mortgage, when there is a substantial conflict in the evidence the finding of the trial court that such deed was not intended as a mortgage will not be disturbed. 2. The rule that an appellate court will not disturb the finding or decision of a trial court where there is a substantial conflict in the evidence is applicable to suits in equity as well as in actions at law, where the suit is tried on oral evidence.

(Syllabus by the court.)

APPEAL from District Court, Washington County.

Affirmed. Costs of this appeal awarded to the respondents.

Alfred A. Fraser and Milton G. Cage, for Appellant.

Where the relation of debtor and creditor exists and conveyances are made, or property is delivered by the debtor to the creditor, the legal presumption is that the relation continues and that the transfers were made as further security for the debt. (Hickok v. Lewe, 10 Cal. 207; Marshall v. Thompson, 39 Minn. 137, 39 N.W. 309; Simpson v. First Nat. Bank, 93 F. 309.) If an existing indebtedness forms the consideration of a deed absolute in form, the relation of debtor and creditor continuing the inference is that the deed was made to secure the debt, not to transfer the title. (Montgomery v Spect, 55 Cal. 352; Riley v. Starr, 48 Neb 243, 67 N.W. 187; Raffier v. Womack, 30 Tex. 332; Huscheon v. Huscheon, 71 Cal. 407, 12 P. 410; Pioneer etc. Co. v. Baker, 10 Saw. 539, 23 F. 258; Campbell v. Dearborn, 109 Mass. 130, 12 Am. Rep 671; Russell v. Southard, 12 How. 139; 4 Wait's Actions and Defenses, 541, 542; Horn v. Ketettas, 46 N.Y. 605.) It is of great importance to inquire whether the consideration was adequate to induce a sale. When no fraud is practiced, and no inequitable advantage taken of pressing wants, owners of property do not sell it for a consideration manifestly inadequate, and therefore in the cases on this subject, great stress is justly laid upon the fact that what is alleged to have been the price bore no proportion to the value of the thing said to have been sold. (Conway v. Alexander, 7 Cranch, 241; Morris v. Nixon, 1 How. 126; Vernon v. Bethell, 2 Eden, 110; Oldham v. Halley, 2 J. J. Marsh. 114; Edrington v. Harper, 3 J. J. Marsh. 354, 20 Am. Dec. 145; Jones on Mortgages, sec. 329; Russell v. Southard, supra; Peugh v. Davis, 96 U.S. 332; Wright v. Mahaffey, 76 Iowa 96, 40 N.W. 112; Ennor v. Thompson, 46 Ill. 214.) "Evidence of the continuance of the debt, such as the payment of interest upon it, or the extension of time of payment, is generally conclusive of the character of the original transaction as a mortgage. It shows either that a pre-existing debt was not surrendered or canceled at the time of the conveyance, or in case there was no such debt, it shows that one was then created." (Jones on Mortgages, sec. 325; Westlake v. Horton, 85 Ill. 228; Budd v. Van Orden, 33 N. J. Eq. 143.) "Wherever the transaction is between the parties whose relations are of a close fiduciary character, the complainant is not held to the same exactitude and strictness of proof, nor is the testimony offered in support of the bill to be viewed with the same scrutiny as in those cases where the parties deal with each other at arm's length." (Bohn v. Bohn, 9 Colo. 100, 10 P. 790; Keith v. Kellan, 35 F. 243.) When the intent of the party to a deed absolute in form is doubtful, the instrument will be construed as a mortgage. (Russell v. Southard, supra; Mitchell v. Wellman, 80 Ala. 16; Rich v. Doan, 35 Vt. 125; Reed v. Reed, 75 Me. 264; Crane v. Bonnell, 2 N. J. Eq. 264; Honore v. Hutchings, 8 Bush, 687; Cornell v. Hall, 22 Mich. 377; Gibson v. Martin, 38 Ark. 207; Rogers v. Burrus, 53 Wis. 530, 9 N.W. 786; Book v. Beasly, 138 Mo. 455, 40 S.W. 101.)

W. E. Borah, for Respondents.

The record presents a conflict of evidence and is peculiarly of that nature and class of cases which it is within the province of the lower court to determine, and when it is so determined such determination is final as to the facts. The real and controlling question in the case is the fact as to whether or not this was intended as a deed or a mortgage. With that fact settled, all the other matters presented are immaterial, and that fact has been fairly determined by the court below and the finding of the lower court should not be disturbed under such circumstances. This rule is well established, of course, but we call attention to some of the authorities upon the subject. In the case below the court said: "The decision of a court in the trial of a cause is of the same force and effect as the verdict of a jury in a jury trial, and when there is substantial conflict in the testimony it is the duty of the appellate court to affirm the decision." (Sabin v. Burke, 4 Idaho 28, 37 P. 355.) "Where there is a substantial conflict in the evidence a finding of fact based thereon will not be disturbed." (Spaulding v. Railway Co., 5 Idaho 528, 51 P. 408; Murphy v. Montandon, 4 Idaho 320, 39 P. 105; State v. Haverly, 4 Idaho 484, 42 P. 506; Sears v. Flodstrom, 5 Idaho 314, 49 P. 11; Simpson v. Remington, 6 Idaho 681, 59 P. 360.) "A grantor who makes an absolute conveyance intending that the beneficial interest shall remain in him is guilty of a gross folly or actuated by sinister designs, and cannot reasonably ask that the rules of law should be suspended to extricate him from the situation in which he has voluntarily placed himself." (2 Leading Cases in Equity, 978; Cake v. Schull, 45 N. J. Eq. 208, 16 A. 434; Cadman v. Peter, 118 U.S. 80, 6 S.Ct. 957; Coyle v. Davis, 6 S.Ct. 108, 116 U.S. 583; Appeal of Fisher, 132 Pa. 488, 19 A. 276; 3 Pomeroy's Equity Jurisprudence, sec. 1196; Tilden v. Streeter, 45 Mich. 533, 8 N.W. 502; Knight v. McCord, 63 Iowa 429, 19 N.W. 310; Kibby v. Harsh, 61 Iowa 196, 16 N.W. 85; Ensinger v. Ensinger, 75 Iowa 89, 39 N.W. 208; Strong v. Strong, 126 Ill. 301, 18 N.E. 665; Sloan v. Becker, 34 Minn. 491, 26 N.W. 730; Johnson v. Vanvelsor, 43 Mich. 208, 5 N.W. 265; Todd v. Campbell, 32 Pa. 254; Winters v. Swift, 2 Idaho 61, 3 P. 15; 1 Jones on Mortgages, sec. 326.) We were somewhat surprised at the position taken by the learned counsel for appellant to the effect that the rule is so well established that the finding of the lower court upon a conflict of evidence will not be disturbed does not prevail in equity cases. But as a matter of investigation, and in view of the fact that counsel broadly stated that we had not, and could not, cite any equity cases where this rule had been invoked and indorsed, and in order that this may be fully and fairly presented to the court and finally put at rest, we ask leave to cite the following cases upon this subject; Brison v. Brison, 90 Cal. 323, 27 P. 189; Sullivan v. Moorhead, 99 Cal. 157, 33 P. 796; Sherman v. Sandell, 106 Cal. 373, 39 P. 797; Mahony v. Bostwick, 96 Cal. 53, 31 Am. St. Rep. 175, 30 P. 1020; Doe v. Vallejo, 29 Cal. 391. We do not care to take up further space in the brief or the time of the court in quoting from the authorities, but we venture to say that there is not now to be found any distinction in this respect whatever, and that the rule obtains just as pronounced in equity cases as it does in law cases, that is, that where there is a conflict of the testimony the finding of the lower court is conclusive, and we cite below without quoting a few of the many cases which might be cited: Silva v. Packard, 14 Utah 245, 47 P. 144; Gagliardo v. Hoberlin, 18 Cal. 395; Duff v. Fisher, 15 Cal. 379; Green v. Butler, 26 Cal. 595; Hihn v. Peck, 30 Cal. 28; Ortman v. Dixon, 13 Cal. 34; Donohoe v. Mining Co., 66 Cal. 317, 5 P. 495; Lyons v. Lyons, 18 Cal. 488; Clark v. Willett, 35 Cal. 534; Dwyer v. Manufacturing Co., 14 Utah 339, 47 P. 311; O'Toole v. Melander, 2 Ariz. 392, 17 P. 564.

SULLIVAN, C. J., STOCKSLAGER, J. Stockslager, J., Sullivan, C. J., concurring. AILSHIE, J., Dissenting.

OPINION

The facts are fully stated in the opinion.

SULLIVAN, C. J.

This suit was brought by the appellant, Granville Stuart, against the defendants, Samuel T. Hauser, Massena Bullard, trustee A. M. Holter, Charles W. Whitcomb, J. C. Rogers, F. W. Sharp, and Eugene T. Wilson, receiver of the First National Bank of Helena, Montana, to have a certain instrument, which appears upon its face to be an absolute deed, declared to be a mortgage, and the property conveyed by said instrument declared to be the property of appellant. Described in said instrument is all of the interest of the appellant in and to the Peacock, White Monument, and Helena lode mining claims, situated in Seven Devils Mining District, Washington county, state of Idaho.

The allegations of the complaint cover a period of more than twenty years, extending from prior to August 6, 1879, to March 5, 1901, the date of the commencement of this suit. In substance, it is alleged: That Stuart, who is plaintiff and appellant, and respondent Hauser, were personal friends between whom there existed the closest relations, social, business and political, by reason of which Stuart reposed in Hauser the greatest trust and confidence, and that at all times mentioned in the complaint Hauser exerted over Stuart an unusual influence. That from about the year 1866, and until its suspension on the third day of September, 1896, Hauser was the president of the First National Bank of Helena, Montana, and during all of said time was one of its trustees, and the principal manager and director of its affairs; and that on said third day of September said bank became insolvent, suspended payment, and the defendant Eugene T. Wilson was appointed receiver thereof. That prior...