O'Toole v. Omlie
| Decision Date | 27 June 1899 |
| Citation | 79 N.W. 849,8 N.D. 444 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Pembina County; Sauter, J.
Action by Thomas O'Toole and Ann O'Toole against O. M. Omlie and David Lane, to have an instrument in form of a quitclaim deed executed by the appellants to O. M. Omlie and covering certain lands in Pembina county, declared to be a mortgage also for an accounting as against O. M. Omlie, and to have a deed from the defendant Omlie to defendant David Lane set aside. Judgment was given for defendants, and plaintiffs appeal.
Reversed.
Judgment reversed, new judgment entered reversing original judgment. Appellants recovered their costs and disbursements.
George A. Bangs and W. J. Kneeshaw, for appellants.
The quitclaim deed given by appellants February 1st, 1897, was in fact a mortgage, because as shown by the evidence, the debt at the time of the transfer continued to exist thereafter. 1 Jones on Mtgs. 325; 3 Pom. Eq. Jur. § 1195; 2 Story Eq Jur. 1018; Voss v. Eller, 7 Western Reptr. 361 McMillan v. Bissell, 5 Western Reptr. 706; Huscheon v. Huscheon, 12 P. 410; Turpie v. Lowe, 15 N.E. 834; Kraemer v. Adelsberger, 25 N.E. 859; Dunton v. McCook, 61 N.W. 977; Keithley v. Wood, 42 Am. St. Rep. 265; Campbell v. Dearborn, 12 Am. Rep. 671; Riley v. Stan, 67 N.W. 187. The great inequality between the value of the property conveyed and the price alleged to have been paid for it shows that it was intended as security only. 1 Jones, Mtgs. 329; Cobb v. Day, 17 S.W. 323; Ferguson v. Bond, 20 S.E. 591; Gilchrist v. Beswick, 10 S.E. 371; Turpie v. Lowe, 15 N.E. 834. The continued possession of the lands by plaintiffs is significant. 1 Jones on Mtgs. 328. The grantors continued to pay taxes and interest on the loan. Kreamer v. Adelberger, 25 N.E. 859; Dunton v. McCook, 61 N.W. 977. And understood the transfer to be as security only. Cobb v. Day, 17 S.W. 323. That it is competent to prove by parole that a deed absolute on its face was in fact a mortgage and to illustrate many of the circumstances controlling the determination of such cases, see Mears v. Strobach, 40 P. 621; Clark v. Woodruff, 51 N.W. 357; Lounsberry v. Norton, 22 A. 153; Ray v. Tatum, 72 F. 112; Thorne v. Jay, 45 P. 642; Montgomery v. Beecher, 31 A. 451; Williams v. Chambers, 26 S.W. 270; Campbell v. Freeman, 34 P. 113; Robinson v. Bank, 3 S.W. 656; Jackson v. Lynch, 21 N.E. 580; Snow v. Pressy, 20 A. 78; Shields v. Russell, 20 N.Y.S. 909; McCauley v. Smith, 30 N.E. 997. When on parole evidence it is doubtful whether the conveyance should be regarded by a court of equity as an absolute deed or as a mortgage the court will incline to hold it as being a mortgage. Van Gilder v. Hoffman, 22 W.Va. 1; Gilchrist v. Beswick, 10 S.E. 271; Ferguson v. Bond, 20 S.E. 591. If this conveyance was not a mortgage it operated to transfer or release the equity of redemption without the passing of any new consideration and with out any consideration except the satisfaction of the antecedent debt. In such case the release will only be sustained when it is bona fide, that is in all respects fair and for adequate consideration. Ford v. Olden, L. R. 3 Eq. Cas. 413; Holdrige v. Gillespie, 2 Johns. Ch. 23; Baugher v. Merryman, 32 Md. 192; Linilell v. Liford, 72 Me. 283; Odell v. Montross, 68 N.Y. 504; Niggler v. Maurin, 24 N.W. 369; Marshall v. Thompson, 39 N.W. 309; Peugh v. Davis, 24 L.Ed. 775; 6 Otto 332. The defendant Lane by his answer relies upon the defense that the instrument in question was an absolute deed. He cannot occupy the attitude of purchaser without notice and in good faith for the reason that this is an affirmative defense and should have been pleaded and proven. Holdsworth v. Shannon, 113 Mo. 508; 35 Am. St. Rep. 719; Frost v. Beckman, 1 Johns. Ch. 288; Everts v. Agnes, 4 Wis. 356; Story's Eq. Pl. § § 28, 806 and 852; Johnson v. Toulmin, 52 Am. Dec. 212; Cummings v. Coleman, 62 Am. Dec. 402; Baynard v. Norris, 46 Am. Dec. 647; Rover Iron Co. v. Trout, 5 Am. St. Rep. 285; Webber v. Rothchild, 15 P. 650; Moshier v. Knox College, 32 Ill. 155; Minor v. Willoughby, 3 Minn. 225; Jewett v. Palmer, 7 Johns. Ch. 64; Padgett v. Lawrence, 10 Paige Ch. 170; Wood v. Raburn, 22 P. 521; Eversdon v. Mayhue, 3 Cal. 641; Nautz v. McPherson, 18 Am. Dec. 216; Blake v. Jones, 21 Am. Dec. 530; Williams v. Shelley, 37 N.Y. 375; Richards v. Snyder, 6 P. 186; Byers v. Fowler, 54 Am. Dec. 271; Bryan v. Torney, 21 P. 725; Boone v. Chiles, 10 Pet. 177; 6 L.Ed. 388; Buchanan v. Wise, 44 N.W. 461; Hume v. Franzen, 34 N.W. 490; Rush v. Mitchell, 32 N.W. 367; Throckmorton v. Ryder, 42 Ia. 84; Berry v. Whitney, 40 Mich. 65; Lettson v. Reed, 45 Mich. 27; Mann v. Falcon, 25 Tex. 271; Landers v. Bolton, 26 Cal. 393; Long v. Dollarhide, 24 Cal. 218. The deed from Omlie to Lane given in December, 1895, was void because the land was in possession of O'Toole claiming under a title adverse to Omlie. § 681 Civil Code, 1877; § 3303 Comp. Laws. The continued possession of the land by O'Toole after his formal conveyance of the legal title is a fact in conflict of the legal effect of his deed and is presumptive evidence that he still retained an interest in the premises and was sufficient to put Lane on inquiry and subject him to the rights of the party in possession. Lipp v. Ry. Co., 40 N.W. 129; Daniels v. Hester, 7 S.E. 65; Phalen v. Brady, 1 N.Y.S. 626; Hottenstein v. Larch, 104 Pa. 454; Boyer v. Chandler, 32 L. R. A. 113; Brook v. Bordner, 125 Pa. 407; Groff v. Ramsey, 19 Minn. 44; Palmer v. Bates, 22 Minn. 532; New v. Wheaton, 24 Minn. 406; Brinser v. Anderson, 6 L. R. A. 205; Gale v. Shillick, 29 N.W. 661; Peasley v. McFadden, 10 P. 179; Lambert v. Weber, 47 N.W. 251; Pell v. McElroy, 36 Cal. 268; Toman v. Bell, 15 S.W. 886; New v. Wheaton, 24 Minn. 406; Groff v. Bank, 50 Minn. 234; Knapp v. Bailey, 1 Am. St. Rep. 295; Brinkman v. Jones, 44 Wis. 498; Grimstone v. Carter, 3 Paige Ch. 420; 1 Jones, Mtgs. 548.
Bosard & Bosard, for respondents.
In the absence of an allegation of fraud, accident or mistake, the terms of the deed could not be altered or explained by parole. 1 Rice, Ev. 259; Osborne v. Hendrickson, 7 Cal. 282; Kritzen v. Mills, 9 Cal. 22; Aud v. Magruder, 10 Cal. 282; Richardson v. Scott, 22 Cal. 150; Ward v. McNaughton, 43 Cal. 159; Washabaugh v. Hall, 56 N.W. 82; Knudson v. Grand Council, 63 N.W. 911; Deering & Co. v. Russell, 5 N.D. 319; Northwestern Fuel Co. v. Bruns, 1 N.D. 137; Plano Mfg. Co. v. Root, 3 N.D. 165; National German Bank v. Lang, 2 N.D. 66; Thompson v. McKee, 5 Dak. 172; Dean v. Bank, 6 Dak. 222; Schmidtz v. Mining Co., 67 N.W. 618; Strunk v. Smith, 66 N.W. 926.
This action is brought to remove an alleged cloud upon the title to certain real estate described in the complaint, and situated in the County of Pembina, and upon which plaintiffs have at all times in question resided. Plaintiffs joined in the execution of two deeds of conveyance of the land to the defendant O. M. Omlie, both of which deeds were delivered and recorded. The first was a deed of warranty, made and delivered on December 5, 1885, and in which the defendant O M. Omlie, the grantee, assumed and agreed to pay a pre-existing mortgage given by plaintiffs for $ 800, and which deed, it is conceded, was given as security for an indebtedness then due the grantee from said Thomas O'Toole. The other deed was delivered February 1, 1887, and was an ordinary quitclaim deed, except that it contained the following recital: "This deed is given for the purpose of perfecting and making absolute a trust warranty deed given by the first party on the 5th of December, 1885." Subsequent to the delivery of the quitclaim deed, the defendants O. M. Omlie and wife joined in a conveyance of the land by deed of warranty to the defendant Lane, which deed was dated December 4, 1895, and was recorded on the 14th day of the same month. The complaint alleges that defendant lane received said last-mentioned deed with full knowledge of plaintiff' rights in and to the land. Plaintiffs allege that both of the said deeds to the defendant O. M. Omlie were, as between the parties, mere mortgages, and were given to secure an indebtedness due to said Omlie from said Thomas O'Toole; and plaintiffs ask that all of said deeds, including the deed to defendant Lane, be adjudged null and void, and declared to be clouds on plaintiffs' title. In effect, the complaint alleges that the indebtedness of Thomas O'Toole to O. M. Omlie, to secure which it is claimed that the two deeds were given to Omlie, has been fully paid; and the plaintiffs ask an accounting as between plaintiffs and O. M. Omlie, and aver a willingness to pay any possible balance found to be due from Thomas O'Toole to said O. M. Omlie, and secured by said deeds to him. The answer embodies a qualified general denial, and alleges that defendant Lane is a good-faith purchaser of the land. The answer admits the execution, delivery, and recording of all of said deeds, and admits and alleges that said warranty deed given December 5, 1885, was given and received as security, and further alleges that said quitclaim deed was not given or received as security, but was an absolute deed, given to perfect and make absolute said warranty deed, to which it expressly refers. The answer further alleges that said quitclaim deed was given in payment for a debt of $ 900 then due from plaintiff Thomas O'Toole to the defendant Omlie. The action was tried in the District Court without a jury, and comes to this Court for a trial de novo. The District Court entered a judgment in favor of the defendants, adjudging, among other things: First, that the evidence did not enable the Court to make any accounting; second, that said first-mentioned...
To continue reading
Request your trial