Ver Straten v. Worth

• Decision Date: 25 January 1926
• Docket Number: 11383.
• Parties: VER STRATEN v. WORTH et al.
• Court: Colorado Supreme Court

243 P. 1104

79 Colo. 30

VER STRATEN v. WORTH et al.

No. 11383.

Supreme Court of Colorado, En Banc.

January 25, 1926

Rehearing Denied March 1, 1926.

Error to District Court, Larimer County; Claude C. Coffin, Judge.

Suit by James B. Worth against J. J. Ver Straten and another. Decree for plaintiff, and the defendant named brings error.

Affirmed.

Thomas H. Gibson, of Denver, for plaintiff in error.

Fancher Sarchet, Paul W. Lee, and George H. Shaw, all of Ft. Collins for defendant in error Worth.

CAMPBELL J.

The object of the action is to have a quitclaim deed of land absolute on its face, declared to be a mortgage. The trial court, without aid of a jury, found all the issues of fact for the plaintiff Worth and rendered the appropriate decree to restore to him his rights in the land and, as a part of and incidental to the principal relief as between the parties to the deed, required the defendant producing company which had been and still was and is in possession of the land as a lessee from both grantor and grantee and operating the same for oil and gas, to acknowledge Worth as the owner and lessor and to account to him for royalties. Defendant Ver Straten is here with his writ to review the decree, joining as defendants in error the plaintiff Worth and the defendant producing company. Of the numerous assignments of error only those are worthy of consideration which go to the insufficiency of the original complaint and that pleading as amended, the alleged insufficiency of the evidence to support the decree, and that the decree itself is contrary to the law and the evidence and the findings of fact based thereon. Probably a more accurate statement is that if these assignments should be resolved against defendant Ver Straten, as they are to be, all other questions urged are mere abstract propositions, regardless of their merits under a different state of facts, and would not justify a reversal.

1. The complaint as filed contains the usual allegations of a bill in equity where the relief asked is a decree declaring a deed, absolute on its face, to be in fact a mortgage; and where the parties themselves at the time by oral agreement intended the deed to be not a conveyance of title but a security, or a change in the form of a security, of a previously existing and continuing debt which the grantor owed to the grantee. An amendment set forth possibly more clearly that when the deed was made it was intended and agreed between the parties thereto that it was to operate solely as a mortgage and not as an absolute conveyance, and was to represent a continuance of the relationship of debtor and creditor, mortgagor and mortgagee, then and theretofore existing between the parties, and was not intended to be taken or understood as an extinguishment of plaintiff's equity of redemption. The purpose, however, of the plaintiff seems also to have been to make the complaint partake of the nature of a bill with a double aspect, and to bring the case in line with decisions of other states (though not considered necessary under our own), which enforce the so-called restricted doctrine that relief is granted in such cases only upon the equitable ground of fraud or mistake. Therefore, in this second amendment the plaintiff further in effect says that it would be a constructive fraud upon him if the defendant was now permitted to treat this deed as absolute since the plaintiff wholly relied upon the defendant's representations and oral agreement that the mortgage was to be continued, notwithstanding the change in form, and that plaintiff would be permitted to redeem, and since the plaintiff would not have executed the instrument save for the oral agreement set forth and that in a court of equity the defendant should be and is estopped now to say that the quitclaim deed was an absolute conveyance and plaintiff's equity of redemption was lost.

In view of the decision of this court in Gibbons v. Joseph Gibbons Consolidated M. & M. Co., 86 P. 94, 37 Colo. 96, 11 Ann.Cas. 323, and other cases, we think it was not error on the part of the court to permit the second amendment to the complaint to be filed, though it added nothing to the efficacy of the original complaint as a basis for the relief asked. At page 105 (86 P. 97) of the Gibbons opinion, it is said that although in some of the earlier cases oral evidence was permitted only on the ground of fraud or mistake, yet in later cases it was deemed sufficient evidence of fraud for the grantee to treat the conveyance as absolute when in fact it was merely intended as a security for an existing debt. Indeed, section 281 of our Code of Civil Procedure provides that a mortgage of real property shall not be deemed a conveyance whatever its terms, so as to enable the owner of the mortgage to recover possession without foreclosure and sale, and the fact of a deed being a mortgage in effect may be proved by oral testimony. Such being the doctrine in this state, we repeat that while this second amendment was not necessary, the order of the court permitting it to be made was not prejudicial error of which the defendant may complain. In L.R.A. 1916B, 18, 81, there is a thorough discussion of the doctrine, and a number of cases from Colorado are cited in which our Code provision is referred to, and this state is classed as one of that large majority in this country which enforces the unrestricted doctrine that parol evidence is admissible to show a deed to be a mortgage even though fraud or mistake is not alleged.

2. The trial court on conflicting evidence found the issues of fact for plaintiff. We have held in other cases that the evidence in support of a cause of action such as this complaint contains must be established by clear, satisfactory, unequivocal, and convincing evidence. This rule, however, does not contemplate that a reviewing court may disregard the findings of the trial court whose presiding judge saw and heard the witnesses as they testified, and substitute therefor its own findings, unless it is altogether clear that the trial court reached its conclusion through a misconception of the weight or sufficiency of the evidence, or that some salutary rule of law or practice was ignored.

In a recent case in this court, Peppers v. Heiserman, 219 P. 781, 74 Colo. 139, the defendant alleged that the deed there in controversy was made in satisfaction of promissory notes which it secured. The defendant in his answer denied, what the complaint alleged, that the deed was so made and alleged that it was given as security for the payment of the notes and prayed a foreclosure of the deed. The trial court found generally for the defendant and dismissed the complaint and, after entering judgment on the notes, decreed a foreclosure. We sustained the judgment. Upon a petition for rehearing, which the plaintiff strongly urged, the contention was that the case was not established by that certainty which is necessary. The petition for rehearing was denied, and we said the weight of the evidence was for the consideration of the court below.

Plaintiff in error relies for reversal most strongly upon the decision of this court in Nelson v. Lunt, 220 P. 1006, 74 Colo. 265. That decision is not in his favor, and the facts of the two cases are radically and essentially different. The plaintiff in the Nelson Case was not attempting to establish the fact that a deed was a mortgage, because there was no debt to be secured; and there was no contention that there was any debt in the case. Yet plaintiff in error seems to think the Nelson Case is identical with his case. There the property was conveyed to the defendant in trust which the defendant repudiated. But the real reason why the Nelson Case is not in point is that there, merely upon conflicting evidence, the court affirmed the judgment of the court below which held that plaintiff did not sustain the burden imposed upon him in such cases by clear, convincing, and unequivocal evidence. In this case we are affirming the judgment of the trial court because the evidence, as found by it, convinced the presiding judge beyond a reasonable doubt that the deed in question here was a mortgage, and nothing appears in this record that authorizes us to set aside the findings.

One fundamental error in plaintiff in error's argument consists in the fact that he insists, without any evidence to support his contention, that the transaction and agreement between the parties at the time this quitclaim deed was signed was that Worth, the grantor, might have a reasonable time within which to buy the property back upon terms satisfactory to the grantee, Ver Straten. The court found against this contention, and we are constrained to say that it could not well have done otherwise. It would serve no useful purpose to comment at length upon the evidence. It will sufficiently disclose the nature of the case to say the evidence tends to show, and the court so found, that the land in question was once owned by Ver Straten and another person who conveyed it to one McBride who gave a trust deed upon the land to secure promissory notes representing the purchase price. McBride afterwards sold the land to the...