Voss v. Eller

• Citation: 10 N.E. 74,109 Ind. 260
• Decision Date: 13 January 1887
• Docket Number: 11,971
• Parties: Voss et al. v. Eller
• Court: Supreme Court of Indiana

10 N.E. 74

109 Ind. 260

Voss et al. v. Eller

No. 11,971

Supreme Court of Indiana

January 13, 1887

From the Hamilton Circuit Court.

The judgment is affirmed, with costs.

T. J Kane and T. P. Davis, for appellants.

D. Moss and R. R. Stephenson, for appellee.

OPINION

Mitchell, J.

This action was commenced by James G. Eller against the heirs and personal representatives of Gustavus H. Voss, deceased.

The complaint alleged that the plaintiff, Eller, being largely indebted to the decedent, Gustavus H. Voss, conveyed to the latter in his lifetime certain tracts and parcels of land in Hamilton county, by a deed absolute in form, but which was in fact intended as a mortgage to secure the payment of such indebtedness.

It is also alleged that contemporaneously with the execution of the deed, and as a part of the same transaction, the plaintiff and the decedent entered into a written contract in relation to the conveyance. This contract, as well as the deed, is embodied in the complaint, and is alleged to have had the effect to constitute the deed and contract a mortgage. It is further alleged that after the deed and contract were executed, the plaintiff had, pursuant to the contract, sold part of the land, and that Voss had, in accordance with the agreement, made conveyances to the purchasers to whom sales were thus made. From the proceeds of sales, from rents received by the decedent, and from other payments made to him, it is averred that the indebtedness to secure which the deed had been executed, had, prior to the commencement of the action, been fully paid and satisfied.

The complaint charges that notwithstanding the debt so secured had been in this manner fully paid, Voss in his lifetime refused to reconvey the lands remaining unsold, and that the defendants, the heirs and personal representatives of Voss were asserting some interest in or lien upon such lands on account of the uncanceled mortgage.

The prayer of the complaint is, that the court adjudge the deed to be a mortgage, and order it to be satisfied of record, and that the title to the land be quieted in the plaintiff.

The agreement, executed concurrently with the deed, after reciting that a conveyance of certain lands had that day been made by Eller to Voss, proceeded as follows:

"Now said deed is made for the payment of certain debts and claims said Voss now holds against said Eller, to wit: One mortgage of ($ 5,000) principal, and the several interest notes due and to become due thereon, supposed to be about $ 1,500, but is to regulate and determine by the amount of said notes which Voss will hold on the 1st day of May next; and also for the payment of several judgments which Voss now holds against said Eller, as appears by the records of the Hamilton Circuit Court, supposed to be $ 1,500, more or less, as will appear from the docket of said court. Now Voss agrees that said Eller may and shall proceed to sell said farm, which is to be done between this and the 1st day of next May, but he is not to sell it for less than the amount of said mortgage, interest and taxes, and all it will bring over that sum is to be applied to payments on said judgments. Eller is also to proceed to sell said lots, and is to have a period of five years to do so in, by paying all taxes and assessments against the same and ten per cent. interest annually to Voss upon said sum due Voss, and Voss agrees to make warranty deeds to all purchasers of said property if made to good parties and upon such terms as is usual. All deferred payments to be secured by mortgage upon the property sold, good, sound bank notes with ten per cent. interest, and so soon as all claims of said Voss have been paid with the said interest, Voss agrees to deed any of said property which may revert to said Eller free of all costs whatever, in full for his commission for selling said property, and make no other claim against said Voss for his services; and Eller further agrees to use his best endeavors to sell said property at as early a day as possible. None of said lots are to be sold for less than $ 200 each without the consent of Voss. Eller may subdivide said farm and sell the same in any such parcels as he and Voss may deem the best subdivision. None of said lands south of the railroad to be sold for less than seventy dollars per acre, and that on the north less than $ 100; and it is agreed now that Eller may sell the thirty-eight acres on the south by itself. Each has a copy.

"G. H. Voss.

James W. Eller."

"June 8th, 1876.

The court below having overruled a demurrer to the complaint, the question first to be considered is as to the legal effect of the deed and the contract above set out. Construed together, as it is conceded they must be, do they constitute a mortgage, or a conditional sale?

On behalf of the appellants the argument is, that the recital that "said deed is made for the payment of certain debts and claims said Voss now holds against said Eller," is conclusive of the fact that the previously existing indebtedness was extinguished by the conveyance of the land. The appellants' position is, that there can be no mortgage without a subsisting indebtedness, and, they argue, since by the express terms of the agreement, the conveyance was accepted in payment of the pre-existing debts, the transaction was not a mortgage. Upon the facts as assumed, the conclusion might well follow.

While each case involving a controversy such as the one before us, must be decided in view of its own distinguishing circumstances, some rules of more or less general application are of controlling influence in determining whether a given transaction is of one character or the other.

A recognized method by which to determine whether a deed, absolute on its face, may nevertheless operate as a mortgage, is to ascertain whether or not at the time of its execution, there was a pre-existing or concurrently created debt by way of loan, owing to the grantee, the subsequent payment of which, in pursuance of a contemporaneous agreement, entitled the grantor, or debtor, to a reconveyance of the estate. An absolute conveyance without any other consideration than that assumed, coupled with an agreement to reconvey, will be regarded as a mortgage.

Whatever form the transaction may have assumed, if the relation of debtor and creditor, with its reciprocal rights, continues between the contracting parties, or if such relation was then created, by a loan or advance, and if...