Watkins v. Greer

• Decision Date: 29 June 1889
• Parties: WATKINS v. GREER
• Court: Arkansas Supreme Court

11 S.W. 1019

52 Ark. 65

WATKINS v. GREER

Supreme Court of Arkansas

June 29, 1889

Decree affirmed.

APPEAL from Jefferson Circuit Court in Chancery, JOHN A. WILLIAMS Judge.

Watkins and wife filed their complaint against Greer, alleging that the instrument copied in the opinion created a mortgage, and praying for an account of rents and for redemption. The court below dismissed the complaint for want of equity, and the plaintiff appealed.

J. W House, for appellant.

The instrument was a mortgage. The law regards the substance of things and not their forms or shadows. 104 Pa. 136; 94 Ind 76; 15 Wisc., 666; 22 id., 465; 58 id., 434; 1 Murphy (N C.), 116; 70 Ill. 416; 55 Pa. 311; 3 W. & S., 384; 41 Ill. 522; 1 Paige (N. Y.), Ch. 56. It shows upon its face that it is a mortgage, intended to secure the payment of indebtedness mentioned therein. It has all the ingredients of a mortgage. Greer held the land in trust as a security for the payment of the debts mentioned. 24 Hun., 451; 60 Pa. 187; Walk. Chy., 110; 5 John. Chy. (Mich.), 435; 17 Beav., 1; 42 Pa. 518. Once a mortgage, always a mortgage. 2 Root (N. C.), 279; 1 Jones on Mortg., sec. 242; 2 Cow. (N. Y.), 324; 2 Col. 89; 18 Peck., 540; 23 Ill. 648; 32 id., 475; 62 Mo. 202; 1 Wend., 433; 3 id., 208; 46 Pa. 331; 55 id., 311; 12 Wis. 499; 9 Wheat, 489; 68 N.Y. 499; 82 N.Y. 385; 32 Me. 141; 3 Jones Eq. (N. C.), 427; 27 Vt. 589; 41 Ill. 522; 23 Ark. 479.

The first clause provides that Greer may sell the lands, and after paying the debts, the surplus is to be paid to Mrs. Watkins. This is a mortgage. 19 Vt. 9; 3 Barb. (N. Y.), 152; 1 Jones on Mortg., sec. 271 and note 5, and 248; 2 Washburn, 55, 56; 5 McLean, C. C., 281; 6 Dana (Ky.), 473; 30 Ind. 495; 3 Watts (Pa.), 188; 6 Pa. 390; 31 id., 295; ib., 138; 5 Mass. 109; 70 Ill. 416.

On payment of the debts the land would have reverted to Mrs. Watkins without a conveyance. 2 Dev. Eq. (N. C.), 470; 18 Pick. 299; 4 Allen (Mass.), 417; 2 J. J. Marsh. (Ky.), 113; 4 Cal. 97; 18 Ill. 578; 3 Watts (Pa.), 118; 11 Mich. 538. 21 Minn. 520; 22 Mo. 79; 38 Mo. 349; 47 Mo. 543; 17 Sarg. & R. (Pa.), 70; 24 Tex. 17; 8 Gray (Mass.), 505; 5 Mass. 109; 22 Ind. 427; 34 Vt. 166; 18 Iowa 576; 49 Iowa 487; 49 Wisc., 697; 90 Ill. 245.

Being a mortgage, an attempt to limit the period of redemption to one year was void. The equity of redemption cannot be thus limited. This clause meant simply that if a sale was not had, or the debts paid within a year, Greer had the right to foreclose his lien in the courts, as under any other mortgage. 7 Johns. Ch., 39; 1 Saxton Ch. (N. J.), 534; 11 Minn. 22; 13 Wisc., 264; 6 Watts. (Pa.), 405; 2 Dev. Eq. (N. C.), 470; 3 Watts. (Pa.), 118; 1 Randolph (Va.), 258; 6 Tex. 294; 3 Sand. Ch., 492; 47 Am. Rep., 551; 7 Vesey, 273; 23 Ill. 648; Busb. Eq. (N. C.), 88; 37 Ill. 216; 6 Pa. 390; 7 Watts. (Pa.), 261; 21 Mo. 325; 65 N.C. 520; 16 Sarg. & R. (Pa.), 361; 4 W.Va. 4; 14 Wisc., 453; 44 Wisc., 408; 109 Mass. 130; 64 Pa. 319; 3 Watts & S. (Pa.), 384; 9 S. & R. (Pa.), 434; 5 Mich. 231; 18 Pick. 299; 4 Allen (Mass.), 417; 2 J. J. Marsh. (Ky.), 113; 4 Col. 97; 18 Ill. 578; 5 Miss. 317; 2 Cow., 324; 16 Ala. 472; 7 Watts (Pa.), 372; 4 Sneed (Tenn.), 415; 18 N.J.Eq. 358; 39 Me. 110; 5 Gray (Mass.), 505; 1 Allen (Mass.), 107; 26 Conn. 213; 42 Ill. 453; 22 Pick. 526; 13 Vt. 341; 22 Kan. 661; 59 Tex. 423; 3 Pick. 484; 55 Cal. 352; 42 Cal. 169; 1 Sand. Chy., 56; 7 Ark. 505; Pom. Eq. Jur., vol. 3, sec. 1195; 1 Jones' Mortg., 265; Tiedeman on Real Estate, secs. 304-5.

The whole transaction was merged in this agreement, and its sole object was to secure Greer in the payment of the several demands mentioned. 29 Gratt., 35; 24 Cal. 385; 92 Ind. 49; 7 N.J.Eq. 27; 33 id., 143; 24 id., 397.

If a mortgage or redeemable estate, parol testimony is inadmissible to contradict it. But if it is not a mortgage on its face, then parol testimony may be introduced to show the real intention of the parties. 37 Ill. 216; 6 Pa. 390; 6 Watts, 130; 31 Pa. 131; 22 Pa. 171; 5 Binney (Pa.), 499; 3 Pom. Eq. Jur., sec. 1195.

The testimony clearly shows the instrument a security for a debt, and Watkins had a right to redeem until barred by the statute of limitation. 67 Pa. 96; 3 Watts & S. (Pa.), 384; 77 Am. Dec., 658; 64 Pa. 315.

U. M. & G. B. Rose, for appellee.

1. The testimony of the lawyers to show what the contract meant, there being no charge of any mistake or ambiguity, was clearly inadmissible for any purpose. 1 Pet., 1; 41 Ark. 499; 46 id., 174; 1 Jones Mortg., sec. 96.

2. When there is reasonable doubt on the face of a writing, whether it be a mortgage or not, it is held a mortgage (38 Ark. 213; 13 id., 115), but one cannot take a plain instrument, throw doubt on it by parol evidence, and then say it must be held a mortgage. 1 Jones on Mortg., sec. 335; 40 Ark. 149; 19 Ark. 278; 31 id., 163; 23 id., 212.

3. The following cases in our own Reports are decisive of this case: 3 Ark. 366; 5 id., 340; 38 id., 264; 34 id., 666. See, also, 1 Russ. & M., 506; 2 Edw. Chy., 139; 8 Paige, 243.

M. L. Bell and Hemingway & Austin, for appellee.

The whole matter was a mere gratuity on Greer's part, and simply meant as it reads, that if the place could be sold in a year for more than the amount of Watkins' indebtedness, the surplus should be paid to Watkins. It was not a mortgage and was not so intended by either party; nor did it create a trust. 34 Ark. 665, and authorities cited by co-counsel, W. R. Coody.

W. R. Coody, also for appellee.

1. What this instrument is must be gathered from its language and stipulations as a whole, according to the intent of the parties as gathered from the entire instrument. 3 Ark. 225; 13 id., 125. Parol evidence not admissible to alter, vary, change or explain a written instrument. 4 Ark. 179; Baker v. Turner, 30 Ark.; 13 id., 592; 16 id., 519; 20 id., 293; 21 id., 69; 15 id., 543.

2. It cannot be contradicted by a pretended reformation. Courts only reform contracts when there is mutual mistake. They do not make new contracts. 26 Ark. 28; 1 Story Eq., secs. 155, 156; 2 Lead. Cas. Eq., part 1, pp. 981, 982, 983; 8 Rep., 175, 176, 177; Rector v. Collins, 45 Ark. 5; 1 Story Eq., 164, 165, 166.

3. Parol evidence not admissible to establish a trust. Mansf. Dig., sec. 3382; Perry on Trusts, sec. 75.

4. It is not a mortgage, because it contains none of the elements of a mortgage--no mortgagor or mortgagee. 1 Jones Mortg., secs. 11 to 16; 18 Ark. 85, 170--something conveyed, 37 Ark. 312; 1 Jones Mortg., sec. 136; no debt to be secured. Jones on Mortg., secs. 69, 70, 343 to 346.

It is not a trust. Perry, secs. 1, 2, 9, 799, 828, etc.; 41 Ark. 400; 15 id., 312; 19 id., 51; 21 id., 539.

6. Mrs. Watkins was only entitled to the surplus in case of a sale within the year. This created no lien. 37 Ark. 516; 39 id., 385. See, also, 113 U.S. 676; 34 Ark. 365.

7. While in many of its provisions it resembles a conditional sale, with power to repurchase within a year, it is wanting in several of the necessary elements of such a sale; because, (first) Watkins had no interest in the land to convey; (second) there was no agreement to reconvey, nor could it revert to them under any circumstances. Jones Mortg., secs. 267 to 276 and 331; Rose Dig., p., 540; 8 Paige, 243.

8. The contract speaks for itself, that, if a sale could be made within a year, all over $ 18,000 was to be paid to Mrs. Watkins.

9. There was no consideration for the agreement--it was a mere gratuity. 1 Pars. Cont., pp. 429, 436, 450; 34 Ark. 303. No mutuality. 4 Ark. 252; 24 id., 52; 42 id., 243; 38 id., 58 to 71.

WILLIAMS, SP. J. HEMINGWAY, J., did not sit in this case.

OPINION

WILLIAMS, SP. J.

The decision of this case involves the correct construction of the following agreement, executed February 27, 1878: "Whereas, at a commissioner's sale had and held at the City of Little Rock, by L. E. Barber, Commissioner, on the 27th day of February, A. D. 1878, under and by virtue of a decree of the Supreme Court of the State of Arkansas, in the case of James K. Brodie et al. v. Thomas Watkins and wife, Green B. Greer, of the Town of Searcy, in the County of White and said State of Arkansas, became the purchaser of the real estate herein after described for the sum of $ 10,000, $ 500 of which sum was paid by him in cash, and the balance in a promissory note for nine thousand and five hundred dollars ($ 9500), payable one half thereof in nine months and the other half thereof in twelve months from the date thereof, to-wit, the 27th day of February, A. D. 1878, and which said promissory note was given by the said Greer with surety, approved by the said Commissioner. And whereas, Thomas Watkins and Margaret Watkins, his wife, of the said Town of Searcy, are indebted to George F. Baucum, of the City of Little Rock, in the sum of eight thousand six hundred and seventy-seven dollars and seventy-five cents ($ 8,677.75), with interest thereon at the rate of 10 per cent. per annum from the date thereof, and to the said Green B. Greer in the sum of six thousand five hundred dollars ($ 6500), with interest at the rate of 10 per cent. per annum from the date hereof, and also the sum of $ 1815, with 10 per cent. interest per annum thereon from the date hereof, being the amount of two notes and interest given by W. R. Coody to Greer & Baucum, and assigned by said Green B. Greer to the said George F. Baucum, but said sum is to be subject to the deduction of whatever sum may be found due and owing to the said Coody, as attorney in the suit of James K. Brodie et al. v. Thomas Watkins and wife.

"And whereas, it is intended by the said Green B. Greer to sell the said real estate for the best advantage for the said Thomas Watkins and Margaret Watkins, his wife.

"Now....