Opinion
(June Term, 1834.)
1. An absolute deed declared to be subject to a proviso for redemption, upon proof that the vendor was an ignorant and impoverished man, was the father-in-law of the vendee, had been upon a treaty with the latter to raise money upon loan, that the purchase was an unequal one, and was the balance which the vendor owed for the same land, together with the fact that he occupied the land for twenty-four years without paying rent, and other attendant circumstances.
2. Absolute deeds taken from embarrassed men after a treaty for a loan are viewed with distrust by courts of equity.
THE material allegations contained in the bill and supplemental bill of the original plaintiff, Frederick Kimborough, were that on or about 1 January, 1803, being greatly pressed to raise $300, which he owed in part of the price of the tract of land upon which he resided, he applied to the defendant, his son-in-law, to assist him in this difficulty; that the defendant agreed to advance this sum, and to take for security a bond from the plaintiff to convey the land in case of failure to repay the money lent; that accordingly the money was advanced, and an instrument prepared, by the direction of the defendant, which the plaintiff, who was wholly illiterate, understood and believed to be such as had been agreed upon, and under such understanding and belief executed; that the land very greatly exceeded in value the sum advanced; that from this period up to the filing of the original bill (September, 1827) the plaintiff had continually resided on the land as his own, paying the taxes, but neither paying nor called upon to pay any rent; that the defendant, during this period, had repeatedly admitted the plaintiff's right to redeem, and declared that he had no other claim on the land than as a security of the money; that the poverty of the plaintiff had rendered him unable until then to make this redemption, but now, by the assistance of his friends, he was empowered and desired to do so, and had tendered the sum lent and its interest; but that the defendant most unconscientiously refused to permit him to redeem, rejected the tender, and claimed the land as absolutely his own under the instrument aforesaid, which purports to be an unqualified conveyance in fee simple. The plaintiff averred that he never did sell nor agree to sell the land to the defendant; (559) that the distinct agreement between himself and the defendant was for a loan of money and a pledge of the land, under a bond to make title as security for its repayment; that he executed the deed under a full belief that it was but such a security, and under an entire misconception of its contents and legal operation. The prayer of the original bill was to be permitted to redeem, and for the defendant to reconvey. The supplemental bill, which was filed in 1829, brought forward the fact that the defendant had since commenced an action of ejectment against him and prosecuted it to judgment, and prayed that the execution on this judgment might be enjoined.
W. A. Graham for plaintiffs.
Nash and Winston for defendant.
The defendant, in his answer to each of the bills, admitted that the plaintiff applied to him for money to pay for what was due for the land, but denied any agreement on his part to lend or to take any security or lien on the land for the repayment of the money; insisted that he purchased the land absolutely at and for the price of $300, which was represented to him as the amount of the plaintiff's debt; that in execution of this contract of sale he paid the $300 to the plaintiff, and received from him an unconditional deed in fee simple, which the plaintiff executed after hearing the same distinctly read over, and approving of it; that after this he went with the plaintiff to the agent of the plaintiff's creditors, and there found that besides the $300, there was $50 due for interest, which additional sum the defendant then paid, and the plaintiff's bonds were then taken up; that the defendant gave a fair price for the land, or that if it was rather low, the plaintiff could not complain, as the defendant, from motives of affection, permitted him for more than twenty years to live upon it and receive its profits rent free; denied that the defendant ever admitted the plaintiff's right to redeem, or that defendant's only claim on the land was as security for repayment of the money advanced by him, and denied any tender, unless it be that George Kimborough, a son of the plaintiff, had a few weeks before asked him if he would receive the money, to which (560) question the defendant answered by asking him if he had it; that these mutual questions were asked twice, but nothing further said or done in relation to a tender.
It appeared that the injunction granted on filing the supplemental bill was, on coming in of defendant's answer thereto, dissolved with costs; that a general replication was entered to the answers; that the original plaintiff died, and his heirs at law were made parties plaintiffs in his stead; and the parties having taken their respective proofs, the cause was set down for hearing and then removed into this Court.
Many depositions were read at the hearing, which it is unnecessary to state.
There is much difficulty in ascertaining, at this day, the truth in regard to this remote transaction, when many of those who were best able to throw light upon it have been removed by death. Neither Wiers, who it appears wrote the deed, nor Jacob Smith or James Wells (which two last were subscribing witnesses to it) have been examined on the part of the plaintiffs or defendant. We can account for this omission on both sides only by the presumption that the testimony of none of these can now be had. There are, however, some facts about which little or no doubt can be entertained. At the time of the transaction the plaintiff was indebted $300 on account of the purchase of this land, which he was anxious and pressed and unprepared to pay. This was known to the defendant, who expressed a disposition to assist the plaintiff, and to take a security upon the land for repayment of the money. The plaintiff levied upon the land, which was then worth from $860 (the lowest) to $1,200 (the highest estimate), and owned scarcely any property beside. The whole of the money paid by the defendant was precisely that needed for the creditor, and (561) was paid over to him. Both the parties are represented as Germans, with very little knowledge of the English language, and the plaintiff is illiterate, and can neither read nor write. A deed absolute in its terms was executed when the money was advanced, and for twenty-four years afterwards the plaintiff enjoyed the land, paid the taxes for it, but paid no rent. And the defendant was the plaintiff's son-in-law. Besides these, which we regard as ascertained facts, many witnesses testified to declarations of the defendant that all he wanted was his money and interest; that the old man might redeem, no one else should, and that the whole must be paid in a lump. There is also evidence of declarations of the old man, who seems to have been never able to redeem by his own means, that the land was Smith's that his creditors could not touch it, and, at one time, that he would no longer pay taxes for it. As we are disposed to rely very little on the testimony as to the declarations of either party, by witnesses who probably imperfectly understood and have partially forgotten what they have heard, and do not very intelligibly relate what they remember, it is sufficient to say that the general effect of this testimony is to confirm the opinion which we have formed upon the facts that we consider as without doubt. There is no evidence of a tender.
It is a rule with all courts to consider the solemn deed of a party as containing the deliberate and well-weighed terms of his contract, and not to permit these terms to be enlarged or restrained, explained or contradicted, by parol evidence. But upon a proper suggestion that through fraud, imposition, oppression, accident, surprise, or mistake, such deed was not made conformably to the terms upon which the parties had agreed, and which deed was to have expressed, a court of equity will examine into the verity of this suggestion, and, upon that being established, will grant relief against the deed, because it is unconscientious that the party should be bound thereby. In receiving such suggestions, and in weighing the proofs by which it is attempted to support them, the Court usually acts with great (562) caution. But it would be unsuited to the exigencies of human society if, while it uniformly adhered to the same principles, it should require in all cases the same amount of testimony to satisfy its judgment. The nature of the transaction to be investigated, the relative situation of contracting parties, the usages of business, and the ordinary motives of human conduct, may render the inference of an equity dehors the deed scarcely possible in one case and quite probable in another; may require for it so complete a demonstration in the former as is seldom to be attained, and permit to be drawn in the latter from comparatively slender evidence. In all, the allegation of surprise or fraud must be established before the Court will act; but different degrees of proof are required according to the probability or improbability of the charge.
Courts of equity view with much jealousy absolute conveyances taken from embarrassed men, after a negotiation for a loan of money. They regard such persons as in a state approaching to moral duress, likely to be goaded on by distress into submission to whatever terms may be exacted; heedless of the forms and inattentive to the words with which the transaction may be veiled; and thus peculiarly exposed to mistake and surprise, as well as to imposition and oppression. Where the written contract clearly conforms to that on which the parties had agreed, equity will often relieve, because its terms are hard and grinding; and it readily receives evidence of the surrounding circumstances of the transaction to show that the written instrument does not in truth conform to the terms on which the parties had agreed. We hold it to be clearly settled that if these circumstances do establish that the parties really contracted as borrower and lender, and that what purports to be a sale and purchase covers a loan of money and security for its repayment — unless there be some explanation why the written instrument does not correspond with the precedent agreement — it will treat the instrument not as an absolute conveyance, but as security for the repayment of money lent; will hold the lender entitled, not to the thing pledged, (563) but to his money for which it was pledged; and will permit the borrower, on repaying what is justly due, to redeem what was pledged for its repayment. It arrives at this conclusion principally from a consideration of these extraneous facts, and regards as of comparatively little consequence the loose conversations of the parties. Among the circumstances which it deems of high moment when engaged in this inquiry, are a striking disporportion [disproportion] between the sum advanced and that for which the property might have been sold; the apparent vendor retaining possession, as if no deed had been made; the vendee receiving no rents, or only rents to the amount or in lieu of interest. We have seen that in the present case there is this disproportion, the money being only about one-third of what such land then sold for in the neighborhood. The man who appears to have made the absolute deed retains the possession, and enjoys the profits for twenty-four years afterwards, and pays no rent. But there are very strong additional circumstances. A loan and a pledge of the land were at one time intended, and except from the deed there is no evidence of a change of intention. The sole object for which the money was wanted, and was known to be wanted, was to enable the applicant to hold this land, the home of himself and his family. The sum advanced was precisely that needed and known to be needed for this purpose, and was all paid over to him whose claim it was necessary to remove. No benefit could result, but a certain and vast injury did result to him who sought the favor, unless this advance was in the nature of a loan. And if it were a loan, the only security which could be given must have been upon this land. Add that the plaintiff was illiterate and almost wholly ignorant of the language in which the deed was written, that the relation between the parties was such as to inspire confidence and occasion carelessness, and that unquestionably the defendant has often expressed a willingness for a redemption, and we think we cannot err in pronouncing that the deed was not designed to make an absolute conveyance of the property. Its (564) original purpose was a security for money, and it was drawn in its present form either by imposition on the grantor or, as we rather believe, from the mistake of the parties, and was afterwards unconscientiously set up by the defendant as an absolute conveyance. We hold, therefore, that the plaintiffs are entitled to redeem, and that for this purpose an account must be taken of whatever advances the defendant has made upon the faith of this security, and of the rents which he has received since he has gained possession.
PER CURIAM. Direct an account.
Cited: McLaurin v. Wright, 37 N.C. 97; Blackwell v. Overby, 41 N.C. 45; Shields v. Whitaker, 82 N.C. 521.