Summary
dealing with this type of agreement and stating, "[i]n a bill filed to redeem property, conveyed to the [creditor] by a deed absolute on its face, a Court of Equity will not relieve the plaintiff, upon mere proof of the parties’ declarations. There must be proof of fraud, ignorance or mistake, or of facts inconsistent with the idea of an absolute purchase."
Summary of this case from Banks v. HunterOpinion
December Term, 1852.
In a bill filed to redeem property, conveyed to the defendant by a deed absolute on its face, a Court of Equity will not relieve the plaintiff, upon mere proof of the parties' declarations. There must be proof of fraud, ignorance or mistake, or of facts inconsistent with the idea of an absolute purchase.
CAUSE removed from the Court of Equity for MOORE, at Fall Term, 1852.
Kelly, for the plaintiff. (54)
Strange, for the defendant.
In his bill, filed 22 November, 1850, the plaintiff states, that early in 1847, he was much involved in debt, and addicted to intemperate habits, which greatly impaired his mind, "though his recollection of the business transactions in which he was engaged is very distinct." That whilst thus distressed by pecuniary embarrassments, the defendant, who is his near relative, in affluent circumstances, and a shrewd manager, professed to feel great sympathy in his condition; that on some few occasions theretofore, the defendant had advanced him money; and that on 25 January, 1847, he called (51) on and obtained from defendant a loan of $383, which, together with sums previously borrowed from him, amounted to $500; and to secure the payment thereof, he conveyed to William Barrett a tract of land worth $350, and a slave named Jack, worth $550 to $600, in trust, for the benefit of the defendant — the deed stipulating that the property was to remain in the plaintiff's possession for one year, at the end of which time it was to be sold, in the event the debt secured was not paid. That he rented the land for that year, and the defendant received the profits, promising to account for the same in their final settlement. That the said slave, being in the possession of plaintiff, was seized and put in jail, under executions issuing from a Justice of the Peace, for $181.35; and that, on 1 May, 1847, whilst the said slave was in jail, and the plaintiff "was much confused and excited with liquor, and busily engaged in preparing for the funeral of an aged lady that had been a member of his family, the defendant came to his house — stated that said property was liable to the satisfaction of the said executions — and advised your orator, excited with liquor, confused with business, and bewildered in intellect as he was, to execute to him instruments purporting to be an absolute bill of sale for said Jack and tract of land, c." That he then stated to the defendant, that the negro, Jack, was a favorite servant, and that "he would not consent to sell him absolutely; but if defendant would allow your orator to redeem the boy and the land when he got able to do so, and would pay said executions, your orator would execute the instruments proposed." That the defendant agreed that he might redeem the said property at any time within ten years, and such was the understanding between them when he executed said deeds. He admits that the defendant, in 1849 or 1850, paid off the said Justices' executions, $181.35, which sum, added to the said sum of $500, constituted the whole amount of his indebtedness to him.
The plaintiff further states that in 1847, the defendant assumed the payment of a debt due by him to one Ritter, and that to secure himself therein, the defendant "caused him to convey to him by deeds purporting to be absolute, but with the express understanding that your orator might (52) redeem, a large amount of personal and real property, of value much greater than the debt assumed, c.," and in May, 1848, he did redeem the same — though, before he was permitted by defendant so to do, the defendant claimed $50 for his trouble, and services rendered, which he paid. That this conduct on the part of the defendant first awakened his suspicions of him, and before he paid the said $50, he required defendant to admit, before a witness, his right to redeem the boy Jack and the land aforesaid, upon his payment of the debt due, to wit., $681.35. That acting on this understanding, he sought a purchaser for said land, and finally bargained to sell the same to one Cole for $350 — intending to apply the purchase money towards the payment of his debt to the defendant.
That since that time the defendant has on sundry occasions and to different persons, admitted his right to redeem said property, and on 26 September, 1850, he tendered to the defendant the whole amount of his debt, and demanded a reconveyance of the said land and negro — and that the defendant refused to comply with his demand. The prayer is for a redemption of the property, and for an account.
The defendant, in his answer, admits that the plaintiff was, in 1847, addicted to intemperate habits, and much involved in debt; and that, being willing to assist him, he had from time to time loaned him small amounts, and afterwards, as charged in the bill, the sum of $383, amounting, in all, to $500; and that, for the purpose of securing the same, he took a deed of trust, as alleged, in which it was stipulated that the property conveyed should remain in plaintiff's possession for the year. That he received the profits of the land for that year; and further, that the negro, Jack, while so in plaintiff's possession, was seized under execution and put in jail. That being alarmed at the course things were taking, and fearing he would be deprived of the security for his debt, he proposed that if plaintiff would make him an absolute title to said land and slave, he would pay off the said executions, and that he would send another negro in place of Jack, to assist him in working his crop — and that the plaintiff readily and gladly assented to the proposition. The defendant further states, that the said negro, Jack, was and is a cripple, and would not at (53) the time have sold for cash for more than $400 — that he did not desire to purchase said property at the price mentioned — and that he did so, not because he considered it a bargain, but to save himself from apprehended loss. And the defendant avers, that his said purchase was entirely unconditional, and he does not believe that the plaintiff, at the time, had any wish to have the property back, but considered it well sold; nor would he, in his sober moments, ever have thought of its redemption, except from the extraordinary rise which has recently taken place in this species of property. He further avers that no advantage was taken of the plaintiff in procuring the conveyances for said property, but they were by him freely executed. It is true, he states, the transaction took place about the time of the funeral of an aged woman, (a pauper at the poor-house, kept by plaintiff), but the bargain took place in the forenoon, when the plaintiff was sober and had full knowledge of what he was doing.
The defendant also admits, that in 1847, he agreed, at the instance of plaintiff, to assume a debt of his to one Ritter of $400 to $500: and to secure himself, took a conveyance of property, absolute on its face, but under an agreement with the plaintiff that he should have the use and benefit thereof — a portion of which property was under incumbrance — in raising which, the defendant was at much trouble and expense, and on account whereof he received $50, which was a reasonable charge. He further admits that he may have told plaintiff at some times that he might have back negro Jack and the land, upon the repayment of the money due him; and for a long time he would have gladly got back his money and interest for the said property; but he positively denies that after his payment of the said justices' judgments, he was under any legal liability to do so. He admits also the sale of the land to Cole for $350, but says the same was made without any reference to the plaintiff, who, so far as he knows, had no agency in the matter.
The plaintiff replied to the answer, and proofs were taken, the general result of which will appear in the opinion delivered in this Court.
Since Streator v. Jones, 10 N.C. 423, there has been a uniform current of decisions, by which these two principles are established in reference to bills which seek to correct a deed, absolute on its face, into a mortgage or security for a debt: 1. It must be alleged, and of course proven, that the clause of redemption was omitted by reason of ignorance, mistake, fraud or undue advantage; 2, the intention must be established, not merely by proof of declarations, but by proof of facts and circumstances, dehors the deed, inconsistent with the idea of an absolute purchase. Otherwise, titles evidenced by solemn deeds would be, at all times, exposed to the "slippery memory of witnesses." These principles are fully discussed in Kelly v. Bryan, 41 N.C. 283, and it is useless to elaborate them again.
The plaintiff has failed in both particulars. He gives no satisfactory account of the fact that the deed is absolute on its face; and he proves no facts and circumstances dehors the deed, inconsistent with the idea of an absolute purchase. It is true he proves declarations of the defendant, which render it highly probable that there was some understanding between the parties, that the defendant would take back his money and reconvey the negro: but this does not bring the case within the two principles above announced.
It was suggested upon the argument, that as the defendant, at the time the deed was executed, stood towards the plaintiff in the relation of a creditor, whose debt was secured by a deed of trust, the case fell within the rule which prohibits one occupying a confidential relation from dealing with one under his influence, unless he could take the onus of proving that no advantage was obtained, and no undue influence exerted or brought to bear.
The case does not come within that principle. The property was in the hands of a trustee whose duty it was to act as the agent of both the creditor and the debtor, and to see that it brought a fair price, if it became necessary to sell. The trustee, therefore, could not have bought of the debtor, because, as it was his duty to sell, he was not at liberty to buy. But the creditor was under no such disability; for it (55) was not his duty to sell, and there was nothing growing out of the relation in which he stood to the debtor, to prevent him dealing with the debtor, and making a bargain by which, upon the advance of a further sum of money, the deed of trust was cancelled, and an absolute deed executed — and the plaintiff must stand or fall upon his being able to bring the case within the two principles applicable to bills of this kind, although it may be that the fact of there having been a prior deed of trust securing the larger part of the purchase money, would be allowed some weight when only a slight matter was necessary to "kick the beam." Kemp v. Earp, 42 N.C. 170.
PER CURIAM. Bill dismissed with costs.
Cited: Brown v. Carson, post, 274; Yates v. Cole, 54 N.C. 114; Clement v. Clement, Ib., 185; Glisson v. Hill, 55 N.C. 259; Bonham v. Craig, 80 N.C. 227, 8, 9.