Cosby v. Buchanan , 81 Ala. 574 ( 1886 )

CLOPTON, J.

— Appellee files the bill to redeem real estate, situate in Troy, which he conveyed March 6, 1882, by absolute deed to A. Y. Cosby, in consideration of two thousand dollars, on the alleged ground that the conveyance was intended to operate as a mortgage. The record raises an unmixed question of fact. It is undisputed that prior to, and at the time of the making of the deed, the grantor owed Cosby debts secured by mortgages on the same and other property, and other small debts unsecured, which entered into the consideration of the conveyance. Winslett, who represented a claim held by his sister, which -was secured by a mortgage, testifies that in March, 1882, he was sent for by Cosby to consult in relation to the property, when it was agreed, complainant being present, that they would -pay a balance of the purchase-money of the lot unpaid, which had a prior lien, and have a deed made directly to themselves. A day or two afterwards, he was informed this agreement had failed, and another consultation wras had, when Cosby agreed with complainant to pay the balance of the purchase-money, take an absolute deed to the lot of land as security, and give complainant a separate instrument in writing showing his right to redeem at some future time. Winslett was not present when the deed was in fact made, but shortly thereafter, Cosby gave complainant an instrument in writing, which bears no date, whereby he obligated himself to make complainant a deed to the lot of land, upon the payment of two thousand dollars, with interest within two years from the date. Winslett is a subscribing witness, and testifies that the instrument was made in pursuance of the previous agreement. There being a difference as to the rate of interest to be paid, it was stated in the instrument, “ with the interest agreed upon.”

It is insisted that the conveyance and defeasance having-been made at different times, the defeasance is without consideration, and no rights can arise under it. The conveyance and the defeasance having been made in performance and by the terms of the same agreement, must be considered and construed substantially as cotemporaneous acts, and as forming one transaction and agreement. The character of the deed must be determined by the intention of the parties clearly and. satisfactorily proved./7 When it is absolute, and only parol evidence is relied on, the party affirming that the conveyance was intended as a security for a debt, must show that such was the intention by clear and convincing evidence. But when it is admitted or shown by separate written instruments, that the transaction is not an unconditional sale, as the deed imports, but either a mortgage or a sale with right to repurchase, the court, in the interest of complete justice, is inclined to construe the transaction as a mortgage; and on the question, whether in such case a mortgage or conditional sale was intended, the same degree of proof is not requisite. Any doubt arising as to the intention will be resolved in favor of the construction, that the conveyance is a security for a debt. — Mitchell v. Wellman, 80 Ala.

The attention ol Winslett was especially directed to the transaction by his interest and connection therewith. Complainant was indebted to his sister, for the security of which she bad a mortgage on the property, and which Cosby told him was a part of the consideration of the deed. His testimony is positive, consistent in itself, supported by the writings, and corroborated by the declarations of the grantee, and the subsequent conduct and dealings of the parties. The complainant continued, after the execution of the deed, to occupy the residence situated on the lot without the payment of rent; the grantee collected rents of this and other property belonging to complainant, and appropriated them to his claim and the Winslett debt, pro rata ; and the executrix and devisee of the grantee has said since his death, that she did not want the property, but the amount due her, to ascertain which an attempt was made by the parties, but failed. The relation of creditor and debtor prior to and at the time of the execution of the conveyance is shown, and also a continuing debt thereafter, which the complainant is liable to pay.' Limiting the consideration to the legal evidence and the testimony of the disinterested witnesses, the conclusion of the chancellor, that the deed was intended as a security for a debt, is sustained by the evidence.

Affirmed.