Thomas v. Livingston , 155 Ala. 546 ( 1908 )

DOWDELL, T.

The bill in this case seeks an accounting for rent of land. The theory of the bill is that the relation of mortgagor and mortgagee existed between the complainant and respondent, and that during the existence of such relationship the respondent collected rents from the mortgaged premises for which he was in equity liable to account, but has never accounted. It was on this theory, as made by the allegations of the bill, that on former appeal from a decree dismissing the bill on motion for want of equity it was ruled that the bill contained equity, and the decree of the chancery court was reversed and the cause remanded, putting the respondent to further defense on the facts as made by the bill. On the remandment of the cause, fhe respondent answered the bill, denying and. putting in issue all of the allegations material to the equity of ■fhe bill; and on the, issues so made evidence was taken, and the cause was finally heard on the pleadings and proof, and a final decree rendered in favor of the respondent, from which the present appeal is prosecuted.

The principles of law applicable to the case were stated on the former appeal, and authorities cited in support thereof, on the facts stated in the bill. The question now is mainly one of fact. The contention of the appellant is that the deed of December 9, 1903, though absolute in form, was intended as a security for a loan. It is admitted that at the time of the execution of the deed there was a contemporaneous agreement expressed m uniting, whereby the complainant, who was the 'grantor in the deed, was allowed the right to repurchase the property conveyed within 12 months for an amount fixed in the paper writing. The writing was not introduced in evidence, but its contents were testified to. The main point in the case is whether the transaction agreed upon between the parties was that which was expressed in the paper writings — the deed and the contemporaneous writing — or whether there was an out side agreement that the same, notwithstanding the paper writing, was intended and understood between the parties to be a mortgage. On this point the testimony of the complainant, supported by that of her husband, is in direct conflict with the testimony of the respondent, supported by that of his attorney. Such is the status of the case in respect to the testimony of the witnesses, who in a sense may be said to be interested. Back of this transaction there existed an indebtedness from the complainant to the mother and sister of the respondent for borrowed money, secured by two mortgages on the property in question, as well as other lands of the complainant. The estate in question, at the time of the conveyance by the deed of December 9, 1903, consisted of a reversionary interest in the land described; the possession of the land being in the life tenant. The respond-(jut represented big mother and sister generally in lending their money, and made the loans in the present instance, secured by the two mortgages, to the complainant, and as the agent of his mother and sister had the management of their business and the control and collection of the mortgages. It was admitted by the respondent that a portion of the money represented in the mortgages was hi.s own; and for the purposes of this case he may be regarded as a mortgagee as to this prior existing indebtedness of the complainant.

The theory of the appellant’s case is based on the proposition that by the transaction there was a mere continuance of the debt, and that the respondent took the deed and executed the contemporaneous writing, giving a right of repurchase to the complainant, because he supposed it gave him a better opportunity to obtain the land by a technical default in the payment, of the debt. Is this theory supported by the evidence? The deed and the written agreement, being contemporaneous, are to he construed as one instrument, and, when- so construed, on its face it- was a conditional sale. To convert such an instrument into a mortgage, the understanding and intention of both parties to such instrument must be shown to have concurred that it should so operate. The fact, however clearly proven, that the grantor intended the transaction a mortgage, is not enough, if as a fact the grantee did not so understand and intend it. The doctrine of mutual assent and concurring minds as an element of a valid contract is one applicable alike to all contracts. As was said in the case of. Douglass v. Moody, 80 Ala. 69, a case similar to the one before us: “We have said the concurring intention of all the parties determines the character of the transaction, and, when ascertained, must prevail. ‘It is not the intention of. the one party, disassociated from the intention of the other, which is to be ascertained.’ The mutual assent of the parties is essential to the completion of a contract. The ascertainment of different intentions and different understandings does not malm a ‘doubtful case/ in which equity will construe the transaction to be a mortgage.” — Douglass v. Moody, 80 Ala. 61; Mitchell v. Wellman, 80 Ala. 10.

Again, a debt is necessary to the existence of a mortgage, and, if nonexisting, the transaction cannot 'be deemed a mortgage. This is a proposition of law so well established that it is hardly necessary to cite authorities, and we content ourselves with the citation of the two cases of West v. Hendrix, 28 Ala. 226, and Robertson v. Farrelly, 16 Ala. 472, where cases, are collated. In the present case, was there a continuance of the preexisting debt, and was it the understanding and intention of the parties that the transaction represented by the writings should operate as a mortgage?- We recognize the doctrine in such cases that courts of equity, where the evidence is conflicting and it is doubtful which of the two> theories is true, that of a conditional sale or mortgage, are inclined to construe the' transaction a mortgage and so resolve the doubt. But in the case before us a careful consideration of the evidence convinces our minds that there was no continuance of the old debt, nor intention of both parties that the transaction should be and operate.as a mortgage. The evidence is undisputed that the old notes and mortgages were canceled and surrendered to the complainant and also marked satisfied on the record. The respondent assumed the payment of the debts due from the complainant to the respondent’s mother and sister, represented in the old notes and mortgages, and as an additional consideration paid tbe complainant $500 in cash. Tbe complainant was not in possession of tbe property conveyed in tbe deed, and bence did not remain in possession. Tbe estate conveyed was only a reversionary interest in the land described. Tbe mortgages which were canceled and satisfied contained tbe property conveyed by tbe deed, besides other lands belonging to tbe complainant. It is not reasonable to suppose that tbe respondent would give up a part of bis mortgage security for tbe old debts and at tbe same time lend tbe complainant $500 additional; and this, too, in tbe face of tbe undisputed evidence that tbe respondent was pressing tbe collection of the mortgage indebtedness and refused to extend tbe same.

Much stress is laid in argument by counsel for appellant on tbe disparity between tbe consideration in tbe deed and tbe value of tbe land conveyed. While tbe evidence shows that tbe land, after tbe falling in of tbe life estate, was worth considerably more than tbe amount of consideration expressed in tbe deed, yet it must be borne in mind that tbe interest conveyed was only a re-versionary interest, and tbe evidence does not show any great disparity between tbe value of such reversionary interest and tbe consideration expressed. We have no doubt, that in tbe transaction both parties speculated upon tbe probable duration of tbe life tenancy. In this we can see nothing more than tbe parties bad a right to do, and nothing that was unfair or oppressive on tbe part of the respondent. Indeed, we fail to discover in tbe evidence anything oppressive or unfair. As we have before said, tbe testimony of tbe principals to tbe transaction was in direct conflict as to its nature and character. Tbe evidence, however, of Abney, tbe only disinterested witness who was present at the time, and who was called in by the parties and drew up the contemporaneous written agreement, sustains the respondent. This witness testified that it was perfectly understood by the parties that the transaction was a sale, and not a continuance of the mortgage indebtedness. None of the elements laid down in Reeves v. Abercrombie, 108 Ala. 535, 19 South. 41, exist tending to show that the transaction was a mortgage. We think there was abundant consideration moving to the complainant, and the contract was one which the parties, being sui juris, had a right to make and should be required to live up to. The life estate having terminated while the title to the reversion was in the respondent, he became entitled to the rents up to and until his reconveyance of the property by him to the complainant. It follows, therefore, that the decree of the chancellor must be affirmed.

Affirmed.

Tyson, C. J., and Anderson and McClellan, JJ., concur.