Sposedo v. Merriman , 111 Me. 530 ( 1914 )

King, J.

The well established rule in this State is that the decision of a jingle Justice upon matters of fact in an equity case should not be reversed unless the appellate court is clearly convinced of its incorrectness, the burden being on the appealing party to prove the error. Young v. Witham, 75 Maine, 536; Paul v. Frye, 80 Maine, 26; Sidelinger v. Bliss, 95 Maine, 316; Herlihy v. Coney, 99 Maine, 469; Railroad Co. v. Dubay, 109 Maine, 29. In Young v. Witham, supra, Peters, C. J., well said: “There is good reason for the rule in our practice. Cases are now heard befort a single Judge mostly upon oral evidence. When the testimony is conflicting, the Judge has an opportunity to form an opinion of the credibility of witnesses, not afforded the full court. Often there are things passing before the eye of a trial judge that are not capable of being preserved in the record.”

There were two issues of fact of essential importance in the case: First, whether the assignment, made June 5, 1911, by the plaintiff to Charles H. Allen, of the bond for a deed, was made as security for a loan, or made as an absolute unconditional transfer of all the plaintiff’s right in the property; and, second, whether Percival P. Baxter had notice prior to October 5, 1911, that the plaintiff claimed that the assignment of June 5, 1911, was given for security only. On both of those issues the oral evidence was very conflicting.

The plaintiff testified that the transfer of his bond for a deed to Mr. Allen was made in pursuance of an oral agreement between them whereby Allen was to furnish not exceeding $500 to pay certain specified bills, and he was to transfer the bond to him as security only for that loan or advancement. His testimony recites in detail the agreement, as he claims it was made. The incumbrances against the property at that time amounted to a little less than $9000, and the plaintiff claimed that it was worth $20,000, and that he had refused offers of $16,000 for it. Wesley M. Snow, testified that in the spring of 1911 he offered the plaintiff $16,000 for the property which he refused, and Fred M. Miller testified that he offered the plaintiff $16,000 for it during 1911.

On the other hand Mr. Allen testified that the assignment of the bond to him was not made for security but as an unconditional transfer of all the plaintiff’s rights and interests in the property. And he claimed, and there was other testimony in behalf of the defendants tending to show, that the property at the time was much out of repair and that $9000 was a fair valuation of it.

As to the other issue, that of notice to Mr. Baxter, the oral evidence was also much in conflict. The plaintiff claimed that after he learned that Mr. Baxter had obtained an assignment of the $5000 mortgage he went to him and explained his interest in the property, and that he had a right to redeem it. On the other hand Mr. Baxter testified that the plaintiff had no such conversation with him at any time, and none whatever until after he had purchased the property from Allen and Libby. That after that time the plaintiff came to his office and asked if he had bought the property, and being told that he had, asked if he could get it back again, and that he told him he had bought it out-right in good faith and did not care to sell it to anybody. There was much other evidence introduced tending to support the contentions of the one side and the other on the issues of fact involved. But it will serve no useful purpose to attempt here any detailed analysis of all the evidence, which we have carefully examined together with the exhaustive briefs of counsel.

The question now before this court on this branch of the case is not determined by a weighing and balancing of the conflicting evidence, as disclosed in the record, and ascertaining on which side it appears to preponderate. The court must be clearly convinced that the findings of fact by the single Justice are manifestly wrong, otherwise they must stand.

After full consideration of all the evidence, and applying the rule above stated, the court is not clearly convinced that the decision of the single Justice on the contested issues of fact in the case was wrong. He saw and heard the witnesses and had a better opportunity to judge of the weight of the -conflicting testimony than this court now has.

1. The learned counsel for the defendants has argued several objections to the decree, some of which depend upon a state of facts which he contends was established by the evidence, but those objections necessarily appear to be unsustainable when examined in the light of the facts as found by the single Justice, and for that reason they need not be here particularly considered. Such is the objection that the assignment of June 5, 1911, cannot be declared to be an equitable mortgage “because the grantee, Charles H. Allen, had no intent that this conveyance be one for security only.” The findings of fact however expressly show the - contrary as to Mr. Allen’s intention. Such also is the objection that the plaintiff has no right to redeem from the defendants because they are “bona fide purchasers” of the property. But as to that fact, too, the finding is otherwise.

2. The objection that the plaintiff is barred by his own laches from seeking to have the assignment of June 5, 1911, declared one for security only does not, we think, have sufficient support in the evidence. Moreover, the facts found are to the effect that prior to the purchase by Mr. Baxter from Allen and Libby of their interest in the property, including Allen’s interest under the assignment of June 5, 1911, Mr. Baxter was notified of the jplaintiff’s claim that the' assignment was given for security only, and was subject to redemption.

3. It is argued that there is a variance between the ground of relief set forth in the bill and that claimed by the plaintiff in his proofs. The variance claimed centers about the transfer of June 5th, 1911, and it relates to the allegations and proofs concerning the alleged oral agreement in pursuance of which that transfer is claimed by the plaintiff to have been made, and to the purpose, effect and validity of the transfer. The allegations of paragraph 4 of the bill are as follows:

“On or about the first day of June, 1911, an oral agreement was entered into between the plaintiff and said Allen whereby the plaintiff agreed to convey to Allen by way of security his interest in the premises, and said Allen agreed to advance to the plaintiff in cash such sum as should be needed, not exceeding a maximum amount of $500.00, to be used by the plaintiff to satisfy the claim of one H. F. Farnham Co., against the plaintiff, and to pay the claims of such other creditors as would agree to accept ten per cent of the face of their claims against the plaintiff in full settlement thereof; and said Allen further agreed that he would reconvey to the plaintiff the interest of the plaintiff so to be conveyed to him as aforesaid, at any time prior to March 1, 1912, when the plaintiff should repay to him the amount advanced as aforesaid. Said Allen agreed that the plaintiff should remain in possession of said premises and collect and retain the rents and profits therefrom.”

In paragraph 6 it is alleged in substance that Mr. Allen did not give the plaintiff any writing expressing the terms of his oral agreement to reconvey the bond to the plaintiff; “nor did said Allen either on said June fifth, or at any time before or since, pay the plaintiff any consideration whatever in return for the instrument in writing executed by the plaintiff as aforesaid on June 5th.” It is also alleged in paragraph 6 that the plaintiff was physically and mentally unable to understand the nature of his acts in signing the instrument, and to protect himself in respect to his own rights under the oral agreement previously entered into between himself and Allen. And it is also alleged that after June 5th the plaintiff obtained the assent of. several of his creditors to accept ten per cent of their claims against him, and that when Mr. Allen was informed of that he repudiated and denied his agreement.

The plaintiff’s proof was that the assignment of June 5th, 1911, was made as security, and that was found to be the fact by the single Justice. But as to the'bills that were to be paid by the money that Allen was to furnish, the plaintiff’s proof differed materially from the allegations of the bill. He testified that the money so to be furnished was to pay interest to the bank of $75, an insurance bill which had been reduced by discount to $87.67, the bill of H. F. Farnham Co. of $87.50, and interest due Allen and Libby of $177.50, the whole amounting to $427.67; and he denied all the allegations of the bill as to a compromise of claims due his creditors on the basis of ten per cent, saying that he then had practically no other creditors, and that he did not understand why such allegations were made in the bill. There was evidence tending to show that the plaintiff was subject to frequent fits as the result of a previous serious injury, and that for a time after suffering a fit he was weak and somewhat incapacitated, but it was not shown that he had a fit on or about June 5th, 1911.

As to the allegation that Mr. Allen did not pay the plaintiff any consideration for the assignment of the bond, an explanation of it may be that it was an imperfect allegation of the fact, as testified to by the plaintiff, that Mr. Allen did not pay or furnish to the plaintiff personally any of the money that was to be furnished as the consideration for the assignment.

Variance, in its legal sense, means a substantial departure in the evidence adduced from the issue as made by the pleadings. It is a disagreement between the allegation and the proof in some matter which, in point of law, is essential to the claim relied upon for relief. House v. Metcalf, 27 Conn., 631. It is not indispensable to recovery that a party should make good his allegations to the letter. A failure to maintain all the allegations of the bill does not preclude the plaintiff from equitable relief if those sustained are sufficient to entitle him to a decree. O’Brien v. Murphy, 189 Mass., 353, 357. Since the statutes were enacted allowing much freedom as to amendments it has been the general rule that no variance between the allegations and proof is to be deemed material unless it is such as must have reasonably misled the adverse party to his prejudice in maintaining his action or defense.

The important and essential allegation of the plaintiff’s bill respecting the assignment to Allen of June 5, 1911, is that the transfer was made “by way of security” for money to be furnished, not to exceed $500, to pay debts of the plaintiff. The proof adduced tended to sustain that allegation, and it was so found. If the allegations were not sufficient for the reception of that proof, the evidence could have been excluded, but we do not find that the question was raised in the court below. Such disparity as there appears to be between the allegations and the proof relating to the particular debts to pay which Allen was to furnish not exceeding $500 is not, we think, of vital importance. It relates to immaterial details rather than to the essential substance of the ground for relief relied upon and proved. Such disparity as there was bore upon the genuineness of the plaintiff’s alleged claim, and upon his credibility as a witness, but the court is of opinion that it does not constitute such a material variance between the plaintiff’s proof and the allegations of the bill respecting the essential claims relied upon for relief as can now avail the defendants in the appellate court.

4. It is further contended that the decree below is erroneous because it provided that the defendants are to be allowed only “for all improvements and repairs made by them that were necessary for the preservation of the estate or to make the premises tenantable or that were made with the consent of. the mortgagor, but the cost of remodeling are rebuilding, and the cost of new structures on the premises are not to be allowed to the defendants except as above.” It is not claimed that the provisions of the decree are not in conformity with the well settled rule that a mortgagee is not to be allowed for permanent improvements in the way of new structures not necessary for the preservation of the property and made without the consent of the mortgagor. Bradley v. Merrill, 88 Maine, 319.

It is urged, however, that Mr. Baxter purchased the property with a bona fide belief that he acquired the absolute title to it, and that the plaintiff’s equity of redemption had become barred, and accordingly that an exception to the general rule as to compensation for permanent improvements should have been applied in this case. But the objection to the allowance of this contention is that the findings of fact do not sustain it. The decree is predicated on facts found that created a. relation between the plaintiff and the defendants equivalent to the ordinary relation between mortgagor and mortgagee. As applied to such a relation the provisions of the decree complained of are not erroneous.

5. Objection is also made that the decree provides that the defendants shall keep the premises insured for the benefit of the plaintiff and defendants as their interests may appear, make such repairs as are necessary for the preservation of the estate or to make the premises tenantable, and pay the wafer rates and taxes, and deduct the cost thereof from the income of the premises while in their possession. We do not think this objection should prevail.

Without doubt it is within the authority of the court, under the jurisdiction given it in equity by statute “for the redemption of estates mortgaged,” in a proper proceeding to redeem, to make such decrees agreeably to equity and good conscience as may be deemed by it necessary to effect justice between the parties. And we think that under this bill to redeem, where the defendants were in possession and contested the plaintiff’s right to redeem, and it was necessary to send the case to a master to ascertain the amount due the defendants, the court had authority over the income from the premises received pending the proceedings and could properly direct that it be used for the purposes specified in the decree. The provision will work justice rather than injustice between the parties.

6. Again, an objection is made because the decree provides that upon payment by the plaintiff to the defendants of the amount found due them, Baxter, MacGowan and -Merriman shall execute and deliver to him a deed of release of the premises. The provision complained of was both proper and necessary, because the $5000 mortgage which was assigned to MacGpwan has now been foreclosed, and the plaintiff gave a quitclaim deed of the premises to Allen and Libby who in turn conveyed, through Griffeth, to Merriman to hold for' Baxter. Therefore such a deed of release as is provided for in the decree will be necessary to reconvey the record title to the plaintiff.

7. Lastly, it is contended that the decree should have provided that in case of failure on the part of the plaintiff to pay the sum found due the defendants within the time specified therefor in the decree, the bill shall be dismissed. It is the usual practice to provide, in the decree for redepmtion, for the dismissal of the bill in case of failure of the plaintiff to pay within the time specified, and no doubt the omission in this case was inadvertent. The point urged in support of the contention is, that a decree dismissing the bill upon failure to pay within the time limited in the decree operates as a foreclosure of the mortgage, and that the defendants were entitled to such a provision for dismissal in this decree so that if the plaintiff fails to pay it will operate through the decree of dismissal as a foreclosure of the alleged mortgages.

In Stevens v. Miner, 110 Mass., 57, it was held, that no formal decree dismissing the bill is necessary to operate as a foreclosure of the mortgage, because that is the legal effect of the plaintiff’s failure to pay within the time specified in the decree. This case is cited in Pitman v. Thornton, 66 Maine, 469, with the following quotation therefrom: “when a mortgagor obtains a decree of redemption his right is thereby defined, and no other or different right remains to him. It is the right of which he must avail himself, if he would redeem at all, and it is cut off when it expires by the terms of the decree.” We do not think that the omission from the decree of an express provision for dismissal of the bill upon failure of the plaintiff to pay within the time limited in the decree is materially prejudicial to the defendants’ rights. The decree fixes definitely the time within which the plaintiff must pay the amount found due by the master. If he does not so pay his right of redemption then expires, and becomes forever barred.

It is accordingly the opinion of the court that the decree below must be affirmed with additional costs, and it is,

So ordered.