Glendenning v. Johnston , 33 Wis. 347 ( 1873 )

Lyoít, J.

If the position of the plaintiff is correctly understood, it is, that the agreement or defeasance signed by the parties and left with Hobkirk, was not so left in escrow, but merely for convenience, and that, although it did not pass into the actual possession of the plaintiff, there was still a valid delivery thereof to him, and the same was a valid, subsisting agreement between the parties when the conveyance was delivered to the Johnstons. If such were the facts (and the testimony introduced by the plaintiff tends to prove the same) the case is, in principle, like that of Wilcox v. Bates, 26 Wis., 465, and the conveyance to the Johnstons, although absolute on its face, is only a mortgage.

The theory of the defendants is, that neither the deed nor the defeasance was delivered, but both remained in the hands of Hobkirk as escrows — the defeasance to be delivered to the plaintiff in case he repaid the advances made for him by the Johnstons, within thirty days, and, if the plaintiff failed to do so, then both the defeasance and the conveyance to be delivered to the Johnstons. The testimony introduced by the defendants tends to prove their theory, and tends also to prove that after he had made default in such payment, the plaintiff gave special directions to Hobkirk to deliver both instruments to the Johnstons.

The circuit court found that the theory of the defendants is the true one, and that the deed was delivered, and the defeasance surrendered to the Johnstons pursuant to the voluntary directions of the plaintiff to Hobkirk. The proofs have all been carefully considered, and we are satisfied that the findings of the circuit court are sustained by a clear preponderance of the testimony.

The difficulty with the plaintiff’s case is, that when the conveyance in question was delivered and the title passed to the grantees by virtue of it, there was no valid, subsisting contract of defeasance in existence. Before such delivery, the inchoate defeasance which remained in escrow, was forfeited and rendered inoperative, and incapable of a valid delivery to the plaintiff, by his default, and was by his voluntary act surrendered to the Johnstons. Such default and voluntary surrender amounted to a complete cancellation of the defeasance, and left the conveyance to take effect, on delivery, as an absolute conveyance of the land, according to the terms of the deed, the same as though no agreement to reconvey had ever been drawn up, signed and deposited as aforesaid. If there is any rule of law by which a deed or conveyance of laud delivered under such circumstances, the same being unconditional by its terms, can be adjudged to be only a mortgage, or any case which so holds, the same has escaped our observation.

The whole transaction amounts to just this : The Johnstons advanced a sum of money for the use and benefit of the plaintiff. It was agreed between them that such advance, if repaid in thirty days, should be a loan, but if not repaid in that time it should be -the consideration for an absolute conveyance of the land in question. Eor that period it was optional with the plaintiff to make the transaction either a loan of money or an absolute purchase and sale of land. By failing to repay the money he elected that the transaction should become a valid, executory contract for an absolute sale of the land, which was fully consummated by the delivery of the deed. Until the plaintiff made default, the character of the conveyance held by Hobkirk was undetermined. The plaintiff might have rendered it a mortgage, but he failed to do so; and hence, upon being duly delivered to the grantees named in it, it conveyed to them the title which it purports to convey, to wit, an absolute, unconditional title to the land in controversy.

The maxim “once a mortgage, always a mortgage” is invoked to sustain the plaintiff’s case. If the maxim be a correct one, there is no room for its application here, for the reason already suggested, that the conveyance to the Johnstons never was a mortgage.

A. applies to B. for a loan, and B. advances the money. 'The oral agreement between them is, that if A. repay the money in thirty days, the advance shall be considered a loan, and B. shall accept payment and cancel the debt; bat if not repaid in thirty days the same shall be a full payment for the farm of A., who, in that event, promises to convey it absolutely and unconditionally to B. The money is not repaid within the time limited, and thereupon A. executes to B. an unconditional conveyance of the farm. No person will contend for a moment that such coveyance is only a mortgage. And the principle is the same, if, when the money is advanced by B., A. made his deed of the farm and deposited it with C. in escrow, and, after default, voluntarily directed C. to deliver it to B.

This is a stronger case against the plaintiff than the one supposed. t For in this case the defeasance was reduced to writing, signed by the parties, and deposited in escrow, and the plaintiff voluntarily directed that it be surrendered to the Johnstons, which surrender, as before observed, cancelled it. In the case above supposed there may be some little ground for saying that there was a contract of defeasance in existence when the conveyance was delivered, which changed the character of the instrument. But here the facts found to exist seem to leave no ground whatever upon which to predicate such claim ; for that which would have been a contract of defeasance, had it been delivered to the plaintiff, was, by the default and the voluntary, act of the plaintiff, entirely annulled, and never had an existence, as a contract, after the conveyance was delivered to the Johnstons.

The conveyance being unconditional in its terms, and there never having been any contract of defeasance in existence from the time the conveyance was delivered to the grantees named therein (and none at the time it was so delivered), it must be held that the instrument is what it purports on its face to be — an absolute, unconditional conveyance to such grantees, of the whole title, whether legal or equitable, to the land described therein.

Considerable testimony was introduced bearing upon the defense of the statute of limitations, interposed by the answer; and some testimony was elicited tending to show that the action is being prosecuted pursuant to a champertous agreement. But inasmuch as the foregoing views are decisive of the case, we feel ourselves relieved from the necessity of discussing or examining those subjects.

By the Court.— The judgment of the circuit court is affirmed.