Young v. Krell

September 17, 1928. The opinion of the Court was delivered by The facts in this case are set forth in the circuit decree, which will be reported, and from which the plaintiff has appealed. We are satisfied with Judge Grimball's conclusion, but do not agree, in certain respects, with the reasoning by which it was reached.

The trial Court expressed, in paragraph 6 of the decree, a doubt as to whether "parol testimony is admissible in a suit of this kind, where the gist of the action is a direct attack upon the validity of a Referee's deed growing out of a foreclosure suit," but gave the plaintiff the benefit of the doubt and admitted the testimony. We do not understand that in this case any attack is made upon the "validity" of the Referee's deed. The purpose of the action, as stated elsewhere by the Circuit Judge, was to have a deed absolute on its face declared a mortgage, and its basis was an alleged oral agreement, forming no part of the foreclosure proceeding.

In so far as the Court's authority to declare a deed to be a mortgage, and the admission of parol testimony for that purpose, are concerned, there is no distinction between a deed executed by an individual and one executed by an officer under order of the Court. In 19 R.C.L., at page 252, it is very aptly said:

"The rule that a deed absolute on its face may be shown by parol to be a mortgage does not generally depend for its application on the circumstance that the grantor in the deed and the alleged mortgagor are one and the same person. * * * Thus it may be provided (proved?) by parol that a deed was given to the grantee therein, not to vest in him the full title, but to secure the repayment to him of sums he had advanced to a third person, to be used by such third person in purchasing for himself the property conveyed. Similarly the proposition finds general support that parol evidence is admissible to show that a person who purchased property at a sale made in the course of judicial proceedings, or in the exercise of a power conferred by a deed of trust, or for a default in the payment of taxes, did so in pursuance of an antecedent understanding with the owner that the title to the property was to be taken and held as a security for the money expended on the purchase."

See, also, 27 Cyc., 993. Bryan v. Boyd, 100 S.C. 397;84 S.E., 992.

In paragraph 7 of his decree the Circuit Judge says: "This Court takes the position that a Referee's deed is so much a part of the judicial acts and functions of the Court itself that this Court should hesitate to declare the deed in question a mortgage, unless the evidence presented by the plaintiff is clear and convincing to the contrary."

The appellant admits that his case was "properly classified by the trial Judge as one to have the Referee's deed declared a mortgage," but contends that the Judge "erred in holding that stricter proof was required in such a case than in one where the deed in question was not a deed under the order of the Court."

The rule announced by the trial Judge undoubtedly is based upon "the policy of the law to maintain judicial sales, whenever it can be done without violating principles or doing injustice," Patterson v. B. A. Mortgage Co., 112 S.C. 205;99 S.E., 828. Tederall v. Bouknight, 25 S.C. 280. We think that this rule applies to attacks made upon proceedings which eventuate in judicial sales, or upon the sales themselves, rather than to an effort to have a judicial deed construed in the light of an arrangement foreign to the record, and no evidence of which is found therein. As has already been shown, the plaintiff in this case is not seeking to attack the foreclosure proceedings under which the Referee's deed was made, or to set aside the sale of the property, but is merely seeking to have the Court declare the deed a mortgage in accordance with an alleged extraneous private arrangement. But, even though a Court deed imports no greater sacredness in such case than that of an individual, still we find no error in the trial Judge's statement of the rule that, in order to declare the deed in question a mortgage, the evidence presented should be clear and convincing, since this degree of proof is required in any case seeking such construction of a deed. Bryan v. Boyd, supra.

The judgment of the Circuit Court is affirmed.

MR. CHIEF JUSTICE WATTS, and MESSRS. JUSTICES BLEASE and CARTER concur.