DocketNumber: No. 6571.
Citation Numbers: 135 P.2d 105, 103 Utah 266
Judges: LARSON, Justice.
Filed Date: 3/24/1943
Status: Precedential
Modified Date: 1/13/2023
An appeal from the District Court of Cache County involving the construction of a written instrument. Plaintiff, as administrator of the estate of Mercy W. Gibbons deceased brought this action against defendants to have a warranty deed executed by deceased to defendant William S. Gibbons declared a mortgage. The deed, fair and regular on its face, and in proper form was executed by the deceased on February 27, 1933, conveying certain real property in Logan City, Cache County, Utah. This deed was delivered and recorded. At the time of the execution of the deed a written agreement was executed between the deceased and defendant William S. Gibbons. Thus, construction of this agreement, with the deed, presents the only questions involved in this action. Plaintiff argues that the agreements construed with the deed, constitutes a mortgage. Defendants *Page 268 contend the instruments show a sale. The trial court held the deed to be a conveyance, not a mortgage. Plaintiff appeals. For clarity of understanding we set out the agreement, omitting the description of the land:
"That Whereas, The said party of the second part has this day conveyed to William S. Gibbons, the party of the first part, by warranty deed, for the consideration therein set forth, reserving therein a life estate to the party of the second part, for the following described property in Logan City, Cache County, State of Utah, to wit:
"First. To pay the indebtedness incurred through the funeral expenses of Joseph Gibbons, Senior amounting to the sum of Two Hundred Four and 50-100 ($204.50) Dollars,
"Second. To pay the cost of preparing deed, agreement, revenue filing fees and abstract of title amounting to the sum of thirty-nine, and 50-100 ($39.50) Dollars, making a total indebtedness due said William S. Gibbons of the sum of Two Hundred Forty Four and no-100 ($244.00) Dollars, which said total amount shall bear interest at the rate of seven per cent per annum payable annually.
"It is mutually understood and agreed by and between the parties to this agreement that the said party of the second part is to remain in full possession of the premises during her lifetime and agrees to pay all taxes and assessments that may now be due or to become due against the said premises, and agrees that if the same are not paid when due the said party of the first part may at his option pay the same and add the amount thereof to the indebtedness against the said property and all such amounts with interest thereon at the rate of eight per cent per annum shall be deemed a valid lien against the said premises.
"It is further understood and agreed that any other amounts advanced by the party of the first part by mutual consent of both parties *Page 269 to this agreement shall be deemed a valid lien against the said property.
"It is further understood and agreed that within a period of sixty days after the death of the party of the second part the said property shall be advertised for sale at either public or private sale and any heir of the party of the second part shall have the right to bid on said property and the same shall be sold to the highest and best bidder for cash.
"It is further understood and agreed that upon the completion of said sale the said party of the first part shall be paid all amounts justly due him with interest thereon as herein provided, the remainder, if any, shall be distributed equally among all of the heirs of the part of the second part."
Does this agreement constitute the deed a mortgage? No evidence was taken on this question except the written agreement pleaded and admitted and its construction was submitted to the court as a matter of law.
The recitals in the agreement which it is contended show the deed a mortgage are: The title was invested in defendants "for the following purposes, to wit:" to pay certain indebtedness specified in paragraphs First and Second, amounting to two hundred forty four dollars, with interest and any 1 subsequent amounts advanced by defendants to the grantor. Also the fact that the grantor was entitled to and did remain in possession, and was obligated to pay all taxes and assessments against the property. That these recitals are such as tend to indicate that the conveyance may have been intended as security and therefore a mortgage may be admitted. Continued possession by the grantor without paying rent is an element to be considered when it is sought to show a deed was in fact a mortgage. Ely v. Coriel,
The recital in the agreement tending to show the transaction was a conveyance subject to a trust and not security for a debt are: That the conveyance had been made by warranty deed for the consideration set forth in the deed; that the grantor hadreserved to herself a life estate; a recital that title was invested in defendant "subject to the life estate" of the grantor; that the conveyance was made "to pay the indebtedness"; agreement recites that grantor was to remain in possession during her lifetime; the agreement provides that at expiration of life estate, grantee sell the property by advertised sale, and directs the disposition he must make of the proceeds. (Italics added.)
It seems clear the owner cannot create in himself a life estate while he also holds the fee simple title. The continued possession of the grantor is evidence tending to show a mortgage, but that inference does not stand where as here she by written agreement retains possession under a life 2-5 estate, which has implicit in it the thought that she is not in possession as equitable owner of the fee. It is well established that to be a mortgage, it must be given to secure
the performance of an obligation, not in satisfaction of an obligation. 41 C.J. p. 287; also p. 333; also p. 335 and cases cited. Monagas v. Albertucci y Alvarez,
The controlling question is what was the intention of the parties as it existed at the time of the execution and delivery of the instrument? The matters indicated above are merely the elements of the instruments executed, the only evidence in the case, that tend to show the intention of the 6, 7 parties when the instruments were executed. All the factors which are urged as showing a mortgage are *Page 272 equally consistent with defendants' contentions. On the other hand, the matters tending to show a mortgage was not intended are not consistent or reconcilable with the theory that the deed constituted a mortgage. This agreement provides that defendant has title for certain specified purposes and uses. Those obligations are of course binding on defendant. He must therefore sell the property according to the methods provided in the agreement; reimburse himself for his advancement with interest as provided; and then distribute the balance of the purchase money to the heirs at law of Mercy W. Gibbons, under the provisions of the statutes of succession of the State of Utah.
But one question remains. Should defendant be permitted to receive interest on his advancements until date of sale of the property or only until the spring of 1935 when Mercy W. Gibbons tendered to defendant the money he had advanced to that date? Under the construction of the agreement made by 8 the trial court, and which we uphold, defendant's money was not due and payable until the sale of the property after the death of Mercy W. Gibbons, provided defendant properly attempted a sale within 60 days after her death. Until his claim matured, he could not be deprived of interest by a tender. If he did not properly attempt a sale of the property within 60 days after her death as provided in the agreement, and was not prevented from making or attempting such sale by plaintiff or any of the heirs at law, his claim would mature sixty days after the death of Mercy W. Gibbons.
The judgment appealed from is affirmed. Costs to respondent.
MOFFAT and WADE, JJ., concur.
Prefumo v. Russell , 148 Cal. 451 ( 1906 )
Dickens v. Heston , 53 Idaho 91 ( 1933 )
Chicago Land Bank v. O'Connor , 354 Ill. 207 ( 1933 )
Wallace v. Greenman , 321 Ill. 423 ( 1926 )
Ely v. Coreil , 166 La. 153 ( 1928 )
Ellis v. Purnell , 167 Md. 687 ( 1935 )
Selik v. Goldman Realty Co. , 240 Mich. 612 ( 1927 )
Monagas v. Albertucci , 35 S. Ct. 95 ( 1914 )
Carson v. Lee , 281 Mo. 166 ( 1920 )
Mayberry v. Clark , 317 Mo. 442 ( 1927 )