Case Name: STUART v. HAUSER
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1903-04-09
Citations: 9 Idaho 53
Docket Number: 
Parties: STUART v. HAUSER.
Judges: Stockslager, J., concurs.
Reporter: Idaho Reports
Volume: 9
Pages: 53–87

Head Matter:
(April 9, 1903.)
STUART v. HAUSER.
[72 Pac. 719.]
Conflict in Evidence — Absolute Deed — Mortgage—Equity Suit, 1. In an equity suit by a grantor to have a deed absolute on its face declared to be a mortgage, when there is a substantial conflict in the evidence the finding of the trial court that such deed was not intended as a mortgage will not be disturbed. 2. The rule that an- appellate court will not disturb the finding or decision of a trial court where there is a substantial conflict ira the evidence is applicable to suits in equity as well as in action® at law, where' the suit is tried on oral evidence.
(Syllabus by the court.)
APPEAL from District Court, Washington County.
The facts are fully stated in the opinion.
Alfred A. Eraser and Milton G. Cage, for Appellant.
Where the relation of debtor and creditor exists and conveys anees are made, or property is delivered by the debtor to th® creditor, the legal presumption is that the relation continues and that the transfers were made as further security for th® debt. (Hickok v. Lewe, 10 Cal. 207; Marshall v. Thompson„ 39 Minn. 137, 39 N. W. 309; Simpson v. First Nat. Bank, 93-Eed. 309.) If an existing indebtedness forms the consideration of a deed absolute in form, the relation of debtor and creditor continuing the inference is that the deed was made to secure -the debt, hot to transfer the title. (Montgomery v. JSpect/55 Cal. 352; Riley v. Starr, 48 Neb. 243, 67 N. W. 187; Raffier • v. Womack, 30 Tex. 332; Huscheon v. Huscheon, 71 Cal. 407, 12 Pae. 410; Pioneer etc. Co. v. Baker, 10 Saw. 539, 23 Fed. 258; Campbell v. Dearborn, 109 Mass. 130,'12 Am. Eep. 671; Russell v. Southard, 12 How. 139; 4 Wait’s Actions and Defenses, 541, 542; Horn v. Ketettas, 46 N. Y. 605.) It is of great importance to inquire whether the consideration was adequate to induce a sale. When no.fraud is practiced, and no inequitable advantage taken of pressing wants, owners of property do not sell it for a consideration manifestly inadequate, and therefore in the eases on this subject, great stress is justly laid upon the fact that what is alleged to have been the price bore no proportion to the value of the thing said to have been sold. (Conway v. Alexander, 7 Cranch, 241; Morris v. Nixon, 1 How. 126; Vernon v. Bethell, 2 Eden, 110; Oldham v. Halley, 2 J. J. Marsh. 114; Edrington v. Harper, 3 J. J. Marsh. 354, 20 Am. Dec. 145; Jones on Mortgages, see. 329; Russdl v. Southard, supra; Peugh v. Davis, 96 H. S. 332; Wright v. Mahafey, 76 Iowa, 96, 40 N. W. 112; Ennor v. Thompson, 46 111. 214.) “Evidence of the continuance of the debt, such as the payment of interest upon it, or the extension of time of payment, is generally conclusive of the character of the original transaction as a mortgage. It shows either that a pre-existing debt was not' surrendered or canceled at the time of the conveyance, or in case there was no such debt, it shows that one was then created.” (Jones on Mortgages, sec. 325; Westlake v. Horton, 85 111. 228; Budd v. Van Orden, 33 N. J. Eq. 143.) “Wherever the transaction'' is between the parties whose relations are of a close fiduciary character, the complainant is not held to the same exactitude and strictness of proof, nor is the testimony offered in support of the bill to be viewed with the same scrutiny as in those cases where the parties deal with each other at arm’s length.” (Bohn v. Bohn, 9 Colo. 100, 10 Pae. 790; Keith v. 'Kellan, 35 Fed. 243.) When the intent of the party to a deed absolute in form is doubtful, the instrument will be construed as a mortgage. (Russell v. Southard, supra; Mitchell v. Well- man, 80 Ala. 16; Rich v. Doan, 35 Yt. 125; Reed.v. Reed, 75 Me. 264; Crane v. Bonnell, 2 N. J. Eq. 264; Honoré v. Hutchings, 8 Bush, 687; Cornell v. Hall, 22 Mich. 377; Gibson v. Martin, 38 Ark. 207; Rogers v. Bums, 53 Wis. 530, 9 N. W. 786; Boole v. Beasly, 138 Mo. 455, 40 S. W. 101.)
W. E. Borah, for Eespondents.
The record presents a conflict of evidence and is peculiarly of that nature and class of cases -which it is within the province of the lower court to determine, and when it is so determined such determination is final as to the facts. The real and controlling question in the case is the fact as to whether or not this was intended as a deed or a mortgage. With that fact settled, all the other matters presented are immaterial, and that fact has been fairly determined by the court below and the finding of the lower court should not be disturbed under such circumstances. This rule is well established, of course, but we call attention to some of the authorities upon the subject. In the case below the court said: “The.decision of á court in the trial of a cause is of the same force and effect as the verdict of a jury in a jury trial, and when there is substantial conflict in the testimony it is the duty of the appellate court to affirm the decision.” (Sabin v. Burke, 4 Idaho, 28, 37 Pac. 355.) “Where there is a substantial conflict in the evidence a finding of fact based thereon will not be disturbed.” (Spaulding v. Railway Co., 5 Idaho, 528, 51 Pac. 408; Murphy v. Montandon, 4 Idaho, 320, 39 Pac. 105; State v. Haverly, 4 Idaho, 484, 42 Pac. 506; Sears v. Flodstrom, 5 Idaho, 314, 49 Pac. 11; Simpson v. Remington, 6 Idaho, 681, 59 Pac. 360.) “A grantor who makes an absolute conveyance intending that the beneficial interest shall remain in him is guilty of a gross folly or actuated by sinister designs, and cannot reasonably ask that the rules of law should be suspended to extricate him from the situation in which he has voluntarily placed himself.” (2 Leading Cases in Equity, 978; Cake v. Schull, 45 N. J. Eq. 208, 16 Atl. 434; Cadman v. Peter, 118 H. S. 80, 6 Sup. Ct. Eep. 957; Coyle v. Davis, 6 Sup. Ct. Eep. 108, 116 H. S. 583; Appeal of Fisher, 132 Pá. St. 488, 19 Atl. 276; 3 Pomeroy’s Equity Jurisprudence, sec. 1196; Tilden v. Streeter, 45 Mich. 533, 8 N. W. 502; Knight v. McCord, 63 Iowa, 429, 19 N. W. 310; Kibby v. Harsh, 61 Iowa, 196,16 N. W. 85; Ensingerv. Ensihger, 75 Iowa, 89, 39 N; W. 208; Strong v. Strong, 126 111. 301, 18 N E. 665; Sloan v. Becker, 34 Minn. 491, 26 N. W. 730; Johnson v.Vanvelsor, 43 Mich. 208, 5 N. W. 265; Todd v. Campbell, 32 Pa. St. 254; Winters v. Swift, 2 Idaho, 61, 3 Pac. 15; 1 Jones on Mortgages, sec. 326.) We were somewhat surprised at the position taken by the learned counsel for appellant to tire effect that the rule is so well established that the finding of the lower court upon a conflict of evidence will not be disturbed does not prevail in equity cases. But as a matter of investigation, and in view of the fact that counsel broadly stated that we had not, and could not, cite any equity cases where this rule had been invoked and indorsed, and in order that this may be fully and fairly presented to the court and finally put at rest, wre ask leave to cite the following cases upon this subject: Brison’v. Brisan, 90 Cal. 323, 27 Pac. 189; Sullivan v. Moorhead, 99 Cal. 157, 33 Pac. 796; Sherman v. Sandell, 106 Cal. 373, 39 Pac. 797; Mahony v. Bostwick, 96 Cal. 53, 31 Am. St. Rep. 175, 30 Pac. 1020; Doe v. Vallejo, 29 Cal. 391. We do not care to take up further space in the brief or the time of the court in quoting from the authorities, but we venture to say that there is not now to be found any distinction in this respect whatever, and that the rule obtains just as pronounced in equity cases as it does in law cases, that is, that where there is a conflict of the testimony the finding of the lower court is conclusive, and we cite below without quoting a few of the many eases which might he cited: Silva v. Packard, 14 Utah, 245, 47 Pac. 144; Gagliardo v. Hoberlin, 18 Cal. 395; Duff v. Fisher, 15 Cal. 379; Green v. Butler, 26 Cal. 595; 'Hihn v. Peck, 30 Cal. 28; Oriman v. Dixon, 13 Cal. 34; Donohoe v. Mining Co., 66 Cal. 317, 5 Pae. 495; Lyons v. Lyons, 18 Cal. 488y^Qlark v. Willett, 35 Cal. 534; Dwyer v. Manufacturing CoJ-14 Utah, 339, 47 Pac. 311; O’Toole v. Melander, 2 Ariz. 392, 17 Pae. .564.

Opinion:
SULLIVAN, C. J.
This suit was brought by the appellant, Granville Stuart, against the defendants, Samuel T. Hauser, Massena Bullard, trustee, A. M. Holier, Charles W. Whitcomb, J. G. Bogers, F. W. Sharp, and Eugene T. Wilson, receiver of the First National Bank of Helena, Montana, to have a certain instrument, which appears upon its face to be an absolute deed, declared to be a mortgage, and the property conveyed by said instrument declared to be the property of appellant. Described in said instrument is all of the interest of the appellant in and to the Peacock, White Monument, and Helena lode mining claims, situated in Seven Devils Mining District, Washington county, state of Idaho.
The allegations of the complaint cover a period of more than twenty years, extending from prior to August 6, 1879, to March 5, 1901, the date of the commencement of this suit. In substance, it is alleged: That Stuart, who is plaintiff and appellant, and respondent Hauser, were personal friends, between whom there existed the closest relations, social, business and political, by reason of which Stuart reposed in Hauser the greatest trust and confidence, and that at all times mentioned in the complaint Hauser exerted over Stuart an unusual influence. That from about the year 1866, and until its suspension on the third day of September, 1896, Hauser was the president of the First National Bank of Helena, Montana, and during all of said time was one of its trustees, and the principal manager and director of its affairs; and that on said third day of September said hank became insolvent, suspended payment, and the defendant Eugene T. Wilson was appointed receiver thereof. That prior to the sixth day of August, 1879, Stuart and Hauser mutually agreed that they would jointly acquire interests in the above-named mining claims. That under four several purchases (three from Levi Allen and one from I. I. Lewis, who were the original locators of said mining claims) they jointly acquired a fifteen-sixteenths interest in said Peacock and White Monument claims and an eleven-sixteenths in said Helena claim. That the title to said interests were taken in the name of Hauser, except the title to a one-fourth interest in the Peacock and White Monument, which was taken in the name of Hauser & Stuart, each having paid one-half of 'the purchase price for said interests, arid each owning an undivided one-half interest thereof, That on October 19, 1886, said Hauser sold and conveyed to' one Albert Kleinschmidt an undivided four-sixteenths interest in said mining claims for $10,000, and on January 21, 1887,-said Hauser sold and conveyed to said Kleinschmidt a further undivided three-sixteenths interest in said.mining claims for $11,250, and that said Kleinschmidt had thereafter transferred said seven-sixteenths interest to the American Mining Company, Limited. That said Hauser thereafter conveyed to said mining company all the interest owned by him in and to the said mining claims, together with an undivided three thirty-seconds interest therein belonging to Stuart, and that no part of the consideration paid by Kleinschmidt had been paid to Stuart. That Stuart now is the owner of a seven-sixteenths interest in said Peacock and White Monument claims, and an eleven thirty-seconds interest in said Helena claim, which interests are of the value of $1,000,000. That on the fourth day of September, 1890, and for a long time prior thereto, Stuart had been largely indebted to said bank, and on said date, and for the sole purpose of securing said indebtedness; Stuart and his wife executed and delivered to Hauser, then president of said bank, a deed in terms conveying to him all of the right, title, and interest of Stuart and his wife in said mining claims. That Hauser never paid said bank any part of Stuart's said indebtedness. That each' and every part of the conveyances made by Hauser to either of the other defendants and the interest thereby conveyed is subject and subordinate to the rights of this appellant, subject, however, to such as the said bank, and its receiver, Wilson, may have thereto as security for the indebtedness due from appellant to said bank. That in violation of. appellant's rights and of the trust and confidence reposed in said Hauser by appellant, the said Hauser, prior to the commencement of this action, and since the fourth day of September, 1890, either by direct or mesne conveyances, pretended to transfer and convey to the defendants Holtér and Bullard all interest in said mining claims mentioned in the complaint, the legal title to which stood in said Hauser's name, and that said' Holter and Bullard held the legal title to seven-sixteenths of said Peacock and White Monument claims and eleven 'thirty-seconds of the Helena claim in trust for appellant. -'That on or about the first day of January, 1896, the defendants Holter- and Hauser, pretending to be the owners of said named interests in said mining claims as aforesaid, entered - into an •agreement with one Lueien Eaves, wherein they agreed to sell to him the said mentioned interests in and to said mining claims, and that under said agreement said Eaves paid to said Holter and Hauser $40,000 — one-half thereof to each; and that they have received other large sums as rents and profits of said prop-arty, and as a royalty for ores extracted therefrom, the exact amount of which is unknown to appellant. And prays that he be adjudged to be the owner of an undivided seven-sixteenths of said Peacock and White Monument claims and eleven thirty-seconds of said Helena claim, and that it be decreed that said Holter and Bullard hold the legal title to such interest for appellant, and that they be required to convey said interest to appellant subject to the liens of said bank; that the defendants Holter and Hauser be required to account to appellant for rents, profits, moneys, and values of every kind received by them on account of their pretended interests in said mining claims, and that appellant have judgment against them therefor; that the amount due from appellant to said bank be ascertained, and that the amount so found to be due be adjudged to be a lien -upon said mining claims in favor of said Wilson, as receiver; and for such further relief as the court may deem just.
The material allegations as to said deed having been executed and given as security for the indebtedness of appellant to -said bank and some other allegations of the complaint were put in issue by the answers of Holter and Bullard and the separate answer of Hauser. The other three defendants were not served with summons, and the cause was dismissed as to them.
Hpon the issues thus made the trial was had, and judgment entered against appellant. This appeal is from the judgment and the order overruling the motion for a new trial. A number of errors are assigned, one of which is the insufficiency of the evidence to support the findings of fact or to justify the de cisión. .In determining this -specification of error it will be necessary to recite some of the history of this case as shown by the- evidence. It is made to appear that the appellant and the respondent Hanser settled in the territory, now state, of Montana, at an early date, and became acquainted in 1862, both residing at Pioneer Gulch, in Deer Lodge county, at that time; that an association sprung up between them in 1863; that the appellant's brother, James Stuart, in the spring of 1863, organized an expedition to go into the Yellowstone country. Mr. Hauser was one of the party. The evidence shows that from that time to the year 1900 appellant and said Hauser were very warm personal friends, and that there existed the close relations, social, business, and political, between them up to about the time of the commencement of this suit. It also appears that said appellant reposed great confidence in the respondent. In the year 1866 the First National Bank of Helena, Montana, was organized by Hauser and others, he being the controlling spirit and the principal owner. Stuart, during a number of years, was a trusted employee in said bank, and after he severed his connection therewith, he, Hauser, and others entered into an extensive stock-raising proposition, buying, selling, raising, and marketing cattle, with their headquarters at Ft. McGinnis, Montana. Stuart had charge of that enterprise for several years, and resided at Ft. McGinnis. Owing to severe winter weather in 1886 and 1887, they had heavy losses of cattle, and the enterprise was not a success financially. Stuart ceased to be the manager of said enterprise, but retained an interest, therein, and in September, 1890, removed from the cattle ranch to .Butte, Montana. After severing his connection therewith..-as manager,- he was connected with Hauser in-a,number of stock deals and mining enterprises in Montana. In'1894' Stuart was appointed envoy extraordinary and minister plenipotentiary to the republics of Hraguay and Paraguay, and left Montana on the 3d of April, 1894, for South America, and remained there four years.
I shall now reeiir to the principal facts out of which this suit arose. On August 19, 1879, Stuart and Hauser purchased from one Levi Allen an undivided one-fourth interest in said Peacock and White Monument mining claims for $1,500, each paying one-half of the purchase price, and the title was taken in the name of Hauser. On November 23, 1880, they jointly purchased from said Allen a further one-fourth interest in said two mining claims and a one-half interest in said Helena claim for the sum of $2,500, each paying one-half thereof, and the title was taken in both jointly. The quitclaim deed conveying said interest by mistake called for a one-half interest in the Peacock and White Monument claims, whereas it should have called for only one-fourth interest therein, as the grantor, Allen, at that time only owned one-fourth interest. Allen having thereafter purchased a three-sixteenths interest in said claims, and learning of the mistake, sought at divers times to have Stuart and Hauser correct it by reconveying to him a one-fourth interest in said Peacock and White Monument claims, or to purchase his after-acquired three-sixteenths interest therein, which they neglected, if not refused, to do, and that matter was not adjusted until after Allen had brought an action to correct said quitclaim deed in 1891. In 1891 one A. M. Holter purchased said three-sixteenths interest from Allen for $10,000. Thereupon said suit was dismissed. On December 5, 1881, Stuart and Hauser purchased from Allen a further one-sixteenth interest in said claims for $1,000, each paying one-half thereof, and the title was taken in Hauser. Thereafter, on June 2, 1882, they purchased an undivided two-sixteenths interest in said claims from I. I. Lewis for $100, each paying one-half thereof, and the title was conveyed to Hauser for their joint benefit.
It appears from the conveyances above referred to that under and by the four several purchases above set out that Stuart and Hauser had become the owners of fifteen-sixteenths of the Peacock and White Monument and eleven-sixteenths of the Helena claims. But it was conceded on the trial that because of the error in said quitclaim deed there had been conveyed to them an undivided one-fourth of the Peacock and White Monument claims more than they had purchased. And it was stipulated on the trial that prior to August, 1890, they had become the owner of eleven-sixteenths of each of said mining claims, and no more.-' It is shown- by said deeds that the title to one-fourth of the said Peacock and White Monument claims was taken hr the names of Stuart and Hauser, and eleven-sixteenths thereof in the name of Hauser. Hauser held a power of attorney from Stuart authorizing him to sell and convey his interest in said-claims. On or about the tenth day of December, 1881, Hauser sold an undivided one-sixteenth interest in said mining claims to A. M. Holter for $300, he having paid Allen $1,000 for a one-sixteenth interest therein five days before the sale to Holter; but said one-sixteenth interest was not conveyed to Holter until the year 1891, at which time Holter and Hauser equalized their interest in said mining claims. On October 19, 1886, Hauser sold and conveyed to Albert Kleinschmidt an undivided four-sixteenths interest in said mining claims for $10,000, taking his promissory note therefor, and on January 21, 1887, he sold to-said Kleinschmidt a further three-sixteenths interest in said-mining claims for $11,250, and took his promissory notes therefor — one for $7,500 and one for $3,750. The deeds conveying said interests so sold to Kleinschmidt were executed by Hauser in his own name, and not as attorney in fact for Stuart. Said-promissory notes were discounted by said First National Bank at the request of Hauser, and the proceeds, $20,600, placed to-his credit. It also appears that there was paid on said promissory notes, both principal and interest, $23,034.48. Hauser testified in regard to the buying and selling of their interests in said mining claims as follows: "I purchased at my discretion and sold at my discretion." Stuart testified that at the time he-executed the instrument in question he had no knowledge whatever of said sales to Kleinschmidt and Holter, and that there had been no settlement between him and Hauser of the proceeds thereof, while Hauser testified that he had placed to Stuart's credit in said bank one-half of the proceeds of the sale to Holter (the books of said bank corroborated Hauser on this point), and! settled in full, and paid Stuart one-half of the proceeds of the sales' to Kleinschmidt at the time the instrument in controversy was executed.
The..reason Hauser gave for having held the proceeds of the-sales to Kleinschmidt for nearly four years was that he did it to protect the property; that, as Stuart was largely indebted to said bank, had he placed it to his credit therein it would have been applied on his debts; that Stuart did not ask him either to distribute it or place it to his credit in the bank. Hauser testified that he informed Stuart of the sales to Kleinschmidt, and gave him a memorandum of said sales setting ¡forth what he had received therefor, and that on the settlement made at the time the deed in controversy was executed Stuart delivered to Mm said memorandum, which was offered and received in evidence on the trial. Said memorandum is in the handwriting of Hauser, 'signed by him, and bears date February 8, 1887, and is as follows:
"Helena, February 8th, '87.
"Dear Sir: Have sold to Albert Kleinschmidt seven-sixteenths of the Peacock, Helena and White Monument copper lodes for $21,250.00, payable in six and twelve months — also for a further consideration of $5,000.00 to be paid from net proceeds. I hereby agree to turn over to Granville Stuart one-half of the net proceeds of the above.
"S. T. HAUSER."
It appears that Stuart was largely indebted to said bank, and in the spring and summer of 1890 the comptroller of the currency was dissatisfied on account 'of the said bank carrymg such a large amount of unsecured paper. Hauser informed Stuart of that fact, and inquired of Mm what property he owned upon which he could secure Ms indebtedness due said bank. Stuart informed Mm of what property he had, and also that he would mortgage all he possessed to secure the payment of Ms said indebtedness. Hauser thereupon suggested that, to put the matter in better shape, and take up a $37,033 note due the bank, he execute one note for $12,500, another for $12,533, and secure their payment by executing a mortgage on appellant's Montana property ; and at that point occurs the conflict in the evidence. The evidence on behalf of Stuart shows that Hauser then suggested that appellant draw on him for the remaining $12,000 of said $37,033, and to secure Mm, give him a mortgage on appellant's interest in the said Idaho mining claims. Appellant testified that he agreed to turn over everything he possessed as security, and that a deed was not mentioned, but that a mortgage was ; that he then executed two notes — one for $12,500 and one for ^$12,533 — and to secure their payment executed a mortgage on his Montana property to A. K. Barbour, as trustee; that the first .intimation he had that the instrument to secure the drafts on Hauser for $12,000 was to be a deed was when he received it by mail from Bullard on the twenty-eighth day of August, 1890; that that was the first intimation he had that the instrument was to be a deed. Stuart testified that after receiving the deed he looked at it, and in consideration of his association with Hauser and the confidence he had in him, he signed it, but did not return it to Bullard until some time after. It was executed on September 4, 1890, and about the middle of that month, 1890, Stuart removed from the cattle ranch to Butte, Montana, and brought the deed with him. About the 6th of October, 1890, he received a letter from said First National Bank, inclosing two notes — one for $12,500 and one for $12,533 — and a mortgage securing their payment on property in Deer Lodge, Lewis and Clarke, and Jefferson counties, to be executed by Stuart. The mortgage ran to A. K. Barbour, trustee, and was executed and notes signed by Stuart and returned to the bank. Accompanying said mortgage and notes were two drafts on Hauser for $6,000, each of which Stuart was to and did sign and return to Bullard. Stuart also returned the deed to Bullard on or about the tenth day of October, 1890, with the following letter:
"West Galena St., Butte, Montana, October 10, 1890.
"Massena Bullard, Helena, Montana.
"Dear Sir: When I came to look into my grip for the deed of all my interest in the Idaho lodes it was not there. I had deft it here, so had to wait until my return. I now inclose it. Trusting that the delay has not inconvenienced you or Mr. Hauser, I remain, Yours truly,
"GRANVILLE STUART."
Nothing is said in said letter about said instrument being a mortgage instead of a deed, but calls the instrument a deed.
Appellant, Stuart, testifies that said deed was intended as a mortgage to secure the payment of said drafts, and nothing more. In corroboration of Stuart's testimony, E. H. Kleinschmidt and Lucien Eaves.both testified that Hauser informed them that Stuart still had an interest with him in said mines. Hauser denies having told them so, and produced several witnesses who impeached said Kleinschmidt and Eaves. The trial court evidently gave no weight to the testimony of Kleinschmidt and Eaves, and as that court met said witnesses face to face, saw their demeanor on the stand and heard them testify, and is therefore better able to judge of the weight to be given to ail of that testimony than this court, we are unable to say that the court erred in that matter.
The respondent Hauser testified, among other things, that the negotiations between him and appellant that led up to the execution of said deed were commenced a month or two before its execution; that appellant owed the Davis estate, or the Davis Bank at Butte, Montana, about $75,000, and the First National Bank of Helena about $40,000, and he wanted an extension of time in which to make payment, and respondent informed him that if he could make a payment he (Hauser) could get the bank to extend the time of payment on the balance, and then appellant would not have any trouble with the Davis estate, as that estate and Hauser owned nearly all of the bank, and that to enable the appellant to make a payment on his said indebtedness he (Hauser) would purchase his interest in the Idaho mines at the same rate that he could purchase a three-sixteenths interest from Allen; that he had given appellant a receipt showing the sales tó Kleinschmidt and the amount received thereon, and that, if appellant would return home to Ft. McGinnis, and bring said Teceipt, they would have a general settlement, and that he would pay appellant $4,500 for his three thirty-seconds interest in said mines; that appellant thereupon went home, and returned with-said receipt, and thereupon they had a general settlement, and it was ascertained that Stuart owed Hauser $2,750; that Hauser •owed Stuart on the sales to Kleinschmidt $10,600, which with the $4,500 agreed to be paid for Stuart's interest in said mines, made $15,100, from which was deducted the $2,750, leaving a balance due Stuart of $12,350, and to settle which Stuart drew said two drafts on Hauser for $6,000 each on October 6, 1890. Hauser also testified, that he threw off about $3,000 interest due on said $37,033 note. It also appears that Hauser held all of the purchase .price paid by Kleinschmidt for seven-sixteenths, of said mining claims for over three years, amounting to $21,250, one-half of which, $10,625, belonged to Stuart. And Hauser testified that the interest he "knocked off" of the $37,033 note-of Stuart's moré than counterbalanced the interest on Stuart's one-half of the Kleinschmidt's notes. He also testified that in the settlement between himself and Stuart he took into consideration the .amount of $3,000 which Kleinschmidt claimed. said mining claims owed him, and Stuart's one-half of that was $1,500; that he had advanced $1,600 in connection with said mines, and Stuart's part of that was $800; that he had paid Stuart between the time of the first meeting and the settlement about $450, and .the $12,000 represented by the drafts was the difference between them due Stuart; that that was the settlement in round numbers, and Stuart was to give him a deed to his interest in said mining claims, and return him his receipts heretofore given Stuart. The receipts were-, returned, and the deed in question executed. That is substantially the testimony of Hauser upon that point. The evidence on the part of Hauser shows that he paid all taxes assessed against said interest in said mining claims, paid Stuart's drafts to the amount of $450, paid Kleinschmidt $3,000, and other items of expense connected with, said mining claims, and that all of said matters were settled in the acceptance by Hauser of the drafts for $12,009 and the execution of said deed to Hauser by Stuart.
In the .oral arguments, as well as in the briefs of counsel, considerable has been said in regard to the drawing of said drafts- and the renewal of them by Stuart; and it is contended by counsel'f.or appellant that said drafts have not been paid, and that Stuart is still.liable for their payment. There is nothing in-this contention, as the evidence shows Hauser made a compromise. settlement with the receiver of said bank, under an order, of the court having jurisdiction thereof, of more than $409,009-of his indebtedness to said bank, in which was included said drafts,; and the receiver testified that said drafts were surren-; dered by the bank, to Hauser under said compromise settlement., It is also contended by counsel for appellant that Hauser was the First National Bank of Helena, and there is evidence from which that conclusion might reasonably be drawn. If it be true that Hauser compromised his indebtedness with the bank, it is not shown that appellant was injured thereby, and, if Hauser was the owner of the bank, no one was hurt but Hauser. Hauser settled those drafts, and the drafts were delivered to him' by the receiver, and were marked "Paid by Hauser." Wilson, as bank examiner, as early as 1893 classified said drafts as Hauser's. The receiver also testified that prior to his getting information from Mr. Walsh (one of the attorneys for the appellant) he had never heard that Stuart was liable on said drafts. The receiver also testified that the compromise with Hauser was effected and the drafts included therein in 1897, some three years before the commencement of this action. The moment Hauser accepted those drafts they became his debt instead of Stuart's, and Stuart was released therefrom when time for protest had passed and no protest made. They were not protested; hence Stuart's liability ceased years before this suit was brought.
It is contended that, as Stuart renewed said drafts, that fact was at least a circumstance in support of his contention that they remained his debt. Hauser swears positively that the drafts were so drawn and renewed at his request, and not for the purpose of holding Stuart thereon as the debtor, but for Hauser'saccommodation. It is evident that the bank did not consider Stuart in any manner liable for the payment of said drafts, as it never demanded payment from him. The receiver himself testified that, prior to being informed by counsel for appellant, he did not know that Stuart was liable on said drafts. The record fails to disclose the fact that appellant ever inquired about or took any interest in the payment of said drafts or the interest thereon from 1890 to 1900 — for a period of about ten years.
Appellant kept an account at said bank — and from 1879 to 1890 — the latter being the year when the instrument in controversy was executed — and. during that period of time various items of taxes, expenses in the development of said mines, etc.> w sre charged up to the account of appellant, but subsequent tó September 4, 1890, no such expenses were charged to his account. And it was testified by Albert Kleinsehmidt that "the record of Mr. Stuart's account at said bank would not have been any different had the payment [of said $12,000] been in cash." It is thus shown that $12,000 of Stuart's liability to said bank was transferred to Hauser, and, as shown by the record, Stuart was released entirely from all obligation on such liability. While technically he might have been held under proper protest of said drafts, the evidence shows that the drafts were not protested, and he has been as effectually released from all liability thereon as he would or could have been had Hauser paid said drafts in cash. The fact that Hauser finally settled those drafts and other of his indebtedness by compromise and discount makes no difference. As to the drafts, they were accepted by Hauser, who thereupon became the principal debtor. In that transaction Stuart's relation was changed from principal debtor to surety. While it is true he renewed said drafts at two different times, it was done at the instance and request of Hauser, and it appears from the record that during all of those years between -September 4, 1890, to 1900, he never made any inquiry either in regard to said drafts or the Idaho mining claims, an interest in which he had conveyed to Hauser by the instrument in controversy. There are these and other circumstances supporting the theory that said instrument was an absolute deed. While the record contains facts and circumstances that indicate the instrument was only intended as a mortgage, yet we are unable to say that the trial court did not arrive at a correct conclusion from the conflicting evidence in the case.
If there was no settlement between appellant and Hauser, according to the evidence, Hauser would be owing appellant several thousand dollars on the sales to Kleinsehmidt; and surely appellant knew of these sales, and being hard pressed during those years to pay his debts, according to his own testimony, he never asked Hauser to settle and pay him what was due him on those sales. Evidently those drafts were considered by him as hi alms against Hauser exclusively and the transaction of executing the deed in question had passed out of his mind until Kleinsehmidt advised him to bring this suit. The bank rendered him statements of the condition of his Montana property mortgaged to it, and of the amounts paid in the debt secured thereby; but not one letter or word passed between appellant and Hauser in regard to said drafts or the Idaho mines, although Hauser had paid taxes and other expenditures thereon. He now claims that said mines were worth at least half a million dollars in September, 1890, and that he knew it at that time, and has let the matter quietly rest for more than nine years, and was hard pressed with debts during all that time. If that be true, it is most unfortunate that he has not sufficient evidence to cleariy establish the main issue in this case. The circumstances are against him.
It is also contended that «because of the social, political, and business relations between Stuart and Hauser the latter exercised an unusual influence over the former, and because of such relationship and influence the court should require proof from Hauser that said transaction was fair and honest in all respects. The trial court found from the evidence as a fact that said Hauser "did not at any time exercise any unusual influence over Stuart." We think that finding is fully sustained by the evidence. While the record shows the relationship between them was friendly, socially, politically, and in business matters, it does not show that Hauser exercised any unusual influence over him. The record shows that appellant is a man possessed of much more than ordinary mental endowments and business capacity. He has had large experience in banking, mining, and in conducting a large business in «buying, selling, and raising livestock, and was the duly appointed, qualified, and acting envoy extraordinary and minister plenipotentiary of the United States to the republics of Uraguay and Paraguay for a term of four years. The latter position he held after the execution of the instrument in controversy. We cite those facts to show that Stuart was a man of large and varied business experience, and a man of more than ordinary mental power and business ability. The evidence does not show that Hauser had acquired a superior influence or advantage over him, and for that reason the rule contended for by counsel for appellant is not applicable to the facts of the case. Counsel also contend that the great inadequacy of pride claimed to have been paid Iby Hauser for said three thirty-seconds interest 'is a circumstance tending strongly to' Show that the- deed was intended as a mortgage: Four witnesses testified and gave their opinions of the value -of-said mining claims at the time' said deed was'executed. Their opinions'of the value range from $500,00'0 to more than $1;500,« 000. The testimony of the experts, if they may be so called, as-to the valúe of said mines, is merely speculative, and should hot be given much weight, when considered with the evidence' showing how the parties themselves valued those mines as shown' by actual sales .made: The record shows that Stuart and' Hauser purchased from Allen, who was one of- the original locators, and- knew the value thereof, a one-fourth-interest in the Peacock and White-Monument claims in the year' 1879 for $1,500.' On November "23, 1880, they purchased a one-fourth interest of the Peacock and White Monument and a' one-half interest, -in the Helena'for $2,'500. In December, 1881, they purchased á one-sixteenth interest in said three claims for $1,000. In June, 1882j they purchased a one-eighth interest ' therein for $100. In February, 1881, Lewis, one of the original locators,1 sold Allen a one-fourth interest in said claims for $1,000. In October, 1886, Hauser sold a fourth interest-for $10,000, and during the same month Lewis sold a one-eighth interest for $5,000. In January, 1887, Hauser sold a three-sixteenths interest for $11,250, and in ' September, 1891, said Allen sold ' a three-sixteenths interest for $10,000.
: It will thus be seen that for a period of ten years before the execution of this instrument in controversy and one year after, numerous sales were made, and the prices paid ranged from $100 for a one-eighth interest to $11,250 for a three-sixteenths interest; Those facts are more reliable as to the true value of said claims than the opinion testimony of witnesses ten years after the date of the transaction which resulted in the execution of the deed in controversy. The highest value for which a three thirty-seconds interest sold was $5,625. We cannot say that the price claimed to have been paid' by Hauser for Stuart's three'thifty-seeohds, to wit, $4,500, was so grossly inadequate as to- justify a court in declaring said deed to be a mortgage in the face of the conflicting evidence given1 on the trial.. -There is a most substantial conflict in the testimony touching the question whether said deed was intended as a mortgage. But it is contended by counsel for appellant that in a suit in equity the rule that the appellate court will not disturb the judgment: when there is a substantial conflict in the- evidence does not Obtain or apply in this suit. Wé might concede that conteUr tiom if the' case were submitted to the trial court wholly*.updn depositions and record evidence; but where witnesses are produced, and give' Oral testimony, and, as in this cáse, where'the mam issue's are sought to', be established by oral evidence, the rule that, where there is a substantial conflict in'evidence, 'the 'appellate court will not disturb the judgment, is as applicable to suits in equity as in actions'¿t law. In Commercial Bank v. Lieuallen, 5 Idaho, 47, 46 Pac. 1020, which was a suit. In equity, this court held that where there was a substantial conflict in the evidence, the facts found by the trial court would not. be disturbed. To the same effect, see, Brison v. Brison, 90 Cal. 323, 27 Pac. 189; Sullivan v. Moorehead, 99 Cal. 157, 33 Pac. 797; Mahoney v. Bostwick, 96 Cal. 53, 31 Am. St. Rep. 175, 30 Pac. 1020. In Doe v. Vallejo, 29 Cal. 391, the supreme court of California completely answered the contention of counsel for appellant on the point under consideration. That was a suit in equity to foreclose a mortgage. The court said: "It is insisted that, this being, an equity case, the court will not -apply the same rule with reference to balancing conflicting testimony which it would if the appeal was from an order denying a new trial in an action at law; that the court will determine the question of fact upon an examination of all the evidence as. if they had never been determined in the court below. We had supposed that this court had so often declined to make any distinction in practice between eases at law and cases in equity that the question might be considered settled. Our system does not contemplate any distinction in this respect, and there is no propriety in maldng any under it. . . . . The witnesses were -examined in open court, and only -brief minutes .of testimony taken as in actions at law. The-record is brought to .this court by statement on motion for a new trial in the same maimer as in actions at law. The court below is possessed of all those aids necessary to enable it to give due credit to every item of testimony which are accessible to the judge who tries an action at law, and which, from the nature of things, are inaccessible to this court." The authorities supporting the above views are numerous, but it is unnecessary for us to cite others. The rule above referred to is well established by the decisions of all code states that we have examined, where the distinction between actions at law and suits in equity has been abolished.
' While on the witness-stand^ the appellant was asked what information, if any, he had concerning the value of said mining claims, and he replied that he and Albert Kleinschmidt had had occasional conversations about the matter. He was then asked this question: "Now, Mr. Stuart, from such information as you are able to gather concerning the value of this property, I wish you would state to the court what, in your opinion, was the value of the property at the time of the execution of this deed in the year 1890." The question was objected to on the ground that the witness had not shown himself competent to testify as to the value, and that he ought not to be permitted to state what he thought the value was from information derived from others; which objection was sustained by the court, and that ruling is assigned as error. We do not think the court erred in excluding the answer to the above question, for the reason that the question did not confine the witness to information received prior to the execution of said deed, for an opinion formed from information acquired by the witness after the execution of said deed was wholly irrelevant and immaterial. Any proper evidence to show what the witness believed the value of that property to have been at the date of the execution of said deed was proper, but an opinion formed from information received subsequent to the execution of said deed was immaterial.
The witness Drake was not permitted to testify as to the amount he had offered Kleinschmidt for his interest in said claims. That action of the court is assigned as error. That testimony was wholly irrelevant, and properly rejected.
The witness Holter was permitted to testify over the objection of counsel in regard to his having purchased a one-sixteenth interest in said mines. That action of the court is assigned as error. We are unable to see how the testimony was relevant to the issues, and we do not see how its admission affected any substantial right of the appellant.
We have considered the other errors assigned, and not specially referred to in this opinion, and find no prejudical error in the record.
The judgment must be affirmed, and it is so ordered. Costs of this appeal are awarded to the respondents.
Stockslager, J., concurs.