Case Name: Lynch, Appellant, vs. Ryan and wife, Respondents
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1907-06-20
Citations: 132 Wis. 271
Docket Number: 
Parties: Lynch, Appellant, vs. Ryan and wife, Respondents.
Judges: 
Reporter: Wisconsin Reports
Volume: 132
Pages: 271–280

Head Matter:
Lynch, Appellant, vs. Ryan and wife, Respondents.
April 16
June 20, 1907.
Mortgages: Equity of redemption: Extinguishment: Conveyance to mortgagee: Trusts and trustees: Execution of oral trust: Appeal: Motion for rehearing: Disrespectful brief.
1. Where the relation of mortgagor and mortgagee has been once established and it is claimed that by a subsequent deed of the premises by the mortgagor to the mortgagee the equity of redemption has been extinguished and the mortgagee has become the absolute owner, it must be clearly shown that the conveyance or release was voluntary, was based on adequate consideration, was untainted by fraud, and that no advantage was taken of the debtor’s necessities to drive a hard bargain. In doubtful cases the court will incline to hold that the mortgage relation still exists.
2. The' evidence in this case is held insufficient to sustain a finding that a conveyance of mortgaged premises to the mortgagee extinguished the equity of redemption.
3. A mortgagor cannot gratuitously release his right to redeem or bar himself from exercising it by any agreement, whether made contemporaneously with the mortgage or subsequently thereto.
4. Where the owner of land conveyed it to another who orally agreed to hold it subject to the grantor’s order, although this oral trust could not be enforced, yet if the grantee voluntarily executed it the beneficiary would be placed in the same position as if the trust had been fully expressed in writing.
5. A brief on a motion for a rehearing charging that one of the respondent’s contentions was disposed of “cavalierly;” that a certain legal proposition in the opinion “almost defies comment;” that "such a decision violates every instinct of justice,” etc.; and describing one of the conclusions of the opinion as a “mere quibble, — a juggling of words,” held so disrespectful to •the court as to justify striking it from the files under Supreme Court Rule 50.
Appeal from a judgment of tbe circuit court for Rock county: B. F. DuNwiddie, Circuit Judge.
Reversed.
This is an action in equity seeking judgment declaring a certain deed to be in fact a mortgage. Many of the facts were substantially undisputed and may be stated as follows:
Prior to March, 1889, the plaintiff became the owner of eighty acres of farm land in the town and county of Rock, and his wife became the owner of another eighty in the same town, both tracts being subject to mortgage. Mrs. Lynch was a cousin of the defendants J oseph A. Ryan and J. B. Slattery. Edward H. Ryan was a brother of Joseph A. Rycm. All the parties named liyed in Rock county excejff Slattery, who lived at Shreveport, Louisiana. Mrs. Lynch died intestate, early in 1889, leaving children, and on March 5, 1889, the plaintiff was appointed administrator of her estate and gave bond in the sum of $2,000, signed by Joseph A. Ryan as surety, and entered on his duties as administrator. February 7, 1895, the plaintiff Lynch executed and delivered to Edward H. Ryan a general power of attorney authorizing him to transact business and mortgage and convey real estate, and shortly thereafter removed to Shreveport, Louisiana. Edward H. Ryan thereupon acted as plaintiff’s agent in managing the plaintiff’s interests and looking after his real estate in Wisconsin, and continued so to do until January 1, 1899. In June, 1895, the plaintiff’s account as administrator was settled by the county court of Rock county, and plaintiff was found indebted to the estate in the sum of $1,067.94, for which sum judgment was entered against the plaintiff and Joseph A. Ryan. December 14, 1895, tbe plaintiff, acting tbrongb bis attorney in fact Edward H. Ryan, gave J oseph A. Rya/n bis personal bond to indemnify bim against hie liability on tbe said administration bond and judgment. To secure this bond be also gave a mortgage covering not only tbe aforesaid eighty acres owned by bim in fee, but also bis estate by tbe curtesy in tbe eighty acres formerly owned by bis wife. Tbe court found that tbe eighty acres owned in fee were at this time not worth more than $2,800 and were incumbered by mortgages to tbe amount of $2,141.67, and that tbe lands held as tenant by tbe curtesy were incumbered in tbe sum of $1,350, 'and tbe value of the plaintiff’s interest therein was less than $600. Joseph A. Ryan paid tbe judgment of $1,067.94 upon tbe administration bond, and was afterwards reimbursed by one of tbe plaintiff’s children in tbe sum of $158.97, leaving due him $908,97 and interest.
July 11, 1896, tbe plaintiff executed and delivered to John B. Slattery a quitclaim deed of both parcels of land. Tbe consideration expressed in this deed was $1,800, but in fact there was no consideration therefor, and Slattery simply took tbe title at the request of tbe plaintiff under an agreement to bold tbe title subject to plaintiff’s order. E. H. Ryan continued to manage tbe property. About December 1, 1897, J oseph A. Ryan saw E. H. Ryan and threatened to foreclose tbe mortgage, whereupon E. H. Ryan proposed that be would get Slattery to convey tbe land if be ( Joseph A. Ryan)' would allow Slattery to have tbe rents for tbe year 1898 and thus save the expense of a foreclosure. J oseph A: Ryan consented to this, and E. H. Ryan consulted with plaintiff, who consented to tbe plan, and Slattery on plaintiff’s request executed a warranty deed of tbe lands to J oseph A. Rycm December 27, 1897, which deed excepted the mortgages from tbe covenant against incumbrances, and also stated that it conveyed only such rights, title, and interest as Slattery acquired under bis deed from plaintiff. On tbe 31st of December, 1897, when this deed was delivered, J oseph A. Ryan executed and delivered to Edward H. Ryan a contract giving the latter the exclusive right to sell the property until hlarch 1, 1899, and providing that in case of sale J oseph A. Ryan should first he paid $908.97 and interest from November 1, 1897, also his costs and expenses in the care of the land and buildings, with interest, after which Edward H. Ryan was to have all that should be received as his compensation. At the same time it was orally agreed that Edward H. Ryan should receive the rents and profits of the farm for the year 1898 as agent for Slattery or the plaintiff. E. H. Ryan claims that he assigned this contract at once to the plaintiff, but plaintiff claims he never knew of it, and further claims that Joseph A. Ryan orally agreed with him that he {Lynch) was to retain the same interest in the land as before. This latter claim is denied by J oseph A. Ryan. E. II. Ryan continued to collect the rents, and both he and Lynch (wbo had returned to Wisconsin and lived in Beloit) endeavored to sell the land during the year 1898, but did not succeed. Plaintiff applied to Joseph A. Ryan in December, 1898, for an extension of time in which to sell, but Joseph A. Ryan refused to grant it. J oseph A. Ryan went into possession of the land about January 1, 1899, and has since received the rents and profits and expended some $2,000 in improvements on the property.
The court found that the deed from Slattery to Rycm was an absolute and valid conveyance of the title of the lands in consideration of the assumption by Ryan of the incumbrances and the release of his claim for money paid upon the administration bond, and entered judgment for the defendants declaring the deed to be an absolute conveyance. From this judgment the plaintiff appeals.
For the appellant there were briefs by Ruger & Ruger, and oral argument by Wm. Ruger and Wm. Ruger, Jr.
For the respondents there was a brief by M. Q. Jeffris and Ryan & Oestreich, and oral argument by Mr. J effris, Mr. Edward H. Ryan, and Mr. 0. A. Oestreich.

Opinion:
The following' opinion was filed April 30, 1907:
Wietslow, J.
The appellant makes a number of minor contentions, which we find it unnecessary to consider in consequence of the conclusion which we have reached upon the merits .of the case.
After careful consideration of the evidence we are unable to agree with the conclusion that the plaintiff's equity of redemption in the lands in question was extinguished by the deed from Slattery to the defendant Ryan, and we shall briefly state the reasons for this conclusion. Where the relation of mortgagor and mortgagee of real estate has been once established between two parties, and it is claimed that by a subsequent deed of the premises by the mortgagor to the mortgagee the equity of redemption has been extinguished and the mortgagee has become the absolute owner of the premises, it must be clearly shown that the conveyance or release was voluntary on the part of the mortgagor, was based on an adequate consideration, was untainted by fraud, and that no advantage was taken of the debtor's necessities to drive a hard bargain. Such transactions will be closely scrutinized, and if the proof be clear and satisfactory that the requirements above named have been observed the transaction will be sustained, otherwise not. In doubtful cases the courts incline to hold that the mortgage relation still exists. These propositions are very well established. Rockwell v. Humphrey, 57 Wis. 410, 15 N. W. 394; Kunert v. Strong, 103 Wis. 70, 79 N. W. 32. It is manifest that, where no part of the debt is discharged at the time of the conveyance or release, the change in the relationship' of the parties is one in name only and not in substance. A mortgagor cannot gratuitously release his right to redeem or bar himself from exercising it by any agreement, whether made contemporaneously with the mortgage or subsequently thereto. 2 Jones, Mortg. (5th ed.) § 1038 — 1046.
In the present case the court found that the consideration for tlie transfer by Slattery to J oseph A. Byan. was the assumption by Byan of the prior mortgages on the lands and the discharge of Joseph A. Byan's claim against Lynch for payment of the judgment on the administration bond. We have searched the evidence in vain to find any basis for these findings. Byan did not assume the payment of the prior mortgages by any stipulation in the deed, nor do we find any evidence of-any agreement so to do either oral or written outside of the deed. There Was no discharge of the indebtedness from Lynch to Byan made nor any delivery of the bond. Doubtless a formal discharge would not be necessary, but it must at least appear that the parties agreed that the debt should .be considered paid, and there is no evidence of such ah agreement or even of any conversation concerning the matter. All the'evidence tends strongly to the conclusion that the idea was simply to put the title into Byarís name, in order that a good deed might be made to a purchaser at any time without the necessity of a foreclosure. If there were any doubt about this as a conclusion of fact from the acts of the parties, it would seem to be removed by a very significant clause in the written agreement which J oseph A. Byan gave to E. H.- Ryan at the time of the execution of the deed giving E. H. Ryan the exclusive right of sale of the lauds until March 1, 1899. This clause is the final one in the agreement and reads,as follows:
"On the first day of March, 1899, this appointment of Edward H. Ryan as agent of Joseph A. Byan to sell the lands herein described, and all rights, privileges, and authority hereby conferred, shall cease and terminate and become null and void, and said Edward H. Ryan hereby agrees to surrender this evidence of authority to said Joseph A. Ryan, who upon said day Iasi named shall become the owner thereof
The final words of this clause expressly negative the idea that the deed itself transferred or was intended to transfer the absolute title. They are only consistent with the idea that the real ownership was still to remain in Lynch (or in Slattery for the benefit of Lynch) nntil the 1st of March, 1899. In other words, they recognize in no uncertain terms the continued existence of the mortgage relation. Many other facts in evidence reinforce this conclusion. In view of the requirement of law that the release of the equity of redemption must he clearly proven to have been voluntarily made without fraud or overreaching and must he based on an adequate consideration, we are forced to the conclusion that the proof in this case was insufficient to justify the finding made. The mortgage relation was not extinguished by the deed from Slattery to Joseph A. By an. The plaintiff was entitled to a decree adjudging said deed to be a. mortgage, that he has the right to redeem therefrom, and that an accounting must be had before the court or a referee, and for this purpose all necessary additional evidence may be taken.
By the Court. — Judgment reversed, and action remanded for further proceedings and final judgment in accordance with this opinion.