Court Opinion

ID: 6513391
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:24:24.727402+00
Date Added: 2024-06-11T15:54:56.992143
License: Public Domain

SOMERVILLE, J.
The purpose of the bill filed’ by the complainant, Mrs. Vincent, a married woman, is to have a deed executed by her on April 7, 1886, to the defendant "Walker, and absolute on its face, declared a mortgage, and thereupon to cancel such conveyance as void, on the ground that it was given on her statutory separate estate, and for this reason was a nullity.
In considering the case we will regard the agreement executed by Walker, and bearing date April 12, 1886, as part and parcel of the deed of conveyance, in accordance with the contention of the appellant’s counsel. This agreement recites the fact that the grantee, Walker, had paid two thous- and dollars in cash for the land, and it confers on the grantors, Vincent and wife, the right to “redeem” the same by paying therefor the same sum with interest to the date of redemption, whereupon he agrees to “re-convey” the land to *336Mrs. Vincent. There is a brief addendum to the instrument, to which we shall hereafter advert.
The following propositions, relating to this subject, are settled by our past decisions:
(1.) While a married woman could not, prior to the time the present married woman’s law went into effect (February 28th, 1887), mortgage her statutory separate estate, such attempted mortgage being an absolute nullity as to her, she could lawfully make a deed of bargain and sale of such estate, with the privilege of repurchasing retained by her, in the nature of a conditional sale. — Peeples v. Stolla, 57 Ala. 53.
(2.) One of the distinguishing tests by which to determine whether an instrument is a mortgage, or a sale with the privilege of re-purchasing, is the existence or non-existence of a debt to be secured. If there be no debt due from the grantor to the grantee, there can be no mortgage. The idea of a mortgage without a debt to be secured by it is a legal myth in our system of jurisprudence. — Douglass v. Moody, 80 Ala. 61; Mitchell v. Wellman, Ib. 16; Peeples v. Stolla, supra.
(3.) The reserving or granting the right “to redeem” lands to a grantor, by paying a certain sum to the grantee by a fixed day, can not convert an instrument, otherwise purporting to be a conditional sale, into a mortgage, there being no debt, or binding obligation on the part of the grantor to redeem. — Haynie v. Robertson, 58 Ala. 37; Logwood v. Hussey, 60 Ala. 417.
(4.) To convert an instrument, on its face a conditional sale, into a mortgage, the intention and understanding of both paities to such instrument must be shown to have concurred that it should so operate. The fact, however clearly proved, that the grantor alone intended and considered the transaction a mortgage, is insufficient to make it a mortgage. West v. Hendrix, 28 Ala. 226; Douglass v. Moody, 80 Ala. 61, supra.
(5.) Inadequacy of price or consideration is not sufficient, of itself, to convert an instrument purporting to be a conditional sale into a mortgage or security for the re-payment of money; although it may be an element of fact to be considered -in determining the question, where there is a debt in existence to be secured. — West v. Hendrix, 28 Ala. 226; Rapier v. Gulf City Paper Co., 77 Ala. 126.
(6.) An instrument can not operate, at one and the same *337time, as a mortgage and a conditional sale, these two classes of conveyance being chiefly distinguished by the existence of a debt in the former, and its non-existence in the latter. Where, however, the repugnancy of its provisions, and the accompanying evidence render its character doubtful, it will accordingly be construed a mortgage rather than a conditional sale — at least, where such construction will operate equitably by securing to the grantee or creditor his debt with interest, and enable the grantor, or debtor, to effect a repurchase of his land. — Ropier v. Gulf City Paper Co., 77 Ala. 126; Crews v. Threadgill, 35 Ala. 334.
(7.) But where the instrument, if construed to be a mortgage, will become void, and operate to promote injustice by losing the grantee his money paid for the land, and of restoring to the grantor property without an honest return of the money actually received by him, and for the security of which such property was conveyed, the inclination of a court of equity, in case of doubt, will be to regard the transaction as a conditional sale, and not as a mortgage. That construction will rather be adopted, on well settled principles, which will uphold the instrument and not destroy it —which will work equity between the parties and not injustice.
The application of these rules fully sustains the conclusion of the chancellor, that the transaction between Mrs. Yincent and the defendant Walker was not a mortgage, but a conditional sale, or sale reserving the right of repurchasing to the grantor. The two papers relating to the matter —the deed of April 7th, 1886, and the agreement of April 12, 1886 — show this on their face, and the burden of proving the contrary is cast on the appellant. The testimony, in our judgment, satisfactorily shows that Walker expressly and positively declined to lend money to the complainant on mortgage, for the reason that she was prohibited by law from giving such security on her statutory separate estate. He was advised by counsel that such a security would be absolutely void, but that Mrs. Yincent might make a sale of the property, reserving the right to repurchase, as appears to have been done on the face of the paper. It is clear that Walker’s intention accorded with the intention imported by the deed and agreement, which stamps the transaction as a conditional sale. That the intention of Mrs. Yincent may have been to borrow money, or that her belief was that she had given a mortgage, instead of a deed, *338is entirely immaterial. There can be no mortgage without the concurring intention of both contracting parties, first, to create a debt; and, secondly, to secure that debt by some form of conveyance. In this case, there is no debt, and hence there can be no mortgage.
The addendum to the agreement of April 12th, 1886, does not overturn this presumption. It was made subsequently to the date of the transaction, having been written by one Gurley, in the absence of Walker, and without-the knowledge or special authority of his principal. The recital as to what Mrs. Yincent “owes” was an inapt expression, contrary to the fact that she owed nothing whatóver. It had reference only to what she would owe in the event of undertaking to exercise the privilege or re-purchasing the land, under the agreement creating the conditional sale.
This conclusion results in the affirmance of the chancellor’s decree, which is accordingly affirmed.