Court Opinion

ID: 5181265
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:42:28.142093+00
Date Added: 2024-06-11T08:26:34.815397
License: Public Domain

Barrett, J.:
The only branch of the appeal which we need consider is that, relating to the validity of the conveyance of the appellant’s second parcel. That portion of the judgment relating to the order of sale of the different parcels seems to have been acquiesced in by the *252.appellant, since no ground of error with regard to it has been raised on the argument or presented in her brief.
The judgment below decides the conveyance of July 16,1890, to be absolutely void as against the creditors of Otto H. Georgi. There are certain undisputed facts bearing upon that conclusion which should be noted. It is, for instance, undisputed that the appellant on July 15, 1890, mortgaged property belonging to her for $6,000 and lent the money to her husband. The appellant and her husband testify, without contradiction, that she declined to let him have the money unless he gave her a deed of this second parcel, and that the loan was made upon his promise to do so. At the time the loan was made there were two mortgages on the property. The first was the plaintiff’s for $4,000. It covered other property than the second parcel, but that parcel was nearly seventy per cent of the -whole. The second mortgage was one for $25,000, given to indemnify one Hupfel against liability as ■ surety upon a bond of Otto H. Georgi’s. It ultimately transpired that Hupfel was not held liable, and thus the mortgage did not in the end detract from the value of the equity. This, however, was not known until November 29, 1890.
Upon the other hand, Murphy, the commissioner who took the acknowledgment of the deed in question, and upon whose testimony the case for the respondents mainly rests, testified that the deed was not executed until the early part of December. He is contradicted, Jhowever, by Georgi, who says that the execution was only a week or two after the date of the deed. Georgi seems to be a much more trustworthy witness than Murphy. Upon Murphy’s own showing as to his position and conduct in the matter, but little reliance can be placed upon his testimony. We should thus have great difficulty in affirming the judgment and finding that the conveyance was fraudulent, even if it were necessary to award the whole of the proceeds of sale either to the creditors on the one hand or the appellant on the other.
We do not think, however, that the agreement of the appellant was to purchase the second parcel outright for the sum of $6,000. The appellant simply testifies: “ I mortgaged that lot for $6,000 with the understanding that he was to deed me the remaining land.” Georgi says: “I was very short of money in July, 1890. I tried *253to raise money then, but couldn’t get any. * * * I asked her would she mortgage that lot I had conveyed to her; I could get the money from Mr. Iiupfel on it, and she said yes, if I would give her a deed for the balance of the property that Mr. Iiupfel was holding that indemnity bond against. She did not care to let me have the money without the deed; I said yes, and so she mortgaged that lot for §6,000. I received the money paid on that mortgage and used it in paying for material and labor on the contract at New Rochelle.”
It seems quite plain from the foregoing, which is substantially all the testimony on the point, that the conveyance was given as security merely. The sole occasion and cause of the deed was Georgi’s need of the loan. The appellant’s unwillingness at first, was the natural unwillingness of one person to lend money to another when there is any doubt about the latter’s ability to repay. The promise of the deed solved this difficulty, and the loan was thereupon made. The idea of a transfer seems never to have before occurred to either husband or wife; and when the arrangement therefor is considered in connection with the need which gave rise to, and the circumstances which attended it, there can be no doubt that it was intended as security. A sale implies a balancing of the value of the property on the one hand and the consideration on the other. Nothing of the kind appears here. The promise to give the appellant a deed was made at a time when it was not even known how much she was to lend. She did not have the money in hand, but was obliged to raise it by mortgage on other property belonging to her. She got §6,000, but there is nothing to show that this was the sum agreed upon. On the contrary, it appears that Georgi was anxious for as much money as he could get, and that the appellant was willing to lend him all she could raise on her other property. Real estate is not usually conveyed by one party to another for such an indefinite consideration as this. What Georgi obtained was a loan, and what he gave was security for it. There is no fact in the case from which it can be reasonably inferred that the deed was given in payment of the loan. Where it appears that an agreement to convey real property was occasioned solely by the solicitation of a loan by the grantor, and there are no facts showing that the essential nature of the transaction was afterward altered from that of a loan, but, on the other hand there are circumstances *254tending to show the contrary, the presumption is that the conveyance was intended as security merely, and it will be held to be a mortgage.
The result reached is not affected by the form of the appellant’s answer. In her pleading she simply sets out the fact of the conveyance to her, and claims, as a legal consequence, to be entitled to the whole of the surplus proceeds of the parcel in question. In stating the result believed to follow from the facts, she erred. If, however, the pleading should properly be construed as alleging ownership in fee, the evidence adduced at the trial, and not the pleading, must control. A party may in his pleading, and often does, allege a state of things more favorable to himself than the proofs at the trial warrant. But the latter are what determine the judgment to be rendered..
We think that the undisputed evidence shows that the conveyance of July 16,1890, was given merely as security for the loan made by the appellant, and the judgment appealed from should be reversed and a rehearing ordered, with costs to abide the event, unless the respondents, the receiver and judgment creditors of Otto H. Georgi, stipulate to modify the judgment so as to provide that the appellant is entitled to be paid out of the proceeds of the second parcel, the sum of $6,000 and interest from July 15, 1890, next, after the payment of the plaintiff’s mortgage, and the necessary expenses of foreclosure charged by the judgment against this parcel. In case this stipulation is given within ten days, the judgment as thus modified will be affirmed, with costs to the parties represented upon this appeal payable out of the property.
O’Brien and In&raham, JJ., concurred; Van Brunt, P. J., and Rumsey, J., dissented.