Court Opinion

ID: 6896023
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:49:49.59018+00
Date Added: 2024-06-11T16:06:00.219559
License: Public Domain

Steahan, C. J.
This is a suit to enforce the specific performance of a written agreement to convey land. The questions presented for our consideration on this appeal *131arise out of the defendants’ motion to strike out certain portions of the complaint and the demurrer to the residue; but we prefer to reach the merits of the case, so far as possible, aside from the mere forms of pleading.
The first question to which we think it necessary to direct our attention is, the nature of the title held by the defendant Bethenia A. Owens Adair to all the lands attempted to be conveyed to her by George H. Alendell and wife. Alendell’s title, derived from the Adairs, though in the form of an absolute deed, was designed and intended by all the parties to it as a mortgage to secure the payment of money; and the defendant Bethenia A. Owens Adair took the conveyance from him with full knowledge of these facts, but with a further agreement on her part that she would hold the same subject to the same terms and conditions under which Mendell had previously held the same.
It is too well settled in this state to admit of any kind of controversy, that a deed, though absolute in form, if intended by the parties to it as security for money or the performance of any other lawful act, is a mortgage. (Hurford v. Harned, 6 Or. 362; Stephens v. Allen, 11 Or. 188; Albany & Santiam W. D. Co. v. Crawford, 11 Or. 243; Wilhelm v. Woodcock, 11 Or. 518.) And it is equally as well settled that a mortgage vests no title in the mortgagee, but is a mere security. (Anderson v. Baxter, 4 Or. 105; Sellwood v. Gray, 11 Or. 534.)
And this does not depend on the form of the conveyance, but upon the real character of the instrument. It is believed to be the better doctrine, that if a deed absolute in form be made merely to secure an indebtedness, it is a mere mortgage, and does not pass the legal title. (Smith v. Smith, 80 Cal. 323; Hall v. Arnott, 80 Cal. 348; Booth v. Hoskins, 75 Cal. 271; Raynor v. Drew, 72 Cal. 307; Healy v. O’Brien, 66 Cal. 517; Taylor v. McLain, 64 Cal. 513; Murdock v. Clarke, 90 Cal. 427; Lane v. Shears, 1 Wend. 434; Peugh v. Davis, 96 U. S. 332; Odell v. Montross, 68 N. Y. *132499; Brinkman v. Jones, 44 Wis. 498; Howe v. Carpenter, 49 Wis. 697.)
The first part of this proposition having already been adopted in this state, the second is a logical sequence, and must follow the first. The result of these conclusions is, that the defendant acquired no title to the real property attempted to be transferred to her by Mendell, nor to the other lands attempted to be conveyed as security, and which she was to hold for the same purpose as the Mendell lands. The deeds to her, though absolute in form, under the allegations in the complaint, which, for the purposes of the suit the demurrer admits to be true, are mortgages, and she acquired no title in the land by virtue thereof which she could transfer or assign without foreclosure. Under this state of facts, a decree for a specific performance would be ineffectual. The plaintiff could not by such decree obtain the title which the defendant agreed to convey. In such case it is the settled practice of courts of equity to refuse a decree which it would be utterly unable to enforce.
In Franz v. Orton, 75 Ill. 100, it was held that when a party purchasing land of one clothed with the legal title, has notice, actual or constructive, that another owns it, and that the vendor holds the legal title as security for money owing him and others, he cannot be placed in a better position than the vendor, and a court of equity will refuse to enforce the specific execution of his contract of purchase. So in Love v. Cobb, 63 N. C. 324, it was held that where one bargains for the land of another, who, as he knows, has only an equitable title, upon the latter being unable to procure a title by the refusal of his bargainor to convey, he is not bound to a specific performance of his contract. And in Hill v. Fiske, 38 Me. 520, it was held that an agreement in writing to procure for the plaintiff a good and sufficient deed of a certain tract of land, the title of which was not in the respondent, and that was known to the plaintiff, lays no foundation for a court of equity to decree *133a specific performance of the contract. In disposing of this case, the court said: “ It is obvious, when the party contracting has no title to the land agreed to be conveyed, that there is nothing upon which a decree for a specific performance can operate.” So also in Shields v. Trammell, 19 Ark. 51, it was held that a specific performance of a contract for the conveyance of land would not be decreed when the vendor has no title, or has, since the contract, conveyed the land to a stranger without notice.
In Ferrier v. Buzick, 2 Iowa, 136, it was held that courts of equity will decree parties to perform that which in legal contemplation they are able to perform, and not that which it is manifest they have no legal power to carry out; and if the decree is to be void and imperfect, and cannot be performed, a specific performance ought not to be decreed. And in Brueggeman v. Jurgensen, 24 Mo. 87, it was held that there was no equity for specific performance of a contract to convey land where the party against whom such equity is asserted has rendered a specific execution on his part Impossible by conveying said land to a third person. And, Morss v. Elmendorf, 11 Paige Ch. 277, is to the same effect.
In fact, our attention has not been called to a single case in which the vendee obtained any relief where the vendor was without title at the commencement of the suit, and the vendee knew the state of the title at the time. We think probably the plaintiff in this case is entitled to recover back the money, with interest, which she paid on the contract, as well as for permanent improvements on the premises after she went into possession; but we are unable to satisfy ourselves that we have any authority to consider or decide that question in this case. The authorities seem to be to the effect that the only decree we can render in such case is to dismiss the suit, leaving the injured party to pursue such remedy at law as he may be advised. (Morss v. Elmendorff, supra; Hill v. Fiske, supra; Kempshall v. Stone, *1345 Johns. Ch. 193; Pomeroy Spec. Perf. Contr. § 475; Waterman Spec. Perf. Contr. § 516.)
These conclusions would lead to an affirmance of the decree, but my associates think the case may be treated as a suit to redeem. As to that I express no opinion, but reverse the decree and remand the cause to be further proceeded with in accordance with the opinion of my associates.
Bean, J.
I am of the opinion; that while in form this is a suit for the specific performance of the contract of sale from Mrs. Owens Adair to Mrs. Rodney Adair, it is in effect nothing more than a suit for the redemption of the land from the lien of her mortgage, and to declare the lien discharged and the mortgage satisfied. (Miller v. Thayer, 74 Cal. 351.)
The facts are fully set forth in the complaint, and to my mind clearly show a case for equitable relief, which should be granted in this suit. The transaction between the parties, it is conceded, amounted to nothing more than a security for the payment of the debt of Samuel D. Adair to Mrs. Owens Adair; and the agreement on her part to re-convey the land to Mrs. Rodney Adair, by his direction upon payment of the debt, did not in any way change the nature of the transaction, or make it any the less a mortgage. Equity looks to the substance, and not to the form; and ‘‘ if a transaction resolves itself into a security, whatever may be its form, and whatever name the parties may choose to give it, it is in equity a mortgage.” (Flagg v. Mann, 2 Sumn. 486.)
While the agreement of Mrs. Owens Adair to convey the land to Mrs. Rodney Adair, upon the payment of Samuel D. Adair’s debt, cannot, in the strict sense of the term, be denominated a defeasance, it is a means mutually agreed upon by the parties whereby the representative of the original grantor could recover what was justly his own. The terms upon which redemption might be had were *135somewhat modified, it is true, and some new features were introduced, but the essential character of the obligation resting upon Mrs. Owens Adair, who held the lands only as security, to restore them to the rightful owner, or his representative, upon payment of the debt for which they stood pledged, was unchanged. I think the parties had a right to substitute Mrs. Rodney Adair for Samuel D. Adair, and the fact that an obligation for a re-conveyance ran to her instead of him, is wholly immaterial. (1 Jones, Mortg. § 241; Flagg v. Mann, 2 Sumn. 486; Jeffery v. Hursh, 58 Mich. 246; Martin v. Pond, 30 Fed. Rep. 15; Pardee v. Treat, 82 N. Y. 385.)
But whether this be true or not, is of no consequence in this suit; for he is a party plaintiff, and asking relief herein, and will be bound, so far as the defendant is concerned, by any decree which may be made. As the case is presented, it is conceded that the defendant Mrs. Owens Adair only has a lien upon the land to secure the payment of a certain sum of money, which was duly tendered to her before the commencement of this suit, and that the only persons who can claim the right to redeem or to a re-conveyance from her are joined as plaintiffs and demanding relief herein; and yet it is said they are without relief in a court of equity, because the, defendant does not have the legal title to the land which she agreed to convey. We have nothing to do with the legal title, or whether Mrs. Owens Adair can convey a perfect or any title, but the question here is, whether she shall be compelled to accept the amount of the debt for which she holds the land as security and release or discharge her lien by re-conveying her interest if any in the land to the party to whom she agreed to so ,re-convey. I am clearly of the opinion she should; and this case ought to be reversed and remanded to the court below, so that the questions of fact, if any, can be tried out.