Court Opinion

ID: 3677100
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:23:31.900501+00
Date Added: 2024-06-11T13:48:11.985298
License: Public Domain

Some time in 1800 a payment of $100 was made for complainant to defendant by one Powell in part of the redemption of the land, and Jones then agreed that if within the first five weeks of 1801 the complainant would pay him the further sum of $600, and give bond and security for the balance, that he would release the land; or, if within that time he could not make such payment, that he would wait another year for the payment and during that year be content with lawful interest; that in the course of the five weeks mentioned above the complainant, by one Reading Jones, offered the defendant $500, and to pay the remaining $100 in one month, if he would surrender the deed; this Jones refused, but said he would see about it at court, which was to meet in a few days; and at the court Jones caused the deed to be recorded, and then told Reading Jones, who offered to pay the $600, that he need not trouble himself any more, for that the lands had been sold by him (the defendant) and that the complainant would never get them again. (425) Complainant then applied to Jones himself, offering to pay the $600 and to secure the remainder by bond with security, when Jones replied that he had sold the land, and offered the complainant a small pecuniary compensation for his equity of redemption; this was refused by complainant, and Jones then evicted him by means of a jury upon a complaint of forcible detainer. The lands were sold to one Martin Lane, who, it was charged, had full notice, and who paid no consideration.
The bill prayed that the sum due, with interest thereon, might be ascertained under the direction of the court, and upon payment thereof that defendant should be decreed to reconvey the lands.
The answer of Jones set up an absolute purchase of the lands, and denied that there was any agreement for redemption, and, admitting the fact that complainant remained in possession until 1801, alleged that his possession was that of a tenant only, under an agreement to pay a certain rent annually so long as he continued in possession. A promise to "resell" to complainant, made afterwards, was also admitted, but at what time was not stated.
The defendant Martin Lane answered that he was a purchaser for valuable consideration, without notice of complainant's claim. *Page 237 
There was much evidence in the case, and the facts shown by the depositions, so far as is necessary to a correct understanding of the points decided, will be found in the opinion of the judges.
The bill charges that the money received from the                 (431) defendant Jones was a loan and not the price of the land, and that the land was to be mortgaged as a security for the debt; that when complainant was about to execute the deed he expressed a wish that a clause of redemption should be inserted in it, but that the defendant objected, and said: "Here take the money you want and trust to my word," and that the defendant refuses to either receive the money or reconvey the land.
From this statement the justice of the case seems to be with the complainant, and relief ought to be granted, unless there is some rule of law founded in policy that forbids it.
It is objected that the contract of the parties is evidenced by   (432) the deed executed by the complainant to the defendant Jones and that parol evidence ought not to be received to contradict it; and that that principle was established in the decision of this Court which took place on the same point in July, 1810, Streator v. Jones, 5 N.C. 449. With respect to that decision, I think my recollection serves me when I say that the decision of a majority of the Court was not as is laid down in that case. I know that the Court did strongly incline against the introduction of parol evidence to prove directly that the deed executed to Jones was a mortgage, but did not doubt but that circumstances might be given in evidence from which a jury might infer that the deed was considered by the parties as a mortgage and find a verdict accordingly; such as the value of the land at the time of the contract, the sum of money paid for it, the rent paid or agreed to be paid by complainant during the time he afterwards lived upon it. And I am supported in this from this further fact that, shortly after that decision was made, an issue was made up on this very point in the Superior Court of Wake County, where the cause was pending, and submitted to a jury. The question submitted was whether the deed was a mortgage or not. There was a mistrial. The question before that jury is the one now before this Court. It may further be observed that the same counsel appeared for the parties in both courts.
With respect to the objection that parol evidence ought not to be received to contradict or control a written instrument, as a general principle or rule of law its correctness is admitted. It is also admitted that *Page 238 
when the parties undertake to embody their contract in writing, and really do so (unless there is fraud, etc., in the case), it cannot nor ought it to be disturbed by parol evidence. The question, then, here is, Was the contract of the complainant and the defendant Jones committed to writing, or was there any other contract made at the time than what the deed sets forth? I think there was; because the complainant was (433) a needy man. The disproportion between the value of the land and the money received for it, the high rent which complainant agreed to give for it, and his remaining in possession so long as he did after the sale; before complainant signed the deed he wished a clause of redemption inserted; Jones said he had given full value for the land; complainant answered that he would not take three times that sum for it. After he signed the deed Jones told him if he would return the money, that was the $800 which he was about to give him, at the end of the year, together with $200 rent, that he might have the land again. This surely does not appear like a serious and bona fide purchase of the land by Jones. Had this money been paid at the end of the year by complainant it would have been paying Jones his principal and 25 per cent interest, which the bill states the contract to have been. At this rate the purchase money would have been swallowed up in the rent due in four years. And it must appear a little singular that $200 rent should be paid for land that was only worth $800. As to the value of the land, the testimony is contradictory. It appears from some of it that the land was worth, in 1799, 75 cents per acre; that in 1804 it was worth $1, without the improvements put on it by Lane, who purchased from Jones. From this testimony the land was worth 25 cents per acre more in 1804 than it was in 1799, notwithstanding timbers had been taken from it by Streator while he lived on it, and by Lane, who lived on it afterwards up to that time. It appears from other testimony that the land in 1799 was worth $2.50 per acre, and from other testimony $3 per acre. A mean valuation between the two extremes would be nearer thrice than twice the sum for which Jones says he purchased it. But it is asked, Why did the complainant execute the deed under these circumstances? And it is argued that, as he has done it, he must be bound by it. My answer, is, he was a needy man. Jones was the lender and he was (434) the borrower; as Lord Mansfield observes, he was the slave of the lender. Doug., 672, note. Borrowers are oppressed men; and their necessities oblige them to submit to any terms. Ca. Temp. Talbot, 41. Under such circumstances it will not do to take shelter under the maxim, Volenti non fit injuria; they are not in pari delicto. 1 Ves., 319.
In Barnell v. Sabine, 1 Vernon, 268, which happened before the statute of frauds, etc., in England, the single question was mortgage or *Page 239 
no mortgage; and the court received evidence of the value of the land; that the purchase money was 950l., that the defendant was offered about the same time 1,400 l.; and to prove that such evidence was sufficient to make it a mortgage they cited two cases, Cole v. Martin, and Beale v.Collins neither of which cases I have been able to find. The chancellor dismissed the bill, not because he would not hear parol evidence, but because the evidence when heard did not convince him that the deed was originally a mortgage. In another case, since the statute of frauds, Ca. Temp. Talbot, Cottrell v. Purchase, the same question arose, whether a deed absolute on the face of it was intended by the parties to be a mortgage, and in that case evidence was given as to the purchase money and as to the value of the land, which was deemed by the chancellor not sufficient proof that the deed had been originally considered by the parties as a mortgage; but he added: "Had complainant continued in possession any time after the execution of the deed, I should have been clear that it was a mortgage; but she was not, and her long acquiescence under the defendant's possession is to me strong evidence that the deed was an absolute conveyance." These cases are introduced, not for the purpose of showing the final decrees of the chancellors, but to show that they permitted parol evidence to be given to prove that deeds absolute on the face of them were by the original contract considered by the parties to be mortgages. In the last mentioned case of           (435)Cottrell v. Purchase the chancellor concluded by saying that they who took an absolute conveyance of an estate as a mortgage are guilty of a fraud; for which he cited Bacon's Tracts, 37. In Prec. in Chancery, 526, it is stated that when the lender having an absolute conveyance refused to execute a defeasance, Lord Nottingham decreed it against him on the fraud, after the statute of frauds.
In that case the decree was made on the ground that he refused to enter into a written agreement to reconvey as the statute required, after having agreed to do so. In this case relief is prayed because the defendant refuses to reconvey after having by parol contract agreed to do so, the statute of frauds not having been in force at the time of the contract. Another case in the same book, 526, was where an absolute conveyance was made for a sum of money, and the person to whom it was made, instead of entering and receiving the profits, demanded interest for his money and had it paid him. This was admitted as evidence to explain the nature of the conveyance. This decree was made on the same kind of evidence as that objected to in this case. The only doubt entertained by the judges in this and other cases of the like kind seemed to be whether the statute of frauds stood in the way or not; for Powell, in his treatise on Mortgages, 200, where the last mentioned case is also noticed, makes this remark: "In such cases the proof offered is not considered *Page 240 
a variation of the agreement, but explanatory only of what it was meant to have been; and the allowing of any other construction upon the statute of frauds and perjuries would be to make it a guard and protection for fraud, instead of a security against it, which was the intention of it." I have before stated that when this contract was made there was no statute of fraud and perjuries in force in this State.
In consequence of this statute the English judges have rejected (436) parol evidence offered to control written contracts (unless they have been procured through fraud, etc.) because a parol contract is void under the statute, and it cannot be established in part by written and in part by parol evidence, more than if it all rested on parol evidence. As in Woolain v. Hearne, 7 Ves., 217, a bill was brought for a specific execution of an agreement for a lease at a less rent than was mentioned in the written agreement, and the variation was sought to be proved by parol evidence. The master of the rolls said "that the statute had been too much broken upon by supposed equitable exceptions," and that he would go no further in giving effect to parol evidence than he was forced to do by precedents. He dismissed the bill, but said that the evidence made out the complainant's case. As coming nearer to this, however, notwithstanding the statute of frauds, I must notice Pemberv. Matthews, which came before Lord Thurlow. A bill was brought by the original lessees of a leasehold estate against the assignees of the lease, for the specific performance of a parol undertaking to indemnify the complainants against all rents and covenants to be paid or kept on the lessee's part towards the original lessor, and to execute a bond for securing such indemnity; the assignment had been by sale and auction, and the conditions of sale did not state the indemnity. It was objected that parol testimony was inadmissible on the ground that when the parties have entered into a written agreement no parol evidence can be admitted to increase or diminish such agreement. Lord Thurlow said, "The rule of law is right, but when the objection was originally made and promised by the other party to be rectified, it came among the string of cases, 1 Eq. Ca. Ab., 230-1, where it is considered a fraud upon the rule of law," and ordered it to go to law upon an issue whether there was such a promise on the day of the execution of the assignment of the lease; and upon the trial the jury found there was such a promise, and complainant had a decree for a specific performance. If this (437) case was decided on the ground of fraud, I think the case before us is not altogether clear of it.
I cannot think that Lord Irnham v. Childs, 1 Brown, 92, is an authority for the defendants. In that case it was agreed that the annuity should be redeemable; but the parties thought that if there was a clause of redemption inserted it would make it usurious, and for that reason *Page 241 
it was agreed that such a clause should not be inserted. Lord Thurlow said there was no fraud in that case, and refused to relieve the parties upon parol evidence; but said that if it had been intended to be inserted, and had been suppressed by fraud, he would not refuse to hear the evidence.
It is observable in this case that the parties intended to evade the statute of usury. They were both in pari delicto. The same remark may be made as to the cases in Brown, 168; 1 Ves., 241. Cases are not wanting on this subject in the United States. In Ross v. Merrell, 1 Wn. 14, the bill was brought to redeem negroes conveyed to the defendant by an absolute bill of sale; parol evidence was received to prove that it had been executed as a mortgage. The Court said they had the less difficulty in receiving it as the complainant had remained two years in possession of the negroes after the conveyance. And in Robertson v. Campbell, 2 Call., 421, the complainant had conveyed by absolute bill of sale certain slaves to the defendant; parol evidence was received to prove that it was the intention of the parties that the slaves should be redeemable, and the Court, believing the evidence, decreed for the complainant. See, also, Sadler v.Greene, 14 Va. 101, and King v. Newman, 16 Va. 40, decided upon the same principle, notwithstanding, as I understand, the statute of frauds, etc., in force in that Commonwealth.
In 1 Johnson Chancery, Boyd v. McLean, the plaintiff      (438) purchased of Golden a tract of land, and borrowed of the defendant the money to pay for it, and directed Golden to convey the land to the defendant as a security for the money, which was done by an absolute deed; the money was tendered and a bill filed praying a conveyance of the land; the defendant relied upon the statute of frauds. Chancellor Kent
decided that it was a resulting trust excepted out of the statute of frauds, and that the fact whether the purchase was made with the plaintiff's money might be proved by parol evidence.
In this case the complainant did not procure a third person to convey the lands as a security to the defendant, but he conveyed them himself as a security for the debt. In both cases the lands were held as a security for the debts, but by deeds absolute on the face of them. If resulting trusts are excepted out of the statute, other trusts may be proved by parol evidence when unshackled by any statute. See, also, 1 Johnson Chan., 273; 2ibid., 274, 405, 585, 630. In 1 Day's Cases, 139, parol evidence was held admissible in equity to show that an absolute deed was intended as a mortgage. 2 Day, 137. Sec, also, note to Co. Lit., 205a, note 96.
I have said that the evidence in this case convinces me that the deed in question should be considered as a mortgage, because I think it was understood by the parties that the land was redeemable; and I have *Page 242 
come to this conclusion from the evidence given in the case. Although the evidence proving directly the declaration of Jones is not much to be relied upon, yet it is corroborative of other evidence as to the value of the land, the possession kept afterwards by Streator, and the rent charged, etc., as well as the needy situation of Streator. And I am also of opinion, from the authorities examined in this case, that it is proper the evidence should be received in reference to the deed from Streator to Jones.
I will take another short view of the case, in regard to the objection that the evidence contradicts the deed. Let it, then be admitted (439) that Jones loaned, or agreed to loan, $800 at 25 per cent interest, or at any other per cent; that it was further agreed that Streator should convey to Jones his land in fee simple as a security for the debt; and it was further agreed that when Streator should replace the money with interest (provided he did it in twelve months) Jones should reconvey the land to Streator, and that such contract rests altogether on parol evidence, and that the statute of frauds, etc., was not in force, and that parol contracts are obligatory upon the parties; and let us suppose that in part execution of the contract the land is conveyed to Jones and the money advanced to Streator; can it be said that the deed embraces the whole contract? or can it be said that the deed contradicts that part of the contract which provided for redemption? It has never been considered that a defeasance and an absolute conveyance will not stand together. It seems to me that in such case the execution of the deed is a part execution only of the contract, and that the residue of the contract remains executory. And this I say without impugning what I have before admitted, namely, that a written contract shall be obligatory, when it appears that it was the intention of the parties to commit the whole contract to writing, and there is no allegation of fraud, etc.