Court Opinion

ID: 9740342
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:32:49.368689+00
Date Added: 2024-06-11T07:24:17.572067
License: Public Domain

T. M. Burns, J.
(dissenting). I am persuaded that the plaintiffs have demonstrated by clear and convincing evidence that the warranty deed executed on September 30, 1960, was intended by the parties to operate as a mortgage on the 2.49 acres and dwelling covered by the land contract.
The determination of whether a deed should be construed as a mortgage depends upon the intention of the parties at the time the deed was executed. In order to uncover the parties’ intent all of the surrounding circumstances are taken into account including the inadequacy of consideration, the pecuniary embarrassment of the grantor, and the grantor’s indebtedness to the grantee. Sheets v Huben, 354 Mich 536 (1958); Ellis v Wayne Beal Estate Co, 357 Mich 115 (1959); Taines v Munson, 19 Mich App 29 (1969).
The evidence adduced at trial which shows that the deed was treated by the parties as a mortgage and not as a conveyance of absolute title may be briefly summarized as follows: The plaintiffs were in dire financial circumstances. The Federal reve*62nue stamps purchased and attached to the deed by the defendants covered only the vacant land and did not include the dwelling and the surrounding 2.49 acres. Several weeks after the deed and land contract were executed, defendant G. Cameron Buchanan wrote a letter to the Lawyers Title Company of Ann Arbor and requested a title policy only on the plaintiffs’ vacant farm land. The house and 2.49 acres were expressly eliminated from the request. Moreover, on the second page of this correspondence, the defendant expressly admitted that the plaintiffs enjoyed an equitable mortgage in the property. Finally the consideration involved was woefully inadequate. At trial plaintiffs’ entire farm was valued at between $58,-000 and $76,000. Assuming for the moment that the transaction in question was a sale then the defendants, by assuming and paying the mortgages on the property, paid a purchase price of $35,000. Or in other words the defendants obtained title to the property for at least $20,000 less than the fair market value. This inadequate consideration in and of itself strongly militates against the conclusion that a deed was intended to operate as an absolute conveyance. Sheets v Huben, supra; Ellis v Wayne Real Estate Co, supra; Taines v Munson, supra.
The inadequate consideration coupled with the plaintiffs’ financial plight together with the actions and admissions of the defendants in procuring the Federal revenue stamps and title insurance compels me to conclude that in keeping with the parties’ apparent intentions, the deed should be construed as a mortgage on the dwelling and 2.49 acres described in the land contract.
Finally, the majority concludes that in any event plaintiffs were guilty of laches. I cannot agree.
*63Before the doctrine of laches can be invoked, it must be shown that there was a prejudicial delay. Mere delay without more will not constitute laches. Moreover, laches will not be applied to defeat a claim where it would be inequitable to do so. Kelley v Hoogerhyde, 314 Mich 37 (1946); Plasger v Leonard, 316 Mich 174 (1946); Taines v Munson, supra.
Under the circumstances of this case it is patent that the defendants either knew or should have known that the deed was in fact considered by all concerned to be a mortgage. Therefore before embarking upon any extensive repairs or improvements, the defendants should have sought foreclosure of the equitable mortgage. They cannot now be heard to complain that they have been prejudiced by the fact that plaintiffs have elected to exercise their concurrent right of redemption.
Accordingly, I would remand the case for an accounting in order to allow the plaintiffs to redeem the dwelling and 2.49 acres from the equitable mortgage.