Court Opinion

ID: 7275499
Source: CourtListenerOpinion
Date Created: 2022-07-25 19:58:55.825069+00
Date Added: 2024-06-11T16:18:50.438344
License: Public Domain

Mr. Justice Morris
delivered the opinion of the Court:
That a deed absolute on its face will be held to be a mortgage, whenever it is shown by satisfactory proof to have been so intended by the parties at the time of its execution, is a principle of equity almost elementary in its character. It is equally well settled that parol evidence is admissible to show the nature and character of the transaction for which the deed was executed. Peugh v. Davis, 96 U. S., 332.
It is also well settled law that parties affected with notice, either actual or constructive, cannot acquire any greater or better rights than those of their grantors. Wilson v. Wall, 6 Wallace, 83 ; Hughes v. United States, 4 Wall., 232.
The grantee of a deed is entitled to rely upon the letter of his grant; and it is incumbent upon him who claims a deed absolute on its face to have been intended as a mortgage, so *139to show by ample and satisfactory evidence. It will not be sufficient to throw doubt upon the matter, or to raise suspicion as to the character of the transaction. There must be ample and satisfactory proof. It will not do to allow such solemn acts as deeds of conveyance to be overthrown by mere suspicion. There must be some security for titles; and it ought not to be allowed to assail them by mere suspicion.
Undoubtedly, there is ground in the present case to suspect that a mortgage was intended between the complainant and the defendant Mayse; and the strongest ground for the suspicion is found in the written communications that passed between the two after the execution of the deed. But after all, these raise-nothing but suspicion. They are consistent with the theory of the defendant that'a sale with the right of repurchase was intended, or a sale with a power to procure a resale and to become entitled to commissions. The theory upon which the monthly rental of $30 was based was also calculated to excite suspicion, as tending to show that there was a continuing mortgage. But at the same time it is not inconsistent with the idea that the interest of the money which he had expended in the purchase should constitute the basis of calculation for rental value. The ground for suspicion in the case is abundant; and yet we fail to find anywhere the ample and satisfactory proof which alone would justify us in holding this absolute deed to have been intended as a mortgage. And in the absence of such proof, we must leave the parties in the situation in which they have placed themselves. When parties have recourse to the dangerous expedient of delivering an absolute deed for the purposes of a mortgage, they have only themselves to blame if they fail to secure the simple but satisfactory proof that is required to demonstrate the fact in the event of subsequent controversy in regard to it.
Gross inadequacy of price is relied on by the complainant as tending to prove his theory of a mortgage. We fail to find any proof of such gross inadequacy. The property *140was greatly within the range of speculative values. Some witnesses testify that it ought to have brought more money; Others say that the price paid was ample, ^nd even more than it was worth. It does not appear that it was fairly and reasonably worth much in excess of the price paid for it by Mayse at the tíme of the conveyance to him. At all events, there was no such gross inadequacy of price as would convert this deed into a mortgage.
Thus far we have considered the case as between the complainant and the defendant Mayse. But even if we assume that as between these two the transaction was a mortgage, we do not think that the rights of the defendant Holman should thereby be prejudiced.
The charge against Holman of conspiracy to defraud is utterly unsustained by proof of any kind, and is unjustified by the circumstances. The charge that Mayse remained interested in the property after his conveyance to Holman, is also shown to have been absolutely without foundation. It seems to be conceded, too, that Holman had no actual notice of any rights or claims of the complainant. But it is sought to charge him with notice by a show of continued possession of the premises by Hayward after his apparent sale to the defendant Mayse. We do not find any satisfactory proof of such notice.
In the case of Townsend v. Little, 109 U. S., 504, the Supreme Court of the United States said:
“ Constructive notice is defined to be in its nature no more than evidence of notice, the presumption of which is so violent that the court will not even allow of its being controverted. When possession is relied on as giving constructive notice, it must be open and unambiguous, and not liable to be misunderstood or misconstrued. It must be sufficiently distinct and unequivocal, so as to put the purchaser on his guard. As said by Strong, J., in Meehan v. Williams, 48 Penn. State, 238, what makes inquiry a duty is such a visible state of things as is inconsistent with a perfect right in him who proposes to sell.”
*141The sale by Mayse to Holman was on June 26, 1890, and by his own showing the complainant had practically abandoned the possession of the property in February of 1890. It is true he says that he had some one on the property or in the neighborhood all the time, to look after the property; but no such person is produced to testify, and the nature and character of his alleged care-taldng are not manifested. This is not, in our opinion, the open, distinct, and unequivocal possession 'that is required to put a purchaser upon inquiry. And therefore we hold that the defendant Holman had no such notice of any alleged rights of the complainant as to convert him into a trustee for the complainant’s benefit.
The complainant’s bill cannot be sustained under any circumstances. The agreement which he sets up, if proved, would have to be held null and void under the Statute of Frauds. It is directly in the face of that statute, and it is too vague and indefinite to be enforced by a court of equity.
Moreover, there is no offer in the bill of complaint to redeem the property, or to pay the indebtedness upon it, or to bring, the money into court. Nor is there any suggestion for a sale of the property to satisfy the mortgages. The bill is framed simply to keep in statti quo, indefinitely the condition of tilings as they are claimed 'by the complainant to have existed. This is something which a court of equity will not do.
We think the decree of the special term of the Supreme Court of the District of Columbia was right, and it is therefore affirmed, with costs.
Affirmed.