Morrison v. Jones

MR. COMMISSIONER POORMAN

prepared the following opinion for the court:

This is an action to have a deed to certain real estate declared a mortgage, and for an accounting of the rents and profits. At the trial of the case the court sustained defendants' motion for a nonsuit, and entered judgment in favor of defendants. The plaintiff appeals from the judgment and from an order overruling her motion for a new trial.

1. It appears from the record that on the 11th day of May, 1898, John Noyes and wife, being then the owners of lot 2 in block 58 of the Butte townsite, leased the same to the plaintiff herein for the period of three years, and also in the lease gave the plaintiff an option to purchase the property for the sum of $4,500, on condition that she comply with all the terms of the lease with reference to the payment of rent, and should make the payments specified in the option within the time therein stated, the last payment thereof being the sum of $2,500, which was to be paid on or before the 11th day of May, 1901. Time was made of the essence of this agreement, and the lease as well as the option was to become null and void in case the lessee (appellant here) should fail to comply with the terms thereof. On May 4, 1899, Mrs. Morrison, the appellant here, became indebted to the respondent Jones in the sum of $3,300, and as security for the payment thereof assigned to Jones this lease and option, with the agreement that Jones should have possession of the property, should rent the same, and account for the net proceeds arising therefrom. This indebtedness from Mrs. Morrison to Jones appears to have been increased, and on May 2, 1900, Mrs. Morrison executed and delivered to Jones, for a *160 consideration of $5,089.80, a bargain and sale deed, by the terms of which she sold, assigned, transferred and conveyed to Jones and his heirs all-of her right, title, interest, claim, demand, possession and right of possession of, in and to this property. This deed also makes specific reference to this lease and option which then existed between Noyes, the owner of the1 properly, and Mrs. Morrison, and includes the lease in the conveyance. The deed then contains this further statement: “It: is agreed and understood, that if said second party shall make the payments required under said lease and agreement from, said John Noyes and his wife to the said first party and obtain' a deed of conveyance for said premises, that, the title thereby' conveyed shall be and remain the property of said second party or his assigns, free from all claims and demands of the said first party, and all and every person claiming, or to claim' through and under her.” It is further specified in this deed that the grantor surrenders, to the grantee, Jones, the right to, the possession of the property, “and he shall henceforth be entitled * * * to the same, and to receive the rents, issues and profits thereof without let or hindrance on the part of the first party or any person claiming under her.” Concurrent with this deed a written agreement was entered into between the parties, by the terms of which Jones is declared to be the owner of this lease and agreement to convey, executed by Noyes to Mrs. Morrison, and Jones further agrees therein that he will assign this lease and option to Mrs. Morrison on condition that she pay to him the sum of $5,089.80, together Avith interest, on or before’ the 14th day of May, 1901, provided this payment is made before Jones shall acquire a deed of conveyance from Noyes, but that, if Jones shall acquire the deed of conveyance from Noyes, then the amount required to be paid is the sum of $5,089.80, plus $2,500, besides the interest thereon, Avhich payment shall be made before the 14th day of May. In the event this payment is made by Mrs. Morrison at any time prior to the 14th day of May, 1901, Jones agrees to account to her for the rents received from the premises from May 2, 1900.

*161 The appellant contends that this deed is a mortgage. The rule adopted by this court for determining whether a deed absolute on its fact is a mortgage is that no conveyance can be a mortgage unless it is made Tor the purpose of securing the payment of a debt or the performance of a duty existing at the time the conveyance is made, or to be created or to arise in the future. (Gassert v. Bogk, 7 Mont. 585 , 19 Pac. 281 , 1 L. R. A. 240.)

The original indebtedness, as will be noticed, was $3,300. The consideration expressed in this deed was $5,’089.80. A considerable portion of this consideration was therefore not included within the former agreement between the parties, and was not secured thereby. The test is whether the grantor in the deed sustains the relation of a debtor to the grantee. In the present case, could the grantee Jones, at any time after the execution of the deed, have successfully prosecuted an action against Mrs. Morrison to recover the consideration expressed in the deed? The written terms of the deed and the concurrent agreement appear to cover about every phase of' the case, and negative any claim of indebtedness. Mrs. Morrison does not in either of these instruments agree in any manner to pay to Jones any sum whatsoever. There is nothing in either of these instruments that would give Jones any right of action against Mrs. Morrison, nor could he, under the terms of these instruments, maintain any action against her or compel her to pay him any sum whatsoever. There was, therefore, no indebtedness existing between these parties; hence there could be no mortgage ; for if this instrument was a mortgage as to Mrs. Morrison, it was also a mortgage as to Jones, and, if a mortgage, there must have been an indebtedness. Being no indebtedness, there could be no mortgage. (Gassert v. Bogk, supra; Martin v. Allen, 67 Kan. 758 , 74 Pac. 249 ; Reed v. Parker, 33 Wash. 107 , 74 Pac. 61 .)

It further appears from this record that Mrs. Morrisson did not pay Noyes the $2,500 due under her option May 11, 1901, but that defendant Jones made this payment. If this instru *162 ment was in fact a mortgage, and Jones had not made this payment to Noyes, the rights of both Mrs. Morrison and Jones would finally have terminated with respect to this property, and Mrs. Morrison would still be liable to Jones for this indebtedness, if it was an indebtedness, of $5,089.80, with the interest thereon; but that indebtedness was canceled by the taking of this deed, as appears from the written agreement between the parties in this case. !

The claim made by appellant that this deed is a mortgage cannot be sustained.

2. There is no evidence in this cause showing that any payment or tender was made to Jones within the time required by the terms of this written contract, or in fact that any tender whatsoever was made. The plaintiff’s rights, if she had any, to enforce a conveyance, were therefore lost by her failure to comply with this written agreement.

3. It is further complained that the court improperly entered judgment decreeing this instrument to be a deed; that the same could not properly be done on a motion for nonsuit. This -is strictly an equitable action, and the defendant may, if he chooses, at the close of plaintiff’s case, submit the cause to the court for decision; and where the plaintiff’s evidence fails to sustain the allegations of her complaint there is no inconsistency in the court’s rendering judgment on the merits of the cause, so far as it is necessary for plaintiff to maintain the same to entitle her to recover. There is no such thing as technical non-suit in a strictly equitable action.

4. The appellant claims, in his specification of errors, that the introduction in evidence of this concurrent agreement dated May 2, 1900, was error. This agreement was a part of the transaction between plaintiff and defendants respecting this property, and it was a proper matter to be inquired into by the court.

We recommend that the judgment and-order appealed from be affirmed.

*163 Per Curiam. — For the reasons stated in the foregoing opinion, the judgment and order are affirmed.

Mr. Justice Milburn, not having heard the argument, takes no part in this decision.