Van Heuvel v. Long

GARDNER, J. This bill was filed by the appellee against the appellant for the purpose of having the deed of December 1, 1908, declared a mortgage, and for an accounting and redemption. On January 24, 1907, the complainant and her husband executed to the respondent' (appellant here) a mortgage on a certain 249 acres of land situated in Olarke county, Ala., to secure a debt of $3,800, at the same time'executing their promissory note evidencing ¡ said debt, payable July 23, 1907. After the maturity of the note, respondent requested payment, but complainant was financially unable to pay same, and asked for an extension of the debt. The negotiations of the parties resulted in the deed of December 1, 1908, here sought to be declared a mortgage. The complainant insists that the deed was given as a mere security for the debt, and an extension of the payment thereof as agreed by the respondent for another year, and that at the same time the respondent agreed to execute a bond to complainant, conditioned to reconvey the land upon payment of the debt with interest, and taxes within said time,- within which complainant was to redeem the same. The respondent admits that there Was a contemporaneous agreement under which complainant was to have until December 1, 1909, in which to repurchase the land, and that he agreed to execute a bond for title, which, he insists, he did, and that the whole transaction -of December, 1, 1908, constituted a conditional sale, or a sale with the' right on the part of complainant to repurchase, and that the deed was executed merely in lieu of the foreclosure of the mortgage. [1] It is well understood that, as a -general rule, to authorize the court to declare a deed absolute on its face to be a mortgage, it is not sufficient to raise merely a doubt whether the instrument speaks the intention of the parties; but the burden is .upon the complainant to establish his bill by “clear and convincing” proof. Reeves v. Abercrombie, 108 Ala. 535, 19 South. 41. It is, however, as equally well established that: “This severe rule does not apply in cases where the writings express a conditional sale, or where it is admitted that there was a contemporaneous agreement different from that expressed in the instrument. * * * Such a contemporaneous agreement must ‘have, an important bearing in weighing the parol evidence tending to show that the ■ absolute conveyance was intended as a mortgage.’ ” Morton v. Allen, 180 Ala. 279, 60 South. 866, L. R. A. 1916B, 11. [2] “It has been universally held that, as between a conditional fee and a mortgage, in cases of doubt the' court will always lean towards the mortgage, as that secures the interest of all parties and works a hardship to none.” Irwin v. Coleman, 173 Ala. 175, 55 South. 492; Morton v. Allen, supra; Nelson v. Wadsworth, 181 Ala. 361, 61 South. 895. It is admitted in the answer of respondent that the transaction of December 1, 1908, constituted a conditional sale, and therefore the rule last above referred to is applicable here. It is without dispute that the recited consideration of the deed of December 1, 1908, was the exact amount due by the complainant to the respondent on that date, to wit, the sum of $4,256, and the bond for title executed by the respondent stipulated for the reconveyance of said property to complainant, in consideration of the payment of the “sum of $4,256, with interest from January 1, 1909, payable December 1, 1909.” 'It is further admitted by the respondent that at the time of the execution of' this deed he had in his possession the note and *30 mortgage evidencing the indebtedness of complainant to himself, and that he did not surrender the same, nor cancel the mortgage of record, but has the said note and mortgage still in his possession. This has been held- to be strong evidence that the debt was not extinguished, and that a mere security was intended. 1 Jones on Mortgages, vol. 1, § 326, and note. It further appears from the evidence that respondent did not collect the rents due upon the land for the year succeeding the date of the execution of the deed, but that the same was collected by the complainant. The amount of the indebtedness, as heretofore stated, was $4,256. The property was sold by the respondent for the sum of-$5,780. The register reports its value as $8,715, while we conclude that its market value was $6,500. The question of disparity between the purchase price and the value of the property is to be accorded consideration. Turner v. Wilkinson, 72 Ala. 361. Considerable correspondence passed between the parties subsequent to the execution of the deed. On December 18, 1908, which, it will be noted, is but 18 days after the deed was executed, respondent wrote: “Please let me know how you are progressing in securing the necessary amount to take up your note.” . In other letters he used such expressions as: “I would be reducing my security *. * * after your time to redeem it. * * » I would like very much to get my money. This loan has given me much thought and worry. * * ® If you will send me $1,000.00 immediately, I will hold the land until January 1st, charging you 8 per cent, interest on the balance, but under no circumstances will I carry you longer on this loan.” It is quite clear from the record that the respondent did not consider the land worth any more than the security, if that much, and that he was more anxious to realize the money than to secure the property. Witnesses testify that respondent stated to them that he had given complainant a year to raise the money that was due him and redeem the land, and that if complainant did not pay him, “and he got the land,” it would be for sale, and that he would sell it for the amount that he had in it, “principal and interest.” [3] We do mot consider, however, that a further discussion oif the evidence would serve any good purpose, but content ourselves with thus referring to some of the salient features of the case. Suffice it to say that, upon a most careful consideration thereof, we are unwilling to disturb the conclusion of the, court below in declaring the deed a mortgage. In November, 1911, the respondent sold separate portions of this property to six different persons, who are made parties respondent to the cause. They received their deeds, were placed in possession, paying one-fourth of the purchase money; the balance being secured by the vendor’s lien. These several purchasers have made valuable improvements on the property, amounting in the aggregate, according to the evidence, to the sum of $2,600. The chancellor concluded that these parties were innocent purchasers/ and were to be protected in a court of equity. He therefore ordered an Recounting to be had by the complainant and the respondent Van Heuvel, in which said respondent was to be charged with the market value of the property, and the rents collected and credited with the debt and interest and taxes paid. [4] We are of the opinion that the court was correct in holding that these purchasers, under the circumstances here disclosed, were entitled to protection in a court of equity, notwithstanding they had not, at that time, paid in full the purchase price. Freeman v. Pullen, 130 Ala. 653, 31 South. 451. [5] It has been held that in cases of this character the mortgagee is responsible to the mortgagor for the value of the land conveyed, and not merely for the proceeds of the sale, and that the mortgagor may claim the proceeds of the sale, or the value of the land at his election. 1 Jones on Mortgages, vol. 1, § 341; Enos v. Sutherland, 11 Mich. 538; Wilson v. Drumrite, 24 Mo. 304; Bissell v. Bozman, 17 N. C. 229; Boothe v. Fiest, 80 Tex. 141, 15 S. W. 799. We approve the holding of these authorities and think that the chancellor was correct in so directing upon the accounting had. .There but remains one question of fact for determination, and that is as to the value of the property. As previously stated, the register fixed the value of this 249 acres at the sum of $8,715. It is not contended that the property is of such value merely for farming purposes, but much stress is laid by the witnesses in their opinion upon the fact that much of the land is situated within a short distance of the business portion of CofCeeville, and suitable to be divided up into lots for residence purposes as well as small truck farms. Tire record fails to disclose the population of the community of Coffeeville, and nothing to indicate that same is incorporated; nor do any of the census reports inform us anything in regard thereto. The evidence is about equally balanced so far as the number of witnesses examined as to the valuation of this property. It consists wholly of opinion evidence, and, as is to be expected in cases of this character, is in irreconcilable conflict. In Thornton v. Pinckard, 157 Ala. 206, 47 South. 289, speaking of the subject of the valuation of property, this court; said:, “Testimony as to the value of the property, such as that involved in this controversy, is in its nature opinion evidence. ‘There is, perhaps, no subject on which witnesses differ more widely.’ * * * in this case the witnesses differ in their estimates of the value. Perhaps there is no better test of the real value of real estate than to put it on the market and seek purchas *31 ers for it. Property is usually worth what it brings.” At the time when the deed of December 1, 1908, was executed, it was agreed between the parties that the complainant (who acted through her husband as her agent) was to make an effort to get purchasers for this property, and such sum as could be secured in excess of the amount of indebtedness should inure to her benefit. Complainant’s husband did make an effort, but failed to secure a purchaser. Afterwards, respondent, through his agent, one May, also made efforts to sell the property to the best advantage, and finally in November, 1911, the respondent found purchasers, in the amount and on the terms previously stated. The complainant insists that the respondent’s efforts to sell interfered with hers, and created some confusion in the minds of prospective purchasers. [6] Upon a careful consideration of the evidence, however, we are not persuaded that this worked any serious interference with a sale of the property. One McCorquodale, testifying in the cause, stated that he had known for a long number of years the market value of this land, and that he had, in 1908, offered the sum of $6,500 for the property as a whole. This appears to be the highest offer that was ever made for the property, and yet tins witness declined to buy portion of this land when subsequently approached by the respondent. [7] We recognize that complainant places upon this property a very high valuation, and several witnesses in that community lend their opinion in support of his. We also recognize the well-established rule in regard to the presumptions in favor of the finding of the register on questions of fact when the witnesses are orally examined before him. Anniston L. & T. Co. v. Ward & Co. et al., 108 Ala. 85, 18 South. 937; Jones v. White, 112 Ala. 449, 20 South. 527. The reasoning of the rule rests, of course, on,the fact that the register h'ad the witnesses before him, and could note the demeanor on the stand, and therefore had better opportunity in the ascertainment of the truth. This rule, of course, must lose much of its force when the evidence was merely that concerning the opinions of the witnesses as to the valuation of the property. It has been frequently stated property is usually worth what it brings on the market. Here, ample opportunity was given to secure purchasers, and we think it quite dear that all interested parties in that community were aware of the fact that property was for sale. [8] We are therefore convinced that the valuation placed thereon by the register was too high, and that the sum to be fixed should not be greater than $6,500, the largest amount shown to have been offered therefor. We therefore conclude that the exceptions to that portion of the register’s report as to the valuation of the property should have been sustained, and to that' extent the decree will be reversed, and one here entered inserting in the report of the register the valuation of $6,500, in Jieu, of $8,715, and the amount of the indebtedness to the complainant accordingly reduced to the sum of $1,546, in lieu of $3,761.50, as confirmed by the chancellor. As thus corrected, the decree of the chancellor will be affirmed. Affirmed in part, and in part reversed and remanded.