Hieronymus Bros. v. Glass

COLEMAN, J. We will not undertake to set out all the averments of the bill in detail; but will make such statement as will fairly present the legal, question involved in the appeal. Hieronymous Bros. held the written agreement of the Alabama Land & Development Company, to, convey by deed to them a certain described parcel of land, upon the payment of the purchase money for the land, evidenced by three certain promissory notes and described in said agreement between Hieronymous Bros, and said company. In pursuance of their contract of purchase, Hieronymous Bros. paid a part of the purchase money. Hieronymous Bros. assigned and transferred the written instrument executed to then} by the Alabama Land & Development Company to the respondent, Adam Glass, by writing duly attested, as follows : “For value received, we hereby transfer, convey and assign, to Adam Glass, all our right, title and interest, in the land embraced in the foregoing instrument, and authorize the Alabama Land & Development Company to have deed executed to the said Adam Glass, covering all the land embraced in. said contract. Witness our signatures,” etc. Adam Glass paid the balance of the purchase mon [49] ey due by Hieronymous Bros., and had the deed of conveyance to all the lands executed directly to him. Hieronymous Bros. filed the present bill in which they aver, that there was a parol understanding and agreement, by and between themselves and Adam Glass, contemporaneous with and a part of the foregoing transfer and conveyance, that Adam Glass was to advance the balance of the purchase money as a loan to them, for which they were to pay him 10 per cent per annum, and that the legal title was conveyed to him as a mere security for the loan, and the prayer of the bill is, that he be declared a mortgagee and the instrument under wdiich he holds be declared a mortgage, and that they be let in to redeem, and offering to pay with legal interest whatever may be found to be due. This short statement of the facts, presents the equity of complainant's case-. The court sustained a demurrer to the bill, and a motion to dismiss the same for want of equity, and the appeal is prosecuted from this decree. The demurrer to the bill and motion to dismiss for want of equity raised the question, as to whether the parol agreement was valid and capable of enforcement, or void under the statute of frauds. It would be a useless task to undertake to reconcile all the decisions and expressions of the court, in this State, upon the question presented for consideration. The case of Moseley v. Moseley, 86 Ala. 289, sustains the conclusion reached by the court, and expressions may be found in other cases to the same effect. The law is thoroughly established in this State, that a deed of conveyance absolute in terms, may be shown by parol, to have been intended by the parties to operate only as a mortgage, and upon sufficient proof, although parol, courts of equity will so declare the instrument. We have no hesitation in declaring that under the uniform decisions of this- State, if Hieronymous Bros. had owned the lands in question in fee, and to secure a loan of money from Adam Glass had executed to him an absolute deed of conveyance, upon sufficient proof, that the deed was intended merely as a security for the loan, a court of equity in this State would declare such to be its legal effect. In a court of equity Hieronymous Bros. having paid a part of the purchase money and holding a bpnd for title, are regarc[ [50] ed as the owners of the land. What sound reason in principle can be brought forward for holding in a court of equity, that the owner of an equity in land, less than the absolute legal fee, may not convey his equity with the same rights and subject to the same rule and pi’inciple as the owner of the legal fee? As matter of fact, The Alabama Land & Development Company had the deed executed direct to the respondent, but this was done only upon the written authority and by the direction of Hieronymous Bros. As between Hieronymous Bros. and Adam Glass, if it be true that the transaction was made for the purpose of securing a loan of money by the latter to the former, Hieronymous Bros. being in equity the owner of the property, a court of equity if necessary to prevent a wrong, would regard the conveyance as that of Hieronymous Bros. It may be that it is unnecessary to decide this precise question. We do decide that a transfer and conveyance of his interest by the owner of a perfect equity, to secure a loan by an instrument purporting to be an absolute conveyance, stands upon the same footing as the absolute conveyance of a legal fee, and that parol evidence is admissible to show that it was intended as a mere security for the loan of money. In the case of Parmer v. Parmer, 88 Ala. 545, the facts were that H. A. Parmer owned a perfect equity in a certain tract of land, the legal title to which was vested in Mrs. Allen. H. A. Parmer desiring to secure a debt he owed to W. K. Parmer, procured the conveyance of the legal title by Mrs. Allen to W. K. Parmer and took from W. K. Parmer an agreement to reconvey to him upon the payment of the debt. This court held that these facts constituted the transaction a mortgage between H. A. Parmer and W. K. Parmer. We do not cite the case on the question of the effect of the statute of frauds, but as showing that the conveyance of the legal title by the holder at the request and for the benefit of the owner of the equity in the land, to secure a debt due from him to the grantee, constitutes the transaction a mortgage, subject to foreclosure and redemption. The same principle was recognized in the case of Downing v. Woodstock Co., 93 Ala. 262, and held in Hughes v. McKenzie, 101 Ala. 415. We cannot adhere to the law as declared in Mose [51] ley v. Moseley, 86 Ala. 289, supra, and if there are expressions in other decisions which seem to sanction the law as there declared, they must be regarded as modified so as to conform to the present decision. The decree of the chancery court is reversed and annulled, and a decree will be here rendered overruling the demurrer and the motion to dismiss the bill. Reversed, rendered and remanded.