Deroin v. Jennings

Maxwell, J. It is a well settled rule that a deed, though absolute on its face, may be shown by parol to be a mortgage, yet a court of equity will not declare such a deed a mortgage, unless the proof is clear, consistent, and satisfactory, that the object of the transaction was to create a security for the payment of money. In this case Joseph Deroin conveyed to Jennings by a deed absolute in its terms, and Jennings, at Deroin’s request, conveyed forty acres of the tract to Neff and Ritter. Jennings sold portions of the tract to Ankron, Pruner, and Freel, all of whom have answered, denying notice and claiming that they are innocent purchasers for a valuable consideration, and we think the proof fully sustains that view of the case. The judgment of the district court as to those defendants is therefore affirmed. It is apparent that the deed made by Joseph Deroin to II. S. Jennings, although absolute in form, was intended as a mortgage to secure the payment of a reasonable attorney’s fee for defending Deroin on the charge of murder, and that the legal title being in Jennings, [100] he, with Derain’s knowledge and consent executed a mortgage of a portion of the tract of land in dispute, to Mason to secure the payment of five hundred dollars. Mason testifies that he knew of the character of the transaction between Deroin and Jennings at the time he took the mortgage. The mortgage was sold to Ritter, who had no knowledge of the character of the transaction at the time of the purchase, but had full knowledge at the time he purchased under the decree of foreclosure. The principle is well established, that if a person who has notice, sells to another who has no notice and is a bona fide purchaser for a valuable consideration, he may protect his title, although it was affected with the equity arising from notice in the person from whom he derived it. Story's Equity, Sec., 409. But we do not deem the question of notice material in this case. The petition does not allege that John Deroin was not made a party defendant in the suit to foreclose the mortgage, nor is there any proof tending to show that fact. We may perhaps infer that he was not a party, but that is not enough. This is an action brought to redeem the lands sold under the mortgage, and it must appear affirmatively that the plaintiff was not made a party defendant and is not bound by the decree. The law presumes that the proper parties were before the court, and the petition must negative that presumption. A reviewing court never presumes that an inferior tribunal has erred. The presumption is that, it has not. Until the contrary is shown by record, every court is presumed to have acted and decided correctly. Wagner v. Dickey, 17 Ohio, 443. Therefore, the case made by the plaintiff entirely fails to show his right to redeem the land sold under the decree of foreclosure, and the judgment of the district court in that regard is affirmed. II. S. Jennings, C. C. King, and Rosetta Deroin failed to answer the petition, and thereby admit the truth of [101] facts stated therein, so far as they may affect themselves. The court therefore erred in dismissing the case as to them, and the case is reversed, so far as it affects these parties in default, and ,-remanded for further proceedings. Judgment accordingly. Chief Justice Lake, concurred. Mr. Justice Gantt, having tried the cause in the court below, did not sit.