Bickel v. Wessinger

Mr. Justice Burnett delivered the opinion of the court. There are other circumstances in evidence, but the corner stone of plaintiff’s case is the conversation of July 12th already quoted. At the outset it is due to the memory of Henry Weinhard to say that the record does not disclose that he ever did an act or uttered a word inconsistent with the statement thus attributed to him by plaintiff. Further, so far as the record reveals, there is no showing whatever, as against any of the parties, of that cunning craftiness and deceit which makes fraud so detestable to honest men. The attitude of all these litigants seems to be that of those who, not having the same viewpoint on account either of interest or prejudice or want of knowledge of the facts, have misapprehended the consequences which in equity follow from substantially admitted facts. It is impracticable to make extended quotations from the voluminous testimony in this case. It will be sufficient to advert to a few of the more salient points. On July 12, 1900, the plaintiff paid the interest to July 10th of that year on both the $10,000 notes already mentioned. The note for the loan and second mortgage on block 32 was retained by Weinhard, and so far as the evidence shows was never surrendered to the plaintiff. Indeed, on a subsequent occasion when the plaintiff settled the — 102 — mortgage on the property in block 9, the surrender of the $10,000 note secured by the second mortgage on block 32 was discussed in a spirit of adjustment of the dealings between the parties; but, failing to agree upon such adjustment, the defendants here retained the note secured formerly by the mortgage on block 32, standing upon what they conceived to be their legal rights, and surrendered only the $10,000 note secured by the mortgage on the property in Couch’s Addition. At the time of paying the interest to July 10, 1900, the plaintiff surrendered the possession of the property in question, giving up the keys and furnishing a list of tenants and rentals. Weinhard died September 20, 1904, and until his death he collected the rent, kept up the taxes, repairs, and running expenses of the property in question, and the same has been continued by his successors in interest. The witness L. L. Schuman testifies to a conversation with Weinhard soon after the sheriff’s sale, in which Weinhard stated that he had bought the property, did not care anything about buying the property of his friend, and that he would prefer not to have it at all. He said that he would sooner not have ‘the property; but as it was, he had to take it, and that, whenever Mr. Bickel would be in a position to pay him back, why he could have the property back. The witness Paul Wessinger, son-in-law of Mr. Weinhard, testifies to a conversation occurring between him and Weinhard after the execution of the sheriff’s deed substantially as follows: Weinhard said: “Well, now, I hear from Adolph Burkhardt that Bickel says around town I took his property away from him.” Wessinger said: “Well, that is all foolish talk.” Weinhard answered: “Well, of course it is. I will give Mr. Bickel another year to pay me back and get his property back, and that will stop that talk”—or something to that effect. It may be — 103 — remarked in passing, that plaintiff denies making any such statement as that attributed to him by Burkhardt. The witness D. W. Hoelbing testifies that in the latter part of 1900 or the first part of 1901 Mr. Weinhard told him that he had been induced to allow Mr. Bickel another year for selling this property as his agent, and that he should receive all the proceeds above what he owed him and the expenses of improving the buildings. Mrs. Louise Weinhard, widow of Henry Weinhard, testifies: “When Mr. Burkhardt told Mr. Weinhard that Mr. Bickel scolded about that we have taken his property away, he says: ‘Well, after this one year is passed he can have it another year.’ ” The testimony discloses that at the time of and subsequent to the sheriff’s sale for several years there was but little demand for real property of the kind in question; that plaintiff tried in vain to effect a sale of the property, and so the matter went on until January, 1906, after the death of Weinhard, the plaintiff took up with the defendants the subject of redeeming the property, which-defendants declined to consider. Afterwards, on April 12, 1907, the plaintiff made a formal written offer to redeem and demanded an accounting of the rents and profits of the property for the purpose of arriving at the amount necessary to redeem the same. 1. The defendants here contend in argument that the evidence of the plaintiff does not conform to the pleading. It is true that some minor matters alleged by way of inducement are not strictly proven, for instance, that Weinhard was willing and able to furnish the money; but the evidence in the main, taking the whole case, corresponds to the pleading in its general scope and meaning, so that there is no substantial variance between the pleadings and the evidence which could mislead the defendants — 104 — to their hurt. Indeed, it was not disclosed, so far as the record shows, that they were so misled. 2. It is next contended that there is no mutuality in the contract between plaintiff and Weinhard. The plaintiff was seeking the extension of time which he says Weinhard granted. By the foreclosure suit Weinhard’s mortgage lien upon the property in question was extinguished on his default. 3. Notwithstanding the sale, the plaintiff had an equity of redemption at all times prior to the execution of the sheriff’s deed. 4. Thus equipped with an asset freed from all claim except the sale price, he approached Weinhard and secured from him the extension of time disclosed by the conversation already quoted. These circumstances disclosed by the evidence are competent to prove the implied promise of the plaintiff to refund the money in consideration of the extension of time. 5. Moreover, a forbearance to redeem the property was a sufficient consideration to support the promise to extend the time: Beebe v. Wisconsin Mortgage Loan Co., 117 Wis. 328 (93 N. W. 1103). 6. It is further urged that the alleged contract is not in writing, is not to be performed within a year, and is therefore void within the statute of frauds. Section 808, L. O. L., makes void “an agreement that by its terms is not to be performed within a year from the making thereof.” It is only where the agreement shows by its terms or within the contemplation of the parties that it cannot be performed within a year that' the statute intervenes. 7. It was possible for Bickel, so far as the terms of the contract are concerned, to have redeemed this property the next day after the agreement was made. No restriction appears to have been made in that respect. The time was extended, but it was competent for him to redeem — 105 — without suit at any time prior to the expiration of the three years mentioned: Devalinger v. Maxwell, 4 Pennewill (Del.) 185 (54 Atl. 684); Durham v. Hiatt, 127 Ind. 514 (26 N. E. 401); Southwell v. Beezley, 5 Or. 143, 459. 8. It is further contended that this suit, being based upon the alleged contract for the sale of land, is void because it is not in writing. This is not a suit for the specific performance of a contract1 for the sale of land. It is a suit in equity to declare a deed absolute on its face to be a mortgage and to be allowed to redeem the real property therein described. This contention may be dismissed with the statement of the well-established principle that it is competent to show by parol that a deed absolute on its face is intended to be a mortgage, whether the deed be between the parties to the suit or procured to be made to the grantee therein by some third party. The line of authorities in Oregon, ample on that subject, begin with Hurford v. Harned, 6 Or. 362, and continue in uninterrupted sequence to Hall v. O’Connell, 52 Or. 164 (95 Pac. 717: 96 Pac. 1070). 9. The authorities are abundant that at any time prior to an execution sale a debtor may make a parol agreement even with the creditor, that the other party to the agreement shall take the title in his own name and hold the same as security for the debt and extend the time for payment. The situation is not different in principle after the sale and prior to the execution of the sheriff’s deed. 10. The process of divesting the judgment debtor of his title in the property is incomplete until the execution and delivery of the sheriff’s deed, so that it matters not whether the parol agreement was made before or after the sheriff’s sale, provided it is made prior to the execution of the deed. 11. Equity regards the rights of a distressed debtor with almost guardian like care, and, while, it requires clear proof of a parol defeasance of a deed absolute in — 106 — form, yet, when the defeasance clause is once shown, equity will go to the utmost in affording relief and in cases of doubt between a mortgage and a conditional sale will almost always decide the question in favor of a mortgage: Plummer v. Isle, 41 Wash. 5 (82. Pac. 1009: 2 L. R. A. (N. S.) 627: 111 Am. St. Rep. 997). That some arrangement looking to the extension of the time and the restoration to plaintiff of the property in dispute existed is manifest from the evidence already alluded to. It is true that plaintiff is the principal witness in his own behalf, and stands alone as to the principal testimony in the case; but by law he is a competent witness. He submitted to searching cross-examination. No successful effort is made directly to discredit him by any witness, and no attack is made upon his reputation for truth and veracity. He is corroborated by the testimony of disinterested witnesses and by admissions of at least one of the defendants. The testimony is convincing, as before stated, that some arrangement existed between Weinhard and the plaintiff. It is urged that the agreement is one not likely to have been made by Weinhard; that he would not extend the time and take for security a property which he had bought at a sheriff’s sale and upon which he had allowed his lien by mortgage to be extinguished by default. The agreement might be improvident from the standpoint of a miser, but not from the standpoint of a generous and munificent friend. The testimony shows that Weinhard was taciturn and reserved, but underneath that grave exterior he was large-hearted and magnanimous. What is more natural than that such a man would go to the utmost to aid his friend of early days? Finally, there being some agreement between the parties, the question recurs: Was it an agreement to sell back the property, or was it a mortgage? The test held by most authorities to be the controlling one in such cases — 107 — is this: Was the preceding debt extinguished, or was it continued? If it was extinguished, the arrangement would only be at best a contract for the resale of the property; but, if the debt was continued, it is taken to be a mortgage. The distinction is very clearly pointed out in the case of Hickox v. Lowe, 10 Cal. 197, by Judge Field, and in McNamara v. Culver, 22 Kan. 661, by Judge Brewer, both of whom afterwards served with great ability as justices of the Supreme Court of the United States. It will be remembered that the $10,000 note for which the mortgage was given as security upon the property in question was never surrendered to the plaintiff, and that he paid interest on the same to Mr. Weinhard after the sheriff’s sale. The indebtedness existing between the plaintiff and Weinhard was thus continued, and that circumstance alone, if no other, would indelibly stamp the transaction between them after the sale as an equitable mortgagé. 13. The doctrine that, in cases of doubt between a contract for the re-sale of property and a mortgage, the latter will be upheld, is founded upon the wholesome and equitable reason that, if the transaction is determined to be an agreement for resale, it is so nominated in the bond that unless by an appointed time the former debtor pays, he loses all and the creditor gains all; but, on the contrary, if it is held to be a mortgage, equity will seize upon the property, convert it into money, returning to the creditor his own with interest and to the debtor the remainder, so that each is saved harmless as near as may be. 14. We conclude that the transaction referred to is a mortgage. It being a mortgage, if the mortgagee refuses to foreclose the same, the mortgagor has a cause of suit to redeem; for one right is the complement of the other. 15. The plaintiff is not guilty of laches and had a right to rely upon the agreement of Weinhard, until the defendants either deny or repudiate the same, without being108 affected by the statute of limitations: Potter v. Kimball, 186 Mass. 120 (71 N. E. 308.) The-defendants occupy the situation of a mortgagee in possession and should be credited with the amount of Weinhard’s bid at the sale, $55,106.50, with interest since June 30, 1900, the day of the sale, and the further sum of $10,000 with interest since July 10, 1900, with- the sums expended for taxes, necessary running expenses, and repairs of the property in dispute since they and Weinhard have been in possession. The rate of interest should be 6 per cent because the act of plaintiff in paying off the mortgage on the property in Couch’s addition at 6 per cent, instead of 5 per cent interest is a circumstance sufficient to turn the scale against him on that question. The defendants should be charged with all rent on the property since Weinhard took possession. In accordance with these provisions, the decree of the circuit court is reversed and remanded to that court, with directions to ascertain by an accounting what balance is due from the plaintiff to the estate of Henry Weinhard; to then enter a decree to the effect that within a certain reasonable time, to be fixed by the court, the plaintiff may pay into court for the defendants the balance thus ascertained, and that within a certain further time after such payment, also to be fixed by the court, the defendants convey the property in dispute to the plaintiff by good and sufficient deed in due form of law, or that in default of such conveyance such decree stand and operate as such deed; and further, that in default of such payment by plaintiff, the real property in dispute be sold in the manner provided by law and the proceeds applied, first, to payment of expense of the sale,, second, to payment of the balance found due by such decree to the estate of Henry Weinhard, and that the remainder be paid to plaintiff. The plaintiff is entitled to costs and disbursements in both the Supreme and circuit courts. Reversed.