Hurlburt v. Chrisman

BURNETT, C. J. 1. It is a matter of little difficulty to reach the conclusion that the deed, which was accompanied by a contract to sell the land to the mother of the plaintiffs on her paying to the defendant the precise amount of the indebtedness and one half of the taxes, constituted a mortgage. We may arrive at that from the answer of the defendant, together with his own testimony. He says in his pleading that, by virtue of the oral agreement made in the spring of 1901, the mother “released her right to redeem said real property” and that he “canceled the debt against said E. E. Cummins.” These indicia appearing in the pleading of the defendant himself clearly show that the transaction based upon the deed and written contract was a mortgage. The existence of a debt to be paid is one — 193 — of the most convincing tests of a mortgage: Davis v. Fleming, 12 W. Va. 246; Bickel v. Wessinger, 58 Or. 98 (113 Pac. 34); Caro v. Wollenberg, 68 Or. 420 (136 Pac. 866). Again, we find the defendant, after recounting the amounts Mrs. Cummins owed him upon some previous mortgages which he held upon the place, when he was asked, “Did you pay her any money besides what she owed you?” saying in his testimony: “Yes, enough to make up the difference; enough to make what they owed me $4,000.” Further he said: “I just simply took the property and cleared up the debt.” He also testified to the effect that part of the $4,000 loan which he made her was represented by the $2,000 which was paid. He was asked, “And you required that the taxes be cleared up out of the money, didn’t you?” and answered : “Yes; they were to clear the record. • “Q. So that you would have a mortgage lien upon the property for $4,000, treating the deed as a mortgage? “A. Yes.” The situation, then, at the time the parties came to make the oral agreement in the spring of 1901, was clearly that of a mortgage, the terms of which the mortgagor had failed to meet. The mortgagee at that time, if he could do so peaceably, could enter upon the possession of the premises and retain them until the rents, issues, and profits thereof should repay the debt, or the same was otherwise liquidated. The defendant is not disputed in any wise in his testimony about the oral agreement had in the spring of 1901. He declares on oath thus: — 194 — “Mrs. Cummins came up and she wanted — she said she hadn’t got anything, practically speaking, for the place — enough to pay the interest or taxes; hut she said she had no encouragement to show, even if I let it run over, or words to that effect. She wanted to give the thing up. She didn’t want to be bothered with it, and didn’t want me to sue her or words- along that way, and wanted me to take the place over, and I finally agreed to take the place over from her. * * She wanted me to take the place and relieve her. So I took it. That I wouldn’t bring any suit against her and have trouble. She wasn’t able to pay it. She gave me possession of it. She said she wanted to give me possession of it, and wanted to be relieved of it, and wanted me to accept it, and I agreed to. * * She wanted to be released, and wanted to relieve me, to close up the transaction, the whole transaction. I agreed to take possession of it, and did take possession of it. * * I certainly did claim to be the owner. “Q. I will ask you directly, when you took possession of the place, did you take possession as mortgagee? “A. No, sir. I didn’t so understand it at all. I just simply took it and cleared up the debt. * * I have just held it the same as if I had bought it of somebody else.” The law governing this case is well settled by Caro v. Wollenberg, 68 Or. 420 (136 Pac. 866.) The principle affecting the present contention is there laid down in this language by Mr. Justice Bean:- “When a mortgagee enters into possession of the mortgaged property under a void foreclosure, he is presumed to hold as mortgagee in possession, and limitation does not run in his favor, or in favor of his grantees, against a suit for redemption and for an accounting by the mortgagor, which is a continuing right, unless there is an actual notice to the mortgagor that they claim to hold in some other right adverse to the mortgage.” — 195 — 2,3. It is unquestioned that the defendant went into possession of the property and has maintained actual physical possession of the same ever since. Immediately upon his taking possession, a cause of suit for redemption of the land arose in favor of Mrs. Cummins. The statute of limitations against this cause of suit in her favor began to run at once. It is a familiar principle that the statute, having once begun to run, will not be interrupted by subsequent occurrences. Her children stand in no better plight in that respect than would Mrs. Cummins herself; and they did not commence this suit within the ten years prescribed for commencing a suit on a sealed instrument: Section 5, Or. L. 4. Under the oral agreement of the spring of 1901, as to which the defendant is undisputed, he was to enter into possession of the property as the absolute owner thereof. Mrs. Cummins thus had notice that Chrisman was holding in some other character than that of a mere mortgagee in possession, within the meaning of the excerpt from Caro v. Wollenberg, 68 Or. 420 (136 Pac. 866). This claim, however ill founded in law at the time, was an actual claim on the part of Chrisman to be the owner of the land absolutely from that date forward. Of this claim Mrs. Cummins had full knowledge. Indeed, she participated in the promulgation of that claim. It was sufficient to initiate that adverse possession which, if persisted in for ten years continuously, ripens into title in fee simple in the adverse claimant, under such precedents as Caufield v. Clark, 17 Or. 473 (21 Pac. 443, 11 Am. St. Rep. 845); Dunnigan v. Wood, 58 Or. 119 (112 Pac. 501); Moore v. Fowler, 58 Or. 292 (114 Pac. 472); Stout v. Michelbook, 58 Or. 372 (114 Pac. 929); Parker v. Wolf, 69 Or. 446 — 196 — (138 Pac. 463); Parker v. Kelsey, 82 Or. 334 (161 Pac. 694); McKinney v. Hindman, 86 Qr. 545 (169 Pac. 93, 1 A. L. R. 1476); Krueger v. Brooks, 94 Or. 119 (184 Pac. 285); Looney v. Sears, 94 Or. 690 (185 Pac. 925, 186 Pac. 548). Caro v. Wollenberg, 68 Or. 420 (136 Pac. 886, [S. C., 83 Or. 311, 163 Pac. 94]), is to be distinguished as to the facts from the instant suit in this: There the erstwhile mortgagee avowed that he was claiming under the deed, which as he said was given in lieu of the former mortgage with a defeasance effective on payment of the old debt, which made the deed unquestionably a mortgage. Claiming as he did under such an instrument, and not otherwise, his possession was not adverse, as pointed out in the opinion of Mr. Justice Bean. Here the defendant claims, not under the deed, which amounts to a mortgage, but under the subsequent parol agreement that he should from thenceforward be the owner of the land. This, indeed, did not foreclose the mortgage or convey the land to him, but it did operate to initiate an adverse claim of ownership, which, coupled with his subsequent hostile possession for more than ten years, served to vest title in him in fee simple, under the precedents cited above. 5. Another view of the situation is that because more than ten years have elapsed since the making of the deed which was in very truth a mortgage, the defendant could not bring suit to foreclose his mortgage: Anderson v. Baxter, 4 Or. 105. The right to redeem is correlative to the right to foreclose, from which arises the deduction that Mrs. Cummins, in whose shoes stand the plaintiffs here, could not have brought suit to redeem unless she commenced within ten years after the defendant took possession of — 197 — the land. Well might she have commenced at any time within that ten years, notwithstanding the fact that under the oral agreement Chrisman had gone into possession, claiming to own the land; for it is said as early as Thompson v. Marshall, 21 Or. 171 (27 Pac. 957), and continuously to the present time, that such an instrument is a mortgage, whatever the parties themselves may have styled it, and that without foreclosing, the mortgagee cannot obtain title under his mortgage. The conclusion is that, while the oral agreement of the spring of 1901 could not pass title or dispense with foreclosure, it would amount to the initiation of an adverse claim, all with the knowledge of the mortgagor, which ultimately at the expiration of ten years ripened into an adverse title in fee simple. The result is that the decree of the Circuit Court must be affirmed. Affirmed. Bean, Johns and Brown, JJ., concur.