Conkey v. Rex

Mr. Justice Scott delivered the opinion of the court: This was a bill to redeem. It is shown by the preponderance of the evidence that on June 1, 1889, when Conkey received the deed from Carr, he entered into a written agreement with Rex, by which Rex was to go into possession of the farm on March I, 1890, and to continue in possession, paying interest on the purchase money at the rate of seven per cent per annum, and whenever Rex should pay $1000 on the purchase price of $4400, Conkey was to convey the land to Rex by warranty deed, and Rex was to execute notes for the balance, due in five years, secured by a mortgage on the land to Conkey. • It is uncertain what length of time Rex was to have in which to pay the $1000. The evidence tends to show, however, that the period was five years and Rex testifies that he agreed to take the land at $4400 and pay for the same on the terms above mentioned. On November 25, 1890, Conkey executed to Rex and wife the first lease, which was signed by all three of them, by which the lands were demised to Rex and wife for a term of one year from March 1, 1891, at an annual rental of $336; to continue, upon payment of rent, to March 1, 1896, and which contained this provision: “If the parties of the second part shall pay to the party of the first part $1000 within the life of this lease, then lie shall make a deed to the parties of the second part and take a mortgage on said land for $3400 and interest.” The purpose of including this in the lease, no doubt, was to evidence the fact that the lease did not abrogate the earlier contract, although its effect was to extend the time within which, by the terms of the contract of June 1, 1889, Conkey was obligated to make a deed upon the payment of $1000. Under these circumstances, was the deed from Carr to Conkey a mortgage with a right of redemption in Rex, or was Conkey the absolute owner of the property by virtue of that conveyance and the contract between him and Rex merely one for the sale of the land ? It will be observed that prior to the execution of the deed from Carr to Conkey and the execution of the agreement between Conkey and Rex, the latter had no interest, either legal or equitable, in the land. It is true that he had negotiated with Carr for the conveyance, but it was to be a conveyanee to. Conkey. It is true, also, that $1000 of the purchase price was paid by the conveyance of the land in South Dakota from Rex to Carr, but Conkey held a mortgage on the South Dakota land to secure a note given by Rex, on which there was more than $1000 unpaid. The evidence show's that Rex homesteaded this land, but left it and moved back to Illinois in the spring of 1888, and the land after that time v'as vacant, unoccupied and unproductive. He wanted to dispose of it, and both he and Conkey desired that the indebtedness secured thereon be adjusted. Conkey released his mortgage that the land might be conveyed to Carr, and thereupon Rex became entitled to a credit for the sum of $1000 upon his note. It is insisted by plaintiff in error, under these circumstances, that Rex never had any interest in the land in LaSalle county that he could mortgage, and that consequently the deed from Carr to Conkey cannot be regarded as a mortgage from Rex to Conkey. In Heaton v. Gaines, 198 Ill. 479, it was contended that a deed executed by Ford to Gaines, the appellee, was a mortgage from Heaton, and that the latter had a right of redemption. This court said (p. 486) : “The deed from Ford to appellee could not be a mortgage to secure an indebtedness from F,dward Smith Heaton, unless it appeared in some way that Edward Smith Heaton had an interest as owner in the lands thereby conveyed. Without an ownership in lands there can be no mortgage of them. (Payne’s Admr. v. Patterson’s Admrs. 77 Pa. St. 134; Carpenter v. Plagge, 192 Ill. 82; Burgett v. Osborne, 172 id. 227.) Edward Smith Heaton cannot be said to have owned any equity of redemption, which was kept alive by any agreement between Ford and the appellee.” In Carpenter v. Plagge, 192 Ill. 82, the heirs of the owner of the equity of redemption in a piece of real estate which had been sold under foreclosure, upon the expiration of the tv'elve months period of redemption, induced Plagge to advance the money necessary to purchase the certificate of sale, and the latter entered into an agreement giving them the right to pay the purchase money to him, with ten per cent interest thereon, at any time within fifteen months after the purchase, and agreeing, upon such payment being made, to assign such certificate for the benefit of the heirs. Afterward the heirs filed a bill for redemption, claiming the transaction to be a mortgage. The court below denied the relief sought, and the heirs appealed. This court said: “Inasmuch, therefore, as appellants had no interest in the property by reason of the expiration of the twelve months, there was no title in them which they could mortgage.” In Caprez v. Trover, 96 Ill. 456, it appeared that Caprez was in possession of a certain lot as the lessee of Towner. The lot was offered for sale. Caprez applied to Trover & Miller to purchase the same for him. Thereupon they purchased the lot and took title from Towner to themselves, and agreed that Caprez was to have a deed to the property when the entire cost thereof should "be paid by him, within a certain period, to Trover & Miller. After his death, his heirs filed a bill to redeem, claiming the deed to Trover & Miller was a mortgage. This court held otherwise, saying (p. 465) : “The deed was not from Caprez, but from Towner, whose duty it was to make an absolute conveyance of the lot. He was entitled to take no mortgage, and his deed was executed as it was intended by all the parties it should be. Indeed, Caprez never had an interest in the lot which was susceptible of being mortgaged. He never had the legal title, and his only claim of an equitable title is a parol contract (condemned by the Statute of Frauds) that the lot would be conveyed to him upon his reimbursing Trover & Miller their outlays in purchasing and improving it.” Defendant in error calls our attention to the fact that a court of equity disregards form and seeks the substance of the transaction, and argues that it is therefore immaterial that the title to the land in controversy was never in Rex. We are referred to a number of authorities in support of this proposition and find that in each of those cases, where the court has given the matter any consideration, the party in whom the right of redemption was held to exist had some interest in the real estate, legal or equitable, prior to the execution of the deed from the third party to the person held to be a mortgagee; as in Carr v. Carr, 52 N. Y. 251, where it is said: “It is not material that the conveyance should be made by the debtor or by him in whom the equity of redemption will exist. It is sufficient if the debtor and he who claims to occupy the position of mortgagor with the right of redemption, has an interest legal or equitable in the premises, and the grantee of the legal title has, and acquired, such title by the act and assent of the debtor, and as a security for his debt. (Stoddard v. Whiting, 46 N. Y. 627.) In the case cited the plaintiff sought to redeem the premises from the defendant, who had taken the title, upon paying a balance due upon a contract of purchase held by the assignor of the plaintiff, who had entered under the contract and paid a part of the purchase money before the arrangement with the defendant, who took the conveyance directly from the original vendor.” In the case at bar, at the time of the execution of the deed from. Carr to Conkey, Rex had no interest, legal or equitable, which he could assert, in the real estate; and as he had nothing which could be mortgaged, the deed in question cannot be regarded as a mortgage from him to Conkey. If Rex’s rights under the contract with Conkey still continue, they cannot be asserted by a bill to redeem. His remedy, if any he has,—as to which we express no opinion,—is by bill for specific performance. The judgment of the Appellate Court and the decree of the circuit court will be reversed, and the cause remanded to the latter court for such further proceedings as to justice and equity may appertain. Reversed and remanded.