Belinski v. National Brewing Co.

Mr. Justice Brown delivered the opinion of the court. There is no serious contest between the parties about the law applicable to this case. It is, as we understand it, conceded by both parties—at all events .it is the law—that an instrument which is an absolute deed on its face is presumptively a deed in fact, and that the burden of proof is on a contestant "who wishes to prove it a mortgage. Heaton v. Gaines, 198 Ill., 479; Gannon v. Moles, 209 Ill., 180. It is also the law that’ it is a question of intention, to be ascertained from all the circumstances in evidence, whether a deed absolute in form is a mortgage or an absolute conveyance. If it appears, whatever the form of the transaction, that the conveyance is but an indemnity or security, it will be held a mortgage, and it is competent in a court of equity to show by parol evidence that an instrument purporting on its face to be an absolute conveyance of real estate is in fact a mortgage. Workman v. Greening, 115 Ill., 477; Johnson v. Prosperity L. & B. Ass’n, 94 Ill., 260. Plaintiff in error seems to contend that because in the agreement dated July 12, 1894, between Andrew Belinski, the husband of complainant, and the National Brewing Company, substantially contemporaneous with the execution of the deed involved in this litigation, Andrew Belinski was not only given the right to repurchase, but actually made a contract of repurchase binding upon him in personam, the burden is shifted, and the deed made prima facie a mortgage. If this be the contention, it is unsound. This agreement and the other contemporaneous one for a, lease for nine months, with privilege of further renewal on a fixed monthly rent, were not between the parties to this litigation, but between one of them and the husband of another —an entirely different person. It is indeed charged by the bill that it was made without the knowledge and consent of the complainant, to deprive her of her title to the premises. The very case cited by plaintiff in error to sustain his contention—Bearss v. Ford, 108 Ill., 16—holds that a new instrument of conveyance by a mortgagor even when an agreement for repurchase by said mortgagor is incorporated therein, will, if it operates as a satisfaction or extinguishment of the original mortgage indebtedness, be regarded as a sale and conveyance of the equity of redemption with an agreement for repurchase. It is the contention of the defendants in error here, in support of which they produced their evidence, that the mortgage indebtedness of the plaintiff in error was extinguished, and all documentary evidence adduced concerning it, as far as it goes, bears out the claim upon its face; The mortgage trust deed purporting to be signed by the plaintiff in error and her husband to F. W.'Kraft to secure the note of $2,500 to the National Brewing Company was duly released and the release recorded. A release of the trust deed to Holec to secure the loan of $5,400 from the Kasper Building and Loan Association, on which $4,000 was due at the time of the warranty deed attached, was also recorded. Although the' notes mentioned in these trust deeds respectively were not produced, the presumption from the evidence is that they were all cancelled. The direct testimony .of Kraft, the trustee in the $2,500 trust deed, is that he cancelled the notes secured by that instrument, and that of Wollin, the cashier and bookkeeper of the National Brewing Company, is that he turned them over to Andrew Beiinski. . We think it clear that the only way that the plaintiff could have properly succeeded before the chancellor below. was to assume and carry by parol evidence the burden of proof which the condition of the record title and the nature ■of the instruments of July 12, 1894, imposed on her; that' that instrument was intended by the parties to be a mortgage merely. This the chancellor found she did not do. He found, on the contrary, from the evidence before him, that it was the intention and understanding of the parties to the transaction that it was one of purchase and sale and not of mortgage and loan. In the hearing before the chancellor all the witnesses, with .a single exception, were examined orally before him. This being so, it is conceded that it is the law that it must appear to an appellate tribunal that the findings of the chancellor on the facts are clearly and palpably against the weight of the evidence, to justify an interference with them. It would serve no good purpose to discuss in this opinion in detail the evidence shown in the record. We have carefully examined it all, and all that has been said of it in the .arguments of counsel, and do not find that it justifies the contention of plaintiff in error concerning it. There is a sharp conflict on vital and material points. If the testimony of Mr. and Mrs. Beiinski and of witnesses produced by them stood alone, it would justify the assertion that the warranty deed in question was regarded by the parties as a mortgage. But on the exact point in controversy, whether before Mrs. Beiinski signed the warranty deed in question, the nature of the transaction was explained to her so that she must have understood, that the warranty deed was intended as an absolute conveyance, the testimony of F. W. Kraft, of Wollin, of Floras and of Zakowski, is direct and positive. They contradict Mrs. Belinski. The testimony of Andrew Belinski is contradicted in its most important parts by that of the same witnesses and that of Plantz and Oehne. The testimony of Mr. Belinski, on which plaintiff in error places much stress, that he only went to the National Brewing Company for help after he had been to Kosminski and Greenhaum, mortgage bankers, and had been offered a loan at a rate of interest and a commission which he found too high, does not bear out the inferences claimed from it. It does not show that any definite amount which these persons would loan on the land was agreed on dr even mentioned—only that the rates would be at a certain point if a loan was made. It would appear indeed that if any sum was mentioned, it was only that in which Mrs. Belinski was indebted to the Building and Loan Association. But it is very clear that such a loan could not have been made without-taking care of the $2,500 incumbrance, also existing on the property, and there is evidence that these sums together-even would not have relieved the distress in which the Belinskis had fallen in the pecuniary affairs, nor enabled them to hold and carry the property. It is, we think, a fair inference from all the evidence that the transaction which involved the making of the warranty deed was the last resort of the Belinskis, as they thought, to continue for a time in possession of the property and to allow Mr. Belinski to retain his business, with the hope that some favorable turn in the future would make possible its repurchase. It was to that.hope probably that must be referred the payment of taxes and some repairs and whatever was paid for the filling of 21st street. At all events these expenditures do not so turn the scale as to warrant us in finding that the weight of the evidence is clearly and palpably against the findings of the chancellor. The decree of the Superior Court is affirmed. Affirmed*