Ellis v. Winlock

Opinion op ti-ie court by JUDGE WHITE Reversing. Appellant instituted this action in the Barren Circuit Court, seeking' to recover of appellee usury alleged to have •been paid her by him. The material facts alleged are that on July 20, 1895, appellant borrowed of appellee the sum of $1,023.05, and to secure her in its repayment appellant executed to appellee a deed for certain described real estate, with the contract and agreement that if, on or before October 20, 1895, he should pay her $1,137.05, the property was to be reconveyed; that, upon being unable to pay the required sum in October, 1895, it was further agreed that the time of redemption should be extended till October, 1896, when the redemption price should be $1,805.27. Appellant allege® that before the expiration of the time to redeem given under the last contract, wlhiicih wag in writing, he, fearing his inability to redeem, sold and assigned to one Parish his right to redeem under the contract, the consideration being $150 froim Parish'. It is alleged that appellee refused to permit Parish to redeem, but afterwards sold the property to Parish for the sum of $1,800. Appellant then claimed the [679] difference between the $1,022.05 and its legal interest from July 20, 1895, and the consideration paid by Parish, expressly agreeing to ratify and confirm the sale to Parish if this be given him. To this petition a demurrer was sustained, and, appellant, declining to plead further, his action was dismissed, and hence this appeal. We are of opinion that the petition states a cause of action. The deed with a right of redemption is, in effect, a mortgage to secure the loan. When appellee accepted the deed, she became a mere trustee, holding the legal title as security for the debt, and was bound to convey upon the repayment to her of her loan and interest. She could sell the trust property, and convert the proceeds to her uwn use, except only as to the extent of satisfying her claim. As appellant and wife consented in writing to a deed to Parish, who yet is willing to ratify and confirm the sale, the title would pass to him; but the proceeds of the sale would go into the hands of appellee as trustee, impressed with the .same trust as was the land. Appellee would be entitled to her loan, and interest on the excess would belong to appellant. This confessing the facts .alleged in the petition to be true, as the demurrer does. It is insisted that .appellant assigned all his rights in the premises to Parish, and therefore had no interest. The assignment purports only to assign the right to redeem, and this right it is alleged the appellee refused to recognize. At the same time this assignment was executed, there could have been uo 'assignment of usury, as none had been paid. There could have been no assignment of excess, as it was not contemplated there would be any excess over the redemption price agreed upon in the written contract. This assignment of redemption is only an [680] agneement that appellee might deed to Parish upon payment of the sum of $1,305.27 agreed upon. But this assignment was not recognized as to the amount by appellee. She demanded and received more, and, being a trustee, she should account for all she received. Being of opinion, that the petition states a cause of action, the judgment dismissing same is reversed, and cause remanded, with directions to overrule the demurrer, and for proceedings consistent herewith.