Maxwell v. Herzfeld

TYSON, C. J. — The bill in this cause seeks to have a certain deed, absolute on its face, executed by complainant to one Ilerzfeld, declared a mortgage, and then to have the mortgage declared void, because given to secure the debt of her husband, in violation of section 2529 of the Code of 1896, which declares “the wife shall not, directly or indirectly, become the surety of the husband.” From this statement it will be observed that the bill is not one for redemption, recognizing the validity of the mortgage, should the evidence warrant the finding of the fact that it was the intention of the jiarties that such should be the nature and character of the deed. Does the evidence establish the fact that tlie deed was intended by both parties to be a mortgage — a mere security for a debt? The burden of proving the affirmative of the proposition by clear and convincing evidence is undoubtedly upon tlie complainant. Conceding that it is shown the grantee in the deed agreed at the time of its execution that he would reconvey the land to complainant, the grantee, upon the payment to him of the consideration expressed in it, with 8 per cent, interest thereon; this fact will not, in and of itself, in this class of cases, have the effect of making the deed a mortgage, but must be held simply to- have the force and effect of stamping the transaction as a conditional sale. This is upon the principle that “where the instrument, if construed to be a mortgage, will become void and operative to promote injustice by losing to the grantee his money paid -for the land, and of restoring to the grantor prop [70] erty without an honest return of the money actually received by him, and for the security of which such property was conveyed, the inclination of a court of equity, in a case of doubt, will be to regard the transaction las a conditional sale, and not a mortgage. That construction will rather be adopted, on well-settled principles, which will uphold the instrument, and not destroy it- — -which will work equity between the parties, and not injustice.” — Vincent v. Walker, 86 Ala. 337, 5 South. 465. This principle in no wise conflicts with the one relied upon by the appellant, so often announced and applied in cases where the bill was to have a deed declared a mortgage and to redeem, that -courts of equity are inclined to consider the transaction as a mortgage rather than a conditional sale. In those cases this construction of the transaction is adopted because complete justice can be done to both parties. The mortgagee is secured in the payment of the money he may have loaned or advanced, with interest, and the mortgagor is protected in his equity of redemption. — Turner v. Wilkinson, 72 Ala. 365. No- such consideration obtains here, and therefore the principles first above announced must govern and control. Here, if the deed be declared a mortgage and then stricken down, as prayed, because void, the grantee in it would have no security for the money he paid on the faith of the transaction to his firm. Upon a consideration of the whole evidence, we feel constrained to hold, upon the reasoning which was allowed to control in Vincent v. Walker, supra, that the complainant has not proven the allegations of her bill that the deed was understood and intended by Herzfeld to- be a mere security for a debt. Affirmed. Haralson, Simpson, and Denson, JJ., concur.