Jones v. Franks

The opinion of the court was delivered by HortON, C. J.: After the referee filed his report with the bill of exceptions of plaintiff, containing all the evidence, the plaintiff moved for a new trial, challenging the findings of fact and conclusions 'of law. Thereon the court decided that the seventh fiuding of fact in the report of the referee was not sustained by any evidence whatever, but was contrary thereto. The court also found that the fifth finding of fact was not supported by any evidence. It refused, however, to set aside the report of the referee, or grant a new trial, but confirmed the report in all things. The defendant, Hattie B. Franks, then remitted the sum of $130 found to be due her from the plaintiff. The ruling of the court confirming in all things the referee’s report cannot be sustained. Two important and material findings in the report have no evidence whereon to rest, and yet these findings are approved, as well as those supported by the evidence. It is impossible, therefore, to determine whether the judgment rests upon the findings of fact supported by evidence, or upon the erroneous findings which ought to have been wholly disregarded. As the referee is an officer of the court, the court can set aside, or modify, or confirm his report, (Hottenstein v. Conrad, 9 Kas. 435;) but here the court affirmed the report of the referee in all things after it had decided that material findings of fact were not sustained by any evidence, and then rendered judgment thereon. In this consisted the error of the district court. As a new trial must be had in the case, it becomes important to declare the law upon the subject of the right to redeem, [503] where the mortgagor has conveyed to the mortgagee the equity of redemption. There is no legal inhibition on a mortgagor selling the mortgaged property to the mortgagee in satisfaction of his debt. “ To give validity, however, to such a sale by a mortgagor, it must be shown that the conduct of the mortgagee was in all things fair and frank, and that he paid for the property what it was worth. He must hold out no delusive hopes; he must exercise no undue influence; he must take no advantage of the fears or poverty of the other party. Any indirection or obliquity of conduct is fatal to his title. Every doubt will be resolved against him. Where confidential relations and the means of oppression exist, the scrutiny is severer than in cases of a different character. The form of the instruments employed is immaterial. That the mortgagor knowingly surrendered and never intended to reclaim, is of no consequence. If there is vice in the transaction, the law, while it will secure to the mortgagee his debt with interest, will compel him to give back that which he has taken with -unclean hands. Public policy, sound morals, and the protection due to those whose property is thus involved, require that such should be the law.” (Villa v. Rodriguez, 79 U. S. 323; 2 White & Tudor’s Leading Cases in Equity, pt. 2, 4th ed., 1984-6; Perkins v. Drye, 3 Dana, 170.) Counsel for defendants refer to Amos v. Livingston, 26 Kas. 106, as announcing a contrary doctrine. The circumstances of that case fully support the judgment of the trial court as affirmed by this court, within the principles above announced; but a portion of the language of the opinion is not approved, and the third part of the syllabus should be limited and qualified. Where the mortgagee takes the mortgaged property in satisfaction of his debt, the burden is upon him to show that the sale or release of the mortgagor’s equity was made willingly, that the conduct of the mortgagee was in all things fair and frank, and that he paid for the property what it was worth. There was some evidence introduced before the referee, that certain property was included in the chattel mortgage not in the possession of plaintiff, and -that the defendants took advan [504] tage of the fears of plaintiff in making the alleged purchase. If it shall appear upon another trial that such was the case, the law will not uphold a sale made by the mortgagor under such circumstances. As the answer set forth that the plaintiff “proposed in part payment of his indebtedness to sell absolutely at designated and agreed prices” the mortgaged property; that “said property was purchased in part payment of said indebtedness;” that “plaintiff has not owned any part of said property, or interest in the same, since February 19,1883,” and also alleged “that the defendants, nor either of them, deprived the plaintiff of any part of his property, save as he has done voluntarily and for which they paid him such price and prices, as were fair and he agreed to take,” we think sufficient facts were therein alleged, if the same shall be established within the principles herein announced, to sustain the purchase of the property embraced within the mortgage. At most, the statements in the answer are defective only. A repiy has been filed, and the answer has not been attacked either by demurrer or motion. The judgment of the district court will be reversed, and the case remanded for a new trial. All the Justices concurring.