Moeller v. Moore

Winslow, J. Counsel for respondent admits that the legal principle is well settled that a deed absolute on its face may be shown to be a mortgage, but contends that another principle of law, which is equally well settled, stands in the. way of plaintiff’s recovery, to wit, that the proofs must be clear and convincing in order to entitle a court to find that a deed absolute on its face is in fact a mortgage. Both of these propositions are undoubted law. They need neither argument nor the citation of authority. [437] But counsel is mistaken in supposing that the last proposition stands in the way of the plaintiff’s right of action. Concede, as we do, that the evidence in this case is not of that clear, convincing, and satisfactory character which the rule requires in order to impress the deed with the character of a mortgage, and the transaction then becomes a voluntary release by a mortgagor to his mortgagee of his equity of redemption. Such a release is subject to a principle of equitable jurisprudence fully as well settled as the two rules above mentioned. That principle is that such a transaction will be regarded with great jealousy by a court of equity, and will only be sustained if perfectly fair and for an adequate consideration. 2 Washb. Real Prop. (5th ed.), pp. 65, 66; Linnell v. Lyford, 72 Me. 280. Applying this principle to the case before us, and scrutinizing the evidence carefully, we find practically no consideration paid for the plaintiff’s equity of redemption. According to the evidence, his equity was worth at least $550 over and above both mortgages. This he released for absolutely nothing. The assumption of the $400 mortgage (even supposing the proof to show that fact) could not reasonably be called a valuable consideration, certainly not an adequate one. The mortgage assumed was a first lien on property worth $1,200, and would most certainly be paid out of that property, so that practically, by its assumption, the plaintiff was no better off than he was before. The property would pay it before this transaction, and the property would pay it afterwards. The assumption was neither a gain to the plaintiff, nor a loss to the defendant, and this is all, in the way of a consideration, which can be found in the evidence. It was not valuable, it was not adequate, and, to crown all, it was left out of the deed. Without any consideration, it is manifestly impossible to call the transaction a fair one. The plaintiff was young and inexperienced, and virtually gave to his mortgagee a [438] valuable equity of redemption for absolutely nothing. The transaction cannot stand. The plaintiff must be allowed to redeem. By the Court.— The judgment of the circuit court is reversed, and the cause remanded with directions to render judgment for the plaintiff according to the prayer of the complaint.