Howland v. Blake, 97 U.S. 624

Howland v. Blake.

A., to secure the payment of money borrowed from B., mortgaged land to the latter, who commenced proceedings in foreclosure, and obtained a decree under which he purchased the land, and received a deed therefor from the proper officer. He subsequently conveyed it to C. Eight years after the death of B., A. filed his bill against C., alleging a parol agreement whereby he was to make no defence to the foreclosure ; that the equity of redemption, notwithstanding the sale and the deed made pursuant thereto, should not be thereby barred, but that B., on receiving his debt from the rents and profits of the land, should convey it to A.; that B., desiring to be repaid at an earlier date, - C., at A.’s instance, paid the same, and took a deed from B. with a full knowledge of the agreement between the latter and A.; that C. agreed that, when reimbursed out of the rents and profits of the land, he would convey it to A. Held, 1. That, in order to make out his alleged agreement with B., the burden was upon A. to produce evidence of such weight and character as would justify a court in reforming a written instrument, which, upon the ground of mistake, did not set forth the intention of the parties thereto. 2. That such evidence not having been produced to show the alleged agreement, and A. s continuing interest in the land, his parol agreement with C. was void, under the Statute of Frauds.

Appeal from the Circuit Court of the United States for the Eastern District of Wisconsin.

The facts are stated in the opinion of the court.

The case was argued by Mr. D. G. Hooker for the appellant, and by Mr. John T. Fish for the appellee.

Mr. Justice Hunt delivered the opinion of the court.

This suit was commenced in 1873, and the claim may be stated thus: In 1857, Isaac Taylor loaned to Eugene Howlan, upon a mortgage, the sum of $7,000, to enable him to complete the erection of certain buildings upon premises in the city o Racine, the entire cost of which was about $24,000, and whic when completed produced an annual rent of $2,200.

Soon after the buildings were completed an agreement was made between the parties, which was carried out, that t ie po session of the property should be surrendered to Tay or, w should enter into possession and receive the rents, until t e n proceeds thereof should pay the principal and the interest o mortgage. u

It is claimed that, while this foreclosure suit was in progress, it was agreed that Howland should make no defence, but allow a sale to take place ; that Taylor should still hold the premises as security for the payment of the mortgage debt, and, when the rents had been sufficient for that purpose, reconvey the premises to Howland.

It is alleged that, under this agreement, Taylor purchased and remained in possession until April, 1863 ; that about that time he desired the payment of his money, and requested Howland to procure some other person to advance it; that Howland thereupon informed Blake and Elliott of all the facts before stated, requesting them to advance the money and take a conveyance from Taylor; that a conveyance to them from Taylor, absolute in form, was thereupon made, but upon the agreement that they would pay Taylor’s debt, retain the premises until the rents thereof should reimburse them, and then would reconvey the premises to Howland; that from that time until the commencement of the present action against them they have een in possession, receiving the rents which greatly exceeded t e mortgage debt, with interest, taxes, insurance, and repairs.

n account and a reconveyance are demanded.

An answer on oath having been waived, Blake and Elli-0 t, the defendants, denied all the equities of the bill, and °^er matters in defence. Taylor died in November,

At the hearing upon the pleadings and proofs, the bill was f misse, upon the ground that where a mortgage had been de °S6f aC^On’ and the equity of redemption sold by a offi 66 t C°Ur^’ and an absolute title given by the proper ParoT ° t 6 ^Ulc^aser at such sale, evidence to show that a interA3^6^61^ Wa.S made Pen(bng the litigation, by which the gage ' t ° 6 °^^a^ne(^ under the sale should remain a mort-this court °n^’ WaS ^ncompetent. Howland appealed to

vol ^^eeS’ addition to this ground of defence, insist

We do not think it necessary to pass formally upon the legal position assumed by the Circuit Court, that parol evidence is not admissible to impeach a title acquired at a judicial sale, nor upon the contention that the sale to Rhodes, upon the proceeding to foreclose the lien of a material-man, terminated any alleged interest of Howland in the property.

The case may be decided upon a principle governing a class of cases of the same nature. Among them there are the following: Where a written instrument is sought to be reformed upon the ground that by mistake it does not correctly set forth the intention of the parties ; or where the declaration of the mortgagor at the time he executed the mortgage, that the equity of redemption should pass to the mortgagee; or where it is insiste that a mortgagor, by a subsequent parol agreement, surrendered his rights. These and the case we are considering are governed by the same principle.

In each case the burden rests upon the moving party of over coming the strong presumption arising from the terms of a written instrument. If the proofs are doubtful and unsatis factory, if there is a failure to overcome this presumption y testimony entirely plain and convincing beyond reasona controversy, the writing will be held to express correctly 11 intention of the parties. A judgment of the court, a deli era deed or writing, are of too much solemnity to be brushe a^. by loose and inconclusive evidence. Story, Eq. Jut., se 152; Kent v. Lasley, 24 Wis. 654 ; Harrison v. Juneau 17 id. 340; Harter v. Christoph, 32 id. 246; McClellandford, 26 id. 595.

In this case, the evidence falls far short of a or i% satisfactory conviction. It is not necessary to say t a complainant’s claim is not made out, or that sue

The testimony is voluminous and conflicting. It is enough to say that the only direct evidence of an agreement by Isaac Taylor that the foreclosure should not operate as such, but that the transaction should continue to be a mortgage, is that of R. W. Howland, a brother of the mortgagor. Throughout the whole transaction he was the person conducting the business on the part of the complainant, who was an absentee. He occupies very nearly the position of a party, and upon the unspotted testimony of a party two of the cases above cited adjudge that such a decree cannot be sustained.

Much also depends upon the value of the property in 1862; and upon this point the testimony is quite conflicting, the opinions as to its value ranging from 88,000 to 826,000. Russell v. Southard, 12 How. 189. . The warranty title given by Isaac Taylor, the party who it is alleged made the agreement, was not challenged until eight years after his death, and ten years after the sale on the forec osure. He is proven to have been not only an upright, honest man, but skilful and astute in the transaction of his business.

is one peculiarity was that of reducing to writing his most or inary transactions, that there might be neither misunderstandmg nor mistake.

Taylor took his mortgage of 87,000 in October, 1857. Soon e hidings were completed, he entered into possession ren^8, did this, pursuance of his j. ’ b tue of a written authority from the mortgagor.

comraenced a foreclosure suit, and in June, sheriff’sXed^^ ^^under by a judicial sale and a

should ke deliberately agreed that these proceedings much m an Or ^hing, and he be a mortgagee still, requires

UTtm°re C°nclusive ^idence than is here presented. ant to sustai^h^^ eVldenCe Prdduced by the complain-are bv nn c aim ; but, after a careful perusal of it, we required bv^^18 S^tlS^ed that it is of the character and extent direct by the principles above laid down.

The same is true of the agreement alleged to have been made by the defendants, Blake and Elliott. Its existence is denied by each of them, and it is not sufficiently proved for the purpose of this action.

This is not, however, so important. Unless the equity of redemption of Howland was kept alive by the alleged agreement with Taylor, he had no interest which could sustain a parol agreement by the defendants to buy the property for his benefit, and to convey to him when required. Such an agreement is one creating by parol a trust or interest in lands, which cannot be sustained under the Statute of Frauds. It is a naked promise by one to buy lands in his own name, pay for them with his own money, and hold them for the benefit of another. It cannot be enforced in equity, and is void. Levy v. Brush, 45 N. Y. 589; Richardson v. Johnsen, 41 Wis. 100; Payne v. Patterson, 77 Pa, St. 134; Bander v. Snyder, 5 Barb. (N. Y.) 63; Lathrop v. Hoyt, 7 id. 59; Story, Eq. Jur., sect. 1201 a (11th ed.).