April 28, 1914. The opinion of the Court was delivered by
MR. JUSTICE FRASER (after making the foregoing statement of issues):
The respondent raises a question as to the jurisdiction of this Court to pass on the facts, and claims that this is an action at law, and the findings of the Circuit Judge are not reviewable in this Court. This question must first be determined. The plaintiff claims the right to possession under a deed from the defendant absolute on its face. The defendant admits the execution of the deed, but claims that, by virtue of a parol agreement, the deed is to be construed as a mortgage, and asks the Court to so find. The defendant does not deny the execution of the deed, or claim that it is a nullity for fraud or any other cause. He asks that his absolute deed be declared a mortgage. This is an equitable issue that must first be determined.
The recent case of Williams v. McManus, 90 S.C. 493, 73 S.E. 1038, says: "It is undoubtedly true that a deed which appears on its face to be an absolute conveyance may in equity be declared to be a mortgage, if the evidence be sufficient to show that such was the intention of the parties, yet it is equally true that the presumption is that the deed is, what on its face it purports to be, an absolute conveyance, and, to establish its character as a mortgage, the evidence must be clear, unequivocal, and convincing; for otherwise the natural presumption will prevail. 3 Pom. Eq. Jur., sec. 1196; Arnold v. Mathison, 3 Rich. Eq. 153; Petty v. Petty, 52 S.C. 54, 29 S.E. 406." The first issue in the case was: Was that deed intended as a mortgage? This raised an equitable issue first to be tried, and this Court has jurisdiction. When a Court sends a case at law to a master, is it the master or the Judge who represents the jury?
I. The first question is: Is the evidence "clear, unequivocal, and convincing" that this absolute deed was given as a mere security for a debt? We think not. The learned Judge who tried the case based his judgment, overruling the master, on three grounds:
(a) "The plaintiff said she had loaned the money and taken security." The plaintiff denied this. It is true the defendant had several witnesses to plaintiff's one. In a case of this sort, the appearance and conduct of the witnesses is an important consideration. The master saw them, and the Judge did not. The case shows several things that prevent the testimony of the many witnesses from producing conviction. They state things from which a mortgage is to be found, but do not use the word "mortgage." The most common word is "mortgage." and yet they all avoid it. They say that Mrs. Banks used these words time and again. The witnesses were of the family of the defendant. There were disinterested witnesses at the time of the execution of the paper, and disinterested witnesses who talked with the parties afterwards, and not one of them heard of the transaction as a loan, security, or mortgage, or anything to indicate that an absolute conveyance was not intended. It is true defendant asked for a loan, and this is a circumstance that tends to show a mortgage; but is not conclusive, and it loses much, if not all, its force under the plaintiff's explanation. She said: "I did not want to do that, as I might need a home some day, and didn't think it would be wise in me to sell my land and lend out the money. He said if I would sell the land he would sell me a part of his land."
The old rule in a Court of Chancery was not to allow the conversion of land into money, in matters within its control, except upon great necessity. If the plaintiff was in bad health, it was wise for her to want a home and enough to save her from the necessity of living on charity. The defendant had raised her, and admits affection for her as if she were his daughter. The defendant was a widower with no legitimate child to provide for, and, whether wise or unwise, people who are getting old too frequently turn their property over to their children and afterwards repent. In his answer he claimed to have paid her interest and a part of the principal in sums too small for safe investment. There is a significant absence of these payments in his testimony. His wife testified: "I heard Mr. Frith say to Beulah on their return home from Abbeville: `Now, Beulah, I have given you a deed to 100 acres of land for your $500, so that, if anything should happen to me, you could not be knocked out of it.'" (Mr. and Mrs. Frith were married subsequent to the date of the deed.) What did that mean? The defendant had that day paid one mortgage and executed another. He knew the difference. He had given to his adopted daughter that day a deed. The intention that day governs. The grantor that day said: "I have given you a deed * * * so that if anything happens to me, you could not be knocked out."
The case does not show that Mrs. Banks was present at the execution of the deed, and nothing was said to them or to the friend at home about security. If the intention of the parties was to secure a debt, it is difficult to understand why an absolute deed was used to secure one debt and a mortgage given for the other. This is unexplained, and unexplained is fatal. We do not think the testimony is sufficiently "clear, unequivocal and convincing."
(b) "There was no change of possession or payment of rent." As both plaintiff and defendant lived on the premises, it is not clear what change of possession was requisite. The man on the premises would probably have managed the business, whatever the nature of the deed. As to payment of rent, the defendant cannot plead his own wrong or take advantage of her leniency. The proceeds of the place seem to have gone to the support of the family, and it was only natural that the man should have handled it and dealt with the tenants.
(c) "Tax return." It is also natural that the man should have made the return, and, if she trusted him to make the return, he certainly could not revoke his deed by making the returns in his own name. He paid the taxes, but he collected the rents, and it was his duty to pay the taxes.
1. Besides this, the grantor had the deed prepared, and the record does not show that the grantee was present. There is no suggestion in pleading or evidence of fraud or mistake. There is no reason suggested for the giving of an absolute deed, unless an absolute conveyance was intended.
2. The defendant had a plat made of 100 acres. Why make a plat when the conveyance was a mere security for a debt, which he expected to pay? Why should the mortgage cover 100 acres, instead of 195 acres? If the deed was a mere security which the grantor expected to pay, and the grantor was not "cramped for money, and never had been," why not include the whole tract? The grantor had the plat made and made for Mrs. Banks.
3. The advertisement was dictated by Mrs. Banks, it is true, but it stated that 100 acres belonged to Mrs. Banks and 95 acres to Mr. Frith. It was taken down in writing and Mr. Frith was present. Mr. Percival, a disinterested witness, said: "Mr. Frith agreed to that, and said part belonged to him and part belonged to Mrs. Banks." The deed was in writing; the plat was in writing, and the advertisement was written. All the writings in the case give to Mrs. Banks the land, and not a mere security.
It puts it mildly to say the proof that the absolute deed was intended as a mortgage is not "clear, unequivocal and convincing."
II. The appellant did not prove that there was an agreement to pay rent by the preponderance of the evidence, and cannot recover rent.
The judgment of this Court is that the judgment appealed from is reversed, and the case is remanded to the Circuit Court, that proper proceedings may be had to lay off the line between the plaintiff and the defendant.
MR. CHIEF JUSTICE GARY concurs.