(39) On 19 June, 1843, the defendant David Overby granted to the plaintiff and John Lewis, for the term of twenty years, a lease of a gold mine, rendering as rent one-tenth of the gold, with a stipulation, among others, that within two years Lewis might, if the chose, take the mine and 40 acres of land adjoining it, in fee, at the price of $1,600, whereof Overby should retain $1,200 for himself and pay $400 to the plaintiff. In a few months afterwards Lewis and the plaintiff began to operate the mine separately, each one for himself. The plaintiff, being quite a poor man, was unable to procure any laborers besides himself, and could do but little. After some time, however, it was agreed between him and the defendants, David Overby and John Overby, that the two latter should, each, furnish a slave to work under the plaintiff, and that the three should divide the net gains equally; and under that agreement the plaintiff collected ore to some small value, perhaps about $100. Soon afterwards the plaintiff was pressed for the payment of about $40, for which executions were in the hands of a constable; and he applied to the defendant David for it, who agreed to let him have that sum, and did so in May, 1844. The bill alleges that the sum thus advanced to the plaintiff was a loan, and that it was agreed between him and the defendant David that the plaintiff should, as a security therefor, assign his interest in the mine, which was all the property he had. An instrument was then drawn up by an acquaintance of the parties, and executed by the plaintiff in the following words: "This instrument is the witness of an agreement or bargain made this ____ day of May, 1844, between John Blackwell of one part and John S. Overby and David Overby of the other part, the conditions of which are as follows, to wit: The said John Blackwell, in consideration of the sum of $40 to him in hand paid by the said, etc., doth bargain, sell, and convey unto the said John S. (40) and David and their assigns all his rights and interest, legal and equitable, in and to a certain gold mine and parcel of land, situate, etc., which was conveyed by the said David to the said Blackwell and John Lewis by lease for the term of twenty years, upon the conditions in said lease specified. The said John Blackwell doth hereby, for himself, his heirs and assigns, forever release, bargain, sell and convey to the said John S. Overby and David Overby, their heirs and assigns forever, all his interest and title in said lease to said gold mine, with all the privileges to him jointly with John Lewis conveyed by David Overby; also *Page 41 including his right and interest in and to the sum of $40 conditionally to him the said Blackwell by David Overby to be paid, should Lewis make the contemplated purchase of Overby within two years. In testimony whereof the said Blackwell hath hereunto set his hand and seal," etc.
The bill states that the plaintiff was an illiterate person, able to read very little, and that he had implicit confidence in the integrity and friendship of the defendants, and was assured by them that the instrument was only a security for the plaintiff's debt, and that he should have whatever might remain of the proceeds of the property when it should be sold, after paying the said debt; and that upon the faith thereof the plaintiff executed the deed or agreement without reading it or understanding it.
The bill further states that, after executing the instrument, the plaintiff continued in possession of the mine, and worked the same with the two negroes of the defendants and himself upon their joint account, as he had done before; that he put the ore then raised with that which he had raised before the execution of the deed; and that he so continued to do until the defendant David made a contract with Lewis to sell him the interest in the lease, formerly belonging to the plaintiff, at the price of $400, whereof $100 was paid down and $300 secured by a bond payable some few months afterwards; that then the defendant (41) John S. Overby made an indorsement on the deed in the following words: "1844, 24 May. I assign the whole of my interest in the within conveyance to David Overby," and the defendant David then granted the term to Lewis at the price above mentioned. Of the $100 received from Lewis, the defendants paid the plaintiff, immediately, the sum of $60, thus reserving $40, as the bill alleges, in satisfaction of the sum borrowed by the plaintiff from David Overby. Afterwards the parties had the ore, to the value of about $200, ground and the gold extracted; and, after paying the rent to David and the expenses of grinding the ore, they divided the net proceeds equally, each share being nearly $40. The defendant David subsequently collected the residue of the purchase money, and refused to pay any part of it to the plaintiff, claiming the whole as his own absolutely, under the instrument executed by the plaintiff. The bill then charges that if such be the nature of that instrument, the plaintiff was induced by the defendants to execute it under a total mistake on that point, for they gave him explicitly to understand and believe that it was but a security for the debt he then contracted, and all parties so treated it afterwards, until the refusal of the defendant David to pay to the plaintiff the residue of the purchase money given by Lewis. The prayer is that the deed may be declared to be but a security for the plaintiff's debt to the defendants, and the defendant David may be decreed to come to an account with the plaintiff for the sum for which he *Page 42 sold the lease to Lewis, and pay him what may be found due him on that account.
The defendants put in a joint answer, and deny that at the time of the assignment the plaintiff was indebted to David Overby in the sum of $40, or any other sum, except $5, which, they say, is still due. They deny that the assignment was intended as a security for $40, or (42) any other sum, or that it was understood that the plaintiff's interest was to be sold and the proceeds applied to the satisfaction of any debt of the plaintiff and the surplus paid to him; or that the plaintiff was assured by either of the defendants that the deed was merely a security for any sum of money; or that the plaintiff was ignorant of the contents and legal effect of the deed. On the contrary, the defendants say that the plaintiff had before frequently offered to sell them his interest in the lease, and that the contract between them was for the absolute sale and purchase of his interest; that the reason which induced the plaintiff to sell his interest was that he was obliged to raise money to meet several executions that were then pressing on him to the amount of about $40; that after they bargained, they applied to one Willie to draw the deed, and that he did so in the presence of the plaintiff and the defendants, and in pursuance of instructions received from them jointly, and then read it to them, and inquired whether it was in accordance with the agreement, and they all replied that they were satisfied with it; and that, in fact, the deed was intended and understood to be an absolute sale and assignment of the plaintiff's interest for the consideration therein expressed; and that the said price was applied at the request and by the direction of the plaintiff in discharge of the said claims and executions.
The answer further states that, at the time of the contract, the defendants did not suppose the plaintiff's interest was of much value, or that it could be resold for much more than the defendants gave for it, and that Lewis was induced to give the price he did from peculiar circumstances, which were: that the plaintiff continued, after the assignment, to mine with the defendant, as he had done before, and that his operations interfered with those of Lewis to such an inconvenient extent that Lewis determined at once to purchase the interest formerly owned by the plaintiff, and thus put an end to the annoyance and (43) collisions to which he was then subject; and he was thereby induced to make the purchase at $400. The answer further states that the defendant David put into the hands of the defendant John S. the $100 received in cash from Lewis, with directions to give it to the plaintiff; and the defendant John S. States that, by the direction of the plaintiff, he applied thereof the sum of $40 to the satisfaction of a certain claim which he held against the plaintiff for collection, as a constable; and *Page 43 that he paid the balance thereof to the plaintiff. The defendant David states that he sent the $100 to the plaintiff simply as an act of kindness, and not because he was under any obligation so to do; and that his reasons for it were that the plaintiff first discovered there was gold on the land and informed him of it, and that he had got a larger price for the interest than he had expected.
The material evidence is that the plaintiff is illiterate and has little or no knowledge of the nature of conveyances, though with a natural capacity, probably equal to that of the defendants; that in the Spring of 1844 a constable, named Hart, had executions against the plaintiff for about $35, which he was unable to pay, unless out of his interest in the mine; that Hart advised him, instead of having that levied on and sold under execution, to endeavor to borrow the money by making a deed of trust for his interest, and that soon afterwards Hart saw the plaintiff and the defendant David together, at Granville Court, the first week in May, and the plaintiff mentioned that he had taken his advice and made a deed of trust to the defendant David, who had agreed to pay the debt for him and was ready to do so; and that he, the said defendant, assented thereto, as the witness understood, and accordingly paid the executions for the plaintiff.
Another witness, Clark, states that he had a note of the plaintiff on which near $40 was due, and that he gave it to Johns S. Overby, as a constable, for collection; that some time afterwards, and after (44) the sale to Lewis, the defendant John S. paid the witness the debt, and both of the defendants told him that they (or we) had sold Blackwell's interest in the gold mine to Lewis for $400, and that Lewis had paid $100, out of which the debt to the witness was paid by Blackwell's directions; and that the defendant David said to the witness: "If it had not been for me you would not have got your money."
Willie states that at May court one of the Overbys applied to him to write a deed conveying to the two Overbys from Blackwell his interest and title in and to the land and gold mine, and stated to the witness the terms of the contract, which were as expressed in the deed; and that he drew the deed, and read it to the two Overbys, and also to Blackwell, he thinks; and asked them if they were satisfied, to which Overby said it was just what he wished, and Blackwell made no objection. The witness went away before the deed was executed.
The deed is not dated of any particular day in May, and is attested by two other persons, neither of whom was examined. Although the form of the instrument is very strong evidence that an absolute deed was intended as a conveyance upon a purchase, especially when supported by an answer, yet it has been often held not to be conclusive. It cannot, indeed, be met by parol evidence, merely, of an agreement at the time for a mortgage. Nor can it be repelled by any evidence which is not clear and cogent. But proof dehors of facts and circumstances which, to the apprehension of men versed in business and judicial minds, are incompatible with the idea of a purchase and leave no fair doubt that a security only was intended, (45) has been deemed sufficient to let in the apparent vendor to redeem. The leading case in our courts is Streator v. Jones, 10 N.C. 423. The questions of evidence and equity were there much discussed, and it was ruled that the distresses of the maker of the deed, proposals for a loan, great disparity between the sum paid and the value of the estate, the possession continuing afterwards as before, an accounting between the parties as if the vendee were still a creditor, and the vendor had still an interest in the property, and the like, were facts constituting a body of evidence as to the real purpose of the deed, stronger than the form of the instrument and the oath of an interested person. The case was followed byKimbrough v. Smith, 17 N.C. 558; Hauser v. Lash, 22 N.C. 212; Howlet v.Thompson, 36 N.C. 369; and several others to the same effect. For, although deeds must be presumed to speak the truth, yet we know that, in reality, instruments intended to be but securities are sometimes put into the form of absolute conveyances, from the ignorance of the writer, the mistake of the parties, great confidence on one side and undue advantage taken on the other of the necessities of a distressed and dependent man. Therefore, in such cases, courts must consider the circumstances, in the hope of discovering the true character of the transaction; and such circumstances as those enumerated have been held to amount to clear and cogent proof — which is necessary — either that the agreement was for security only or that the bargain was a hard and unconscientious one, and relief given accordingly.
The case has every material ingredient on which the equity was sustained in those cited, and others equally strong. The first — always deemed the most material — is a gross inadequacy of the money paid, as a price, being just one-tenth of the value. Ten times the price was got for the mine almost immediately after the deed; and therefore (46) the value at the time may properly be thus estimated. It is true, the answer says that the sale to Lewis was for much more than the parties expected and more than the value. But as the case stands, that account cannot be credited. The defendants have not examined Lewis in support of their answer, as to his motives for buying, nor proved by him or any one that the value was less than the price he gave. *Page 45 Indeed, the original lease fixed on the very sum which Lewis did give as that he should give in case he chose to buy within two years; and the operations of the plaintiff, after the deed, were no greater annoyance to Lewis than they had been before. Consequently, the price given by Lewis must be taken as the value; and it seems impossible that a man in his senses and with a free will could agree to sell out and out, for $40, property for the sale of which he had contracted conditionally at $400, and which in three weeks was finally sold at that price to the person who had before contracted for it. It is further admitted in the answer that the plaintiff was in great distress for a small sum of money. The defendants say that, for that reason, he had often offered to make a sale to them. But there is no proof of that assertion; and there is evidence that he wished to borrow the money upon the security of this property. There is, indeed, no direct evidence of the negotiation between the plaintiff and the defendants, which was to themselves, and does not seem, in its particulars, to have been communicated to any person. It is true that Willie says Overby stated to him the terms of the contract. But he does not give them to us further than merely saying they "were expressed in the deed," which is certainly very unsatisfactory and amounts only to this, that he wrote the deed according to his understanding of the terms. He should have given us the words of the parties, so that the court could see whether the instrument conformed to the contract or whether the true nature of the contract, in respect to the important point (47) now investigated, was at all explained or understood by the witness. The defendants asked him no questions on that point, but leave the case upon the vague terms used by that witness. The truth, probably, is that the witness, as a neighbor and not as an adviser, was asked to write a deed for the parties, and that he did not think of inquiring whether it was founded on an agreement for a sale, or for a security, nor did they think of giving information. The understanding of the matter by the witness, separate from the facts on which it was founded, is entitled to very little weight, as the instrument itself shows that he had but a slender capacity for the task he undertook, beyond mere writing legibly. The testimony of the writer of the deed, therefore, leaves the case much as it would be without it, and upon the paper by itself. Then, it is clear that the price or alleged price was not paid at the preparation or the execution of the deed, nor any security given for it. The defendants have given no evidence of it, and have not thought proper to examine either of the subscribing witnesses. On the contrary, it is proved that David Overby paid it afterwards to the constable in discharge of the executions against Blackwell and in his presence; the latter saying at the time that he made Overby a deed of trust for the mine, and the other not disputing it. There is also something singular in the fact that the deed is *Page 46 made to John S. Overby as well as to David, inasmuch as he does not appear to have paid any part of the $40 mentioned as the consideration, and he assigned his share to David without value, as far as is expressed in the assignment or shown by proof, and he got no part of the price paid by Lewis, excepting that he retained out of the money received from Lewis enough to satisfy a debt in his hands, as constable, for collection. It is, under such circumstances, much more than simply a (48) conjecture that he became a party to the deed merely to obtain a security by way of indemnity from loss for indulging the plaintiff on Clark's debt, and, therefore, when he got payment of that debt, he gave up all claim under the deed, and assigned his naked legal title to David, in order that he might make a clear conveyance to Lewis. This is fortified by the fact that, upon the execution of the deed by the plaintiff, John S. Overby did not discharge nor take on himself the plaintiff's debt to Clark; but he waited until the sale of the mine to Lewis, and paid the debt out of the price — both of the defendants saying that they had sold Blackwell's interest to Lewis. It would seem, then, almost certain that John S. Overby was not a purchaser in this transaction; and it follows that the other defendant also was not one.
The circumstances hitherto adverted to receive great additional force from the indisputable facts that, after the deed, the plaintiff continued in possession, taking the profits, as he had done before, and that upon the sale to Lewis the defendants accounted to him for the money received. The possession, it is true, was but for a short period; but it continued up to the sale to Lewis, and that alone was the reason for its termination. But the continuing in possession at all of a gold mine, after the deed, without a new contract, creates a strong presumption that the sale was not absolute. If it had been, the vendor could not have thought of working the mine afterwards; but he would have been stopped instantly, just as the plaintiff and the defendants all did, as soon as a real sale was made to Lewis. The other fact, that the defendants paid the plaintiff the money received from Lewis upon the sale, puts the matter beyond doubt, if any remained. Unexplained, that act, concurring in tendency with the other circumstances, completes the evidence, so as to make it irresistible. The defendants felt the force of it, and, when they could not deny, endeavor to avoid it by saying that it was a (49) gratuity. But there is not the slightest proof in support of the averment. They do not show that they accompanied the payment with any declaration of the kind, so as to afford some presumption that the plaintiff received the money on those terms. The payment, therefore, must naturally be taken to have been made on an acknowledged right of the plaintiff to the money — agreeing with the defendant's declaration to the witness, that the money was got for the plaintiff's interest in the *Page 47 mine. And, upon the whole, the case seems a strong one for holding, upon presumptions arising from undoubted facts, that the deed was unduly obtained in this form, and declaring that it was intended as a security only. Confirming the sale, as he does, the plaintiff is entitled to the proceeds, deducting what he may owe the defendants or either of them on prior debts or for advances for him after the deed; and it must be referred to make the usual inquiries on those points.
PER CURIAM. Decree accordingly.
Cited: Moore v. Ivey, 43 N.C. 197; Colvard v. Waugh, 56 N.C. 337;Porter v. White, 128 N.C. 44, 45.
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