Altenbrun v. First National Bank

Robinson, Ch. J.

From the beginning to the end, the transactions narrated in this case bear marks of indirection, windings, and subterfuge. On January 25, 1917, for the express consideration of $1, the plaintiffs made to ITawkinson and Liclity, officers of the bank, a warranty deed for 480 acres of good land in town 122, ranges 65 and 66. The grantees quitclaimed the land to the bank. The plaintiffs continued their residence on the land, farming it, and giving to the bank a large part of the annual crops and returns. Now the plaintiffs claim that the deed is in fact a mortgage to secure the bank for debts and advances. They ask that the bank account and give them a true statement of all debts, advances, and moneys received from the plaintiffs and the crops; that the court determine the amount due and adjudge the deed to be a mortgage. Defendants, by answer, claim that the deed was an actual bona fide sale of the land, and not a mortgage. Plaintiffs appeal from a judgment against them.

Now the turning facts of the case are these. The plaintiffs owned the land. They had resided on it for some twenty years, and naturally by such long residence they had become attached to the land and set on it a price of affection. They owed the bank on chattel security about $2,000, and, on a second mortgage, $1,000. They owed each defendant named in the deed about $100. No other securities had become due except some interest on a mortgage to McLaughlin. The amount secured on the land was $12,000, more or less. The bankers represented to plaintiffs that McLaughlin was about to foreclose and to make a ruinous expense, and that to avoid the same it was necessary to deed the land to the bank. Confiding in their bankers, the plaintiffs acquiesced. Accordingly the bankers prepared the deed in question, took it to the farm, and obtained the signatures of plaintiffs. Then the plaintiffs *269wore induced to take a cropping lease of the land, signed by Lichty and Ilawkinson, and they made to the plaintiffs a contract authorizing them, within one year, to sell the land for any sum in excess of $12,400, and to retain the excess. During the deal the bankers continuously protested and assured the plaintiffs that they did not want the land, and that all they wanted was the money due. Neither at the time of the making of the deed, nor at any time until two days before the commencement of this action, did the defendants, or either of them, return, release, or offer to surrender to the plaintiffs any of the notes and mortgages held against the land. In other words, the plaintiffs made the deed without a particle of consideration, except an oral understanding that they would be protected against foreclosures. The record contains not a word of evidence to show that the plaintiffs ever bargained to sell the land.

Mr. Holey, the bank manager, testifies:

Q. There was not any talk of the bank buying the land out and out?
A. No, not definitely.
Q. Was he offering to sell the land ?
A. No, sir; not exactly.
Q. Your idea was to save expense of foreclosure?
A. Yes, sir.
Q. You were interested because you had a subsequent mortgage?
A. Yes, sir.

In October, 1919, two days before the commencement of this action, he figured the amount against the land at $12,241.68. Then he made a pretended sale of the laud to Mr. Langley and Mr. Hall for the price of $31 an acre. That included a commission of $3 an acre.

Question to Mr. Holey:

Q. The land was sold to Mr. Langley and Mr. Hall?
A. Yes, sir.
Q. Mr. Langley is a brother of your cashier?
A. Yes, sir.
Q. He is also your agent for the sale of the land ?
A. Yes.
Q. In fact, all he has paid down is the commission?
A. Yes, sir.
*270Q. He had not put one cent of money into it ?
A. No, sir.

And that is how they tried to save the expense of foreclosure! It is needless to extend the discussion. The record shows conclusively and beyond all doubt that the plaintiffs did not bargain to sell the land to the defendants or either of them, and that the deed in question was made as a security for past and future advances necessary to save the expense of foreclosure. Such a deed is a mortgage. Sherwin v. American Loan & Invest. Co. 42 N. D. 389, 173 N. W. 758.

Every transfer of an interest in land, other than in trust, made only as security for the performance of an act, is to be deemed a mortgage. Comp. Laws, § 6727.

The judgment must be reversed and the case remanded to the Dis•trict Court for further proceedings.

Grace, J., concurs: