Walls v. Endel , 20 Fla. 86 ( 1883 )

The Chief-Justice delivered the opinion of the court.

The first and material question in this case is whether in an action of ejectment a “ plea on equitable grounds ” is appropriate and should be allowed; whether under the first equitable plea interposed in this case, viz: that the apparent legal title of the plaintiff was a deed absolute in form, but in fact, was executed to secure the iudebtednesss of the grantor to the grantees, and was in equity a mortgage.

Our statute enacts a. recognized rule of equity, that all deeds of conveyance conveying or selliug property Cor the purpose or with the intention of securing the payment of money shall be deemed and held as mortgages and shall be-subject to the same rules of foreclosure and the same regulations and restrictions as now are or may hereafter be prescribed by law in relation to mortgages. Act January 30,. 1838.

In 1853, Chapter 525, this was re-enacted with a further provision, that in no case shall the right of possession of the property by the mortgagee he recognized in a court of justice until a due foreclosure according to the forms of law for the foreclosure of mortgages. McC. Dig., 765.

At common law the rule was well settled that in ejectment or any other form of action for the recovery of land it was incompetent to prove by parol that a deed of conveyance in fee was intended by the parties to be a mortgage or held as a security for money. Webb vs. Rice, 6 Hill, N. Y., 219. Though it might be shown by parol in equity. 4 Kent’s 'Comm., 142, and authorities cited.

By section 69 of “ an act to amend the pleading and practice in this State,” approved February 8, 1861, it was enacted that the defendant in any cause in any court, in which if judgment were obtained he would be entitled to relief against such judgment on equitable grouuds, might plead the facts which entitle him to such relief by way of defence: Provided, Such plea shall begin with the words, “ for defence on equitable grounds,” or words to the like effect.

Would the defendant, if he had not made such plea, and judgment had gone against him upon the issue of law, be entitled, upon the facts pleaded by him to relief against such judgment, by hill in equity and injunction ?

In Petty vs. Mays, 19 Fla., 652, it is said that “ an equitable right which might be available in equity cannot avail the defendant in ejectment as against the legal title.” The’ ■plea in that case was “ not guilty ” only. The question of pleading an equitable defence was not raised. What was said was in reference to the legal defence pleaded.

This plea, though not artificially drawn, alleges that the plaintiffs’ right, though in form a deed absolute, yet that it was given as a security for indebtedness and advances to be made by plaintiffs to defendant to carry on his business, that he objected to it in that form, but was told by plaintiffs that “ all they wanted was security,” and would give defendant “ a paper writing back, which they did ” the next day, and defendants have remained in possession of the premises, and the plaintiffs have only a mortgage interest, if any, in the property, under the circumstances stated.

Tf these circumstances were alleged in a bill to enjoin the judgment mentioned and proved, such judgment certainly ought to bo enjoined because the result of these facts is that the deed was given to secure the payment of money, and is therefore, by the rules of equity, only a mortgage, and the statute we have cited declares it to be a specific lien, and that the holder cannot have possession without due foreclosure, decree and sale ; while the judgment at law would give possession Avithout foreclosure and sale.

A plainer case for equitable relief can scarcely be imagined. If the plaintiff has only a specific lien on the property, though it is in form a deed in fee, it is not only inequitable but contrary to the plain words of the statute that he should obtain possession otherwise than by due foreclosure of the mortgage interest.

Any fact which clearly proves it to be against conscience to execute a judgment at law, of which the complainant could not have availed himself in a court of law, will induce a court of equity to enjoin the judgment. Marine Ins. Co. vs. Hodgson, 7 Cr., 832; 1 Story’s Eq. Jur., §887.

The Codes of Hew York, Wisconsin and other States allow equitable defences in suits elsew;here denominated remedies or actions at law, and they are held to include actions of ejectment. Our statute allows the defence on equitable grounds in any cause, in any court, in which the defendant would be entitled, to relief against the judgment if obtained at law. Heeessarily the courts to give effect to the statute must admit under the equitable plea such evidence as could be received to establish the facts if they were alleged in a bill in equity. In Despard vs. Walbridge, 15 N. Y., 374, 378, the court say, “that since the enactment of the Code of Procedure a defendant may avail himself of an equitable as well as legal defence in all cases, whatever may be the nature of the action, there would seem to be but little room for doubt,” citing Dobson vs. Pearce, 12 N. Y., 156; Crary vs. Goodman, id., 266. “That a deed absolute on its face was intended as a mortgage, would, before the Code, have been an equitable defence, because it could not have been proved at law. In order that it should now be made available in legal action, as provided by the Code, the evidence to establish it must be admitted in that class of actions.”

In Kent vs. Agard, 24 Wis., 378, it is said “ the plaintiff should have been allowed to show by parol that the absolute deed was intended as a mere security and was consequently only a mortgage. That this may be done in some form of action is not contested. And I see no reason why it may not be done in an action to recover the possession of real estate. When the facts are proved such deed is a mortgage only, both in law and in equity. The rights of the mortgager and mortgagee are precisely the same as though the defeasance were contained in the deed itself. The only difference is in the manner of proving the defeasance.” And see Murray vs. Walker, 31 N. Y., 399; Brick vs. Brick, 98 U. S., (8 Otto) 514.

“ The doctrine is that such evidence is not received to contradict an instrument of writing, but to prove an equity superior thereto.” Saunders vs. Stewart, 7 Nev., 200.

There is no apparent difficulty in arriving at the justice of the case by a trial of the facts under this plea in ejectment, for if it be shown to the satisfaction of the jury that the deed was intended at the time it was executed to be a security for the payment of money due or to become due, or to secure advances to be made by the creditor, they must find, for the defendant upon that deed ; and the creditor’s remedy must be to enforce his claim by a' foreclosure of the lien.

We therefore conclude that the court erred in striking out the first, “plea on equitable grounds.” The second equitable plea does not show a defence at law or in equity. It does not allege performance.

The appellant excepted to the ruling of the court in refusing to receive in evidence the “ judgment ” of the Circuit Court in the forcible entry and detainer proceedings. The court committed no error in this ruling. The judgment in those proceedings does not conclude the parties in ejectment, either as to the title or the question of mesne profits as damages. And it may be well to remark here that the “ record ” offered was not a complete record but only a portion of a record. It was not competent evidence. Stark and Wife vs. Billings, 15 Fla., 318; Greenl. Ev., §501, et seq. The whole record or an authenticated or sworn copy of the whole should be produced. The minutes or portion of the record here produced do not show the subject matter of the suit.

As to the rejection of the tax deed, whatever the object may have been in offering it, the court decided properly. It contained no description of any property which could be identified as the lot in question.

It is unnecessary to notice in detail the numerous assignments of error. What has been said sufficiently covers the whole case.

We suggest that the verdict in this record does not find what estate the plaintiff' had in the premises. This is required by the statute. Ch. 3244, Act Feb. 22, 1881; McClellan’s Dig., 481. And the judgment must correspond with the verdict in this particular. Ib.

Judgment reversed and new trial granted.