Under the practice in Montana, a defendant may move for a
nonsuit upon the ground that the plaintiff has failed to prove a
sufficient case for the jury; but if he proceed to put in
testimony, he waives this right.
When one party has been permitted to state his understanding of
the contracts which form the subject of the litigation, there is no
error in giving a like license to the other party.
An exception cannot be taken to "a theory announced throughout"
an instruction of the court.
A general exception to a refusal of a series of instructions
taken together and constituting a single request is improper, and
will not be considered if any one of the propositions be
unsound.
When a grantor makes an absolute deed of real estate for a money
consideration paid by the grantee to the grantor, and the grantee
at the same time executes and delivers to the grantor an agreement
under seal, conditioned to reconvey the same on the payment of a
certain sum at a time stated, and there is no preexisting debt due
from the grantor to the grantee and no testimony is offered
explanatory of the transaction, it is for the jury to determine
whether the parties intended the transaction to be an absolute deed
with an agreement to reconvey, or a mortgage.
Teal v. Walker, 111 U. S. 242,
distinguished from this case.
Wallace v. Johhnstone, 129 U. S.
58, held to decide that, in the absence of proof in such
case "of a debt or of other explanatory testimony, the parties will
be held to have intended exactly what they have said upon the face
of the instruments."
Page 149 U. S. 18
This was an action at law instituted by Henry Gassert, Jacob
Reding, and James H. Steele, as plaintiffs, against Gustavus Bogk,
as defendant, upon a lease of certain premises in the City of
Butte, and also certain mining claims in Silver Bow County, wherein
plaintiffs prayed judgment against defendant for the restitution of
the premises, and for damages for the detention thereof at the rate
of $500 per month.
The facts of the case are substantially as follows:
Gustavus Bogk, the defendant below, was the owner of a lot of
ground in Butte City, Montana, upon which stood a public house
known as the "Virginia Chop House." He was also the owner of some
mining claims, five in number, located in Summit valley, Silver Bow
County, Montana. Having become involved in debt and unable to hold
the property, on May 19, 1885, he sold and conveyed by deed in fee,
duly executed, an undivided half interest in the property to James
H. Steele, one of the plaintiffs, for the sum of $7,500, and, upon
the same day, by another similar deed, he sold and conveyed the
other half interest to Gassert and Reding, the other plaintiffs,
for a like sum. These two amounts were paid to Bogk, and disbursed
under his direction. By a separate and independent instrument in
writing of the same day, the plaintiffs, Gassert, Reding, and
Steele, agreed to reconvey the property to Bogk if on or before the
end of one year thereafter he would pay to Steele the sum of
$8,967.50, and to Gassert and Reding a like sum. This sum of
$17,935, in the aggregate, was the purchase price of the property,
$15,000, with interest compounded thereon monthly for one year. The
agreement of reconveyance recited the previous sale of the
property, but made no mention whatever of any loan of money.
Two days afterwards -- namely, on May 21, 1885 -- Bogk took a
lease of the property from Gassert, Reding, and Steele for the term
of one year at a nominal rent of $450, payable on or before
December 1, 1885, with a privilege of working the mines for his own
use and benefit. Bogk never offered to repurchase the property or
tendered to the plaintiffs the sum of $17,935, or any other
sum.
Page 149 U. S. 19
Under this condition of things, the lease having expired,
plaintiffs, demanded possession of the property, and, upon the
refusal of Bogk to comply with the demand, brought action before a
justice of the peace under a statute of Montana providing for
summary proceedings against tenants holding over. Upon a plea of
title interposed by Bogk, the suit was transferred to the district
court of the proper Judicial District in accordance with the
requirements of the statute, and was there tried before a jury.
Plaintiffs proved the deeds of conveyance, the agreement to
reconvey, the lease by them to Bogk, the rental value of the
property, and then rested. Notice to quit and failure to surrender
the premises had been averred in the complaint, and, not being
denied by the answer, under the provisions of the Code of Procedure
in Montana, were taken as admitted. Thereupon counsel for defendant
moved for a nonsuit upon the ground that the plaintiffs had not
shown that they were ever entitled to the possession of the
premises or that the defendant had entered into possession under
the lease, or that notice to quit or demand for the surrender of
the premises had ever been given to defendant. The court overruled
the motion for a nonsuit, and defendant excepted. The trial
thereupon proceeded, and defendant introduced witnesses showing the
value of the city property to be from $18,000 to $25,000, and the
other property to be from $22,000 to $25,000, making in all the
lowest estimate at $40,000, and the highest at $50,000; that the
negotiations commenced for a loan; that the object was to raise
money to pay off mortgages, judgments, liens, etc., upon the
property; that plaintiffs never had possession of any of it; that
interest was computed upon the amount advanced; that the lease was
given to secure the representation of the mining property, and pay
the taxes, and that the transaction was intended as a mortgage.
Plaintiffs thereupon introduced certain evidence in rebuttal,
and the jury returned a verdict for the plaintiffs, awarding them
restitution of the property, and $2,175 as rent of the premises
from May 21, 1886. Upon this verdict judgment was entered, the case
appealed to the supreme court of the
Page 149 U. S. 20
territory, and the judgment affirmed. Defendant thereupon
appealed to this Court.
Page 149 U. S. 22
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
The action in this case was upon the lease of a city lot and
certain mining claims, and a judgment was demanded for the
restitution of the premises and for damages for detention. The
answer set forth, in substance, that the lease was one of a series
of contemporaneous agreements, consisting of two deeds, an
agreement to reconvey, and a lease; that the deeds were intended as
a mortgage, and that the rental of $450 named in the lease was the
amount which it was understood would be necessary to pay the taxes
upon the property and the annual assessment work upon the mining
claims, and that, upon payment thereof by defendant, Bogk, the
object of the lease should be fully satisfied and discharged; that
the defendant paid this sum, and that the said lease became void
and of no binding force.
The trial took place before a jury, and the assignment of error
relates to the rulings of the court made in the course of such
trial. We proceed to consider them in their order.
1. That the court erred in overruling defendant's motion for a
nonsuit. In this connection, the bill of exceptions shows that the
plaintiffs put in evidence the deeds from Bogk and wife to the
plaintiffs, the agreement to reconvey, the lease, with oral
testimony of the rental value, and then rested. Defendant thereupon
moved for a nonsuit upon the ground that plaintiffs had failed to
prove that they were ever at any time in, or entitled to, the
possession of the premises; that
Page 149 U. S. 23
defendant ever entered into possession under or by virtue of
said lease, and that plaintiffs totally failed to prove a demand to
have been made for the possession of the premises, or ever served
or gave notice to quit upon the defendant. This motion was
overruled. Defendant excepted and proceeded to introduce testimony
in defense.
The practice in Montana permits a judgment of nonsuit to be
entered "by the court, upon motion of the defendant, when, upon the
trial, the plaintiff fails to prove a sufficient case for the
jury." Without going into the question whether the motion was
properly made in this case, it is sufficient to say that defendant
waived it by putting in his testimony. A defendant has an undoubted
right to stand upon his motion for a nonsuit and have his writ of
error if it be refused, but he has no right to insist upon his
exception after having subsequently put in his testimony and made
his case upon the merits, since the court and jury have the right
to consider the whole case as made by the testimony. It not
infrequently happens that the defendant himself, by his own
evidence, supplies the missing link, and if not, he may move to
take the case from the jury upon the conclusion of the entire
testimony.
Grand Trunk Railway v. Cummings, 106 U.
S. 700;
Accident Insurance Co. v. Crandal,
120 U. S. 527;
Northern Pacific Railroad v. Mares, 123 U.
S. 710;
Union Insurance Co. v. Smith,
124 U. S. 405,
124 U. S. 425;
Bradley v. Poole, 98 Mass. 169;
Columbia & Puget
Sound Railroad v. Hawthorne, 144 U. S. 202.
2. The second error assigned is to the admission of the
conversation of the parties at the time of the execution of the
instrument. Exception was duly taken upon the trial to the
admission of this testimony. This exception does not seem to have
been incorporated in either of the bills of exceptions, but in a
"statement on appeal," which appears to have been settled and
signed by the judge in the same manner as a bill of exceptions, and
to have been treated as such by the supreme court of the territory.
The Code of Civil Procedure of Montana provides (sec. 432) for a
statement of the case to be used on appeal, which shall state
specifically the particular errors
Page 149 U. S. 24
or grounds upon which the appellant intends to rely, and which
seems to take the place of an ordinary bill of exceptions. Under
this Code (sec. 628),
"when the terms of an agreement have been reduced to writing by
the parties, it is to be considered as containing all those terms,
and therefore there can be between the parties, and their
representatives or successors in interest, no evidence of the terms
of the agreement, other than the contents of the writing, except in
the following cases: first, where a mistake or imperfection of the
writing is put in issue by the pleadings; second, where the
validity of the agreement is the fact in dispute. But this section
does not exclude other evidence of the circumstances under which
the agreement was made, or to which it relates, as defined in
section 632, or to explain an extrinsic ambiguity, or establish
illegality or fraud. The term 'agreement' includes deeds and wills,
as well as contracts between the parties."
In this case, Bogk had been called upon as a witness for
himself, and testified that he had applied to these parties for a
loan, not a sale; that he wanted money to pay off parties whom he
owed; that he first spoke to Gassert or to Steele, but there was a
dispute whether he should pay one percent or one and a half
percent,
"but it should have been made in a deed with a bond to me for a
deed back again to me. I wanted it for a year, to pay off these
parties, and give them a mortgage for it. That was the first
agreement."
But the plaintiffs demanded a deed with an offer to give a bond
for a deed back again,
"so you can release it -- pay it off at any time. . . . Steele
and Harry Gassert said this to me; said, 'We want a deed, but will
give you a bond to convey back at any time.' . . . At the time of
the negotiation of this loan, I promised to repay the $15,000 to
the plaintiffs just as soon as I made a sale of my mines. I had
these mines, so that I thought I could make a sale of them, and
calculated to pay it that way. I promised to pay it inside of a
year. The interest was put altogether for a year, but I agreed to
pay this interest every month, but through my sickness, and bad
luck I had, I could not succeed, and could not pay it. The
agreement was this way: if I should pay the interest, they should
give me a
Page 149 U. S. 25
written paper and credit for the amount, if it was paid in
installments as agreed between us. This lease, which was read in
evidence, was made to secure the representation of two of my mining
claims, the Eva and Leaf, which were then unpatented, and to secure
the payment of the taxes on my property, which would probably be
$250, and $200 for representing, making in all $450, which this
lease was given to secure and nothing else; which representation
work I did for that year, 1885, and I have paid the taxes. . . .
There was nothing at all said in these interviews between me and
plaintiffs or their agents or attorneys as to the sale of my
property. They said, give them a deed and they would give me a bond
for a deed back again. The negotiation between us was to loan me
money. There was no price set to any piece or pieces of this
property. It was a loan on all the property together. They made me
no proposition pending these negotiations to purchase my property,
to buy it of me."
In rebuttal, Steele and Gassert were put upon the stand and
asked as to the conversation which took place at the attorney's
office at the time the deeds and contract to reconvey were made.
This conversation was admitted, and defendant excepted. Now while
this might have been improper as original testimony, it would have
been manifestly unfair to permit Bogk to give his version of the
transaction, gathered from conversation between the parties, and to
deny the plaintiffs the privilege of giving their version of it.
The defendant himself, having thrown the bars down, has evidently
no right to object to the plaintiffs having taken advantage of the
license thereby given to submit to the jury their understanding of
the agreement. The Code is merely in affirmance of the common law
rule, and was evidently not intended to apply to a case of this
kind.
3. Error is also imputed to the court
"in adopting the theory announced throughout the instruction
given on the part of the defendants [in error] that the transaction
could not amount to a mortgage unless there was a personal
liability on the part of the plaintiff [in error, defendant below]
upon which a recovery could be had, and error in giving
conflicting
Page 149 U. S. 26
instructions upon said matter."
This assignment is obviously too general. No exception was taken
to any "theory" announced by the court, but if there were it would
not be valid, since the theory of the court must be expressed in
particular language, and the exception should be taken to such
language. Different persons may derive different theories from the
same language, and in this very assignment, error is charged in
giving conflicting instructions upon the same matter.
4. Error is also assigned in not giving either of the
instructions 2, 6, and 7, as requested by defendant. Upon the
trial, the court was requested by the plaintiffs to give, and did
give, seven instructions, to which defendant excepted; but as no
error is assigned here upon such refusal, we are not at liberty to
consider them. Defendant also requested twelve instructions, all of
which were given, except the second, sixth, and seventh, "to which
action of the court," says the bill of exceptions,
"the defendant then and there objected for the reason that said
instruction numbered two, six, and seven correctly state the law as
applicable to the facts in evidence, and are necessary in order
that the jury may arrive at a correct conclusion; but
notwithstanding said objection, the court refused to give said
instructions two, six, and seven, to which action the defendant, by
his counsel, excepted,"
etc.
This exception, as well as the one taken to the granting of the
plaintiffs' requests, is open to the objection, so often made, that
a general exception taken to a refusal of a series of instructions
taken together, and constituting a single request, is improper and
will not be considered if any one of the propositions be unsound.
Johnston v.
Jones, 1 Black 209,
66 U. S. 220;
Rogers v. The
Marshal, 1 Wall. 644;
Harvey v.
Tyler, 2 Wall. 328;
Beaver v. Taylor,
93 U. S. 46;
Worthington v. Mason, 101 U. S. 149;
Moulor v. American Life Insurance Co., 111 U.
S. 335. This is not only the rule in this Court, but
also in the courts of Montana,
Woods v. Berry, 7 Mont.
195, although, since this case was decide and at a session of the
legislature in 1887, the law was changed so that the giving or
refusal to give instructions are deemed excepted to, and no
exception need be taken.
Page 149 U. S. 27
The first of these instructions, No. 2, stripped of its
verbiage, assumes that an absolute deed and a separate written
contract to reconvey, both under seal, bearing even date, executed
and delivered at the same time, between the same parties, and
relating to the same land, the agreement to reconvey being
conditioned upon the payment by the grantor to the grantee of a
certain sum of money within a certain period, constitute in law and
fact a mortgage, and will not convey any interest in the premises
or entitle the grantee to the possession of the land described.
There is undoubtedly a great conflict of authority upon this
point. The case of
Teal v. Walker, 111 U.
S. 242, is relied upon as sustaining this position. In
this case, one Goldsmith borrowed of Walker $100,000, and gave his
note therefor. At this time, Goldsmith was the owner of certain
lands in Oregon, and he and Teal were the joint owners of certain
other lands. These parties executed three several deeds of these
lands, absolute on their face but intended as a security for the
note, as appeared by a defeasance in writing executed upon the same
day as the note. This instrument, after reciting the execution of
the note, declared the legal title of the lands conveyed to be in
trust, that Teal and Goldsmith should return possession of the
lands until said note should become due and remain unpaid thirty
days, and, upon default being made in the payment of such note,
they would surrender the lands to Hewitt, the trustee in the deed,
who should take possession of them, and, upon thirty days' notice
in writing, should sell the same at public auction. These
instruments were construed to constitute a mortgage. In delivering
the opinion of the Court, Mr. Justice Woods said, p.
111 U. S.
247,
"The execution of all the deeds, and the execution of the
defeasance, which applied to all the deeds, occurred on the same
day, and was clearly one transaction, the object of which was to
secure the note for $100,000 made and delivered by Goldsmith to
Walker."
Here it will be observed that there was a debt, a note, a deed
absolute on its face, and a defeasance conditioned upon the prompt
payment of the debt.
The case of
Wallace v. Johnstone, 129 U. S.
58, is
Page 149 U. S. 28
more nearly in point. The petition in this case alleged that
defendant. Wallace, by deed of warranty, conveyed certain lands to
plaintiffs and one Leighton; that on the same day, the grantees
delivered to defendant Ford a contract in writing giving him the
option for sixty days of purchasing the land in question upon
payment of the sum of $5,876, which contract on the same day was
assigned to Wallace. Neither of the defendants ever paid anything
on the lands, and neither exercised the option of repurchasing, and
their rights had thus become forfeited. Defendant answered,
admitting the deed and contract but alleging that, taken together,
they were understood by the parties as constituting a mortgage for
the security of the money received by him at that time, which was
in reality a loan, and that the transaction was to avoid the effect
of the usury laws of Iowa. He therefore prayed for a right to
redeem. In delivering the opinion of the Court, Mr. Justice Lamar
said:
"If this question could be determined by an inspection of the
written papers alone, the transaction was clearly not a mortgage,
but an absolute sale and deed, accompanied by an independent
contract between the vendee and a third person, not a party to the
sale, to convey the lands to him upon his payment of a fixed sum
within a certain time. Upon their face there are none of the
indicia by which courts are led to construe such
instruments to be intended as a mortgage or security for a loan;
nothing from which there can be inferred the existence of a debt,
or the relation of borrower and lender between the parties to the
deeds, or between the parties to the contract. . . . A deed of
lands, absolute in form, with general warranty of title and an
agreement by the vendee to reconvey the property to the vendor or a
third person upon his payment of a fixed sum within a specified
time, do not of themselves constitute a mortgage, nor will they be
held to operate as a mortgage, unless it is clearly shown, either
by parol evidence or by the attendant circumstances, such as the
condition and relation of the parties, or gross inadequacy of
price, to have been intended by the parties as a security for a
loan or an existing debt."
The purport of this case is that, in the absence of proof of a
debt
Page 149 U. S. 29
or of other explanatory testimony, the parties will be held to
have intended exactly what they have said upon the face of the
instruments.
In the case under consideration, there is no mention made in
either of the three instruments of a debt, a loan, a note, or
anything from which the relation of borrower and lender can be
inferred, and the case in this particular is distinguishable from
that of
Teal v. Walker, and is more nearly analogous to
that of
Wallace v. Johnstone. It is true that in
Wallace v. Johnstone, there was a deed with the usual
covenants of warranty, and that the contract to reconvey was made
with a third person; but, as the contract was immediately assigned
by such third person to the grantor in the deed, it is not
perceived that the case is affected by either of these
circumstances. The inadequacy of price was undoubtedly great, but
this would not of itself authorize the court to take the question
from the jury. In this connection, it might be reasonably urged
that defendant, having not only made an absolute deed of the
premises, but having, two days thereafter, taken a lease of the
same from his grantees, was thereby estopped to deny their title,
but we do not find it necessary to express an opinion upon that
point. The case was evidently a proper one to go to the jury, who
were left to determine the question whether the instruments were
intended as a mortgage and were instructed that if they found them
to be such, the plaintiffs could not recover. The case seems to
have been fairly tried, and the defendant has no just cause for
complaint.
In the second of these instructions, No. 6, the defendant
requested the court to charge
"that if the jury believes from the evidence that the defendant
was induced to sign and execute the alleged lease in evidence
herein by the deceit, misrepresentation, trick, or fraud of the
plaintiffs, or that the defendant executed the same by and under an
innocent mistake or misapprehension as to the facts, then said
lease is invalid and void, and you will find for the
defendant."
As there was no evidence in the case of deceit or
misrepresentation or fraud, or even of the fact that the defendant
executed the instruments under a mistake of fact, the request was
properly
Page 149 U. S. 30
refused. All his evidence amounts to is that he wanted a loan of
money, and that the plaintiffs insisted upon a deed and an
agreement to reconvey, instead of a mortgage. But defendant did not
claim to have been imposed upon, deceived, or defrauded, and he had
no right to a request based upon this hypothesis.
The disposition we have made of these requests renders it
unnecessary to consider the other, and the judgment of the court
below is therefore
Affirmed.
