1022 UCKER v. WATSON. [169 UCKER v. WATSON. r; Opinion delivered December_ 7,•1925.„ 1. MOBTGAGES-DEED ABSOLUTE IN FORM .—While : oral eVidence is - admissible : US show that a deed absolute in forth was . intended as a mortgage, the intention of the parties will govern : its , con-. struction and . enforcement. , _MORTGAGES—DEED ABSOLUTE IN FOAM deed 'absolnte : in form will not' be COnstrued to be a mortgage, thongh a *contemporaneons Contract provided : that the several lots conveYed s mighf 'be repur : chased by' the grantor within a year 1* , paying certain Sums, • where : both parties testified that the deed and .contract expressed their intention. Appeal from Washington Chancery Court ; SaM Chancellor ; reversed. 11. L. Pearson, for appellant. J. V. Walker, for appellee. • MCCULiocH, C: J. Appellee, Charles A. Watson.; was . the OWner of 'certain lotS in the city *or FayetteVille, and on April 5, 1922, he conveyed thenr t6 apPellants, W. E: Ucker and A. C.*Ucker, by deed in' absOlUte . form' purporting to convey the title iii fee siMple. The Pres-
rUCKER: V. WATSON. 1023 erit controversy, arises cOncerning the effect ;of the deed; whether it is:to be construed as a conveyance of the title of the Jots in fee. simple; or as a mortgage in connection with a 'written : contract between. the parties; entered into prior, to the e) . Tecution -of the deed., Appellee.first execnted two ;mortgages. to, appellants to :secure . dets :aggregating' $1,0,00. , The two mortgages c.onvoyed 44•of. the lots described, in a ;contract entered into between the parties on March 30,4922; ;which said contract, omitting caption, etc., reads as follows: CliarW A 1Watsbn, firSt. PartY, t . ' r grees, to deed 'to the' tcker :Bros:;:the folloWifig RAS; 'all Gunter 's 'Addition to the citY of Fayetteville,:ArkansaS; fo7 wit: lots 1, 2, .5 and 6, blOck 8, and lot 0 arid ihe south hif Of let kbloCk''eleren that the -Itckei-'BrO'S: byA. O." t ' eker,. . for hini;Seli and Under power of 4iisc4.40 for W. E. teker, agreeS'to the felloWingY That On PAYment by the said Chas. A. Watson to A C.'Ilicke i r . on .or hetol"-e lu • n e 1 ; ' . 1922 ' of $15 1; of 'aforesaid 'additiori • 0 to release lotS' 1 bleek 'from the , mort . g 1 a • g e • h -; eld by Ueker Bros found in redord 159 on page;82 of Vashirit;-- ten,Countr, , Arkansas, records, and on pay-ment by,Chas.. A. 1) vatson 'likewise of $200 on Or before June 1, 1922; to ' releaSe , iet 6 arid the South half of :let: 5, 'bio;Cle"11, afoi. esk , id , , fro . m the , iniortgage held bY . tcker 'Bros., foi:id in record 147 . on page 611, Wa'Shington CiountY recordS; , Aiia te tfeed said 'lot . 'and one-half to ChaS.' A. Watsen iiee` Of 'Said mortgage; that likewiSe . the teker Brothers agree to give Chas. A. Watson, first Party, one year froUi P Aprir ic'1922 ; ' ' to seli 'lots 1, 2; . 5 and 6; lalock 8', said 'addition,' and likewise agree that eacli'of the t 4 lot§ , last-meritioried- th . e likewise to be regarded1;asOf equal value; , and that, if Chas. 'A Watsori at any .tiriie within; the;year 'from April 1, 1922, shall Sell twO ormore of Said lots - jUst mentiOned, they shall he released; . arid deeded to said firSt party on' payment of theii Propior,, tional ! Value of ; what is then due; that i to say;' said lots 1 and' 2; block ; 8, 'shall be released froM Mortgake found in record 152 on page 82, -and 5 and bloa • 8;
1024 IJCKER 2). WATSON. [169 likewise from : mortgage in record 147, on,page 611; Wash-ington : County xecords, and the same shall then on:pay. merit mentioned -be deeded 'by -A.: C. ITcicer to Chas. A. WatsOn free : of said-mortgages. 'And it is agreed that, in case any of these '4 lot& held 'one year are not sold at that ! titne -;- they 'are , ito. 'be ; the' ptnpetty ! in fee )simPle of the 'IJcke'r' BrOs.; 'and -the Clebt'IS to be ! disCharged. )• hi-terest is to' be compounded yearly and tint qUarterlyi•on ihe principal:note?' • PurSii'ant to " ilia .cOntraet; 'appellee executed a deed tO appellants' on:April. : 5, 1922, conveying the lots which the cOnfractr,Speeified. should . be . deeded; td-wit lots 1,“2, 5' and' '. 6, blOCk -8,: and 'hit 6, .and _the ,sonth half Of lOt" . 5::in blO'Cli 11 anbseqUently atip'ellee amid rants. tIVSilna . " Of 0_50, and lotS f 'and: of blOck 1 'Were ielased iioM the Mbrtga:ge in .ae C ' ord'ance with tbe :con-tiaCt; and.appellee also paid to appellants the suM Of ati'd 'the tots in ibloclt 1 . 1Were released as prOVieled in; th6' , 0'ntract, Aippelleejaiieci to sell the other fonr lots iSpecified in the contract within the time MentiOned oi to:" to . ay 'for the'same, and; ' 'aS . befoie: Slated the controversy :between the . ilartieS , noW is (whether . the deed Slicnild be tre'ated aS a mortgage, or as an absblute con-Veyailce: The Chancery cOnrt held:that' the d ' eed ancl eon-tra4,, when read together, 'conStituted a mOrtgage and Offered tO 'dCeree . a . foreelosnre, 'but" apPelfants declined • tO .accept such" a decree and insist upon having the abr solut , e title deere • e d to theM Thelcontroversy . mu:st.h 4ccide& upon; the f ace . of , the papers, for each ,of the parties expressly: disclaims , any.intention other than that . expressed in those instruments,,of writing. Each of . them testified as :witnesses in the , ;ease,and very candidly , admitted that ,at the time of . this _transaction between them they had no ; idea that a : deed : absolute,in form could, under any,circumstances, be treated as a mortgage, and that they had no Intention other Allan that expressed in r the written record , of the transaction between them.
ARK.] UCKER V. WATSON. 1025. The testimony introduced in the case establishes the fact that at the time the deed was made the , lots were worth not exceeding $400 1 which was substantially the amount of the balance of fhe original debt after all payments : had been made. In analyzing the contract and its relatiOn to the deed it must be remembered that lots 1 and 2 in block 2 are not conveyed in this deed, but were einbraCed in. 'one of the mortgages'. There being no absolute conveyance of these,. and-no release from the mort-. gage prior to the payment of the $150 as specified in the contract,.they were left subject te the mortgage, and tbe fact that theY remained Tinder 'Mortgage lien does not affect the interpretation to be placed on the conveyance-of. the 'other' lot. Appellee paid. the suth mentioned, and these two lots were released from the Mortgage.; thereL fore that part of the transaction has no bearing upon this controversy. The lots -in block 11 were in the conveyance, and also in . the original' mortgage, but 'the amount of $200 specified in the contract was paid, and those two lots were deeded back to appellants as provided in the contract: Neither does that transaction have any bearing on the controversy, because the contract expressly provided for a reconveyance of the property. It is insisted by counsel for appellee that the language of the Court necessarily characterizes the -transaction . as a continuatien of the original mortgage', and not .s a contract for sale and reSale: Stress is laid on the concluding clause of the contract, which reads that, iii . case the four lots are-not sold within the year `‘ they are to be the . property'in fee simple of 'the, -Ucker Brothers and the debt is to be' discharged. The Whole tenor of the contract was that the amount:of the original debt should be paid. This was the . consideration Upon . which appellee. was to have a reconveyance of the property,' and the conclUding language' of the -contract was merely descriptive of this debt, and does not show any intention to treat the conveyance as a. Mortgage instead of an absolute conveyance of the ;title according to the import of . the
1026 UCKER V. WATSON. [169 deed itself. The contract provides for the conveyance by appellee to appellants, and merely specifies the terms upon which reconveyance may be had. This of . itself constitutes a sale on condition, and not a mortgage. The existence of the original debt was continued only for the purpose of providing 'the terms upon which' there should be a reconveyance by appellants to appellee, and the fact that the original debt was thus used in the transaction does not convert the deed . into a mortgage. We have often held that oral evidence is•admissible to show that a deed absolute in form was intended as a mortgage, and that the true intention of the.parties to the transaction will govern its construction and enforcement. Wimberly v. Scoggin, 128 Ark. 67; Snell v. White, 132 Ark. 349. In the present , case . the real inten-, tion of the parties as shown by the .undisputed evidence was in accord with the express language of the deed, which was absolute in terms ; for, as we have already seen, both parties testified that they intended just what was expressed in the language of the deed and contract— nothing more and nothing less. The fact that certain partial payments were made by appellee to appellants, and the acceptance thereof by appellants during the year specified in the contract, has no bearing upon the construction of the deed and contract for the reason that appellee had the legal right to make payments and appellants were bound to receive them. It is true the contracts provided for the sale of these lots by appellee during the year specified, and that, when one or all of them should be sold, appellants would reconvey them, but the gist of this provision was that appellee should have the lots back upon payment of the proportionate part of the original debt. The fact that they were to be reconveyed to the purchaser was a mere incident,, and appellee had the right to pay the proportionate part specified, and have. the lots reconveyed to himself. . Our conclusion is that the' chancery court erred in holding that the deed should be construed as a mortgage.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.