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Merrick v. Daehler

APRIL 25, 1972.

EDWIN W. MERRICK, AS EXR. OF ESTATE OF PAULINE M. EVANS, DECEASED, ET AL., PLAINTIFFS, COUNTER-DEFENDANTS AND APPELLEES,

v.

FLORENCE DAEHLER, DEFENDANT, COUNTER-PLAINTIFF AND APPELLANT.



APPEAL from the Circuit Court of Lee County; the Hon. JOHN S. GHENT, Judge, presiding. MR. PRESIDING JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:

This appeal questions whether the grantee in a deed given as security in the nature of a mortgage has effected a change in prior title by a conveyance after repayment of the debt.

Edwin W. Merrick, as executor of the Last Will and Testament of Pauline M. Evans, Deceased, and Elizabeth Bales, a residuary beneficiary under the will, sued to eject the defendant from the premises on which she resided, and to quiet title in the Estate. The defendant Florence Daehler counterclaimed, asking that the deed divesting her of any interest in the property be declared a mortgage release. She also claimed homestead, and sought reformation of the later divesting deed.

The property was acquired in 1951 by Ray Evans and Pauline Evans, his wife, in joint tenancy. In 1954 Pauline Evans conveyed her interest to her son Robert Daehler. In April of 1958 Ray Evans was divorced and conveyed his interest to Pauline Evans and Robert Daehler as joint tenants. Florence Daehler married Robert in September of 1958. In October of 1958, Pauline Evans (then owner of one-half interest in the property jointly with Robert Daehler), and Robert Daehler (then owner of the one-half interest in the property as a tenant in common with the joint interest in the remaining half), executed a deed to Dement Schuler.

It is undisputed that the deed to Schuler, although absolute in form, was taken as security for the construction of a home on a portion of the premises. Because of difficulties between Florence Daehler and Pauline, the new house was to be built for Mrs. Evans to live in, with Florence to live in the original home. Simultaneously, the parties entered into a printed form contract titled "Articles of Agreement for Warranty Deed Installment Contract" with Schuler. In this agreement Schuler and his wife were designated as "seller" and "Pauline Evans, Robert O. Daehler, and Florence Daehler, wife of Robert O. Daehler" were designated as "purchaser". The contract provided for the payment of $2,400, plus interest, in monthly installments. It also contained the following typed provision:

"In case of the death of Pauline Evans or Robert O. Daehler, prior to the delivery of the deed, the survivor may complete the payment and shall be entitled to a deed. If both purchasers are living when payments are completed, deed shall be made to both as joint tenants and not as tenants in common."

The printed portion of the agreement included the usual provision that,

"If there be more than one person designated herein as `Seller' or as `Purchaser' said word or words * * * although expressed in the singular shall be read and construed as plural."

The contract was fully paid on March 8, 1960. Schuler and his wife then executed a deed to Pauline Evans and Robert O. Daehler, as joint tenants, purporting to comply with their understanding of the contract.

Robert Daehler died in 1969. Pauline Evans died in 1970. Florence Daehler was not mentioned in the will.

The court found, in a memorandum opinion, that the original conveyance was a "security transaction in the nature of a mortgage" for redemption purposes, but that it differed from a common law mortgage and, in fact, conveyed a title which the grantee could reconvey as agreed upon by the parties as distinguished from a release. He held that the deed conformed to the agreement and the intent of the parties, construing "both purchasers" as referring to only Pauline Evans and Robert Daehler. The court decreed that title be quieted in the plaintiffs and that they have possession.

In this appeal, Florence Daehler argues that a security transaction gives the mortgagee no title, but only a right to release the security. Therefore, she claims that she is entitled to the undivided one-half interest as tenant in common of the premises which her husband had prior to the conveyance to Schuler. Alternatively, she argues that a proper construction of the reconveyance to "both" purchasers as joint tenants; and that a proper interpretation of the agreement would show that Florence Daehler was included as a purchaser, concluding that the reconveyance deed should be reformed because of the mistake.

In arguing first that the Schulers could convey no title as they purported to do by the reconveyance deed dated March 8, 1960, but could only release the mortgage, Florence Daehler cites the provisions of Ill. Rev. Stat. 1959, ch. 95, par. 13,

"Every deed conveying real estate, which shall appear to have been intended only as a security in the nature of a mortgage, though it be an absolute conveyance in terms, shall be considered as a mortgage." *fn1

Florence Daehler argues that the statute cannot be restricted by making a distinction between common law mortgages and equitable mortgages. (DeVoigne v. Chicago Title & Tr. Co. (1922), 304 Ill. 177, 182, 183; Osborne on Mortgages, Sec. 77, page 87.) Based upon this conclusion, she further cites cases holding that a conveyance by a mortgagee cannot effect the previous status of title (Willhite v. Berry (1908), 232 Ill. 331, 334; Lightcap v. Bradley (1900), 186 Ill. 510, 522-523; and cases which stand for the proposition that a mortgagee has only a lien ...


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