Wagg v. Herbert

This was a suit commenced on June 13, 1903, in the district court of Pawnee county, Oklahoma, by William H. Herbert and Mary B. Herbert, his wife, against a number of defendants, the principal one being Solomon R. Wagg, the appellant. The suit was one to have a certain conveyance, in form conveying the legal title to a tract of land from Mrs. Herbert to Wagg, adjudged void, as having been fraudulently obtained, and to redeem the property from a prior mortgage lien. An outline of the transaction between the Herberts and Wagg is as follows: On October 26, 1898, they borrowed from him $1,000, and gave their promissory note, payable in one year, with interest after maturity at 10 per cent per annum, and as security therefor a mortgage on 80 acres belonging to her, and adjoining the town of Cleveland, in the county of Pawnee. Wagg retained $100 as interest for the first year, and sent the mortgagors $900. At the same time, as required by him, the plaintiffs executed to him a warranty deed for the same real estate, which was left in the bank of Cleveland in escrow as security for the note and mortgage. In closing this transaction he wrote to one of the plaintiffs a letter, in which he said: 'This pays first year's interest, second year's interest is not due until the end of the second year, and six months' grace on end of this makes a full two and a half years before you allow, or I can ask for, the deed in case of default of contract.'

On December 26, 1899, he withdrew the deed in escrow from the bank, and caused it be filed and recorded in the office of the register of deeds of Pawnee county. His excuse for this was that not merely was $100 due as interest, but also that there was a default in the payment of taxes for the year 1898, and that, to protect the property, he had been obliged to pay them, amounting to $24.94, with accrued penalty and costs. Notwithstanding he had taken and recorded this deed, which apparently transferred to him the legal title, he advised Mrs. Herbert that she might still redeem the land according to the terms of the original loan. In May, 1901, the parties, who had been talking of a settlement for some time, executed two deeds, one for Mrs. Herbert, her husband having left for parts unknown, to the defendant, of the entire 80 acres, and one from him to her of 25 acres. Thereafter this defendant platted the 55 acres as an addition to the town of Cleveland, and sold and conveyed lots to the other parties named as defendants.

In the second amended petition, the one upon which the case was tried, plaintiffs alleged that the defendant Wagg was guilty of fraud and oppression, and, taking advantage of his position and the relationship of the parties, obtained for a grossly inadequate consideration the title to the 55 acres; that, after platting, he conveyed some lots 'to innocent purchasers, the exact lots and amounts received for which are not known to the plaintiff, but which amount to a large sum of money;' that he had not accounted for the moneys so wrongfully received, and that an accounting was necessary.

The case was tried by the judge without a jury. Several hundred pages of testimony were taken, and on May 19, 1905, a decree was entered finding generally the issues in favor of the plaintiff, Mrs. Herbert, the death of whose husband had been suggested pending the suit, adjudging that the deed of May, 1901, from her to the defendant, was a mortgage, that an accounting be had, and that she be allowed to redeem. The case was reserved for further consideration and determination of the claims of, and an accounting with, the other defendants. This decree was, on October 12, 1907, affirmed by the supreme court of the territory (19 Okla. 525, 92 Pac. 250), all the defendants joining in the appeal to that court. Thereafter the case was brought here on appeal by the defendant Wagg, the other defendants not joining in the appeal, but named as parties appellees.

Mr. Arthur J. Biddison for appellant.

[Argument of Counsel from pages 548-550 intentionally omitted]

Watson E. Coleman and E. M. Clark for appellees.

Mr. Justice Brewer delivered the opinion of the court: