Borton v. Joslin

NOURSE, J.

Plaintiffs sued to have certain deeds, absolute in form, declared to be mortgages, for an accounting by defendants, for a conveyance of certain real property to plaintiffs and the quieting of their title thereto. The cause was tried before the court and resulted in a judgment for the defendants, from which the plaintiffs have appealed upon a bill of exceptions.

For some time prior to May 3, 1916, the plaintiffs were the owners of the property described in the complaint subject to an indebtedness of $22,000, secured by a trust deed. This property was the community property of the plaintiffs, although the deed thereto was made in the name of Laura E. Borton as sole grantee. Her husband, C. F. Borton, acting as her attorney-in-fact, represented to the defendants that it was her separate estate, and upon these representations he induced the Hammond Lumber Company on May 3, 1916, to accept a deed executed in her name alone conveying the property to the company as security for an indebtedness which was then due the company from the plaintiffs. Prior to April 10, 1917, the plaintiffs became indebted to certain claimants in the sum of $9,302.39 for work, labor, and materials in the construction of the Borton Apartments upon other property, the title to which also stood in the name of Laura E. Borton. These creditors were all represented by

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defendant C. E. Joslin, an attorney at law, and were at the time threatening to file liens upon the property upon which the Borton Apartments were being constructed. For the purpose of satisfying these creditors and saving the Borton Apartments from the cloud of liens which were about to be filed, the plaintiffs and defendant C. E. Joslin agreed that the plaintiffs should convey the property described in the complaint to the Title Insurance and Trust Company, subject to the encumbrances, in full satisfaction of the indebtedness owing the lien claimants, and that the latter, in consideration thereof, would release their claims on the building. In accordance with this agreement deeds were executed by Laura E. Borton and the Hammond Lumber Company to the Title Insurance and Trust Company, absolute in form, and purporting to convey to the grantee clear title to said property. At the same time plaintiff C. F. Borton, again acting as attorney-in-fact for his wife and representing her to be the sole owner of the property, gave directions in writing to the Trust Company by which it was authorized to sell the property for not less than $35,000 and from the proceeds of the sale to pay all fees, charges, expenses, and encumbrances against the property, and the surplus, if any, to C. E. Joslin, who was designated as sole beneficiary. At the time, of the execution of these documents an option was given to Laura E. Borton running to September 30, 1917, to purchase the property subject to all encumbrances of record for the sum of $10,200, which sum was estimated to be the total amount of the demands of the lien claimants, plus attorney’s fees to C. E. Joslin and interest accruing during the period of the option. As a part of this transaction the lien claimants waived in writing all claims of lien upon the Borton Apartments, accepting the equity in the property described in the complaint in full payment of their claims, and a receipt in full payment and discharge of all claims was given to the plaintiffs by C. E. Joslin, who acted throughout the transaction as attorney for the lien claimants only. Up to the time of the expiration of the option plaintiffs endeavored to find a purchaser for the property, but were unsuccessful in this and on October 5, 1917, the trust company notified them in writing that their option had expired and that all their rights thereunder had ceased. Beyond their efforts to secure