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CONAWAY v. THOMAS

Oklahoma Supreme Court1924-04-01No. No. 13225
101 Okla. 227

Summary

Holding. The judgment of the trial court is affirmed. The court upheld the trial court's finding that Conaway, as mortgagee in possession, was guilty of gross negligence in managing the property and therefore could be charged with reasonable rental value in addition to actual rents received.

Melesse Thomas sued Loren Conaway to cancel two deeds—a warranty deed and a quitclaim deed—that she had executed to him, claiming they were intended as mortgages rather than absolute conveyances. Thomas also sought an accounting of rents collected from the mortgaged property. The trial court held that the warranty deed covering Tulsa city property was indeed a mortgage and canceled it, but found the quitclaim deed covering farm land was an absolute conveyance. The court credited the farm land purchase price against Thomas's debt to Conaway and charged Conaway with the reasonable rental value of the city property (not just actual rents received), resulting in a judgment for Thomas of $32.18 plus cancellation of the city property deed.

Conaway appealed, arguing the court improperly charged him with rental value he never actually collected. The appellate court applied the standard rule that a mortgagee in possession is accountable only for rents actually received unless the mortgagee is guilty of willful default or gross negligence. The court found that Conaway acted with gross negligence by selling the property to a third party without Thomas's permission, allowing that party to occupy it rent-free for years, and then suffering significant delays in regaining possession. Thomas did not appeal the portion of the judgment upholding the quitclaim deed as an absolute conveyance and therefore cannot raise that issue on appeal.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a deed may be characterized as a mortgage despite its form
  • Accountability of a mortgagee in possession for uncollected rent
  • Whether gross negligence justifies charging a mortgagee with reasonable rather than actual rental value
  • Standing to raise issues on appeal without filing a cross-petition in error

Procedural posture

The defendant Conaway appealed the trial court's judgment that canceled the warranty deed, upheld the quitclaim deed as an absolute conveyance, and assessed him with reasonable rental value of the Tulsa property.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

COCHRAN, J.

Melesse Thomas, as plaintiff, brought this action against Loren Con-away, as defendant, for the purpose of canceling a certain warranty deed and a quitclaim deed, which she had executed to the defendant. She alleged that such convey- anees were, in legal effect and contemplation of the parties, a mortgage upon the real estate therein described. She further asked for an accounting for the rents collected on the property covered by said conveyances, during the period of time the same were in the possession of the defendant. The warranty deed covered certain property in the city of Tulsa, and also forty acres of farm land. The quitclaim deed covered the farm land, but did not cover tihe city property. Judgment was rendered holding the warranty deed to he a mortgage and canceling the same, but judgment was rendered holding that the quitclaim deed was intended as an absolute conveyance and vesting title in the farm land in the defendant The court credited the amount of the purchase price of the farm land and the reasonable rental value of -the city property on the indebtedness of the plaintiff to the defendant and found that the plaintiff was entitled to judgment for $32.18 against the defendant in addition to the cancellation of the deed to the city property. The defendant has appealed from the judgment so rendered and complains of the action of the trial court-in charging the defendant with rent on the Tulsa property which was not actually received by him. It appears that the court charged the defendant with the reasonable rental value of the Tulsa property during the entire time the same was in his possession, although he did not actually receive the rent therefrom for a considerable portion of time. The general rule in this regard is stated in Jones On Mortgages (7th Ed.) 1123, as follows:

“As a general rule the mortgagee in possession is held to the exercise of such earq and diligence as a prudent owner in charge of the property would exercise, but he will not be held accountable for anything more than actual rents and profits received, unless there has been willful default or gross negligence on his part.”

The defendant contends that the evidence is not sufficient to show that he was guilty of willful default or gross negligence in the matter of collecting the rents on this property. It is our opinion that the evidence is sufficient to justify the conclusion that the defendant was guilty of gross neglect in that regard. The defendant testified that he sold the property to a man by the name of Thomas, who remained in possession of the property for several years, and paid no part of the consideration and no rent during that time, and that he regained possession of the property only after he had brought a suit to recover possession thereof, and after much delay in getting the ease to trial. The testimony of the plaintiff was to the effect that, while the defendant had charge of the property for the purpose of renting it for her, he sold it to Thomas, without her knowledge or consent, and, in view of that testimony, we are of the opinion that he whs guilty of gross negligence in the handling of the property which had been intrusted to him by the plaintiff.

The plaintiff, in her brief, asks for a modification of the judgment of the trial court so as to cancel the quitclaim deed covering the farm land. No cross-petition in error was filed by the plaintiff, and she will not be heard to complain of the judgment on this appeal, which was prosecuted by the defendant. In Van Arsdale & Osborne v. School District No. 35, 23 Okla. 894. 101 Pac. 1121, it was said:

“Parties who fail to appeal are deemed to acquiesce in the judgment below. They cannot be heard, on appeal by others, to complain of errors below, and can demand no relief from the appellate tribunal.”

The judgment of the trial court is affirmed.

JOHNSON, O. J., and NI0HOLSON, HARRISON, and MASON, J.T., concur.