JANUARY TERM, 1910.*

SCHMIDT v. BARCLAY.

1. MORTGAGES-EQUITY-FORECLOSURE OF DEED AS MORTGAGE. While the burden of proof is on one who seeks to show that a conveyance absolute in form is in fact a mortgage, a preponderance of the evidence is sufficient, and complainant is not required to satisfy the court beyond a reasonable doubt.

2. SAME-EVIDENCE-WEIGHT.

The adequacy of price is a consideration of great weight in determining the character of such an instrument.

3. SAME CONVEYANCES-DEEDS AS MORTGAGES.

Upon a review of the evidence it is held, as a matter of fact, that a deed of real property worth upwards of $75,000, incumbered by a mortgage of $28,000, for a consideration of $16,516.92 was given as a mortgage.

Appeal from Wayne; Murphy, J. Submitted January 14, 1910. (Docket No. 79.) Decided April 1, 1910.

Bill by Ida W. Schmidt against William L. Barclay to have a deed absolute in form declared to be a mortgage. From a decree for complainant, defendant appeals. Affirmed.

James G. McHenry (A. B. Hall and John T. Nichols, of counsel), for complainant.

Edward E. Kane and Allan H. Frazer (William L. Carpenter, of counsel), for defendant.

MOORE, J. The trial judge filed a written opinion in this case, from which we quote as follows:

Continued from Vol. 160.

"The complainant herein seeks relief appropriate to the theory that a deed, absolute in form, executed and delivered by her to the defendant upon July 15, 1905, was mutually intended to be, and in legal effect is, a mortgage. She filed her bill of complaint April 24, 1908. Amended bills were subsequently filed as of the respective dates May 23, 1908, February 11, 1909, and March 16, 1909, the last-mentioned one, the only one signed by the complainant herself, being filed during the progress of the hearing. The cause is at issue upon the answer filed to the original bill, counsel for the defendant having stated during the hearing that in their view no necessity for any other or further answer had arisen by reason of the filing of the amended bill, and that the answer first filed might be regarded as interposed to the bill as finally amended.

"The facts established by the proofs I find to be as follows: Prior to the delivery of the deed, each of the parties hereto owned an undivided half of the northerly half of lot number 38, in section 8, of the Governor and Judges' plan of the city of Detroit. This property is situated upon the west side of Woodward avenue, between State street and Grand River avenue, in the heart of the choicest retail section of the city. This northerly half has a frontage of 30 feet on Woodward avenue. The southerly half of the lot is owned by a third party. Upon the entire 60 feet there stands a modern business structure erected in 1890 at a cost of $49,000.

"The complainant acquired her interest in the property through the death of her father, who died intestate in 1897. His ownership was acquired in 1889. After his death, his heirs seem to have made an amicable division of his estate. In the allotment this property was assigned complainant at a valuation of $45,000, this sum, though an undervaluation, being agreed upon as equitable because of a corresponding undervaluation placed upon certain realty assigned the widow, who was the stepmother of complainant.

From 1872 until the time of his death, complainant's father, Traugott Schmidt, and the defendant, had been acquainted. As the years progressed, the former placed great reliance in Barclay. The latter gave his time chiefly to the conduct of a carpet and furniture business. For at least eight years this business was carried on by a corporation, Detroit Carpet & Furniture Company, of which Mr. Schmidt was president and Mr. Barclay vice

president, though Mr. Schmidt's active attention was given to other interests. The intimacy increased after Schmidt purchased the parcel in 1889. He bought from defendant's sisters. Very soon thereafter the construction of the building referred to was begun; Barclay having sole supervision of the work.

"When completed, the entire charge of the Schmidt interest, as well as his own, was intrusted to Barclay. He collected the rents, decided upon and superintended repairs, and was, indeed, given sole management. Mr. Schmidt's confidence in Barclay was shared by other members of the Schmidt family. When Mr. Schmidt died, though the complainant had not theretofore been personally acquainted with Barclay, she unhesitatingly continued to permit the management, after she had acquired ownership, to be exercised solely and unquestionably by the latter. This situation continued without interruption to the day of the execution of the deed in controversy.

"For many years complainant had been an invalid, unable to walk, and requiring the constant attendance of a maid. Upon the hearing, seated in an invalid chair, she spoke with manifest physical effort. While of a certain alertness of mind, she is, as her business dealings show, and as, perhaps, is not unnatural in one who has long labored under great and constant physical distress, lacking in that business capacity which sees danger and guards against it. Her share of her father's estate had in July, 1905, been largely dissipated, either in speculation or profitless business projects, some of which latter were always regarded as chimerical by others. Upon the realty in question there was in July, 1905, a mortgage of $28,000. She was then being pressed and harassed by creditors, and judgments had been taken against her. She had in hand a business venture, in which she had great faith, but which needed finances. The only productive portion of her heritage, and practically the only remaining piece, was this property.

"She had implicit faith in the defendant. He, in turn, knew her true condition financially. He knew the other difficulties under,which she labored, including an estrangement from the members of her family. The one source whence she expected disinterested guidance was from this defendant. In her dilemma she turned to him. He had always advised her against parting with the property in dispute. If retained, it would insure her ample support