76-251. Deed intended as mortgage; recording; effect.

Every deed conveying real estate, which, by any other instrument in writing, 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. The person for whose benefit such deed shall be made shall not derive any advantage from the recording thereof, unless every writing operating as a defeasance, or explaining its effect as a mortgage, or conditional deed, is also recorded therewith and at the same time.

Source

Annotations

1. Intent

2. Defeasance

3. Evidence

4. Miscellaneous

1. Intent

Where deed absolute in form is intended as security for a debt, it will be construed as a mortgage. Koehn v. Koehn, 164 Neb. 169, 81 N.W.2d 900 (1957).

Absolute deed and contract of defeasance executed as part of the same transaction should be construed together, and if it appears that the instruments were intended as security, should be given effect as a mortgage. Ashbrook v. Briner, 137 Neb. 104, 288 N.W. 374 (1939).

When grantee under deed intended as security is in possession, grantor's equity of redemption may be defeated by parol settlement. Stall v. Jones, 47 Neb. 706, 66 N.W. 653 (1896).

2. Defeasance

If deed is accompanied by separate written instrument of defeasance, transaction constitutes a mortgage. Campbell v. Ohio National Life Ins. Co., 161 Neb. 653, 74 N.W.2d 546 (1956).

Land contract, absolute in form, may be mortgage. Lipp v. So. Omaha Land Syndicate, 24 Neb. 692, 40 N.W. 129 (1888).

Grantee in deed accompanied with defeasance in writing cannot lease. Connolly v. Giddings, 24 Neb. 131, 37 N.W. 939 (1888).

Where defeasance is canceled, deed becomes absolute. Wamsley v. Crook and Hall, 3 Neb. 344 (1874).

3. Evidence

To establish absolute conveyance as instrument intended for security, testimony must be clear, convincing and satisfactory. O'Hanlon v. Barry, 87 Neb. 522, 127 N.W. 860 (1910); Wilde v. Homan, 58 Neb. 634, 79 N.W. 546 (1899).

Parol evidence may establish deed, absolute in form, as mortgage. Morrow v. Jones, 41 Neb. 867, 60 N.W. 369 (1894).

4. Miscellaneous

To extent that this section conflicts with Nebraska Trust Deeds Act, this section is modified by implication. Blair Co. v. American Savings Co., 184 Neb. 557, 169 N.W.2d 292 (1969).

Warranty deed executed and delivered for purpose of securing an indebtedness considered a mortgage. Hanks v. Northwestern State Bank of Hay Springs, 143 Neb. 204, 9 N.W.2d 175 (1943).

Record of deed is constructive notice of grantee's interest in premises. Livesey v. Brown, 35 Neb. 111, 52 N.W. 838 (1892).

Purchaser for value without notice is protected. Kemp v. Small, 32 Neb. 318, 49 N.W. 169 (1891).

Land contracts under consideration were considered to be equal with mortgages. Ehlers v. Vinal, 253 F.Supp. 58 (D. Neb. 1966).