Smith v. Harding
Kansas Court of Appeals
2010 WL 2044920 (2010)
- Written by Eric Miller, JD
Facts
Derrick and Janelle Harding (defendants) loaned Chester and Fannie Smith (plaintiffs) $94,000 so that the Smiths could purchase a parcel of land adjacent to the Smiths’ home. The resulting promissory note covered both the Smiths’ home and the parcel that the Smiths hoped to acquire. The Smiths defaulted on their monthly payments to the Hardings, which led the parties to a new agreement. The Smiths deeded the subject land to the Hardings, who orally leased the land to the Smiths for $1 per year. It was understood that the Hardings would deed the property back to the Smiths if the Smiths fully repaid the debt incurred on the initial mortgage. The Smiths sued the Hardings, seeking an equitable mortgage, recission, or reformation of the deed. The Smiths also alleged breach of fiduciary duty and fraudulent inducement, though the district court denied all claims except for the equitable-mortgage claim. The court held that the deed in lieu of foreclosure constituted an equitable mortgage and computed a new payment of $12,000 per year. The Hardings appealed, arguing that the court had repudiated a legitimate contract entered at arm’s length.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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