## Facts

- Ora Lean Anderson owned a one-acre tract and residence and sought funds to remodel but could not qualify for a bank loan.
- Anderson and her friend, James Lee Kimbrough, agreed that Anderson would convey the property to Kimbrough so he could obtain a loan using the property as collateral, with an understanding the property would be reconveyed after the debt was satisfied.
- Kimbrough obtained a \$10,000 bank loan in June 1993, structured as monthly installments over five years.
- The parties disputed how much of the loan proceeds Anderson actually received.
- Payments on the loan were made inconsistently by Anderson, Kimbrough, and at least once by Anderson’s daughter.
- Anderson remained in possession of and continued living in the home after executing the deed.
- Kimbrough later obtained additional loans secured by the same property without Anderson’s consent, increasing the indebtedness tied to the land.
- After Anderson fell behind on payments, Kimbrough served her a notice to vacate and asserted ownership based on the deed.
- Anderson sued in chancery court to prevent eviction and to set aside or recharacterize the deed, but the chancellor dismissed her complaint and confirmed title in Kimbrough as an outright owner.

## Issues

1. Whether an absolute deed executed solely to secure a loan, with an agreement to reconvey upon repayment and continued possession by the grantor, must be treated in equity as a mortgage rather than a sale.
2. Whether the grantee may evict the grantor and claim unqualified ownership without foreclosure while the secured debt remains outstanding.

## Decision

- The Court of Appeals of Mississippi reversed and remanded.
- The court held the deed, though absolute in form, should be treated as a mortgage because it was executed to secure a debt and was accompanied by an understanding of reconveyance and continued possession by Anderson.
- The court held Kimbrough was not entitled to dispossess Anderson or obtain title free of her interest without using foreclosure procedures.

## Legal Principles

- In Mississippi, a deed absolute on its face may be construed as a mortgage when the transaction’s substance is to secure a debt rather than transfer beneficial ownership.
- Courts determine whether an absolute deed is security by examining intent and surrounding circumstances, including a continuing debt, an agreement to reconvey upon repayment, and the grantor’s continued possession.
- A mortgagor cannot be divested of the property through forfeiture based solely on the deed’s form; the mortgagee must pursue foreclosure, and the mortgagor retains redemption rights until foreclosure.

## Conclusion

The appellate court required the transaction to be treated as a mortgage and ruled that Kimbrough could not rely on the deed’s form to evict Anderson or claim outright title without proceeding through foreclosure, so the judgment confirming title in Kimbrough was reversed and remanded.


Anderson v. Kimbrough, 741 So. 2d 1041 (Miss. Ct. App. 1999)