Hughes v. Harlam

The plaintiff’s testator, Albert E. Hughes, executed and delivered to the defendant a written instrument by which certain personal property, including a formula for the manufacture of “Albert’s Rheumatic and Gout Remedy,” was transferred to the defendant, subject to the condition that if the testator paid his promissory note for $3,000, payable to the order of the defendant, then the transfer should become null and void. The instrument, however, provided that, if the testator died before the note was paid, then the transfer was to be unconditional and absolute. At the time the instrument was executed the plaintiff’s testator was, and, until his death, which occurred a few days later, he continued, in possession of the property transferred, when the defendant took possession. The

The conclusion reached by the trial court was correct. The instrument was not a bill of sale. It was a chattel mortgage, and nothing else. It was given as collateral security for the payment of the note, and expressly provided that it was to become “absolutely null and void” upon such payment. The provision inserted in it, that, if the payment was not made during the lifetime of the mortgagor, the transfer should then become unconditional and absolute, did not change the character of the instrument in any respect. Default in the payment of the sum secured by the mortgage occurred when the testator died, and then the legal rights of the parties were exactly the same as though default had been made by the testator in his lifetime. The title to the mortgaged property then vested at law in the defendant, and nothing was left to the plaintiff, except an equitable right to redeem (Charter v. Stevens, 3 Denio, 33 ; Stoddard v. Denison, 38 How. Prac. 299), which did not depend upon any agreement of the parties. It was something independent and irrespective of the parties to the mortgage, which the law gave, and which it would not permit them, even by agreement, to take from the mortgagor. Jones, Chat. Mortg. § 682; Henry v. Davis, 7 Johns. Ch. 40 ; Clark v. Henry, 2 Cow. 330 ; Bunacleugh v. Poolman, 3 Daly, 237 ; Bayley v. Bayley, 5 Gray, 505 ; Newcomb v. Bonham, 1 Vern. 7. “The reason of the rule,” says Judge Woodruff in Clark v. Henry, supra, “is, because it puts the borrower too much in the power of the lender, who, being distressed at the time, is generally too much inclined to submit to any terms. There is no exception to the rule, ‘Once a mortgage always a mortgage.’ 1 Madd. 413. No agreement of the parties can affect the doctrine as to redemption in a court of equity.” Newcomb v. Bonham, supra, is directly in point. There an absolute conveyance was given, with, a defeasance upon the payment of £1,000 during the lifetime of the grantor, and the grantor agreed that the premises conveyed should never be redeemed after his death. The grantor died before payment, and, in proceedings by his representatives to redeem, the lord chancellor held that such right existed, and a decree was entered to that effect.

Under the authorities cited, it is clear that the plaintiff had a right to redeem. It is, however, urged by the appellant’s counsel that the complaint cannot be considered as one to redeem, and that it is insuffi

It follows that the judgment appealed from should be affirmed, with costs to the respondent. All concur.