Glover v. Payn

The deed of Payn and the lease or agreement were executecj at the same time, and it is of no consequence that they bear date on different days. The judge decided that the two instruments together, amounted in law to a mortgage. I think he erred. Judging from the papers themselves, this was simply a sale of land for a consideration paid at the time, with an agreement to re-sell at a future day at an advanced price—the re-sale depending on the election of the original grantor. There were no previous dealings between the parties, and no debt was created by the transaction. It is impossible to maintain, either upon principle or authority, that this was a mortgage. If any thing can be made of it but an absolute sale and an agreement to re-convey at the option of the vendor, it must be by proving facts which cannot be gathered from the face of the papers. Had it appeared that the deed was given to secure a pre-existing debt, or on a loan of money—that the consideration paid for the land was greatly below its real value, or that Payn was under obligation to pay the purchase money, there would have been a question, either at law or in equity, which does not now arise. On the facts disclosed by the bill of exceptions we can neither say that this was a mortgage, nor that the transaction was subject to any objection whatever. Delavan purchased and paid $7000 for the property, agreeing at the same time to reconvey at a future period, on being paid $8000. Payn, without contracting any obligation on his part, was entitled to any advance in value beyond $1000; and Delavan while he might profit to that extent, might also be a loser to a greater amount by a depreciation in the value of the property.

Defeasible purchases are narrowly watched, and courts of equity always lean strongly in favor of the right of redemption. Longuet v. Scawen, 1 Ves. sen. 402. Still it is well settled that an agreement to reconvey, either with or without an advance in price, will not turn an absolute conveyance into a mortgage. In Robinson v. Cropsey, 2 Edw. V. C. R. 138, there had been previous dealings between the parties, but the debt was extinguished at the time of the conveyance: and the vice chancellor held that an absolute

deed with a separate agreement for the right to redeem within a year, was not a mortgage, but a sale on condition. This decision has, I learn, been affirmed on appeal to the chancellor. In Goodman v. Grierson, 2 Ball & Beat. 274, Goodman was seized of land subject to a charge of £1000 to the wife of Higgins. He conveyed.to trustees for Higgins and wife, reciting that they had agreed to accept the land in lieu and satisfaction of the £1000, and that he had agreed to convey for that purpose. The deed then contained a covenant that if Goodman paid the £1000 within ten years, the trustees should reconvey. On a tender of the money after the ten years had elapsed, and a bill to redeem, it was held that this was not a mortgage, but a conditional sale. The chancellor said, “ the fair criterion by which the court is to decide whether the deed be a mortgage or not, I apprehend to be this: are the remedies mutual and reciprocal ? Has the defendant all the remedies a mortgagee is entitled to 1” He thought it material that the grantees in the deed had no remedy for the balance, in case the property on a foreclosure should not bring enough to pay the debt. The case of Parmer v. Gurnsey, 7 Wendell, 248, does not lay down a different rule. There the conveyance was made to secure a debt, and there was an express agreement that the grantor should have the overplus money on a sale of the property. Although the note was given up, it was held that the debt still remained, which the plaintiff on failure of the mortgage security, was allowed to recover. There may, no doubt, be a mortgage without any personal liability on the part of the mortgagor, if the parties choose to contract in that form. 1 R. S. 738, § 139. And so where there is a loan, and fraud on the part of the lender in relation to the form of the security, a court of equity will permit the grantor to redeem, although the conveyance is absolute. Strong v. Stewart, 4 Johns. Ch. 167 . But where there is no debt and no loan, it is impossible to say that an agreement to resell will change an absolute conveyance into a mortgage. Verner v. Winstanley, 2 Scho. & Lef. 393, Barrell v. Sabine, 1 Vern. 268. Endsworth v. Griffith, Vin. Abr. Mortg, U. pl. 8, Conway v. Alexander, 7 Cranch, 2I8-.

4 Kent’s Com. 144, 2d ed. Sugden on Vend. 223, 5th Lond. ed. 1 Powell on Mortg. 130, n. R. Id. 138, n. T. The only case I have met with which apparently favors the decisión made at the circuit, is Manlove v. Bale & Bruton, 2 Vern. 84, and 1 Eq. Cas. Abr. 113, pi. 15. I have no doubt that the facts of this case are imperfectly stated ; and as nothing but the decree is given, it is impossible to say on what ground the master of the rolls placed his decision. In Brown v. Dean, 3 Wendell, 208, there was a loan of money and a bond for repayment. And there was, also, I think, a loan in the case of Hammond v. Hopkins, 3 Yerg. (Tenn.) 525 . In Stewart v. Hutchins, 13 Wendell, 485, it may be gathered from the statement of the case and the opinion of the court, that Tomb had conveyed lands to Stewart, which were chargeable with certain legacies which T. was bound to pay. He then conveyed other lands to S. to secure him against the charge of the legacies, and on condition that this conveyance should be void if T. paid off the legacies. There was a debt or duty on the part of the grantor; the conveyance was made as a security, and on condition to be void if the grantor satisfied the charges. That was certainly a very different case from the one at bar. Until the courts are prepared to make contracts for parties, and to assume the guardianship of adults as well as infants, such a transaction as we have been considering cannot be declared a mortgage. It is an absolute sale, with an agreement for a reconveyance; and the vendor must comply strictly with • the terms on which he is allowed to repossess himself of the title, or his right will be at an end.

The view already taken renders it unnecessary to examine the other questions presented by the bill of exceptions.

New trial granted.