2 Cow. 324 | Court for the Trial of Impeachments and Correction of Errors | 1823
The bill states that at the time the assignment was made, the appellant declared it was by way of pledge, and that the instrument in writing delivered to the respondent was an agreement to re-deliver the mortgage on payment of $225. In the answer, the -appellant alleges, it was an absolute sale and transfer, but he admits that he agreed to re-sell and re-assign, if the respondent paid $225, on or before the first of October, then next; that he wrote and signed an instrument to that effect.
Bill.
Answer.
Haisted’s evidence.
William Halstead, a subscribing witness, testifies, that Clark gave Henry a writing, which specified, that if Henry paid the money by the first of October, he was to re-assign; if not, Clark was to hold the mortgage. This does not vary materially from the writing stated in the answer. There is no magic in the words “ agreeing to sell the mortgage,” to distinguish the case from an agreement to re-assign. Halsted is not contradicted as to the fact, that the assignment was received as a security.
Without reference to the construction which the law would put on the transaction, I am satisfied, that, at the time, neither party considered the assignment an absolute sale. If it was not, the respondent had a right to redeem and is not barred by non-payment at the day.
Parties understood it to be a mortgage.
The case warrants the inference, that Clark supposed the papers were so drawn as to defeat the right of redemption, if there was a failure of payment, and that the word “ sell” was inserted, instead of the more appropriate term re-assign, so as thereby to obtain a mortgage of $1065, for the inadequate consideration of $225.
Clark supposed there was a clause of redemption.
The whole operation, seems to be devised for the purpose of overreaching an ignorant man who could neither read nor write.
Operation was to overreach an ignorant man.
There cannot, however, be any doubt, that the writing executed by the appellant was per se a defeasance merely. On what terms was the appellant to sell ? Not for the value of the security, but the amount of the original debt not equal to one-fourth of the mortgage. This speaks a language not to be mistaken. The instrument must be constructed as a covenant to re-assign.
Writing was a defeasance.
The right to redeem is carefully protected by Courts of Equity. They will not suffer an agreement to prevail, that the estate shall become an absolute purchase in the mortgagee, upon any event whatever. The reason of the rule 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, and always a mortgage.” (1 Mad. 413.) No agreement of the parties can affect the doctrine as to redemption in a Court of Equity. In Seton v. Slade, (7 Ves. Jun. 273,) Ld. Eldon observes, “ you shall not by special terms, alter what this Court says are the special terms of that contract.” I refer to the following cases which fully support these principles. 2 Cha. Ca. 58, 159, 147. Toomes v. Conset, 3 Atk. 261: 1 Vern. 8, 33. Floyer v. Livingston, 1 P. Wms. 268.
Right to redeem, carefully protected.
gagTafwaysa mortgage,
The respondent in April, 1821, gave notice to Davis that he should look to him, and forbade his making payment to Clark. In May following, Davis made a settlement with Clark, and accepted a discharge. He appears to have -been fully-apprised of the circumstances, and took upon -himself the risk of being answerable to the respondent. He cannot justly complain, in being made liable for the balance that, may remain due after execution against the appellant shall have been executed and exhausted.
I am of opinion, that, the decree of his Honor, the Chancellor, be affirmed.
Sutherland, J. concurred.
(after stating the facts.) I concur fully in the opinion given by his Honor, the Chancellor. The assignment was intended merely as a security, and not as an absolute sale. Such was the understanding of the witness, Halstead, and such is the reasonable construction upon the acts of the parties.
Absolute deed, with written or parol defeasance, is a mortgage.
That a deed, absoluteon its face, but accompanied by an agreement, in writing or by parol, operating as a defeasance, is a mere mortgage, is perfectly well settled. (Dey v. Dunham, 2 John. Ch. Rep. 189. Paterson v. Clark, 15 John. Rep. 205.)
The character of the transaction between the parties being established, the rights of mortgagor and mortgagee are easily ascertained.
No agreement allowed to change mortgage .into absolute deed.
Once a mortgage always a mortgage.
It is a well settled principle, that Chancery will not suffer any agreement in a mortgage to prevail, which shall change it into an absolute conveyance upon any condition or event whatever. (Howard v. Harris, 1 Vern. 190. James v. Oades, 2 id. 402.) “ Once a mortgage, always a mortgage.” In Newcomb v. Bonhan, (1 Vern. 7,) where an absolute conveyance-was given, with a defeasance upon payment of £1000, during the life of the grantor, and the grantor covenanted, that it should never be redeemed after his death ; yet redemption was decreed.
This being the unanimous opinion of the Court, it was thereupon ordered, adjudged and decreed, that the decree of his Honor, the Chancellor, made in this cause, be in all things affirmed; and that the appellant pay to the respondent his costs in this Court, to be taxed; and that the record and proceedings, &c., be remitted, &c.