6 Watts 405 | Pa. | 1837
The opinion of the Court was delivered by
Originally, it would seem that what are now called mortgages, whether contained in one instrument, or divided into an absolute deed and a defeasance on a separate paper, were considered at common law as sales on condition, and if the condition was not performed at the day, the estate became absolute, and could never be recovered; payment or tender afterwards were equally unavailing; and perhaps we may suppose this was the intention of one party, and the terms submitted to by the other under the infatuation which seems at all times to have cheered the heart of the debtor with a hope that he would soon be able to pay. It is unnecessary to inquire at what time, and by what gradations,
The result of these cases seems to be, that, if the agreement is in substance a loan of money, no management or contrivance of the lender; no form of expression in the instruments; not even dating the defeasance several days after the deed; not even the lender uniformly stating that he will not have a mortgage, will avail. A sale in form, but which, in fact and substance, may be avoided, by the payment of money within a given time, is, and will be held to be a 'mortgage; if a mortgage until that period elapses, it must continue a mortgage, until lapse of time or some other matter changes it.
In different cases, we find different particulars stated, as being criteria by which _to distinguish, whether the instrument be a mortgage, or an absolute sale. Each of these may have weight, but it is not safe to designate the insertion or omission of any one clause or circumstance as conclusive, for that would be adopted by the rapacious, and submitted to by the needy, and the wholesome rules now established would become useless. The cases, however, seem to admit the possibility of a deed absolute on its face, and a defeasant’s agreeing to reconvey if the money be paid on a certain time, and that the latter may be unavailing, unless the money be paid at the time specified. This, however, can, as I apprehend, only occur, where the contract and conveyance were clearly for an absolute sale, and the agreement to reconvey a subsequent and distinct matter, not in the contemplation of the parties when the sale was made, and deed delivered. In such case, the agreement to reconvey will amount only to an executory agreement to sell, on which the covenantee may have an action.
The authorities, however, say, that even when the matter assumes this appearance, the courts are bound to scrutinize the transaction with great care, and to be watchful that it was not originally a loan of money; and when we consider, that many of those who lend are astute to devise some mode by which to become
The offer in the present case, assumes the appearance of making the agreement to reconvey, a new and distinct matter, not contemplated, until after a sale had been agreed on and completed. It is now contended, that the testimony ought to have been heard, and the matter on the evidence left to the jury to decide, whether, under all the evidence, and the fair inferences from it, this transaction was in substance an agreement to advance money on an absolute deed, with an agreement that Gilmores were to have the land back on repaying the money within a year; and if so, the writings and agreement were in law and equity only a mortgage, and this, although both parties had agreed that the deed should be absolute, unless the money was repaid within a year; but that on the other hand, if the transaction was a bona fide sale, at first, and so completed by payment of the money, and execution, and delivery of the deed; and that after this was done, and without any previous understanding or agreement, a new contract was made, by which Kerr agreed to reconvey on the terms specified, then the deeds do not amount to a mortgage, but the one is an absolute deed of bargain and sale, and the other only an executory agreement to convey on certain terms therein specified.
All the cases show, that all the circumstances of the whole transaction are inquired into, in chancery, and in our own courts; and all the cases show, that an absolute sale and defeasance contained in the same instrument, must be a mortgage, and nothing but a mortgage. It is well settled, that the making two instruments, a deed and a defeasance, at the same time, of the same date, leaves it still a mortgage, precisely, as if both were in the same instrument.
If, however, we should once admit, that, to make a sale absolute, and the land irredeemable, unless the money be repaid at the day, nothing more was necessary than to tell the scrivener to write a deed of conveyance, and insert a certain sum as the consideration; . and this deed being executed, to then tell him to draw a defeasance by which the deed was to be void, or a reconveyance be made, if the money, and interest, and. expenses were repaid at a given day, we should break down the system so well established, and open the door to every money lender, who was disposed to take advantage of the needy borrower. I repeat, that almost every person who borrows, feels a hope, however unfounded, that he will, with the aid of a little money, be able to retrieve his affairs, and repay at a precise time. The advantage taken of those in distress, and who are under this infatuation, induced courts and legislatures to interfere; and long and uniform experience has sanctioned the interference, and established the law as above stated; so that it has become impossible to draw any conveyance, nay, to make any contract, by which property shall
It is not error to reject that, Avhich clearly cannot avail the party if proved.
Mr Butler, Co. Lit. 205, a, note 96, (1), lays it doAvn as a general rule, and subject to very few exceptions, that, wherever a conveyance or assignment of an estate is originally intended as a security for money, Avhether this intention appears from the deed itself, or by any other instrument, it is always considered in equity as a mortgage, and redeemable, even though there is an express agreement of the parties, that it shall not be redeemable, or that the right of redemption shall be confined to a particular time, or to a particular description of persons. And after mentioning a great many cases in support of the rule, he observes, “ In many of these cases, the courts have found it necessary nojt only to apply their general principles, but to determine the/act whether the conveyance Avas intended as an absolute sale, or as a security for money. If the money paid by the grantee, was not a fair price for the absolute purchase of the estate conveyed to him; if he was not let into the immediate possession of the estate; if, instead of receiving the rents for his own benefit, he accounted for them to the grantor, and only retained the amount of the interest; and if the expense of preparing the deed of conveyance was borne by the grantor, (it being customary in England, for the grantee to defray the expense of preparing the deed, of conveyance, only in the case of an absolute sale;) each of these circumstances has been
Mr Wilmot, in his Compend on Mortgages, page 5, has adopted the rule, as laid down by Mr Butler, which accords not only with all the authorities on the subject, but likewise with what is said by Mr Powell, in his treatise thereon, who gave great attention to the subject, and has been very fully sustained by his late editor, Mr Coventry. In vol. i. pages 115 and 116, he says: “ Every contract
From what, then, would seem to have been established on this subject beyond controversy, it is perfectly evident, that if the original contract, under which the estate was conveyed, was in nowise connected with the payment of money or the performance of some collateral act or matter, but confined exclusively' to the absolute purchase of the estate, it cannot be considered a mortgage. And, though, it is not necessary, in order to constitute a mortgage, that the condition or defeasance should be contained in the deed conveying the estate, yet it is indispensably requisite, I apprehend, if the former be in a separate instrument or deed, that both should be executed at the same instant, or, perhaps, more properly speaking, in fulfilment of the same original agreement, by virtue whereof their execution in contemplation of law will be made to relate to the same instant of time; so that both shall be considered as parts of the same act, and forming but one disposition in regard to the estate.
Mortgages of the fee in real estate, it must be observed, were originally made either by executing a deed of feoffment, containing the condition or clause of defeasance, or else by executing at the same time with the first a separate deed containing the second. But if the defeasance was executed after the feoffment, it came too late, 1 Powell on Mort. 4, a, (Coventry’s ed.;) Co. Lit. 236, b. And the reason assigned is, because livery of seisin or corporal tradition being necessary at common law to all conveyances of land, no mortgage thereof was valid unless possession was also delivered to the mortgagee; and the livery coram paribus in such case, attesting an infeudation, in which there was no condition, the tenant must hold the land according to that investiture, which was absolute. But notwithstanding livery of seisin or corporal tradition coram paribus is now done away with by statute, and the deed of defeasance may be rqádered available, so as to make the deed of conveyance, though executed days or even, weeks before the defeasance, a mortgage, still it can only have this effect when it is executed in pursuance of and as part of the original agreement, which renders the whole but one act, in law. Upon this principle the case of Lynch v. Dearth, 2 Penns. Rep. 101, was decided. In the case of a feoffment or other conveyance, when the estate is executed, it must be made at the same time that the principal deed is executed, so that both instruments may form part of one and the same assurance. See Mr Rand’s note to his edition of Powell on Mort., vol. i. 3S1 a, note (1,) or, as is said in Folwell v. Forrest, 2
Now in the case before us, although the point of the evidence offered and rejected is somewhat loosely stated, and, I confess, I am a little inclined to believe, from this circumstance, that it would probably have weighed nothing with the jury had it been given, yet it is plain that a part of it would have tended, in some degree, if admitted, to prove that the deed of defeasance was executed under an agreement entered into after the execution of the deed of conveyance to which it has reference, was fully completed; and if this fact had been made out to the satisfaction of the jury, it would have changed the character of the transaction from that of a mortgage, which it may very properly be considered, judging of it solely from the face of the two instruments, to that of an absolute purchase of the estate by Kerr, and an agreement made by him afterwards for the resale thereof; for if the execution of the deed by Kerr, agreeing to reconvey, formed no part of the agreement under which the deed of conveyance was made to him, but was actually executed by him in pursuance of an agreement made between the parties subsequently to the delivery of the deed of conveyance, it
The evidence, then, if it tended in the slightest degree to prove that the conveyance was not founded upon or connected with a debt or loan of money, and given as a security for the payment thereof, ought to have been received, and the weight and credit of it left to the jury, who alone were competent to judge of it in this respect. This was a most important fact, which was directly involved in the issue joined, and had it been clearly established, would have removed most completely, the only ground of presumption upon which the two instruments per se can be construed to be a mortgage. If the evidence, then, would have had such tendency, why should it not have been received? It cannot be pretended that its tendency was to alter, contradict, add to, or diminish the writings, and therefore inadmissible; because it is not stated nor averred in any part of the same, that the conveyance was given as a security to repay money lent or á debt created in any way: that is barely a. presumption, which the law, from its most jealous anxiety to protect the interests of debtors from oppression, raises in favour of the grantor, from very slight circumstances; as those of the two deeds being dated on the same day, attested by the same witnesses, acknowledged before the same justice of the peace, and the sum of money to be repaid with interest being precisely the same with that mentioned in the deed of conveyance as the consideration of it. The only evidence, then, of the two deeds being, as it were, but one act, and amounting only to a mortgage, is the mere coincidence of those circumstances which, though such as usually attend the execution of a mortgage, can at most only raise a probability of the fact being so, that there was a loan of money, and that the conveyance was taken as a security for the repayment of it; and therefore, from its being only probable that it is so, parol as well as other evidence tending to prove the contrary is clearly admissible. Besides, it is from circumstances Avhich are almost invariably established by parol evidence, that courts of equity frequently determine whether a conveyance, which on its face appears to be absolute, shall be considered as an unconditional sale, or as a security for money; and if the latter, therefore a mortgage: as, for instance, if the money paid by the grantee be not a fair price for the purchase of the absolute estate conveyed to him, especially if it be grossly inadequate. This Avould incline the court to consider it a mortgage. Newcomb v. Bonham, 1 Vern. 232; S. C. 2 Ventr. 364; Barrell v. Sabine, Ibid. 268. Or if the grantee be not let into possession of the estate immediately after the pretended purchase; if, instead of receiving the rents for his oavu benefit, he accounts for them to the grantee, and only retains the amount of the interest; if a collateral security, as a bond, judgment or warrant of attorney be given at the same time for further securing the supposed purchase money. 2 Scho & Lefr. 393. Or if the expense of preparing
The cases, however, of Maxwell v. Montacute, Pre. in Ch. 526; Walker v. Walker,2 Atk. 98; and Joynes v. Statham,3 Ath. 388,seem to establish the principle that parol evidence is admissible to show and explain the true intention and purpose of the parties, in order to develop the real character of the transaction. Seeing, then, that parol evidence is admissible to show that a deed of conveyance, appearing on its face to be an absolute purchase of the estate, was in reality only intended to be a mortgage, I must confess that I am unable to discover any good reason why the same species of evidence should not be received to show that it was in fact an absolute purchase of the estate, and so designed by the parties at the time of the execution and delivery of the deed of conveyance. That was all that was demanded in this case, but it was refused; and it does appear to me that the court below erred in doing so.
It is said, however, in support of the decision of the court on this point, that the deed of defeasance, made by Kerr, appears to have been executed at the same time with the deed of conveyance made to him, and therefore, from the tenor of both taken together, they constitute only a mortgage, and must be so consi
Again, it is said, that the two instruments were executed, not only on the same day, but at the same meeting of the parties, which the evidence offered does not in the least tend to disprove, but on the contrary, seems plainly to admit, and therefore, must be regarded in law as having been executed at the same time, and forming but one instrument between them. There is certainly no authority, and perhaps, less reason, if possible, for saying that because these instruments were executed at the same meeting of the parties, that, therefore, either the one or the other of them, shall be concluded from showing, that the instrument for reconveying the estate, was, in point of fact, executed in the fulfilment of an agreement made between them after the first instrument conveying the estate had been completely executed, and the estate vested under it. It has been shown already, from both authority and reason, that the meaning in lata, of instruments of writing or deeds, between the same parties, being executed at the same time, is where they are executed in fulfilment or pursuance of one and the same original agreement; for otherwise, it is impossible, that they can, on any rational principle, be considered as having been executed at the same instant, which seems to be what is required in order to make them one and the same disposition and assurance of the estate. I do not see how, in the nature of things, or in reason, the circumstance, of the whole having been transacted at the same meeting, ought to give it a fixed and determinate character, that shall not be changed or varied according to the truth of the fact, as it shall be shown by evidence aliunde. For twenty different things, even between the same parties, not having the slightest connection with each, may be transacted as well at the same meeting, as one thing only: and every day’s observation and experience prove, that when many and different matters are so transacted, the effect or operation of each, is precisely the same, as
If the circumstance of the two deeds having been executed at the same meeting of the parties, is to have such a conclusive effect, as to preclude the introduction of evidence, to show that in truth, they were not made in fulfilment of the same original agreement, but, that the deed, containing the covenant to reconvey, was executed under a different agreement between the parties, made after the execution of the deed of conveyance, and not even thought of, or at all events not mentioned before, then in order to be consistent, and render the operation of the principle reciprocal, it would be necessary to hold all evidence incompetent, which would tend to control the presumption, had the court been of opinion, from the face of the deeds, that it was in favour of Kerr’s being considered an absolute purchaser under the first deed. Suppose, for instance, it had appeared from the deeds, that they had been executed at different meetings, held on the same day, or on different days, or in different years, and the court had, therefore, thought it probable, and accordingly presumed that the first was an absolute purchase of the estate, and the second an agreement for a repurchase thereof; and the grantor, claiming that they were only intended to be a mortgage, and insisting upon his right to redeem, had offered evidence to show, that, though executed at different meetings of the parties, as it appeared from the deeds, yet they were both executed hr pursuance of one and the same original agreement, in order to secure the repayment of the money with interest, mentioned in the deed of conveyance, which was lent at the time by the grantee to the grantor, I do not see how this evidence could have been received, consistently with the principle involved in the decision now made. But to reject such evidence, woüld'be. a violation so palpable of the rule established heretofore, in relation to this subject, that I take it for granted, it is not claimed: and certainly could not be maintained for a single moment. But does it not go to show, that the circumstance of the deeds being made at the same meeting of the parties, is not, and never could, with consistency and a proper regard for truth, have been made the test at all, and much less, the incontrovertible test of their being constituent parts merely, of one and the same act or assurance ? Most unquestionably, it does, and even more; for it also conduces to prove, that the original agreement made between the parties, is the only safe test by which the question of mortgage or absolute purchase can be determined and settled, if their intention is to be regarded in putting a construction upon what they have done: consequently, in order that such test may be had, all evidence offered tending to show the terms, object, and extent of the agreement, ought to be received. Every question or difficulty that can be presented, will be readily solved or overcome by this test, when the terms and extent of the qriginal agreement, are
It is the original agreement, that is to govern and give effect in law, to all the subsequent acts of the parties performed in pursuance thereof; and that is to determine whether they are to be taken as parts of the same design; and if so, that they shall, when performed, he deemed in law as one and- the same act, accomplished at the same instant of time. This is also the conclusion of the law, though the various acts performed in accordance with the original design, should happen to be executed at as many divers meetings, held on divers days by the parties.
Then suppose the agreement between the parties, to have been made for the absolute purchase of the estate in fee, at a certain price, which is paid, and the deed of conveyance, in conformity to to the agreement, executed and delivered by the vendor to the vendee; can it be questioned, nay, must it not be admitted, without even tbe least shadow of doubt, as nothing more remains to be done in order to fulfil and complete the performance of the agreement between the parties, that the instant the vendee receives the deed, he becomes not only invested with the title to the estate, but likewise the perfect and absolute owner thereof; and considered in law, and equity too, at and from that moment, as much so, as if he had been the owner of it for years before, or should continue to be so, for years thereafter, without doing any act to affect his right? So completely, seised is he of the estate for his own entire and exclusive use and benefit, that if he were to marry the next minute after receiving the deed of conveyance, and before the parties had separated, his wife upon his death, if she survived, would be entitled to her dowry out of it. 2 Bl. Com. 131-2. But according to the notion that seems to be entertained, and upon which this case is now determined, he would have the right after his marriage, at any time during the meeting at least, at which he received the deed, under a new agreement, then made and mentioned, for the first time between him and his vendor, without the concurrence of his wife, to deprive her of her right to dower in the estate, in any subsequent event, by making a deed, binding himself to reconvey the estate to his vendor. This is certainly introducing a new rule, and abrogating the old upon this subject. ■ •
So the law, by the adoption of this new principle, will be changed entirely in regard to what, heretofore, has ever been deemed sufficient to make the holder of an estate in fee, who at first succeeded to it by descent as heir ex materna, a purchaser thereof, and produce thereafter a change in the line of descent. For instance, if a man, seised of lands in fee, as heir on the part of his mother, made a feoffment thereof in fee, and took back an estate to him and heirs, he thereby became a purchaser of the land, and held it by purchase, and not by descent as before; and if he died without issue, the heirs on the part of the father instead of the mother, were first entitled to inherit. Co. Lit. 12, b. So, if he had by a deed of bargain and sale, for a money consideration, received of the bargainee, conveyed the land in fee, and upon a repurchase thereof, taken a reconveyance of it in fee, the effect, under our act of assembly, would have been the same as by deed of feoffment, though all done at the same meeting of the parties. But if the change of seisin in the land is to be deemed of no moment or account, because it only endured for a part of the time spent by the parties at the same meeting, it is difficult to say, and renders it uncertain, what may be the effect of it.
But I am unable to discover that any inconvenience, much less real evil, has been felt from the operation of the rule that has prevailed hitherto on the subject. All the authorities and decisions prove clearly, that no conveyance of real estate has ever been held to he a mortgage, without it appeared that it had been given as a security for the repayment of money lent, a debt contracted, or the performance of some collateral .act. Its real object must appear in some form to have been, to make it merely a security, and therefore, at most, only a charge upon the estate, so that the right derived therefrom, to the grantee, is considered, in equity, merely of a personal character, and as falling within the rules applicable to personal estate. Hence the money secured thereby, if not paid till after the death of the grantee, will belong to his personal estate, and be receivable only by his executors or administrators; and not by his heirs. Accordingly his right, under the mortgage, does not come within the provisions of the statute of frauds, made in regard to real estate; and, therefore, he may transfer or assign it without writing, or release his right altogether, in the same way for a valuable consideration. Martin v. Mowlin, 2 Burr. 978 — 9. But from the very nature of the thing itself, as well as authority, the deed of conveyance must, in all cases, obtain its distinctive character the instant it is delivered or executed. It is then either a mortgage or it is not. But if it is not a mortgage then, we have seen that it cannot properly be made so afterwards. Indeed having taken effect once as an absolute deed of conveyance, thereby constituting the grantee the sole and absolute owner of the estate, it is incongruous to suppose that he can be converted into a mortgagee, and his estate
Judgment affirmed.