33 Ky. 170 | Ky. Ct. App. | 1835
delivered the opinion of the Court.
On the 11th of February, 1827, George Dryeir. advanced to Perkins four hundred dollars, and received from h™ two negro girls — Esther, about sixteen, and Amy, about fourteen years of age, for which a bill of sale was, at the same time, executed by Perkins, purporting to be a transfer of said slaves to Drye, for the consideration of four hundred dollars then received and one hundred ^°^ars to he paid in six months and fifteen days, with a waranty of soundness and title, and the following condition, viz. “And if said Perkins pay said Drye the “purchase money, with six per cent interest, at any “time between the present date and within six months, “said Drye binds himself to give up said negroes to “said Perkins. If any accident should happen to either «0f said negroes during the six months, it is to be con“sidered said Perkins’ loss, as by death &c. unless by “the exposure of said Drye.” And on the same day, Drye delivered to Perkins an instrument importing, that he had bought two negroes of him, which, if the bargain was complied with, he was at liberty to redeem at any time within six months. There is also upon the bill of sale of the 11th of February, a receipt, acknowledging the payment of the sum of one hundred dollars therein provided for, which, although attested by a subscribing witness, is without date.
On the 11th day of March, 1827, a second bill of sale was executed by Perkins to Drye, for a negro boy Samuel, about sixteen years old, for the consideration of one hundred and seventy-two dollars, acknowledged to have been then received, and containing the same
■On the 5th of May following, Perkins executed an absolute bill of sale to Drye, for all three of the negroes expressed to be in consideration of seven hundred and seventy two dollars, in round silver, in hand paid. And which was attested by two witnesses, and recorded.
In December, 1829, Perkins filed his bill, praying for an account of the hire and increase of the negroes, and that he might be permitted to redeem, &c. He states that, being much pressed for money, he applied to Drye to lend at six per cent, which Drye agreed to do if he would give him alien upon some negroes; whereupon, four hundred dollars were advanced to him by Drye, on the terms stated in the bill of sale of February 11th, 1827, and the two negroes therein named taken into his. possession. That, shortly afterwards, being in want of more money, he borrowed from Drye the further sum of one hundred and sixtysix dollars, at the same interest, .and delivered Sam, by way of security. The second bill of sale exhibits the terms on which this second advance was made. He charges that, these bills of sale were looked upon as mortgages; that Drye never advanced any thing but the two sums above mentioned, and that the absolute bill of sale was given upon the understanding, that the time of redemption was to be extended to five years; but that Drye refuses to let him redeem, and has fraudulently sold one of the negroes. He exhibits the writing executed by Drye, on the 11th of February, as evidencing his right of redemption.
The father of Drye, who claims Esther and her childrenismade a defendant; who answers, insisting that he made a fair purchase without notice, &c.
George Drye jr. in his .answer, admits, that he has sold Esther, and that she has had two children. He denies, that he loaned the money to Perkins, or took the ’ J
It is proved that, the negroes Esther and Amy were worth about seven hundred dollars, at the date of the first bill of sale,'and that Samuel, named in the second, was worth near three hundred dollars. There is no proof of any advance of money by Drye to Perkins, except the four hundred dollars, and the one hundred and sevéntytwo dollars, (or as the complainant states it,
It is sufficiently apparent, from the bill and answer, as well as from the terms of the contracts of February and March, that Perkins was harassed with debts, and pressed for money. Did he want to borrow money, or was he desirous of raising it by the sale of his property? If the latter had been his object, he would have fared better to let his negroes be sold under execution,— which was the worst evil the law would have inflicted on him, than to sell them at a price so disproportioned to their value, as that which Drye was willing to allow. But he alleges that he applied to the defendant to lend him the money, which is not denied by the answer; and the reservation of the right of redeeming the slaves by repayment of the money, shews, not only that he did not wish to sell, but renders it highly probable, that he did not suppose he was selling them. The defendant denies that the money was loaned, and alleges that he made a conditional purchase of the negroes; he does not deny that a loan was applied for. The effect of
But what is the effect of the writing itself? Does it show that the negroes were sold to Drye, and that the money advanced by him was thenceforth the money of Perkins? The stipulation contained in each of the two first instruments, that any accident happening to the negroes before the time of redemption, should be the loss of Perkins, evinces satisfactorily to our minds, that notwithstanding the absolute words of transfer, the negroes were considered as belonging to Perkins, and the money to Drye. If the negroes had died within the six months, Drye would still have had a claim for the money. It is evident from this consideration, that they were taken as a security for the money, and that the instruments were therefore mortgages.
The opinion of this court has not, it is true, been uniform as to the effect of the agreement that one or the other party should sustain the loss. See Gray vs Prather 2. Bibb, 224; and Prather vs Norflet, 1. Mar. 178 &c. But if the circumstance, that Perkins, who parted with the slaves, was to sustain the loss in case of death within the period during which he had the right to redeem, ought not to be as decisive as in our opinion it' is, still the disposition uniformly manifested by the Court of Equity to construe a contract to be a mortgage in all doubtful cases, would bring us to the same conclusion with regard to the real character and effect of these conditional bills of sale. In accordance with this disposition, it was said, in the case of Edington &c. vs Harper, 3. J. J. Marshall, 356; that when ‘the written contracts
These considerations and the conclusion to which they have brought us, apply to each of the conditional bills of sale; the terms of each, as well as the transactions to which they belong, being substantially the same. Indeed though separated by the intervention of a few days, they might well be considered to be identical in their origin, as they in fact were in their intended termination, if it were not that the second contract,' as unequal and oppressive as the first, if regarded in any other light than as a mortgage, shows that the necessi
But the relation of mortgager and mortgagee being, in our opinion, clearly established between the parties, by the contracts of February and March, the question as to the character and effect of the contract of the 5th of May, which was engrafted upon the two first, and depended upon them for its consideration, is relieved of its greatest difficulty. The question now is, not whether parol evidence is admissible to convert an absolute bill of sale into a mortgage, nor whether the parol testimony in the record, is sufficient to show that it was intended
It is not to be denied, that it is competent for the mortgagor to extinguish his right of redemption by conveyance to the mortgagee; but it must be fairly done, in a transaction that will bear the light, and upon a consideration, the particulars of which, the mortgagee will be able at least to state, if not to prove. It would be strange indeed, if the Court of Chancery which so carefully guards the equity of redemption from all restraints that the parties may attempt to impose in the mortgage which creates it, or in any other cotemporaneous deed, should thenceforth abandon it to the arts or influence of the mortgagee, who, having already a hold upon the property by the original contract, comes into every new transaction with the mortgagor with increased advantage. We are aware that the opinion is advanced by a respectable writer on this subject, (1. Covantry's Powell, 122-4,) that the mortgagee is as free as any other person to deal with the mortgagor in regard to the equity of redemption, and that the Chancellor looks with no peculiar vigilance upon such dealings. But we apprehend the principle of the authorities, both ancient and modern, to be, that if the mortgagee purchase the equity from the mortgagor, it must be for a valuable, and a fair consideration; and that Courts view such transactions with jealousy “and will set aside such sales “ by mortgagor to mortgagee, where, by the influence of “ his encumbrance, the mortgagee has purchased for less “ than others would give.'' In the spirit with which a Court of Equity watches over the pecuniary transactions between individuals, one of whom is, by reason of his pecuniary relations to the other, in any degree subject to his control, it will not'1 only set aside a sale from the mortgagor to the mortgagee, if unfairly obtained, but will require, that the fairness of the transaction shall distinctly appear.
These principles, consonant with the character and practice of a Court ofEquity, are decisive of the present case. What compensation did Perkins receive for the valuable right of redeeming, from an encumbrance of five hundred and seventy-two dollars, three slaves worth nearly one thousand dollars, and increasing annually in value? A horse worth forty or fifty dollars, but which can only be charged at thirty dollars — the price bid for him by Drye, and some money, and some personal services in transacting some business. And these items make up
It is unnecessary farther to recapitulate the facts.— There is scarcely a colorable consideration for the absolute bill of sale; like the receipt, it is false upon its face. Executed by a mortgagor harassed with debts, and despairing of being able to redeem, it bears, when coupled with the admissions of the defendant, plain marks of undue influence growing out of the first mortgage, and of an eager desire on the part of Drye, to defeat the right of redemption. There was no real compensation for that right; no fair value; nothing by which, in equity and good conscience, it can be considered as extinguished.
It follows, that the decree of the Circuit Court, dismissing the bill, was erroneous; and that Perkins is entitled to redeem the negroes, and to have an account taken of then hire since they came to the possession of Drye; and also, of the value, at the time of assessment, of Esther and and her children, who are in the possession of George Drye, senior, by purchase, without notice of Per
The decree is reversed, and the cause remanded, with directions to enter a decree in conformity with this opinion.