| Ill. | Nov 15, 1863
delivered the opinion of the Court:
Appellant, on the twenty-seventh day of March, 1850, conveyed a farm with its improvements, to Jacob Eeaman and Henry O. Gilbert. The consideration named, is three thousand dollars, which was the amount received by appellant. The grantees, concurrently with the execution of the deed, executed a bond to appellant, reciting the conveyance, and by which they bind themselves, if appellant should, within two years from that date, pay them the sum of three thousand dollars, to make, execute and deliver to him a deed of conveyance for the premises. It is stipulated in the condition to the bond,, that the three thousand dollars shall be payable without interest, in consideration of which Feaman and Gilbert were not to be accountable for rents. They were to have the possession of the premises, but appellant was not to pay for improvements which they might make on the farm.
This bond was recorded on the 30th day of March, 1850, in the proper recorder’s office. It is alleged that within the two years, appellant, who was then in California, employed one Taylor to see Feaman and Gilbert and to pay them the three thousand dollars. But this he failed to do, or even to make a tender of the money. He, however, testifies that within the time he saw Feaman and informed him that he had authority to pay it, but that Feaman declined doing anything in the matter, but promised to write to Gilbert on the subject. He also says it was the understanding that Gilbert would call and see him in reference to the matter, but that he never did. The evidence shows that various conveyances of the premises have been made, but they occurred after the bond to appellant was recorded. These purchasers have, therefore, taken their titles subject to notice of this bond, and any rights which appellant may have in the premises.
. It is urged, that the execution of the deed and bond for the reconveyance, as simultaneous acts, is in contemplation of law but a mortgage, and not a sale and contract for a resale. To determine whether such a transaction is a sale, or a mortgage to secure the payment of the money advanced, the intention of the parties at the time must control. To ascertain that intention, the transaction must be viewed in the light of all the surrounding circumstances. In equity, the form of the transaction is not regarded, but the substance must control. It is not the rule in equity that to constitute a transaction a mortgage, it should be so expressed in the instrument conveying the land, but it may appear by a separate agreement; nor is it necessary the deed and the defeasance, in terms, refer to each other. Their connection may be established by parol evidence, and the defeasance need not be even in writing. The conveyance may be absolute on its face, and yet be shown by parol that it was intended as a security for the payment of money, when it will be treated as a mortgage. Miller v. Thomas, 14 Ill. 428" court="Ill." date_filed="1853-06-15" href="https://app.midpage.ai/document/miller-v-thomas-6948014?utm_source=webapp" opinion_id="6948014">14 Ill. 428. In such a case all of the attendant circumstances will be considered, in ascertaining the true character of the transaction. It is from them the intentions of the parties can be ascertained. This is the rule recognized in the cases of Davis v. Hopkins, 15 Ill. 519" court="Ill." date_filed="1854-06-15" href="https://app.midpage.ai/document/davis-v-hopkins-6948265?utm_source=webapp" opinion_id="6948265">15 Ill. 519; Smith v. Sackett, ib. 528, and Williams v. Bishop, ib. 553. In these cases the rule in the case of Miller v. Thomas, is recognized, and applied as the correct principle.
It then remains to determine whether the evidence in this case brings it within the rule. Whether it is shown to have been designed as a mortgage or a conditional sale. Both instruments having been executed at the same time, must be regarded as forming but one transaction, and they seem rather to indicate a loan and mortgage, than a purchase and a resale. Such purchases and resales are not of frequent occurrence, whilst such mortgages are not unusual. The first we learn of this transaction, is when the deed .and bond were being prepared. The scrivener who drew these instruments, first prepared a conditional deed with similar provisions to those contained in the bond; but Feaman and Gilbert preferred a regular deed of conveyance, and to secure a reconveyance within two years upon the money being refunded without interest. He then prepared the papers in their present form. The scrivener testifies that it was his understanding from the parties, that appellant was embarrassed, and that the other parties had advanced the money to relieve him from his pecuniary necessities, and that if appellant should refund the money within two years, they would reconvey the land.
Again, whilst the bond provides that in consideration that no interest shall be paid, Feaman and Gilbert are not to be accountable for rents. If it had been designed as a conveyance and a resale, no necessity existed for stipulating against their paying rents, as in that case the land would have been their own. But understanding it to be a mortgage, they must have known that they would be accountable for rents and profits. It seems that the rents were largely in excess of the interest on the sum advanced. This may have, and probably did, suggest the necessity of inserting this provision, to avoid liability to account for the rents on the redemption of the land. It is also probable that it was designed to evade the laws against usury.
This all seems to establish the fact that it was the intention of the parties to make it a security for a loan, and not a sale with the right to repurchase. And whilst the evidence is somewhat conflicting, yet when all of the circumstances are considered, we cannot avoid the conclusion that it was designed as a mortgage to secure a loan.
It is, however, insisted, that although the weight of evidence may establish it to have been a loan and security, yet it is not sufficient to overcome the sworn answers of the defendants. We regard the evidence of the scrivener who drew the papers, sufficient to establish it a mortgage, in the absence of an answer under oath. The transaction disclosed by the mere production of the deed and bond, would, unexplained, raise the same presumption, and would be sufficient to authorize a decree allowing a redemption, had there been unsworn answers in the case. The evidence afforded by this witness, and the papers themselves,- wp regard as sufficient to overcome the answers in the case. We are, therefore, of the opinion, that the evidence establishes this to have been a mortgage at the time of its execution.
This, then, being a mortgage, it still remains such, until foreclosed. There is no rule of law which requires that a redemption shall be made within the time limited by the mortgage. Until foreclosed, it is a subsisting right, unless barred by the lapse of time. This being the case, appellant has a right to redeem the premises. But he has no right to insist upon an account of the rents, as he has expressly agreed in the original transaction that they shall not be accounted for by the mortgagees; and those holding under them, hold under the same exemptions. He was not to pay interest and they were not to account for rents and profits. It would be highly inequitable and unjust for him to escape the payment of interest, and to receive rents and profits of the mortgaged premises, in "violation of his express agreement. The decree of the court below must be reversed and the cause remanded.
Decree reversed.
Mr. Chief Justice Caton, on account of ill health, was absent during the whole of this term.