Swift v. Swift

36 Ala. 147 | Ala. | 1860

R. W. WALKER, J.

1. Whether the instrument executed by the defendant on the 3d March, 1850, be considered by itself, or in connection with the absolute bill of sale executed by the complainant on the next day, it is not, either in form, or in legal effect, a mortgage, but shows a sale of the slaves by the complainant to the defendant, with the right secured to the former to repurchase all or any of them, within the period, and on the terms specified in the first named writing. But a contract, which is in form a conditional sale, will be treated as a mortgage, if it is shown by parol evidence that the object of the transaction, as understood by both parties, was to create a security for a debt: and in every case, where the question to be determined is whether a particular transaction is to be considered a sale (either absolute, or conditional) or a mortgage, this is the turning-point of the inquiry. Eor a mortgage is essentially a security for a debt; and the rule is without exception, that when no debt exists, a mortgage is impossible. It is a necessary ingredient of a mortgage, that the mortgagee should have a remedy against the person of the debtor. There can be no right of redemption on one side, unless there be the right of foreclosure on the other.

In the present case, the evidence which is set out in the I’eeord fails to satisfy us that the object of this transaction, as understood by both parties, was to create a security for a debt. As to the $8,200, the consideration paid for these negroes, it is not shown that the complainant remained under any obligation, express or implied, for its repayment to the defendant. On the contrary, the inference is unavoidable, that the arrangement which the parties made did not create the relation of debtor and creditor between them, except to the exteut of the difference between the agreed price of the slaves, and the amount of the debt which the defendant assumed for the complainant. For this difference, the complainant executed to the defendant his four notes, as testified to by the witness Goodwin; but for the $8,200, the price at which the negroes were taken, no note, or other evidence of indebtedness, was given. If the defendant, upon such evidence as is set out in this record,-had either brought an action at law against the complainant for the recovery of the $8,200, the agreed price of these slaves, or filed his bill praying a sale of the slaves, the application of the proceeds to the repayment of the purchase-money, and a decree against the complainant for whatever balance might still remain due, it is clear that he must have failed in the suit.

It is true that the contract seems to have had its origin in, or rather to have been preceded by, a proposition for a loan ; and this, it is well settled, is a circumstance which strengthens the inclination which, in cases of doubt, courts always feel, to consider the transaction a mortgage, rather than a conditional sale. For some reason which does not appear, the proposition' which the defendant made by letter, in answer to the complainant’s appeal for aid, was not acceded to; and the arrangement which was finally made,"was altogether different, in substance as-well as in form, from that which -the defendant at first proposed. This first proposition clearly contemplated, that all of the negroes of the complainant were-to be transferred to the defenda-ntysolely for the purpose of securing the latter agaiust liabilities to be incurred for the benefit of the complainant; while,--on the other hand, the arrangement finally concluded between the parties, so far as it relates to the seventeen slaves named.in the two writings, was neither a loan of money, .nor the creation of a debt, but a sale of the negroes for a -consideration then given — namely, the discharge by the defendant^of liabilities of the complainant,.amounting to $58,2 00; that being the sum agreed upon as the aggregate value of-the slaves. The stipulation securing to the complainant the right to redeem any pari of the slaves, within the period designated, is a strong circumstance to show that the transaction was a conditional sale, and not a mortgage-The making of the first proposition -certainly did -not deprive the defendant of the right afterwards to negotiate for and acquire the absolute title. This he appears to have done, in good faith. There was no-such- disparity between the value of the slaves, and the price paid, as to cast suspicion on the transaction; nor do we find any evidence showing that the defendant was guilty of-fraud, imposition, or unfairness.

Under all the circumstances disclosed in .the -record, we must treat the transaction between these parties, not as a mortgage, but as a conditional sale, the terms of which are set forth in the writing executed on 3d March, 1850. — Eiland v. Radford, 7 Ala. 726; Sewall v. Henry, 9 ib. 24; Murphy v. Barefield, 27 ib. 634; West v. Hendrix, 28 ib. 234; Sewell v. Price, 32 ib. 97; Crews v. Threadgill, at the last term; White & Tudor’s Lead. Cases Eq., vol. 2, pt. 2, 431-442, and cases there cited.

2. If it be conceded, that a court of chancery would take jurisdiction of a bill for the specific performance of the defendant’s contract to resell all or any of the slaves on the terms -set forth in the writing executed by him, it is clear that the complainant .has-no right, under this bill, to any such relief. In the first place, the bill alleges,, that the contract between the parties was a mortgage, not a conditional sale; whereas it was, in fact, a conditional sale, and not a mortgage. The contract proved is, therefore, not the contract alleged. In the second place, the-defendant would not, under the contract, be chargeable-with the hire of the slaves; and as the only offer to re. deem, alleged in the bill, is one which was coupled with a demand for hire, and which, therefore, the defendant had the right to refuse, it follows, that'the complainant shows no right to relief- founded on the contract. — - Murphy v. Barefield, 27 Ala. 684; Farrelly v. Robinson, 16 ib. 472; Casey v. Holmes, 10 ib. 777; Bell v. Thompson, at the last term; McLeod v. Powe, 12 Ala. 9.

Decree- affirm edi-