Engels, Hooper & Co. v. McKinley & Garioch

Murray, C. J., delivered the opinion of the Court. Heydenfeldt, J., concurred. Passing by the question of the assignment by Mowbray to the defendants, we are of opinion that the judgment of the Court below is not sustained, by the evidence adduced on the trial. It is shown by the testimony of the plaintiffs’ own witness, uncontradicted, that the assignment to the defendants was made to secure a loan of four thousand dollars, and that Mowbray, the assignor, was to remain in possession of the premises until he had discharged such debt and interest, paying to the defendants one half of the net profits, until the full payment thereof, at which time the relation of the parties was to cease. That the defendants never had entered upon the premises, but that he (Mowbray) remained in possession up to the time of their abandonment. Under this state of facts it is clear that the assignment can only be treated as a security or mortgage, to secure the $4,000 loan. The defendants were not entitled to the possession of the demised premises, except upon the breach of the agreement entered into between Mowbray and themselves, and he might at any time have compelled a cancellation of the assignment, by payment of the note and interest, and one half of the net profits. It is not sufficient to show that the defendants have a paper title, and a legal right, which might have been enforced against their assignors. They could not be liable to the reversioner on the ground of privity of contract, but by privity of estate, or the actual occupation and beneficial enjoyment. Judgment reversed, with costs, and new trial ordered.