Solomon v. Sparks

By the Court. Benning J. delivering the opinion. Was the mortgage deed contrary to the Act of 1818, which forbids insolvent debtors, to make preferences among their creditors ? The Act declares, that assignments made by persons unable topay their debts, “intrust” for the benefitof some of their creditors, in preference to others, shall be fraudulent and void as “against creditors.” Pr. Dig. 164. Is a mortgage deed an assignment “in trust?” If it is not, it is something which is not at all within the Act. This is manifest. It has been held by this Court, that a mortgage deed is not even a conveyance j that, it is a sort of thing which creates merely alien. Davis vs. Anderson, 1 Kelly, 193; Elfe vs. Cole, decided at Macon, January, 1858. If a mortgage deed is not a conveyance at all — not an assignment at all — it cannot be an assignment “in trust,” and therefore, it must be a thing which is not within the Act. But there are some ¡decisions of the Court, inconsistent with the idea, that a mortgage deed is not a conveyance. Behn & Foster vs. Phillips, 18 Ga. 466; Knowles vs. Lawton, Id. 476. And in my individual opinion, a mortgage is a conveyance. See my opinion in Elfe vs. Cole, supra. Conceding, then, for the sake of the argument, that a mortgage is a conveyance, is it a conveyance “in trust ?” And the answer must be in the negative. The estate created by a deed of mortgage, is a conditional estate at law. The mortgagee holds as his the property mortgaged, on condition that the debt is not paid. All that equity has to do with the estate, is to relieve the mortgagor against a breach of the condition, by allowing him to redeem the property after such [390] breach, on payment of the debt. And this, equity does, on the same principle on which it relieves the debtor by bond against the penalty of the bond. And that principle is, that it would be unconscientious in either case, to let the creditor hold on to his legal rights, when he is offered the money he lent with interest. This is the principle. There is no such principle as that the mortgage deed conveys the property, to the mortgagee “in trust” for the mortgagor, or conveys if, otherwise in trust. No such principle as that it creates the relation of trustee, and cestui que trust between the mortgagee and mortgagor. It must follow then, that although it may be true, that a mortgage is a conveyance — an “assignment” — it cannot be true, that it is a conveyance, or an assignment, “ in trust.” And, therefore, it follows, that a mortgage deed, even if an assignment, cannot be within the provisions of the Act of 1818, aforesaid. It was argued that a part of the debts provided for by the mortgage stood -upon a different footing, from the rest, the part not enumerated, hut as to which it was stipulated that they might be paid by Sparks, the mortgagee, when pointed out to him by Breazeal, and on BreazcaPs request. It was argued, that these might be debts of a creation indefinitely subsequent to the mortgage. But we think that that was not the intention. We think, that the intention was, merely, to provide for some existing debts which, the parties could not remember, at the moment, or, as to which, they wero undecided about putting them in the mortgage. Even, however, if these were intended to be debts of future creation, that fact would not prevent the instrument from being, a mortgage deed, and, if it was a mortgage deed, it was not, as we have seen, within the Act of 1818, And the sole question in the case is, whether the instrument was within the provisions of that Act. Judgment affirmed.