Colwell v. Woods

The opinion of the Court was delivered by Kennedy, J. Several errors have been assigned in this case; but it appears to me that the only point in which the district court erred, that this court can review and correct, is in the charge to the jury; in which his honour the judge advised them that the deed of conveyance made by Lindell to Woods, and the bond given at the same time by Woods to Lindell, conditioned for a reconveyance of the property upon Lind ell’s reimbursing the purchase money with interest thereon, beside costs and charges which had been paid by Woods in consequence of the purchase, were upon their face per se a conditional sale, and not a mortgage. The deed of conveyance and the bond, as was very properly stated by the judge in the court below, are to be considered as only one instrument ; for they are constituent parts of the execution of the same agreement, executed both at the same time as appears by a declaration to this effect contained in the bond. They also appear to have been both acknowledged at the same time before the same officer, and to have been recorded within twenty days afterwards.' If the bond, or deed of defeasance as it may be called, instead of having been put into the form of a distinct and separate instrument from the deed of conveyance, had been introduced into the latter in the form of a clause of defeasance, as is usually done in drawing mortgages, I apprehend that no one would have hesitated a moment to pronounce it a mortgage. Indeed it ssems to me, from the whole current of authorities on this subject, it could not have been considered otherwise either in law or equity. The conveyance and the bond then being deemed but constituent parts of one and the same [197] instrument, must be regarded precisely in the same point of view and of the same effect as if they had been joined together in the same writing, and had formed but one deed. The sum inserted in the conveyance as the consideration is 9500 dollars; and it is expressly provided by the bond, that upon the repayment of, this sum by Lindell within one year thereafter, together with the interest thereon and the charges incurred by Woods in consequence of the purchase, that the latter should reconvey the property to the former. The purchase money being to be repaid with interest tends rather to show that it was a loan in reality. And as it was to be repaid with interest in the course of a year, it goes to show that it was not the understanding of the parties that Woods should take possession of the property under the conveyance during that time, because it would have been inequitable as well as usurious in him to have received both the rents of the property .and the interest ori the money. And this still tends further to show that the money advanced was a loan, and that the conveyance and bond taken together were to be a security for the repayment of it; that is, to be considered a mortgage and not a conditional purchase. And again, from the circumstance that Woods was not to take the possession of the property until after the year had elapsed, it may reasonably be inferred that in the estimation of both parties it was worth more than the money advanced upon it, by at least the amount of the interest thereon for the year; which likewise goes to show that the transaction was in reality founded on a loan of money and not upon a sum paid for the property, which was considered and agreed on by botli parties at the time to be a fair and full price for it. And I am inclined to believe that it is the advancement of what at the time was considered by both parties a fair price for the property, when it consists of real estate, taken also in connection with their intention, that must give to the transaction the character of a conditional purchase or a defeasible purchase subject to a repurchase, instead of a mortgage. Mellors v. Lees, 2 Atk. 495; Wharf v. Howell, 5 Binn. 503; Stoever v. Stoever, 9 Serg. & Rawle 447. I consider the case of Manlove v. Bale and Bruton, 2 Vern. 84, very like the present, only more strongly indicative perhaps of an intention in the parties to make it a conditional sale. Bruton having a church lease for three lives in 1664, conveyed it to the father of Bale in consideration of 550 pounds; the conveyance was absolute: but Bale the purchaser, by writing under his hand and seal agreed that if Bruton the vendor should, at the end of one year then next ensuing, pay him 600 pounds, he would reconvey. The 600 pounds were not paid. Two of the lives died, and the lease was renewed twice by the defendant Bale and his father. It was held to be a mortgage : and twenty years after the first conveyance, Manlove, to whom Bruton had assigned the equity of redemption in satisfaction of a debt, was adjudged entitled to redeem; and accordingly a decree of redemption was passed in his favour, on his paying the 550 pounds with interest, together with the [198] fines paid in order to procure renewals of the loan; and Bale at the same time to account for the profits from the death of his father, but anterior to that they were to be set off against the interest. Judgment reversed, and a venire de novo awarded.