Thompson v. Banks

The Chancellor: This cause was argued before me during the sittings of the term, by the solicitor of the complainant, and is now submitted under the rule. The bill, which is filed by the complainant, as the insolvent trustee of one George S. Davis, alleges, that a deed executed by said Davis, on the 25th of September, 1840, and by which the grantor conveyed to the defendant, Banks, certain leasehold estate in the city of Baltimore, absolutely, for the sum of five hundred dollars, was intended as a mortgage merely, to secure the repayment of that sum, the same being at the time regarded by both parties, as a loan. That the claim of the defendant, now set up, to hold the property as his own is fraudulent, and the deed upon which this pretension is founded, was procured with the fraudulent design of so setting it up, in opposition to the express agreement and understanding of the parties, at the time of its execution. The charge, therefore, in effect is, that this $500, the consideration mentioned in the deed, was advanced by the defendant, to Davis, by way of loan, and that the instrument to secure its repayment, which was intended to be a mortgage, was procured by imposition, and is now used for a fraudulent purpose. The answer denies the fraud ; and the necessity of proving it, by evidence direct, or circumstantial, is, of course, manifest. That fraud°may be inferred from facts and circumstances, from the character of the contract, or from the condition and circumstances of the parties, is well established. Watkins vs. Stockett, 6 Har. & Johns., 435; Brogden vs. Walker, 2 Har. & Johns., 285. And there can be no doubt, that upon proper averments and upon sufficient evidence, this court may treat an absolute [433] deed, as a mortgage, and decree a redemption of the property by the mortgagor, or solely for the purpose of paying the sum due. The case of Brogden vs. Walker, is a decisive authority upon this point, such a decree having been passed in that case, by the Chancellor, and affirmed upon full argument by the Court of Appeals, George H. Williams for Complainants. The question therefore is, whether, in this case, the facts and circumstances are of sufficient strength, to justify the court in coming to the conclusion, that the deed in question, was intended as a mortgage, and not an absolute conveyance of the property, and upon a careful examination of the evidence, and deliberately considering the facts and circumstances attending the case, the character of the contract, the condition of the parties, I do not see how the conclusion can be escaped, that the instrument was designed to be a mortgage merely, and not an absolute conveyance. There are, in this case, circumstances which repel the idea of sale, and there is, besides, direct evidence of a character so strong, that, in my judgment, no reasonable doubt can be entertained upon the subject. I shall, therefore, send this case to the Auditor, with directions to state an account between the parties, in the usual manner, and report the same to this court for its further order.