Youle v. Richards

The Chancellor. The complainant has set out an equitable right. According to his statement, the conveyance, when coupled with the agreement, is, in equity, nothing more than a mortgage, and he is entitled to redeem on payment of the amount due. He alleges that he tendered the debt and interest, first to the principal, Richards, and then to Evans the agent, and that both tenders were made within the year. Richards declined receiving the money tendered, without first seeing the agent; and the agent, when called on, declined receiving it, and said it must be paid to the principal. These facts are substantially admitted by the answer. Richards says he agreed to consider the tender lawful, so far as respected the amount due, but was unwilling to receive the money, or give any receipt for it, until he could hear from his agent. And Evans says, that shortly after this, but at what particular time he cannot recollect, the tender was [537] made to him, and that he declined receiving the money, because he had no authority to take it. So far forth the equity of the bill is admitted by the defendants. The answer alleges, it is true, that after the two several tenders made by the complainant, Evans, the agent, called upon the complainant to know if he still wished to redeem ; that he appeared undecided, and promised to let him know in one week, which he failed to do; and that after the lapse of more than a month, Evans, as the agent of Richards, took possession of the property. Admitting these facts as stated, I do not see that they affect the complainant’s equity, or that they gave the defendant a right to take possession of the property and use it as his own. The fact of possession cannot aid him, for he was not let in by the complainant. The complainant is to be considered in this couit in the light of a mortgagor. His situation is not altered by the fact that Richards (as stated in the answer) originally held a mortgage against him, and that upon an arrangement made between them, the complainant agreed to give him, and did actually execute and deliver to him, an absolute deed, on receiving an agreement in writing that he should be at liberty to redeem by paying the money due in one year. The conveyance could operate only as a mortgage in equity, and the agreement, so far as it restricts the right of redemption to one year, is void. The principle is well settled, that all such restrictions are void. Whenever it can be clearly shown to be the intention of the parties, that real estate, when conveyed, shall be subject to redemption, it is considered as a mere security; and the right of redemption cannot be confined to a limited time, or to a particular class of persons. In Kilvington v. Gardner, 1 Vern. 192, it was decreed, that although the condition of the mortgage was to redeem during the life of the mortgagor, the heir might redeem notwithstanding. In Clinch v. Witherly, Cas. Temp. Finch, 376, there was a surrender of a copyhold estate to the use of A. B., without any condition expressed in it, but a judgment was given at the same time as a further security; and it was agreed by a note in writing, that if the mortgagor should within a twelve-month pay back the consideration money of the surrender, that he would yield up the copyhold and acknowledge [538] satisfaction on the judgment. The court considered the surrender and judgment as securities only for the repayment of the money, and decreed a redemption sixteen years after the twelve months had expired. “ Once a mortgage and always a mortgage,” is an ancient equity maxim, of approved policy and wisdom. There would have been, without it, a door open for the imposition of every kind of restraint on the equity of redemption, and thereby the borrower, through necessity, would have been driven to embrace any terms, however unequal or cruel; which would have tended greatly to the furtherance of usury, and the conversion of the equitable jurisdiction of the court into an engine of fraud and oppression. In the chancery of New-York, it was held, that every contract for the security of a debt by the conveyance of real estate, is a mortgage ; and all agreements of the parties tending to alter, in any subsequent event, the original nature of the mortgage, and prevent the equity of redemption, is void. If the conveyance is a mortgage in the beginning, the right of redemption is an independent incident, and cannot be restrained or clogged by agreements: Henry v. Davis, 7 John. C. R. 42. Such an agreement, says Fon-blanque, would be contrary to natural justice in the creation of it, and prove a general mischief, because every lender would by this method make himself chancellor in his own case, and prevent the judgment of the court: 2 Fonb. 259. See also Fry v. Porter, 1 Ch. Ca. 141; James v. Oades, 2 Vern. 402; Seton v. Slade, 7 Ves. 273; and 1 Pow. on Mortg. 116, et seq. Considering Richards, the defendant, as a mortgagee in possession, he is not authorized to cut down timber and commit waste upon the premises. No act prejudicial to the estate can be justified in equity. Even if the proceeds of the timber cut were appropriated to the extinguishment of the debt, it would be very questionable policy to allow the mortgagee to pay himself his debt out of the property, according to his own ideas of right: Harson v. Derby, 2 Vern. 392; Farrant v. Lood, 3 Atk. 686; 1 Pow. on Mortg. 188-9; Eden on Inj. 118. Were there no other facts in the case, I should feel no difficulty in retaining the injunction until the hearing, on the ground that Richards is a mere mortgagee in possession* and therefore [539] not justified in committing waste on the property ; but there is one circumstance in the case which materially varies the whole ground. Tt appears, according to the complainant’s own showing, that the instrument of writing in the nature of a defea-sance, which w7as given for the safety of the complainant, was delivered up to the defendant, Richards, and cancelled. This, if a bona fide transaction, is binding on the parties. A mortgagor may, for good cause, surrender his right of redemption, and render the mortgagee’s title absolute. This is an every day transaction, and does in no wise impugn the principles already established. It is alleged, however, by the complainant, that this was a fraudulent transaction, and ought not to take away, or even to prejudice, his rights. He states that Evans, one of the defendants, knowing that the original article of agreement was entrusted to William Wayne, called on Wayne to effect a redemption of the land, and, by making divers false representations, induced him to deliver up the article : that this was contrary to the wishes of the complainant, and he was ignorant of it until some time afterwards. If this be true, the complainant’s equity is not impaired, and he is entitled to the full aid of the court, not only to protect him in his rights, but to expose the fraud by which those rights are sought tobe destroyed. I think, however, the answer of the defendants sufficiently repels the charge. It sets forth, that after the complainant neglected to redeem the land, the business remained unsettled, and that Richards referred it to Evans to make such arrangement with Wayne, who was entrusted with the agreement, and who was the brother-in-law of the complainant and acted as his attorney and agent in the matter, as he might think proper and right; and it was accordingly agreed between them, that Richards should retain the land, and pay to Youle the sum of two hundred and fifty dollars, in full of all his interest, right of redemption, or other claim therein; and that the agreement should be cancelled and delivered up. This arrangement was acceded to by Richards, and he agreed to pay the money to Wayne on his producing an order from Youle, the complainant, to receive the amount, and also the original agreement. That accordingly, on the 5th September, 1826, Wayne, acting on behalf of Youle, [540] produced the agreement, and also a written order from Youle, authorising Richards to pay to Wayne two hundred and fifty dollars, as the balance in full; whereupon he paid the money to Wayne, and took his receipt, stating it to be for lands near Martha furnace, purchased by Jesse Evans for Richards’ account. This appears to me a complete answer to the charge of fraud. And it is not new matter, which, according to the practice of the court and the reason of the thing, cannot avail the defendant on this motion. It is directly responsive to a material allegation of the bill. The defendant, in denying a charge against him, has a right to state the whole transaction. In making this arrangement, it appears that Wayne undertook to actas the agent of Youle, the complainant; who now insists that Wayne was not authorised. But we are to take the defendant’s answer as true, upon the present inquiry ; and it shows, not only that Wayne acted as agent, and made the contract as such, but that the contract was not completed until he produced the written authority of Youle himself to receive the stipulated sum of money, and also produced the original agreement or de-feasance to be cancelled. This could not have been done without the knowledge and approbation of the complainant. As the case is presented upon the bill and answer, the title of the defendant is complete, and there is no ground for continuing the injunction. Injunction dissolved.