13 112 122 56 Scott, White & Co. vs. Henry & Cunningham. [ JANUARY SCOTT, WHITE & Co. vs. HENRY & CUNNINGHAM. Where a bill of sale, absolute upon its face, was intended by the parties as a secu- Courts of equity will be inclined to construe contracts to be mortgages rather than If a deed be absolute in the first instance, and the defeasance be executed subsequently, it will relate back to the principal deed, and connect itself with it, so as to render it a security in the nature of a mortgage. Where the bill charges the execution of a defeasance, and the defendant, in his answer, admits its execution, but alleges that he was induced to execute it by misrepresentation, and without uuderstanding its legal effect, &c., this is matter in avoidance, and must be proven aliunde-the answer is not evidence of such allegations in avoidance. It is a general rule, that no person can come into a court of equity for a redemption of a mortgage, but he who is entitled to the legal estate of the mortgagor, or claims a subsisting interest under him. But it is equally well settled, that an assignment of a mortgage vests in the assignee the right to redeem; or one to whom a bona fide transfer of the mortgagor's estate is made, may redeem the property; and the same rule extends to persons having any subsequent interest in the property. W. borrowed money of S., W. & Co., and advanced it to P., in payment of slaves, to which he held the legal title. P. conveyed the slaves to S., W. & Co. to secure the money loaned by them to W., and they executed a defeasance to W.: HELD, that W., or his assignees, had the right of redemption. Appeal from the Chancery side of Crawford Circuit Court. THIS was a bill by Henry & Cunningham, assignees of Thomas Wilson, against Scott, White and Pennywit, partners under the TERM, 1852.] Scott, White & Co. vs. Henry & Cunningham. name of Scott, White & Co.; Wilson and wife, McLean, Turner and Paschal. The object of the bill was to redeem two slaves, alleged to have been mortgaged to Scott, White & Co., in which Wilson, the assignor of complainants, held the right of redemption. The material facts of the case are stated in the opinion of this court. The court below decreed in favor of complainants, and Scott, White & Co. appealed. PIKE & CUMMINS, for the appellants, submitted that the court erred in excluding from its consideration, as not proven, the debt of the defendants against Wilson, as the judgment against Wilson, annexed to the answer of Pennywit, which was read without objection at the hearing, sufficiently proved the debt: but if the judgment was not well proven, still the debt against Wilson, which the defendants allege is a lien on the negroes, is shown by the pleadings. The complainants charge that the defendants claim to hold the negroes as a security for a debt due from Wilson, and call upon them to answer; and the defendants were bound to answer fully, and their answer is evidence for them; (Stafford v. Brown, 4 Paige R. 88, 90 Smith v. Clark, ib. 368. Story Eq. Pl. sec. 605, 606 and notes, 852 et. seq. to 856. 3 Paige 211. 1 J. C. R. 107. Gre. Eq. Ev. 21. 1 J. C. R. 65. 2 Paige 105. 1 Gill. & John. 272. 9 Cranch. 153. 1 Ed. Ch. R. 386. 16 Verm. 179. 1 Cow. 742. 10 Yerg. 385;) and the letter of Scott, and other admissions by the defendants as to this debt being proven by the complainants, were conclusive against them. Smith v. Clark, 4 Paige 370. Henry & Cunningham being assignees of a mere equity, took it, subject to all the equities between the assignor and defendants, and could not redeem without paying this debt; for he who seeks equity must do equity. Story Eq. sec. 849, 850. 12 Pet. Rep. 178. There is no valid contract between Wilson and Paschal—no consideration for a contract: or if there was, it was unknown to the defendants, and their contract for the purchase of the negroes was not based upon any consideration passing between Wilson and Paschal; nor was there any consideration passing to the de Scott, White & Co. vs. Henry & Cunningham. [JANUARY fendants for the defeasance; the defeasance, therefore, was a nude pact, enforceable neither at law nor in equity. We submit that the entire answers of Scott, White & Co., in respect to the fraud in procuring the defeasance, want of right in Wilson, and want of consideration for the alleged contract, are directly responsive to the allegations and charges in the bill, and consequently, evidence for them. Woodcock v. Bennett, 1 Cow. 742. The Med. Ep. Ch. v. Wood, 5 Ham. R. 285. Robinson v. Scotney, 19 Ves. 584. 7 Ves. 404.. Ib. 587. Popham v. Eyre, Lofft 789. Ormond v. Hutchinson, 13 Ves. 53. 1 Coop. Ch. Cas. 161, cited 2 Phil. Ev. Cow. & Hill's notes, 286. Smith v. Clark, 9 Paige 370. McCan v. Blewitt, 2 McCord's Ch. Rep. 102. 10 J. R. 541. 1 Cow. 742. 5 J. C. R. 542. 2 McCord's Ch. R. 349. 1 Har. & Gill. 80. WALKER & GREEN, and WATKINS & CURRAN, for the appellees, contended that one partner had the right to execute the defeasance; that it was operative though it was executed subsequently to the bill of sale, (4 Kent Com. 141,) at least, it was executed at the same time the bill of sale was ratified by Paschal: that any agreement in the deed or in a separate instrument, or proved by parol evidence, that the bill of sale was intended as a security for the repayment of money, will constitute a mortgage. (4 Kent 142, and cases there cited. Blakemore v. Byrnside, 2 Eng. 505.) That the answers of the defendants in relation to the defeasance were not sufficient to defeat it, as the facts set forth in the answers were not responsive to the bill, but of matters not enquired into, and should therefore have been proven. Danl. Ch. Pr. 990. Jones v. Slerby, 5 Har. & John. 372. 2 Phill. Ev. Cow. & Hill's Notes 646, p. 360. A copy of a judgment, unless authenticated, is no evidence. Mr. Justice WALKER delivered the opinion of the Court. The material facts deduced from the record are, that Herro and Thomas E. Wilson obtained judgment in the Crawford circuit court against John Dillard, for the sum of $3,800, with an TERM, 1852.] Scott, White & Co. vs. Henry & Cunningham. agreement of record that $950 thereof should be collected at the end of 6, 12, 18 and 24 months: that Paschal, who was the attorney for Wilson, held claims for collection against him, for the payment of which he took an assignment from Wilson of the first two instalments on said judgment: that execution issued thereon, which was levied on the estate of Dillard, amongst which were two slaves, Mingo and Anderson: that at the sale of this property, Paschal became the purchaser, under an agreement with Dillard, made with the assent of Wilson and other creditors, that he (Dillard) should have the privilege of redeeming the property within twelve months: that Dillard died without complying with the terms agreed upon, and thereafter an agreement was made with Wilson, extending the privilege to him; in the mean time, and before Wilson had taken steps to redeem, he hired the slaves of Paschal, and before the expiration of the hire, Paschal addressed to him a letter, urging the propriety and necessity of disposing of the slaves at once, saying that he purposed making the slaves bring $1,000, and then made to Wilson the following proposition: "Give me the acceptance of Scott, White & Co. at 8 per cent., due at six months, for $750, and you remit on the third instalment of your judgment $250, (one thousand dollars.) "As they have priority on the best property, you see the advantage I am disposed to extend to you. Now to secure Scott, White & Co., you can easily hire them the negroes for their boat, at $30 per month, and let the bill of sale be made. to them, besides giving them any other collateral security you can." This letter bears date the 7th January, 1847. On the 16th of that month, Ogden, as agent for Paschal, executed to Scott, White & Co. an absolute bill of sale for Anderson and Mingo, for the consideration of $750, which, after deducting Paschal's account with that firm of about $104, was settled by a draft upon the terms proposed in Paschal's letter to Wilson. Ten days after this, Paschal ratified the act of Ogden, by his written approval on the back of the bill of sale, and at the same time, the firm, by White, one of its members, executed to Wilson their Scott, White & Co. vs. Henry & Cunningham. [JANUARY covenant, reciting the bill of sale, by which the firm was bound to re-convey the negroes to Wilson, or to such other person as he should name, upon the payment of the $750, with 8 per cent. interest, and agreed that the hire of the negroes, after deducting expenses, should be thus applied. And thereupon, Wilson delivered the obligation of a steam boat Captain for Anderson and for his hire to Scott, White & Co., and in a few days after that also delivered Mingo, in whose possession they still remain. There is much evidence tending to explain the nature of the transaction, which may be more appropriately introduced in connection with the particular acts to which it relates, as they arise in the further investigation of the case. The main question to be determined is, whether the sale of the slaves to Scott, White & Co. was an absolute sale of the property or a mortgage. Did Scott, White & Co. purchase the slaves for themselves, and as their own property, or was the bill of sale, though absolute on its face, intended to secure them against loss for the sum of money advanced towards their purchase, or for that and as security for the payment also of the debt alleged to have been due from Wilson to them? If the former, then the slaves are theirs; but if the latter, then no matter what language may have been employed in expressing the terms of the contract, it will be held and treated as a mortgage. Bright & Taylor v. Waggle & Aikin, 3 Dana Rep. 352. 2 Story's Com. Eq. 287. Johnson v. Clark, 5 Ark. Rep. 336. Blakemore v. Byrnside, 2 Eng. 505. 1 S. & M. Ch. Rep. 372. 4 John Ch. Rep. 166. And for the purpose of ascertaining the true intention of the parties, it is a well established rule, that the courts will not be limited to the terms of the written contract, but will consider all the circumstances connected with it; such as the circumstances of the parties, the property conveyed, its value, the price paid for it, defeasances verbal or written, as well as the acts and declarations of the parties, and will decide upon the contract and the circumstances taken together. Oldham v. Hally, 2 J. J. Mar. |