
    
      Thompson, Appellant, v. James Davenport and James Davenport, Jun. Appellees.
    October Term, 1792.
    Equity Practice — Distinction between Absolute Purchase and Mortgage — intention. — In question whether a deed is to be considered as a mort-
      gane, or an absolute purchase, a Court of Equity governs itself by the intention of the parties; and. if the former appears to have been intended, the Court will not suffer it to be turned into a purchase by any form of words, so as to preclude a redemption.
    Same — Same—Governing Principles. — The deed in this case is in aspect, form, and expense, a mortgage. —No price was contemplated or agreed upon; — the grantor retained the possession, and there is a covenant for payment of the money: and though interest is not mentioned, yet the principal debt being payable on demand, it bore interest from the date. In the case of a purchase, the vendee takes possession, in lieu of interest, and if there be a. condition to re-purchase, it is done on payment of the principal only, unless the contrary is stipulated.
    Payments — Application—Judgments—Relief against.— In what manner payments are to be applied. — On a bill to be relieved against a judgment at law, if the relief is granted in part only, the defendant is entitled to his costs at law, and must pay me costs in equity.
    This was an appeal from a decree of the High Court of Chancery. The bill was filed by the appellees, to be relieved against a judgment at law, on a bond payable the 2d of March 1784, executed by the appellees for ^113: 16: 4, being the amount of a tract of land, mortgaged by a certain David Davenport to the appellant, to secure a debt of ^40: 18: 7, with interest from the 19th of August 1756, and sold under a decree of the County Court of Hanover, and purchased by the appellee James the younger, for whom the other appellee was security.
    The ground of equity is, that the mortgage had been paid off by David Davenport : — that under a deed of trust, or power of attorney, from the said David, to Lewis and Ross, the land, had been long before the decree of Hanover Court, sold at public auction, and purchased by the appellee, James Davenport, the elder, at £30, the appellant being then present, and silent as to his title. That James the elder, paid the purchase money to Lewis, has been ever since in possession, and in 1779 received a. conveyance from David Davenport for the land; so that James the younger, has had no benefit from his purchase under Thompson’s decree, and ought therefore to be relieved against the payment of the money.
    Both grounds of equity are flatly denied by the answer. So far from the mortgage money having been paid off, the defendant states an account, commencing in December 1756, by which, after crediting the said David with every payment contended for, he makes him debtor £7: 5; 4, over and above the mortgage money. — The defendant insists, that the intention of the mortgage was to secure subsequent advances of money, or other things; and that the balance due, for posterior dealings, ought to be satisfied out of the mortgaged premises. He denies, that he concealed his incum-brance from the plaintiffs, but, that on the contrary, he disclosed it to them, on the day of Lewis and Ross’s sale, that besides this, James the elder, is a brother to David; has been a near neighbor to the defendant, ever since the purchase was made, and finally, that the price which *he gave for the land, was not more 'han the value of the equity of redemption.
    The proofs in the cause, relate principally to Thompson’s confessions, that the mortgage was paid off, and his silence at the sale. Amongst the exhibits, is a letter from David Davenport to the court of Hanover, desiring a decree to be entered up, in the suit of Thompson against him, for the principal sum mentioned in the mortgage, and interest from the date, which he says is justly due. The account stated, and reported by the master, after crediting Davenport with all his payments, and debiting him with the posterior account of Thompson, down to the last payment made by Davenport, makes a balance of £29: 1: 3, due upon the mortgage in June 1762, and £31: 5: 7)4i due for subsequent dealings.
    The court injoined the defendant, from proceeding to levy more of his judgment at law, than so much of £29: 1: 3, with interest from the 28th of June 1762, as shall remain, after deductions therefrom, of the costs expended by the plaintiffs, in their action at common law, and in the said High Court of Chancery.
    
      
      The reporter was not in court, when the opinion in this case was delivered. — Note in Original Edition.
    
    
      
      Mortgages and Conditional Sates — Distinction.—On this question the principal case is cited in foot-note to Robertson v. Campbell, 2 Call 421; Walraven v. Lock, 2 Pat. & H. 552; Klinck v. Price, 4 W. Va. 9; Davis v. Demming, 12 W. Va. 282, 283; Lawrence v. Du Bois, 16 W. Va. 460, 461; Hofiman v. Ryan, 21 W. Va. 430; Sprigg v. Bank, 22 Fed. Cas. 976. See mono-graphic note on “Mortgages” appended to Forkner v. Stuart, 6 Gratt. 197.
    
   The PRESIDENT

delivered the opinion of the court.

The evidence of Mr. Thompson’s confession, respecting the payment of the mortgage money, is loose and desultory; liable to the objections justly stated by the Chancellor, and to others also important; amongst which, one is, that none of the witnesses mention the time, or near it, when those confessions were made — the proof respecting his silence at the sale, is also very defective.

To sustain the decree so far as it goes, the counsel, made several observations upon the evidence, which need not be further noticed, since we agree with the Chancellor on that ground.

The counsel for the appellees, upon this point, supposing that the evidence should be adjudged insufficient, to prove the mortgage to have been paid off, insisted, that no day of payment being mentioned, it was a conditional purchase, and not a mortgage; that Davenport might repurchase at any time, upon payment of principal without interest; which not being mentioned, cannot properly be demanded.

In questions, whether a. deed should be considered as a mortgage, or an absolute purchase, chancellors have said, they would govern themselves by the intention of the pa.rties; and *if the former appeared to have been intended, they would not suffer it to be changed into a purchase by any form of words, which might elude the justice of the Court, in permitting a redemption.

In aspect, form, and essence, this is a mortgage without a trait, indicating a purchase. No price for a purchase was contemplated, or discussed, as in a sale. The vendor retains possession, which is uniformly the effect of a mortgage, and not of a sale. There is also a covenant for payment of the money; and tho’ interest is not mentioned, yet the principal debt was due on demand, and bore interest from the date, as in the common case of a bond._

In the case of a purchase, the vendee, has possession of the property, in lieu of interest, and therefore, if there be a condition to repurchase, it is done on payment of principal only, unless interest be expressly mentioned; because otherwise, the vendee would have double satisfaction, namely, interest, and the use of the land. But, in this case, Thompson has received no equivalent for interest, since Davenport retained the possession" of the land. Upon the whole, it is clear, that this is a mortgage, and as such, is redeemable upon the common terms, of paying principal and interest.

But the decree, reducing the mortgage from £40: 18: 7 principal debt in 1756., to ;£29: 1: 3, principal in 1762, is complained of, by both of the parties. The appellant’s counsel insisting, that since there was a running account between the parties, on the close of which, a balance was due to Thompson, there ought therefore, to be no deduction from the mortgage debt. On the other side it is insisted, that since payments were made subsequent to the mortgage, more than sufficient to discharge both principal and interest, they ought to be so applied, and the balance should be credited in the account.

The rule as it respects the application of payments is agreed, but the question is, how it operates on the present case?

It is insisted, that the credits, are not to be considered as payments, but as forming so many items in a running account. Whether this would be the case or not, if the credits were mere matters of account, we will not now determine, as we understand, that it will be made a question in some other cause which is to come on.

But in this case, the credit in June 1762 of ;£80, which reduces the mortgage, is not of goods, or produce, so as to be a matter of account only; but was a payment made in money, *or what was equivalent thereto, by two orders on Jackson and Crenshaw.

After the account was paid off, to that time, there was no choice of application, there being no debt but the mortgage.

The decree therefore is right, so far as it respects the balance due, but is defective, in not decreeing a conveyance, and disposing of the surplus.

As to the costs in Hanover, and the District Courts; whether it proceeded from a difference in opinion between the Chancellor and this court, or that it was not attended to by him, we cannot say; We rather suppose the latter, since we cannot discover any ground for making the defendant pay those costs; since he was certainly entitled to a considerable balance, and was pursuing regular methods to recover it. The costs in the Court of Chancery, were properly awarded against him, since the plaintiff was relieved.

The decree as also the first decree dismissing the bill with costs must be reversed with costs.  