
    Cross, Administrator, v. Hepner and Others.
    A deed of conveyance taken upon a loan of money, with an accompanying agreement that the land shall be reconveyed upon payment being made, operates as a mortgage.
    An agreement to receive the rents and profits of land for a term of years, for the use of money, will not be held usurious from the fact merely that the rents and profits are shown to have been of greater value than six per cent, per annum on the sum borrowed.
    To render the agreement usurious, it must appear that there was an intention to evade the statute.
    A lender of money took a conveyance of the borrower’s land, and at the same time executed an agreement in which it was stipulated that he was to receive the rents and profits till tlie money fell due, and that upon full payment the land should be reeonTeyed, &c. Held, that after the money became due, the possession of the land by the lender or his assigns was that of mortgagees in possession, and that in ascertaining the amount due to him, the rents and profits due to the borrower since the money became payable, should be ascertained and deducted, &c.
    
      Note.—The opinion in this case was delivered at the November term, 1852; but the printing of it was deferred by reason of a petition for a rehearing, which was not disposed of untE this day. Having been overruled, the opinion is here inserted.
    
      APPEAL from the Parke Circuit Court.
    
      Wednesday, December 26.
   Smith, J.

This was a suit in chancery, commenced by Gross, administrator of George Saxton, to subject certain real estate to the payment of the debts of the intestate. The material facts bearing upon the questions involved are as follows:

On the 2d of March, 1840, Saxton, the intestate, loaned to Eli Hepner 950 dollars, tailing from him a note for the payment of that sum five years after date. There was no stipulation in the note for the payment of interest.

On the same day, Hepner and wife conveyed to Saxton the undivided half of a tract of land, by an absolute deed; and Saxton executed a bond for the reconveyance of the land to Hepner, on the payment of the note above mentioned, with all interest accruing before such payment. It is recited in the bond that the deed was made to Saxton for the purpose of securing the payment of the note, and that, by a special agreement between the parties, Hepner was to have the rents and profits of ten acres of the land during said period of five years.

The parties, also, at the same time, executed another agreement in writing, by which it was stipulated that Saxton was to have the rents and profits of the land conveyed to him, for five years, in lieu of interest on the note for 950 dollars, except the ten acres reserved by the recital in the bond. It was also stipulated that Hepner should open a lane and make certain fences upon the land in question, and that Saxton should erect certain buildings for which Hepner was to pay him what they were reasonably worth.

Saxton, in the year 1842, conveyed the same to his son John, who, during the same year, conveyed it to his brother Gersham; but these conveyances were voluntary, and fraudulent as regards creditors. No question is made respecting them.

The defence made by Hepner is, that the agreement was usurious, because the rents and profits of the land were worth more than the interest of 950 dollars, and that the principal had been fully paid by said rents and profits.

The rents and profits of the land thus mortgaged to Saxton, and which thus came into his possession, were variously estimated by a large number of witnesses, whose depositions were taken. An average of their estimates makes these rents and profits worth about 120 dollars per annum.

The Court, upon the hearing, found that the deed of Hepner, with the accompanying agreements, was a mortgage to secure the payment of the note for 950 dollars; and the deeds to John and Gersham Saxton were declared void. Thus far the decree is right. The Court below also decreed that the agreement that Saxton should have the use of the rents and profits for five years, for the use of the sum loaned by him, was usurious, because they were worth more than the legal rate of interest upon that sum; and finding that the rents and profits were worth 120 dollars per annum, and that, estimating them at that value, the principal loaned, or the sum of 950 dollars, without interest, had been paid, the debt was decreed to be extinguished and the bill was dismissed.

This latter portion of the decree can not be sustained. It appears to be founded on the supposition that an agreement to pay, by giving the use of other property for a period of time, for the use of a sum of money, is necessarily usurious, if a majority of the persons residing in the neighborhood should be of opinion that the rents and profits of such property are worth more than the legal rate of interest upon the sum loaned. If that was the case, an agreement to give a larger sum of money than the legal rate of interest for the temporary use of other property, would be liable to the same objection; and all such contracts might be deemed usurious, if the lessor or bailee should agree to give more than, in the opinion of his neighbors, would be equivalent to the legal rate of interest upon the value of the property leased or bailed.

Our statute upon the subject of usury prohibits the taking of any greater sum, or greater value, than at the rate of six per centum per annum for the loan or forbearance of either money or other property, and it is as much usury to give and receive more than six dollars per annum for the use of each hundred dollars’ worth of other property, as to give and receive a larger sum for the use of each hundred dollars in money. But it could not have been the intention of the law, to deprive the parties to such contracts of the right to put their own estimate upon the value of the property in question, or to prevent their own agreement as to such value from being binding, if it is made in good faith, and without any intention of evading the prohibition against usury.

In the present case, there is not the slightest evidence of an intention to evade the statute against usury, except the single fact that a majority of the witnesses stated that, in their opinion, the rents and profits of the farm were worth considerably more than the legal rate of interest upon the sum of money loaned. These witnesses, however, varied very much in their estimates, some of them fixing the value of the rents and profits at a sum about equal to the lawful interest. Taking into consideration that the parties themselves must be regarded as the most competent persons to determine what was the actual value of the lands, or of their use for a term of years, at the time the contract was made, we think the evidence given was not sufficient to authorize the conclusion that the agreement was not made in good faith.

"We are also of the opinion that after the expiration of the five years for which the contract was made, Saxton and his representatives should be regarded as mortgagees in possession of the undivided interest of Hepner in the land in question, in common with the other joint tenants, so long as they continued in such possession. In order, therefore, to render the proper decree in this suit, the Court should have ascertained the time during which such possession continued, and the proportion of the rents and profits to which Hepner was entitled during that period as mortgagor of an undivided interest, and as an authorized agent to receive the proportion which would be due to some of the other joint tenants. The sum thus found should have been deducted from the amount of the note, with interest from the time it became due until the decree was rendered.

J. A. Wright, E. W. Me Caughey, J. Morrison, C. A. Ray and J. T. Morrison, for the appellant.

S. B. Goolcins and A. L. Roache, for the appellees.

There is some evidence that Hepner acted as agent for two of the other joint tenants while Saxton was in possession, but for what length of time does not clearly appear. Neither does the evidence fully show how long Saxton or his representatives continued in possession of the mortgaged premises. It may be necessary that additional proof should be heard as to these points.

Per Curiam.

The decree is reversed with costs. Cause remanded, with instructions to the Circuit Court to hear such additional proof as may be necessary, and to render a decree in conformity with this opinion . 
      
       Gookins, 3., having been concerned as counsel, was absent when the petition for a rehearing was considered.
     