
    Floyd v. Harrison and Others.
    July, 1843,
    Lewisburg.
    (Absent Cakbll, P., and Brooke, J.)
    Mortgages — Redemption—Case at Bar. — A deed is made, whereby, alter reciting that F. the grantor hath sold to H. the grantee, for the sum of 200 dollars, certain real and personal estate, it is witnessed that the grantor, in consideration of that sum, conveys the same to the grantee ; and then the deed concludes as follows : "It is agreed and fairly understood by and between the said F. and H. that in case the said H. or his heirs or assigns shall not be able to make the aforesaid 200 dollars out of the estate herein be - fore conveyed, that then the said F. shall refund the same to the said II. or his heirs or assigns, with lawful interest thereon from this date till paid, or such part of the said 200 dollars as the said H. shall not be able to realize as aforesaid.” Under the authority of this deed, the grantee sells and conveys the estate, and his grantee again sells and conveys the same. After which, to wit, about ten years after the date of the first mentioned deed, the grantor in that deed flies a bill in equity to redeem the estate conveyed, on paying whatever may be due of the 200 dollars, with interest. Hsld, the bill cannot be sustained. Allbn, .1., dissented considering the case within the prin-162 ciple of Chowning v. Cox •‘‘and others, 1 Rand. 308, recognized more recently in Breckenridge v. Auld and others, 1 Rob. 148. The two other judges who sat in the case (Stanard and Baldwin) considered it not within the principle of those cases.
    Same — Whether Mortgagee May Sell under Power Given by mortgage. — The case of Chowning v. Cox and others, 1 Rand. 306, is a departure from the doctrine, now well settled in England and recognized in New York, that a mortgagee may sell the property after forfeiture, under a power given l'or that purpose in the mortgage deed: per Baldwin, J. — The doctrine so settled in England and recognized in New York seems to have been wholly overlooked by counsel and court in the argument and decision of Chowning v. Cox. Though this consideration may not warrant the reversal of that decision, it is most cogent to limit its authority to the particular case then in judgment. Per Stan-ard, J.
    
      Same, — The grounds on which Stanard, X, concurred in the decree in Breckenridgre v. Auld and others, 1 Roh. 148, stated hy him in his opinion in this case.
    On the 27th of November 1816, a deed -was made between Gabriel J. Floyd, then of the to,wn of Louisville in the county of Jefferson and state of Kentucky, of the one part, and Charles L. Harrison of the same town of the other part, whereby, — after reciting that Benjamin Johnston senior died intestate, leaving eight children, to wit, Susanna Johnston who intermarried with Davis Floyd, Ann C. Johnston who intermarried with John F. Gray, Robert Johnston, and five others, of whom each child became entitled to one eighth part of his estate; and after further reciting that the said Robert Johnston and Ann C. Gray had died intestate and without issue, whereby the said Susanna Floyd became entitled to one seventh part of the said Robert Johnston’s, and one seventh part of the said Ann C. Gray’s part of the estate of the said Benjamin Johnston senior; and after further reciting that the said Susanna Floyd' had died, having first had issue, to wit, the said Gabriel J. Floyd and Charles D. Floyd, whereby the said Gabriel J. became entitled to one moiety of his mother’s interest in the estates of the said Benjamin Johnston senior deceased 163 *and the said Robert Johnston and Ann C. Gray deceased; and after a further reciting that “the said Gabriel J. Floyd hath this day sold to the said Charles L. Harrison, for and in consideration of the sum of 200 dollars, all his interest of, in and to all the estate, both real and personal, of the said Benjamin Johnston senior deceased and Robeit Johnston and Ann C. Gray deceased, to which he is now or may hereafter be entitled as one of the heirs of his said mother Susanna Floyd deceased, lying and being, or owing, within the states of Virginia and Kentucky,’’ it was witnessed that the said Gabriel J. Floyd, for and in consideration of the premises, and of the aforesaid sum of 200 dollars to him in hand paid, conveyed unto the said Charles L. Harrison “all his the said Gabriel J. Floyd’s interest as heir as afore mentioned, of, in and unto all lots, parts of lots and lands within the states of Virginia and Kentucky, claimed and owned by the heirs of the said Benjamin Johnston senior deceased, and also all the right, title and interest which he may become entitled to hereafter by descent, and also all his right, title, interest and claim in and to bonds, notes, bills, judgments and executions which he is or may be entitled to by descent, which are now due and owing to the estate of the said Benjamin senior deceased and Robert and Nancy deceased, or which may hereafter become due and owing as aforesaid.” Then followed the habendum clause, and a warranty by the grantor against himself and all persons claiming under him. After which came the following clause: “And it is agreed and fairly understood by and between the said Gabriel J. Floyd and Charles L. Harrison, that in case the said Harrison or his heirs or assigns shall not be able to make the aforesaid 200 dollars out of the estate herein before conveyed, that then the said Floyd shall refund the same to the said Harrison or his heirs or assigns, with lawful interest thereon from this date till paid, or 164 *such part of the said 200 dollars as the said Harrison shall not be able to realize as aforesaid.”
    On the 16th of July 1823, a deed was made from Charles L. Harrison (by James Harrison his attorney) to John and James M’Lure, whereby, after reciting various conveyances to the said Charles from persons interested in the estate of the said Benjamin Johnston deceased, embracing the conveyance from Floyd as well as others, Harrison, for the consideration of 550 dollars, conveyed unto John and James M’Lure 1‘all the lands or land claims, or part or parts of tracts of land, now owned, claimed or possessed by the said Charles L. Harrison by reason of said conveyances made as aforesaid, in either of said states of Virginia and Kentucky, also all debts or demands which the said Charles has against any person or persons, derived by said purchases of the aforesaid ..shares or parts of the said estate of said Benjamin Johnston ; to their only proper use, benefit and behoof.”
    The rights of John and James M’Lure under this deed were conveyed by them, on the 30th of October 1826, to John Gibson for the consideration of 800 dollars.
    After all these conveyances, a deed was made on the first of November 1826, between Charles L. Harrison and Gabriel J. Floyd, whereby the former conveyed ■ unto the latter, for the nominal consideration of one dollar, all the right, title, claim and interest of said Harrison, held and then owned by him by virtue of the deed made to him by said Floyd, of, in and to lands in the states of Kentucky and Virginia.
    And on the first of September 1829, Floyd commenced a suit in chancery in the county court of Ohio, against Charles L. Harrison, John M’Lure, James M’Lure, John Gibson, William F. Peterson and Charles Allison.
    The greater part of the bill was taken up with explaining the state of the 165 title derived from Benjamin *Johnston the elder; and exhibits were also filed with it, explanatory of the title. It will suffice, as to this matter, to say (in the language of one of the judges composing the majority of this court) that the title in its origin, according to the plaintiff’s statement of it in his bill, appeared extremely objectionable, and the interests claimed under it were, at the date of his deed to Harrison, for the most part, if not altogether, in action instead of possession.
    The bill states that on the 27th of September 1816, the complainant was indebted to Harrison in the 'sum of 200 dollars; mentions that the estates conveyed by the deed of that date were of great value; and charges that the deed was intended as a mortgage, and given in the form it was, to enable Harrison to make sales and conveyances to raise the sum aforesaid; that Harrison so understood the deed; and that after selling portions of the property to the amount of the debt and charges, or nearly so, he, on the 1st of November 1826, made to the complainant a reconveyance of all the right and title acquired by him. The bill mentions the deed from Harrison to M’Lures, and states that at the time of that conveyance, Harrison was fully paid, and that the complainant, at the time of settling with Harrison, acquitting him, and receiving the reconveyance, had no knowledge or notice of the said deed to M’Lures. The bill also mentions the conveyance from M’Lures to Gibson, and charges that Gibson holds the property in his own name for the use and benefit of William E. Peterson, who pretends to be acting as attorney in fact, and in that capacity has sold to, or otherwise interested in the business, Charles Allison, whom he has put in possession of part of the property. The prayer of the bill is for a release to the complainant of the legal title; or, if a balance of the debt shall be found yet due, that he may be permitted to redeem.
    166*John M’Lure put in a plea and answer, pleading that he was a purchaser without notice, and answering that the plaintiff had notice of the deed of 1823 to John and James M’Lure, before he took his reconveyance from Harrison in 1826; that the plaintiff had disclaimed title to the land in controversy in 1827, and had nevertheless sold his interest in it to David Pugh, for whose benefit this suit was prosecuted.
    Gibson answered to the same effect.
    Peterson answered, disclaiming interest. The subpoena was returned executed upon James M’Lure and Charles Allison, but they did not answer. Harrison was proceeded against as an absent defendant.
    Depositions were taken on behalf of the defendants, to prove that the complainant w'as perfectly aware of the conveyance from Harrison to the M’Lures when he obtained a reconveyance from Harrison to himself, and that he took that reconveyance under an idea that, to the extent of the lands in Brooke county, he could overreach the M’Lures and those claiming under them, by getting the reconveyance recorded in that county before the conveyance to the M’Lures was recorded there.
    On behalf of the complainant, the deposition of John Edie was taken. Being asked what he supposed to be the value of a share, or the one sixth part, of such of the lands of Benjamin Johnston senior in Brooke county as were not sold by him in his lifetime, he answered, 1 ‘that he is of opinion that the share in Brooke is of the value of 4000 dollars; that is, the one sixth of the unsold lands of Benjamin Johnston senior in the county of Brooke.” In answer to another question, he explained his opinion to be, that the share inherited by Susanna Eloyd from her father, brother and sister, ‘ ‘if none of it had been sold by her husband, would have been worth 4000 dollars in the year 1827.” He stated that he was acquainted with the parts of her share sold by her husband Davis Eloyd, 167 and was of opinion that *in 1827 the said parts were worth 2000 dollars, “leaving the share of each of her sons in 1827 worth 1000 dollars.” He spoke of the lands in Brooke county only.
    But the deed before mentioned of the 16th of July 1823, from Harrison to John and James M’Lure, conveyed, for the consideration of 550 dollars, not only what had been conveyed by Eloyd to Harrison, but the share of Gabriel J. Johnston a son of Benjamin Johnston senior, the share of John Harrison who intermarried with Mary a daughter of the said Benjamin, and the interest of Benjamin Johnston junior, another son, in the share of his sister Ann C. Gray.
    The cause was removed by certiorari to the circuit court of Brooke, and on the 13th of October 1832 came on to be heard before that court, when it was decreed that the plaintiff’s bill be dismissed as to the defendants John M’Lure, James M’Lure, William F. Peterson, John Gibson and Charles Allison; that they recover of the plaintiff their costs; and that if the counsel for the plaintiff desire the same, it be referred to a commissioner to state an account between the plaintiff and the defendant Harrison. But this account the plaintiff, by his counsel, waived.
    Erom this decree an appeal was allowed.
    G. N. Johnson for
    The deed of November 1816 is a mortgage, intended to be coupled with a power of sale. The transaction was not a sale to Harrison; else why was the vendee to sell the land again from time to time, until the sum of 200 dollars with interest was raised? It was not a sale, because there was no equality in the bargain. Harrison was, upon that supposition, to get 200 dollars with interest, at all events, and as much more as he might make out of the sales of land of indefinite and constantly increasing value, part of which was worth 1000 or 2000 dollars. 168 It *was not a sale, because the vendee had precisely such rights in the property as an ordinary mortgagee would have, with the nugatory addition of the invalid power to sell, attempted to be conferred; a power, too, not inserted in absolute deeds, and indicating rather fiduciary than absolute ownership. Nothing was wanting to make this a mortgage in form, but the express reservation of an equity of redemption. But it is held universally, that whatever be the form, every conveyance of land as a security for the repayment of money to the grantee is a mortgage. See 1 Powell on Mortg. 115, 116, note (H), and p. 4, note (3); Hughes and others v. Edwards and wife, 9 Wheat. 489; Conway’s ex’ors v. Alexander, 7 Cranch 218; also 4 Kent’s Comm. 142; 1 Lomax’s Dig'. 31S, 321. | It is so held, in spite of express agreements that the estate shall not be redeemable. See 1 Powell on Mortg. 116, note (H), above cited, and the cases there mentioned. In the case of Clay and others v. Willis, 1 Barn. & Cress. 364, 8 Eng. Com. Law Rep. 103, as in this case, there was no right of redemption reserved, and there yas a power of sale; and the court considered the deed a mortgage. The existence of a covenant binding the grantor personally, is looked upon as a very strong, if not a conclusive evidence that the deed is a mortgage. See Coote on Mortg. 22, 3, and case there cited of Howard v. Harris, 2 Ch. Cas. 147; Conway’s ex’ors v. Alexander, 7 Cranch 218; 1 Lo-max’s Dig. 321, and cases cited in note (6). Again, it is held that “mortgages are mutual;” that is, where one of the parties receives the benefits of a mortgage from the transaction, the court will hold the deed to be a mortgage, in favour of the other party; so that if it gives the grantee the power of getting his money and interest back at all events, by means of a covenant to repay or otherwise, the grantor will be allowed to redeem the land upon repayment of the money with interest. Coote on Mortg. 33; 1 Powell on 169 Mortg. 33S, *and note (R); Howard _ v. Harris, 2 Ch. Cas. 147. The circumstance that the grantee has not an immediate remedy upon the personal covenant, although the grantor may have the immediate right to redeem, is not material. See Coote on Mortg. 33, 34. The mutuality need not run quatuor pedibus. The great principle upon which courts of equity originally interposed, and moulded ancient mortgages to their present state, was this, that it was inequitable that a creditor .should obtain a collateral or additional- advantage, through the necessities of his debtor, beyond principal and interest. See Coote on Mortg. 21. In Bonham v. Newcomb, 1 Vern. 214, 232, the risk of loss to the grantee was relied upon to shew that the transaction was a sale, not a mortgage. Courts will not allow a mortgagee to accompany his bargain by any agreement by which a collateral and undue advantage may be gained. Coote on Mortg. 26, citing Jennings & others v. Ward & others, 2 Vern. S20. Wherever, in doubtful cases, the courts have construed the transaction to be a sale, it will be found that the bargain was fair and equal. See the class of cases mentioned by Coote, p. 28. The gross inadequacy of the consideration is another strong proof that the transaction was a mortgage. Wharf v. Howell and wife, 5 Binn. 499; Conway’s ex’ors v. Alexander, 7 Cranch 218; 1 Powell on Mortg. 125, note (P).
    Gibson, the holder, claims to be a purchaser without notice .of Floyd’s equity: but that defence is manifestly inapplicable- to the case. For the deed from Floyd to Harrison, importing a mortgage, discloses the equity upon its face, and each subsequent deed in the chain of title refers to that which preceded it. The case of Graff and others v. Castleman &c., 5 Rand. 195, determined that notice of a deed was to be presumed against a purchaser, under circumstances less strong than exist here. If Gibson really believed his title to be indefeasible, it was his own fault or 170 misfortune. The *principle is, “once a mortgage, always a mortgage. ” Powell on Mortg. 116, note (H). The risk whether a mortgage is redeemable or not, rests with the purchaser. Hansard v. Hardy, 18 Ves. 455.
    George H. Lee for appellees.
    The deed from the appellant to Harrison was not, nor was it intended to be, a mortgage, but was in fact and was intended to be an absolute conveyance of an undivided interest in an estate of uncertain title, extent and value; the grantee requiring (in consequence of the doubt whether or no the interest granted was of any value), and the grantor giving, a guarantee that the grantee should, when he came to dispose of it, be able to realize the amount of the purchase money, or that he (the grantor) would make good the deficiency. The question whether a conveyance is to be considered a mortgage or otherwise, depends upon all the circumstances of the contract, and is not confined to the mere written evidence of it. Robertson v. Campbell &c., 2 Call 421. For the traits of a mortgage, as distinguished from a conditional sale, see Thompson v. Davenport &c., 1 Wash. 125, Chapman’s adm’x v. Turner, 1 Call 280, Leavell v. Robinson,- 2 Leigh 161, and Conway’s ex’or v. Alexander, 7 Cranch 218. In the last case, land was conveyed to trustees, in trust to convey the same to A. in case B. should fail ■ to repay, on a certain day, certain money advanced by A., with interest. B. failed to pay the money on the day limited, and the trustees conveyed the land to A.; and it was held that B. had no equity of redemption.
    But if the deed is to be construed as in the nature of a mortgage, yet it was made. and intended, and the particular form - used was adopted, not with a view to authorize the grantor to demand a reconveyance upon paying the consideration he had received, but for the very purpose of enabling the grantee to make sale of the subject, and with the understanding that 171 he should *do so. And a mortgage with such power to sell is good, and the sale under- it effectual. In Tajdor’s adm’rs &c. v. Ghowning, 3 Leigh 654, such a sale was sustained. The practice in New York is to permit such sales. Jackson v. Henry, 10 Johns. R. 184. And the modern english doctrine is the same way.
    The exercise of the power conferred by the deed (and expressly intended to be exercised), by the sale to the M’Lures, ought not now, after the'lapse of time since the execution of the deed, and especially considering the conduct and declarations of the appellant, and the other circumstances of the case, to be disturbed or questioned. In Roberts’s adm’r y. Cooke, 1 Rand. 121, judge Cabell relied much upon the acquiescence of Roberts. Here the acts and conduct of the appellant are such as should prevent a court of equity from giving him its assistance.
    G. N. Johnson in reply.
    The new eng-lish practice was creeping into use in that country, under the protection of some of the eminent conveyancers, especially mr. Coventry, when it was powerfully shaken, if not overthrown, by the strong objection to it manifested by lord Fldon in Roberts v. Bozon, in 1825. He appears to have heard of the new practice then for the first time. See Coventry’s note, 1 Powell on Mortg. p. 9. There could not be a stronger demonstration of the evils of the new practice, than is afforded by the laboured a'pol-ogy of mr. Coventry for them. In this court, however, it ought to be sufficient to refer to its own adjudications in the cases of Chowning v. Cox and others, 1 Rand. 306, and Breckenridge v. Auld and others, 1 Rob. 148.
    If the deed is to be construed as a sale of the land at the price of 200 dollars, with a guarantee that the land should produce in the market at least that sum with its interest, leaving to the purchaser the full benefit of whatever surplus might be 172 procured, then the transaction K'wculd be obviously usurious. It is well settled doctrine, that wherever the contract assures to him who advances money a return of his whole principal and interest, at all events, and gives to him a chance only of farther profit, this chance is regarded as a premium over and above the lawful interest, and will make the contract usurious. Ord on Usury 70; Gibson v. Fristoe and others, 1 Call 76, 81; Smith v. Nicholas &c., 8 Heigh 349.
    
      
      They were absent the whole of this term, having been prevented from attending by indisposition.
    
    
      
      Mortgages. — See the principal case cited in Spencer v. Lee, 19 W. Va. 192, 195; also, foot-note to Breckenridge v. Auld, 1 Rob. 148.
      See generally, monographic note on "Mortgages” appended to Forkner v. Stuart, 6 Gratt. 197.
    
   BARD WIN, J.

The justice of this case is clearly against the plaintiff. He makes a conveyance, for a valuable consideration, of his interest in certain lands and choses in action, without any limitation upon his grantee’s power of alienation; lies by for a number of j'ears, without asserting any claim to the property, and till after successive sales and conveyances thereof to bona fide purchasers; then, with full notice of the fact, obtains a reconveyance from his grantee, fraudulently made by him to defeat his own purchasers; and now seeks to recover back the subject, upon the allegation that the deed was intended merely as a mortgage. If the plaintiff is entitled to relief under such circumstances, it ought to be very clearly established.

The deed in question, if a mortgage, certainly departs very widely from the usual form of such instruments. It contains no unconditional covenant for repayment of the consideration, nor any acknowledgment of a subsisting indebtedness; no covenant on the part of the grantee for a reconveyance, nor any condition upon which the estate, is to be avoided; no reservation, in any shape or form, of a power of redemption on the part of the grantor, nor of a right, for any period, to the possession and enjoyment of the property, which passed with the title to the grantee; while the authority of the latter to sell or otherwise dispose of the subject, ad libitum, is recognized by a necessary implication. In short the instrument, after a recital of the ^grantor’s title and the sale of his interest to the grantee for the sum of 200 dollars, is in the common form of a deed of bargain and sale, except that it contains a guarantee of the value of the property conveyed, not absolute but contingent ; the terms of the guarantee evidently contemplating a sale or sales of the subject by the grantee, without his being able to realize the price paid by him, with its interest; in which event only it is stipulated that the grantor shall make good the deficiency. But there is no obligation to sell imposed upon the grantee; and according to the terms of the contract, he was at liberty to retain the property itself, or the proceeds of sales, as his own, without accountability. This guarantee, however, rendered the contract unequal, inasmuch as it guarded the grantee, during the solvency of the grantor, against the hazard of loss, while it left him the chance of gain by an increase in the value of the property. A guarantee of value is unusual in sales of real estate, though not so in sales of personal choses in action; in regard to which the law, in the absence of an agreement to the contrary, implies such a guarantee; and therefore if the purchaser of a bond is unable, by the use of due diligence, to make the money out of the obligor, he is entitled to reimbursement from the assignor, of the consideration paid, with its interest. This inequality in the contract did not render it the less a sale,, if so intended by the parties, as its language imports. Under what circumstances, if any, an action of covenant would have lain upon the guarantee, or whether under anj' it would have been enforced by a court of equity, are matters foreign to the enquiry. It was not a stipulation for the benefit of the grantor, but for an additional advantage to the grantee; and whether valid or invalid, could not affect his title as purchaser.

The cause, however, is not to be determined by .the mere form of the contract, but by the intention of the ^parties, to be gathered not only from the terms of the instrument, but also from extrinsic circumstances. The propriety of resorting in such cases to evidence aliunde, results from the nature of the question ; for otherwise a mortgage might be converted into a sale, or a sale into a mortgage, by fraud, accident, or mistake. But the present. case is not embarrassed by the enquiry whether the transaction was intended as a mortgage or as a conditional sale; an enquiry frequently of much perplexity and nicety; the difficulty arising out of the circumstance that both the one and the other are estates upon condition, and the condition of the like character in both, so far' as its performance goes to defeat an estate granted, by repayment of the consideration ; and the essential distinction being, that in the event of nonperformance, the estate in the former case is forfeited at law but not in equity, and in the latter both at law and in equity. Here the question is not between a mortgage and a conditional sale, but between a mortgage and an absolute sale: for if the transaction was in fact a sale, there is no room for the idea, nor is it pretended, that it was upon any condition whatever. And o’n that question, it seems to me impossible to hold this instrument a mortgage upon its face, without maintaining that the harshness, or inequality, or (if you please) unlawfulness of a provision in a contract of sale, is to have the effect, not of rendering abortive the provision itself, or of avoiding the entire contract, but of changing it into another contract of a wholly different nature. How can we undertake to pronounce this deed a mortgage by its very terms, in the absence of any condition or provision to defeat the absolute title conveyed to the grantee?

But though the deed is not a mortgage upon its face, the clause of guarantee may very properly be relied on, in connexion with other evidence, for the purpose of

175 ascertaining what was the real character of the ^'transaction as contemplated by the parties; for upon that question of fact, we are to look to all the circumstances of the case; and it is an important consideration, which in a doubtful case might have a decisive influence, that the grantee is assured against the risk of loss, to the full amount of his principal money and interest. Upon such a question, authoritative rules can do little more than ascertain the abstract distinction between a sale and a mortgage: beyond that, they are guides rather to the investigation than the adjudication; the fact of intent being a common sense deduction from all the evidence, by a sound discrimination of the weight of circumstances, and a just combination of the whole. Still the imperfection of human testimony requires us to bear in mind, that the intrinsic import and legal effect of the instrument itself are not to be lightly disregarded; that there is a prima facie presumption of its expressing truly the agreement of the parties; and that though it may be difficult, if not inexpedient, to prescribe the limits of extrinsic testimony, it ought to be of such a nature as to furnish some reason for the necessity of its introduction. This is usually found in the unskilfulness or carelessness of the scrivener; the ignorance of the parties; the misplaced and abused confidence of one of them; the relation existing between, or the relative condition of, the parties, subjecting one of them to the power or undue influence of the other; or, in a word, in whatever may be fairly referred to fraud, accident, or mistake. And when, upon the whole case, it appears that the conveyance was executed to secure a loan or a preexisting debt, objections arising out of the informality or imperfections of the instrument must be made to yield to the substantial merits of the cause; and so must even express stipulations tending to defeat, or restrain, or clog the equity of redemption, and thus give a collateral or additional advantage to the creditor, beyond his principal money and interest.

*When we examine the plaintiff’s bill, we find it stating broadly, that the deed was intended as a mortgage to secure a debt due from him to Harrison the grantee, with a power to the latter to make sales and conveyances of the property, to an extent sufficient to discharge the sum due. It makes no pretence that the instrument does not express truly the agreement of the parties. On the contrary, it treats the paper as a mortgage upon its face, so understood and acted upon by the parties; as evidence of which it alleges that the defendant Harrison, after making sales to the amount of the debt and charges, or nearly so, reconveyed the subject to the plaintiff. There is no complaint against Harrison in the bill, except that, before the reconveyance to the plaintiff, he sold and conveyed the property to the defendants John and James M’Lure; of which sale and conveyance, the plaintiff falsely charges that he had no notice at the time of the re-conveyance. And when we come to look into the proofs in the cause, we find nothing to warrant the belief that the contract between the parties was in any wise different from that evidenced by the deed. There is no proof that the consideration of the conveyance was a loan of money, or a preexisting debt; nor of an agreement to re-convey or surrender the property, or account for its value or the proceeds of sales, in any event whatever. The actual reconveyance, so far from interpreting the original contract favourably for the plaintiff, shews, under the circumstances, a combination between the parties to defraud the vendees of Harrison. It appears from the evidence to have been procured by the plaintiff under the delusive notion that it would enable him to claim such of the lands as lie in Brooke county, in the character of a purchaser from his own grantee, without legal (though with actual), notice of the previous sale to the M’Lures, the deed to them not having been recorded in that county. This, and his other conduct already noticed, are irreconcilable *with the idea of a consciousness on his part that he stood in the relation of mortgagor. The pretension that the consideration of the deed to Harrison has been reimbursed to him, otherwise that by his sale to the M’ Lures, seems to be wholly unfounded. Nor is any light thrown upon the question by the testimony on the part of the plaintiff, to prove the inadequacy of that consideration upon a contract of sale. It consists of the opinion of a single witness as to value, without reference to the period of the sale, or the state of the title; and is of little weight compared with the prices at which that, and other interests in the common subject, were sold, first to the M’Lures, and afterwards by them to the defendant Gibson; which will be found, upon calculation, not to exceed per share the consideration received by the plaintiff. In fact, the value of the subject sold would seem to have been altogether uncertain and precarious; the title in its origin, according to the plaintiff’s own statement of it in his bill, appearing extremely objectionable, and the interests claimed under it, for the most part, it not altogether, in action instead cf possession. In such a state of things, the value must have been merely speculative; anda purchaser, though he may have been willing to risk the title by taking a deed with special warranty, might prudently require a guarantee that if he did not make, he should not lose any thing by his speculation, beyond the labour and expense of pursuing it unprofitably. And in point of fact it has turned out, that instead of gaining, he has lost by the contract.

But whatever may be the force of the circumstances aliunde, they cannot affect the subsequent purchasers without notice; and none is pretended by the bill, nor established by the proofs, beyond that furnished by the face of the instrument. Of this defence they, the only substantial defendants, (the plaintiff having declined an account against the defendant Harrison) have availed *themselves in due form of pleading; so that at last the cause must turn upon the intrinsic import and effect of the deed in question.

If the clause of guarantee could be so construed as to give the plaintiff an equity of redemption, it would at the same time so modify that equitjr, as to defeat the plaintiff’s unjust demand against the bona fide purchasers, under the power of conversion acknowledged by himself to have been conferred by the instrument. Regarding the paper as a mortgage, there being no time limited for the payment of the debt, the grantor might redeem at any time; but then, when he comes to redeem, he must exercise his right in a way adapted to the actual condition of the subject: if before a sale by the grantee, he is entitled to a reconveyance of the property; if after, to the proceeds in the hands of the grantee, subject to the payment of the debt; and the vendees are in no wise bound to see to the application of the purchase money. In truth, they are substantially purchasers from the mortgagor himself, through his duly constituted agent; and it would be a grievous iniquity, if the principal, after a sale under his lawful authority, could turn round and reclaim the property from the innocent purchasers.

It is contended, however, on the part of the plaintiff, that the power of sale vested in the grantee is void, under the authority of Chowning v. Cox &c., 1 Rand. 306. That case is a departure from the english doctrine, now well settled, (1 Lomax’s Dig. 322; Coote on Mortg. 128,) that a mortgagee may sell the property after forfeiture, under a power given for that purpose in the mortgage deed; a doctrine recognized in New York, and the practice there regulated by statute. 4 Kent’s Comm. 141. In Chowning v. Cox &c. it was decided, for reasons lucidly and cogently stated, that the mortgagee could not thus, by his own act, foreclose the equity of redemption. But that decision has no *application to the case before us. Here there was no forfeiture, and no foreclosure: no forfeiture, because the right of redemption was not limited in point of time; and no foreclosure, because the sale was not made to enforce a forfeiture. It was made by the mortgagee, not in that character, — not as a creditor coercing the payment of his debt, but as a trustee appointed to possess, control, manage, and dispose of the estate, with unlimited discretion, not merely for his own benefit, but for that of the grantor likewise. There are no considerations of justice or policy against the exercise of such a power, in which the grantor must be considered as giving his tacit concurrence; as much so as if he were present at the sale, and acquiescing therein ; which, according to Taylor’s adm’rs &c. v. Chowning, 3 Leigh 6S4, (the supplement to Chowning v. Cox &c.) renders a sale by the mortgagee valid, though made by way of foreclosure. It would hardly be doubted, I presume, that a debtor may by power of attorney authorize a creditor to sell his land, receive the purchase money, retain the amount of the debt, and account for the residue; and that a conveyance of the title and surrender of possession, for the better exercise of the power, would be unobjectionable. A trust is not incompatible with a mortgage security. A mortgagee in possession is a trustee, with authority to receive, and accountable for, the rents and profits. He may purchase the subject from the mortgagor, and, a fortiori, sell it by his permission to another. If the possession of the mortgagee is conferred by the contract, and no time is limited for the payment of the debt, the security bears a considerable resemblance to the vivum vadium of the common law, and also to the welsh mortgage; in both of which there is no forfeiture and no foreclosure; and in the latter of which, if not in the former also, there may be a redemption at any time. Coote on Mortg. 9, 207, 517. In such a security, *there is no reason why the mortgagee may not be empowered, in addition to or in lieu of the profits, to apply the capital itself, from time to time, to the extinguishment of the debt; and for that purpose to convert it from land into money.

Thus, whether the transaction is to be regarded as a sale or as a mortgage, the plaintiff is entitled to no relief against the derivative purchasers; and if entitled to any against his grantee alone, he has waived it by declining an account. In my opinion, therefore, the circuit court did right in dismissing the plaintiff’s bill.

AlyLEN, J.

The principal question in this case will depend upon the construction of the deed of 1816. The extrinsic circumstances in evidence furnish but little aid in determining' whether it is to be construed as a mortgage or an absolute sale. The deed is in the ordinary form of an absolute conveyance, conveying to the grantee the various interests described; and then comes the clause which gives rise to the difficulty. “It is agreed and understood by and between the said G. J. Eloyd and C. Iy. Harrison, that in case the said Harrison or his heirs or assigns shall not be able to make the aforesaid sum of 200 dollars out of the estate hereinbefore conveyed, that then the said Eloyd shall refund the same to the said .Harrison or his heirs or assigns, with lawful interest from this date till paid, or such part of the said 200 dollars as the said Harrison shall not be able to realize as aforesaid.” In the absence of all proof to the contrary, it seems to me that the terms here used import a loan of money, and nothing more. The consideration mentioned in the deed is to be refunded, with interest from the date of the agreement. It is clear that the parties did not contemplate any beneficial occupation of the premises by the grantee; for in that event the profits, it is to be presumed, would have equalled the interest. The parties contemplated *an immediate sale, and the application of the proceeds to the payment of the sum advanced; and there was a personal covenant to refund the money with interest, or such part of it as might not be realized by the sale. Under this covenant, it seems to me there could be no doubt, that if Harrison had applied to a court of equity to foreclose the deed as a mortgage, and upon a sale of the property the amount had not been realized, he would have been entitled to a personal decree for the residue, the deed itself reciting and imbodying an express agreement to refund. The absence of a covenant to pay the money will not make it the less a mortgage, if it appears that the conveyance was originally intended as a security for the payment of money. 1 Powell on Mortg. 119 a. note (K), and the cases there cited. But where, as in this case, there is such a covenant contained in the conveyance, it is difficult to conceive how the instrument can be construed to be any thing more than a security. In the case of Howard v. Harris, 2 Chan. Cas. 147, the judge, in' decreeing redemption, added, that he did so the rather because the defendant had a covenant for the repayment of his money, and therefore he had it in his power to have made it a mortgage at any time. The same construction, it seems to me, must be given to this instrument. The parties not contemplating a beneficial occupation of the premises, but a sale to raise the money, and the grantor having covenanted to repay with interest from the date, he could not have denied his liability for the debt. This distinguishes the case from Conway’s ; ex’ors v. Alexander, 7 Cranch 218. In that case there was no covenant to repay, nor any evidence of a loan; and the chief justice observed, that an action at law could not have been maintained for the recovery of the money, and if, to a bill praying a sale, and a decree for so much as might remain due, the grantor had answered that this was a sale and not a ' mortgage, clear proof must "'have been produced to justify a decree against him. If the grantee, then, could have treated this as a mortgage, the rule that a mortgage cannot be a mortgage on one side only, but must be mutual, applies, and governs the case. And this rule operates, though the rights of the parties may be in other respects different: as in the case cited in Talbot v. Braddyl, 1 Vern. 395, — if A. lend upon a mortgage, with a proviso to redeem on payment of a certain sum at the end of two years, there one side cannot foreclose till the end of the two years, but the mortgagor may come before and redeem. And so e converso, though the grantee here could not proceed on the personal covenant until after a sale,-the grantor could at any time redeem before a sale, upon paying the amount secured. The contract, viewed as an absolute sale, would, be most unequal and oppressive. Under that construction, the grantee could either retain the property and reap the profits without account, or, whenever he thought proper, proceed to sell. He was sure of his advance with interest, under any circumstances, and entitled to all he might make in addition. And the grantor, in the mean time, could take no step to relieve himself. If the property were depreciating, he could neither redeem it nor enforce a sale. Por whenever it is conceded that he had a right to relieve himself from this contingent liability by requiring a sale, the deed loses its character of an absolute sale, and can only be viewed as a security. If the conveyance in its inception was a mortgage, the absence of a provision for redemption cannot affect it. Where it is doubtful whether an absolute or conditional sale, or a mortgage, was intended, the want of such a provision is a circumstance entitled to proper consideration. But where the instrument was intended as a security, the absence of a provision to redeem, or express stipulations to prevent it, will not change, its character. 1 Powell on Mortg. 119 a.

*If the deed in its inception was a mortgage, the power to sell, according to Chowning v. Cox &c., 1 Rand. 306, is invalid, and the right of redemption is not barred as against the defendants, purchasers with notice; for the deeds under which they held disclosed the right of the original grantor. The doctrine in Chowning v. Cox &c. may be inconvenient, and an unnecessary interference with the rights of adult parties. But the case has been recognized since as law, and very recently in Breckenridge v. Auld & others, 1 Rob. 148. I am not disposed, when we have but a bare court, to disturb it. The distinction taken between this case and that, seems to me to be unsubstantial. Whether the sale be made to enforce the forfeiture after the day of payment is passed, or to raise the money in pursuance of a power conferred in the instrument, it equally militates against the principle which lies at the foundation of the rule, — the power of the creditor over his debtor, and the incompatibility of a due exercise of the powers and duties of a trustee, with the relation of creditor.

I think, therefore, that the decree is erroneous and should be reversed.

STANAKI), J.

I concur unreservedly in the conclusion of my brother Baldwin, that the decree of the circuit court, denying, under the circumstances of the case, the aid of equity to the plaintiff below against the purchaser of the land, ought to be affirmed.

Some interesting questions have been earnestly and elaborately discussed, the resolution of which is not essential to the conclusion in which I have averred my concurrence. I have, however, considered those questions, and proceed briefly to state the opinions deliberately formed, or at least to which I strongly incline.

We have no information or proof of the transactions between the parties, that induced the execution of the *deed from Floyd to Harrison, nor of the consideration of the deed, other than that which is furnished by the instrument itself. The deed has not a single distinct lineament of a mortgage. The final covenant, that the subject conveyed was of a given value, and if that value should not be realized, the grantor would make good the deficiency, is the only matter from which it is attempted to be implied that the conveyance was a mere security for money, and consequently that the title of the grantee was defeasible, and substantially that-of a mortgagee. This implication rests for its validity on the assumption that the consideration of the deed was a debt due Harrison from Floyd, or money advanced to the latter by the former, to the amount of 200 dollars. Now, though 200 dollars is stated to be the consideration of the conveyance, it does not follow that that was the consideration, much less that it was in numero the amount of a previous debt from Floyd to Harrison, or of money then advanced. The transaction might, in perfect consistency with the deed, have been an exchange of property, the consideration from Harrison being other property; or the consideration might have been a collateral duty to him from Floyds.

The subject conveyed to Harrison was in all probability most precarious, or at least so deemed by the parties, and they might fairly stipulate, to avert total loss from Harrison, that to a certain extent its productiveness should be guarantied by Floyd. If such was the nature of the transaction, every semblance of a mortgage is obliterated. The deed is an absolute one, the result of an actual sale, in which, in place of a general warranty of the vendor, is substituted a guarantee of value to a limited amount, on a consideration which may have exceeded the amount of the guarantee, though short of the possible amount that might be realized from the subject conveyed. In this view of the *case, it was a contract of hazard as to value beyond 200 dollars. The deed contains nothing that forbids us from taking this view of it. The conduct of the parties evinces that they so regarded the transaction. For a period of more than ten years, during which Harrison was dealing with the property as his own, no claim or act of Floyd brought in question the title of Harrison. The first movement of Floyd after the lapse of more than ten years, is one not proceeding on the ground of rights reserved by or implied from his deed to Harrison, but one impliedly renouncing such rights, and by a fraudulent confederacy with Harrison, seeking to place Harrison’s reconveyance to him in advance of the conveyances made by Harrison to others. The acts of the parties reflect back on the original deed, and justify a court of equity (at least when relief is sought by confederates in fraud) in measuring and limiting their claims as they have measured and limited them by their own acts, and forbearing to give activity and effect to an equity which those acts shew was not contemplated by the parties.

But the most interesting question that has been discussed is on the postulate that the deed from Floyd conveyed but a defeasible interest to Harrison, with a power to him to sell: and the question is whether, such being assumed as the plain effect of the deed, Harrison could sell any part of the real subject conveyed, and by his sale and conveyance fairly made, passed to his vendee an indefeasible estate. On the part of the appellant it is insisted, that such sale and conveyance would have still left in Floyd an equity of redemption, and that as to him the estate of Harrison’s grantee would continue to be defeasible. For this proposition the case of Chowning v. Cox &c., 1 Rand. 306, is relied on. I do not mean in this place to bring in question the authority of that case, having strict regard to its particular circumstances, and the limitations on its doctrine *deducible from the sequel to that case, reported in 3 Heigh 654. It may however be remarked in passing, that that case was argued and decided without any reference to or notice of the decisions of the courts of Westminster and New York, on the general question respecting the efficacy of a power in a mortgage deed, authorizing the mortgagee, in particular contingencies, to sell the land, and pass an indefeasible estate to the vendee. That such sale with such effect may be made under such power, is the established doctrine of the english courts, and of the court of equity in New York; and that doctrine, as so sanctioned, seems to have been wholly overlooked by counsel and court in the argument and decision of the case of Chowning- v. Cox &c. These considerations, though they may not warrant the reversal of the decision in the case of Chowning v. Cox &c. are most cogent to limit its authority to the particular case then in judgment, and forbid the application of general remarks used in that case, or argumentative expansions of general principles inferred from it, to other cases as within the reason of that case.

The case of Chowning v. Cox &c. coupled with that of Taylor’s adm’rs &c. v. Chow-ning, presented the following traits. A con-' veyance was made by a debtor to a creditor to secure the payment of a debt, and with power to the creditor as trustee, in default of the payment of the debt at a specified time, to make sale of the land, discharge the debt, and pay the surplus to the debtor. Before the sale was made, the parties got involved in litigation, and the debtor, resisting the right of the creditor to sell, had obtained an injunction to prevent the sale. The parties remaining in this antagonistic position, the injunction'was dissolved, and the sale was made in invitum as respected the debtor. So far the case appeared when the original cause was brought to judgment: and the court then decided that the trustee was but mortgagee, and that, his sale notwithstanding, *the debtor’s equity of redemption was applied to a case in which, ostensibly, the sale was made by a party who was but mortgagee, against the assent and in spite of the active resistance of the debtor, while there were matters in litigation between them which might influence the extent of the debt chargeable on the land. The power to sell was claimed by virtue of a provision in the deed, by which that power was to arise in the event of the default of the mortgagor. Now, looking to the original principle on which courts of equity have interposed and reduced that which had become absolute in law to a de-feasible estate, it is ascertained that it was to relieve against a forfeiture. That forfeiture, in the ordinary mortgage, accrued to the mortgagee by rendering his estate at law absolute. Courts of equity interposed to avert this forfeiture, which made the estate at law absolute in the mortgagee; and it soon became a canon of that court that no stipulation between the parties, where the conveyance was a mere security for money, should extinguish this equity. Proceeding on these principles, it was certainly plausible to treat the stipulation for power to dispose of the land to another, free from the equity of redemption, to arise on a subsequent default of the mqrtgagor, as partaking of the nature of a forfeiture; and as the parties could not stipulate that an absolute estate should vest and abide in the mortgaged on any future default of the mortgagor, such stipulation could not be effectual to enable the mortgagee, as a consequence of any such default by the mortgagor, to pass an indefeasible estate to a third person. On this jrinciple the court of equity might, in apparent consistency with the principle of its original interference, have interfered to relieve against the mitigated forfeiture of a power in the mortgagee to sell, and extinguish the equity of redemption, on the subsequent default of the mortgagor. On this principle *1 think the case of Chowning v. Cox &c. must rest. Beyond it, I do not deem it authority; and even to that extent, it is confronted by the adjudications of the english and New York courts.

The effort of the counsel for the appellant has been to extract from the case of Chowning v. Cox &c. (in which he is countenanced by some of the general expressions of the court) this general principle, that a power to sell and convey real estate, free from an equity of redemption in the party who by conveyance creates the power, cannot be exercised effectually, if the party to whom the power is given is entitled as creditor or incumbrancer to the proceeds of the sale, in whole or in part. To that extent the case of Chow-ning v. Cox &c. is not authority; and as I humbly conceive, if the general reasons of the court cover such a principle, they do not consist with well established doctrines. My opinion is, that according to established doctrines, a creditor may act as trustee for his debtor, and the debtor may impart to a trustee, though that trustee be his creditor, a power to convey an indefeasible estate on a fair and bona fide sale to a third person, notwithstanding the whole or part of the proceeds may come to the creditor; at least when such power is exercised without any distinct effort by the debtor to recaí the power, on grounds that ostensibly jeopard an honest and fair exercise of it. And this conforms to multiform and unquestioned transactions of society, embracing interests numerous and important. Property is conveyed in trust for the payment of debts and the support of the family of the grantor, with power to keep it together, to expend money in improvements, and to sell at discretion to pay debts, and the charges of keeping and improving the property and supporting the family. The trustee makes large advances before sale, and can get reimbursement by sale only. The power of sale is exercised, and years afterwards it is ^ascertained that the sale was so made (and that too at a fair and full price) by the trustee, to reimburse what is honestly due him. Yet if the principle attempted to be extracted from Chowning v. Cox &c. be sound, law and equity must regard the sale as unavailing to give an indefeasible title; the power of the trustee would be defeated and annulled by the fact that he was interested in the sale, and the purchaser under him would be but a mortgagee. A testator by his will devises to his executor his real estate, in trust to sell at his discretion for the payment of debts, and the executor happens to be a creditor, ' (a case probably of frequent occurrence). Has it ever been surmised that the interest of the executor as creditor disables him' from executing the trust under the will, so as to convey on a fair sale an indefeasible estate in the property sold? A large part of the business of society is transacted by agency, the agent to whom the power of sale is confided being creditor for advances, or other dealings of the party who confides his property with him for sale. Has it ever been supposed that under such sales the purchaser takes but a defeasible estate, if the agent be the creditor of the owner, and the sale be made to provide the means of paying his debt? When a conveyance is made in trust, with general power in the trustee to sell and convey an absolute estate, assent is given in the most formal manner to the sale that may be made by the trustee, he and his vendee acting bona fide. In the case of Taylor’s adm’rs &c. v. Chowning, 3 Leigh 654, the sale was sustained, though made under a power given to a mortgagee, to arise on a subsequent default of the mortgagor; on the ground of the acquiescence of the mortgagor in the exercise of the power of sale, implied from the fact of knowledge of the sale, and his forbearance to interpose any objection at the sale to the exercise of the power. Was this evidence of acquiescence stronger than that afforded by the ' ' solemn *creation of a general trust to be exercised by making a sale, and the continued declaration of the purpose to have the power so exercised, which the unquestioned continuance of the trust imported? If the proof by parol, that the creator of the power knows that it is about to be executed and forbears to interpose an objection to its exercise, be adequate to secure to the purchaser under the-power an indefeasible estate, must not his solemn declaration under hand and seal, unre-tracted, of his assent to the creation and exercise of the power, give equal security to the purchaser?

I take this occasion to state what in substance I orally stated from the bench, in expressing my concurrence in the decree that was entered in the case of Breckenridge v. Auld & others, but which I inadvertently failed to reduce to writing, and to have published as part of the report of that case.

My concurrence in the decree in that case was in no degree influenced by the case of Chowning v. Cox &c., 1 Rand. 306. In that case Auld, who sold to Strider, had an absolute deed from Breckenridge, who had no interest in the land but that arising from a secret trust between him and Auld. The deed to Auld was absolute, for the purpose of enabling him to make sale of the land. Such being the situation of the title, Auld, as the fee simple owner, made sale of the land to Strider by a contract entirely fair on the part of Strider, and Strider took possession. In this state of things, Breckenridge made known and ' ' asserted his title under the secret trust. Had Strider insisted on his purchase, my unhesitating opinion was that it ought not ' to have been invalidated in deference to-the claim of Breckenridge under his secret trust, and that so far as Strider was concerned, Breckenridge was as much bound as if he himself had made the sale. The case of Chowning v. Cox &c. in its utmost' latitude, was unavailing to defeat a fair’ purchase from one held out to the1 world as the *fee simple owner, and so held out for the very purpose of making the sale. But in that case Strider,. so far from insisting on his purchase, was a plaintiff before the court below, asking a rescission of the contract. Breckenridge also asked for a rescission ; and as to Auld, as between him and Breckenridge, he was but an incumbrancer, having no substantial interest in the question whether the land remained Breckenridge’s, charged with his incumbrance, or Strider’s, subject to the same charge. So far then as respected the question whether the sale to Strider should be sustained, both the parties having substantial interest in that question concurred in asking that the sale should be rescinded: and on that ground only, I concurred in the decree rescinding the contract.

Decree affirmed.  