
    Davis and Another v. Stonestreet.
    A tender of money in a handkerchief, with a statement of the amount and kind, is a sufficient tender.
    The maxim in relation to mortgages is, that “ once a mortgage always a mortgage.”
    Courts of Equity do not favor conditional sales; and they will pronounce that a mortgage which, at law, would he a conditional sale. They are disposed to consider every deed, whatever he its form, which resolves itself into a security for the performance of any act, as a mortgage.
    Where a party advanced money to another, and for his security took an instrument from the latter, from the language of which it was doubtful whether a conditional sale of land or a mortgage was intended, but took no note for the money advanced, held, that the omitting to take the note was not conclusive that a conditional sale was intended.
    
      Thursday, May 26.
    Where from the language of an instrument it is difficult to determine whether a conditional sale or a mortgage of lands was intended, if the price was grossly inadequate, it will be construed to be a mortgage.
    ERROR to the Miami Circuit Court.
   Stuart, J.

Stonestreet filed his bill in chancery against Davis, Crispin, and others, to redeem land alleged to have been mortgaged by him to Crispin. Final hearing on the pleadings, depositions, &c., and decree in accordance with the prayer of the bill.

Stonestreet was the owner of a canal-land certificate, on which he had paid about 206 dollars. There was still a balance due thereon at the land-office. In December, 1846, Crispin paid into the office, on the land, 46 dollars and 89 cents, and to Stonestreet, for the alleged purpose of paying his expenses to Ohio, 16 dollars and 36 cents. To secure Crispin, Stonestreet transferred the canal-land certificate, duly assigned—the assignment absolute in terms. But concurrently therewith, Crispin and Stonestreet executed the following agreement. After describing the parties, and using language implying a penalty, though there is none, it proceeds: The condition of the above agreement is such, that whereas the above-named Crispin hath this day paid into the land-office, at Peru, the sum of 46 dollars and 89 cents, for Stonestreet, together with the sum of 16 dollars and 36 cents, cash in hand now paid, the receipt of which Stonestreet hereby acknowledges, making in all the sum of 63 dollars and 25 cents, for and in consideration of which, said Stonestreet hath this day assigned Wabash and Erie canal-land certificate, No. 4314; now be it known, and it is further agreed by and between the aforesaid parties, that if the said Stonestreet shall well and truly pay, or cause to be paid, unto the said Crispin, the sum of 63 dollars and 25 cents, on or before April 1, 1847, then the said Crispin is to assign the said certificate to the said Stonestreet; but should the said Stonestreet make default, then the said certificate to be and remain the property of the said Crispin. Given under our hands and seals, this 4th day of December, 1846. Peter Crispin, [seal]. Henry R. Stonestrect, [seal].

On the 8th of January, 1847, Stonestreet and Davis met in the state of Ohio, and Stonestreet appointed Davis his agent in relation to the land, giving him a power of attorney to sell and pay Crispin.

On the 17th of April, 1847, Crispin assigned the certificate to the defendant, Helm, for 63 dollars and 25 cents, the amount due without interest, taking from Helm an obligation similar to that he had given, by which the time for Stonestreet to redeem was extended until September 1, 1847. This was done with the consent of Davis, and Crispin delivered Helm’s obligation to Davis, as the agent of Stonestreet. The avowed object of Helm, was to save a doctor bill he had against Stonestreet. On the 30th of August, 1847, Davis procured Helm to assign the certificate to him for 87 dollars, which included the 63 dollars and 25 cents, the doctor bill, interest, exchange, &c. Davis also delivered the obligation given by Helm to Crispin.

Shortly after this transfer, Davis wrote to Stonestreet, who was still in Ohio, that the certificate was sold, and could not be redeemed for less than 150 dollars; but he was cautiously silent as to the name of the purchaser. In the fall of 1847, Stonestreet returned, tendered to Davis the 63 dollars and 25 cents, and interest, and demanded an assignment of the certificate. He held the money in a handkerchief, telling Davis the amount and kind of money, and ofiering it to him. By his amended bill, the tender was continued, and the money brought into Court.

The defendants, in their several answers, admit the facts very much as they are alleged in the bill; but they deny the legal conclusions. They deny that the assignment and defeasance taken together, constitute a mortgage, and insist that the transaction was a conditional sale.

It appears that the value of the land, on the 1st day of April, 1847, was from 500 to 600 dollars.

Passing over the obliquity of Davis’s course as an agent, there are but two questions arising in the case:

1. Was the tender sufficient?

2. Was the assignment to Crispin a mortgage or a conditional sale?

On the first question, the authorities are explicit. A tender of money in a bag, untold, is sufficient. Buller’s N. P. 155.—3 Steph. N. P. 2602. Davis himself regarded it as a tender. His version to one of the witnesses is, that Stonestreet had been at his house that day, and offered to pay the amount due on the land certificate in specie; but that he, Davis, wanted a settlement of all the matters between them. In amount, too, the tender was sufficient. Helm's doctor bill was no lien on the land; nor were the other items of exchange, &c., claimed by him and. Daw's. On these, their remedy, if any, was against Stonestreet at law. All that any of them could hold the land for was the 63 dollars and 25 cents and interest, if the transaction was really a mortgage. If it should turn out to be a conditional sale, the tender and all Stonestreet's efforts to redeem, were labor lost.

On the second question it is very difficult to deduce any clear, well-defined rule from the books. There are numerous criteria recognized by the courts to distinguish between a conditional sale and a mortgage. The price, the circumstances, the situation of the parties, &c. But these and other considerations, which have controlled the decisions of courts of equity, are so blended in the reported cases, setting aside, at times, the express agreements of the parties, that it is difficult to deduce a rule at once safe and comprehensive. The element which is regarded as conclusive in one case, is wholly wanting in another; and each case seems to be decided very much on its own peculiar circumstances. On one point the authorities are all agreed, that “ once a mortgage always a mortgage.” If, says Savage, C. J., the transaction was a mortgage in its inception, no subsequent event, whatever, can make it more—not even the agreement of the parties to change it to an absolute conveyance, will be regarded in chancery. Clark v. Henry, 2 Cow. 324.

The leading case on the side of conditional sales, and which has been followed by the state courts, is Conway's Executors v. Alexander, 7 Cranch 219. This case in Cranch is not, as will be seen in the sequel, inconsistent with the case in Cowen, but only distinguished as an elaborate summary of the doctrine of conditional sales.

It appears that courts of equity do not regard conditional sales favorably. They will pronounce that a mortgage which at law would be a conditional sale. They are disposed to consider every deed, whatever be its form, which resolves itself into a security for the performance of any act, as a mortgage. 2 Sumner 486. In Conway’s Executors v. Alexander, Marshall, C. J., lays down the rule, that the policy of the law and the leaning of courts are against conditional sales; and doubtful cases have generally been considered mortgages.

Such has become the settled rule of construction. In Strong v. Stewart, the defendant set up a sale by assignment in absolute terms of all the right, &c., of the party to the land, and denied the fact of a loan. But he admitted, in his answer, that after the assignment was made, he gave the party time to return the money and take back the assignment. Kent, Ch., says, “ On the strength of the authorities, I shall decree an existing right in the plaintiff to redeem. The admissions in the answer are sufficient to presume a mortgage against the absolute terms of the assignment.” 4 J. C. R. 167. A deed absolute, with agreement to redeem in a year, is in equity a mortgage. Saxton’s Ch. R. 534. An assignment of a contract for the purchase of land conditioned to re-assign on the payment of a debt, is a mortgage. 1 Paige 617.— 6 id. 480.—8 id. 243.-6 Gill and J. 275.—1 Blackf. 305, and n. 2. A deed and defeasance taken together, amount to a mortgage. 3 Blackf. 51.—6 id. 113.

Some stress is laid on the fact that there was no note taken by Crispin from Stonestreet for the repayment of the money. This, though an element for consideration in doubtful cases, is by no means conclusive. It is not necessaiy to a mortgage that there should be a covenant to repay the money. 2 Sum. 486.

There is one feature in the defeasance conclusive as to the character of the transaction. That is the price. If it was a conditional sale, Stonestreet derived no benefit from the 46 dollars paid into the land-office. That payment inured to the benefit of Crispin himself. On this hypothesis, Stonestreet sold for 16 dollars, land worth 600 dollars, a fact sufficient of itself to stamp the character of the transaction. Thus in 8 Paige, supra, Walworth, Ch., held that a deed absolute, accompanied by an agreement to reconvey, will be considered a mortgage, especially where there is great inadequacy of price. So, gross inadequacy of price will be sufficient to show that a deed, absolute in form, is only a mortgage. 2 Ired. Ch. 94. In 7 Cranch, supra, great stress is laid on the fact that Lyles paid a full price for the property. In the light of these authorities, 16 dollars for property worth 600 dollars, is too grossly inadequate to support the hypothesis of a conditional sale.

We are referred, with great confidence on the part of the plaintiffs in error, to the case of Conway’s Executors v. Alexander. We have already alluded to this case on two points, viz., the rule of construction in doubtful cases, and the recognition of price as a consideration in giving character to a conveyance.

In that case, it is true, the conveyance was declared to be a conditional sale. Yet, when analyzed and compared with that before us, the decision in Cranch will be found to make strongly against the party citing it. It recognizes principles fatal to the case he has made. It has some similarity to the one now before us, in the following-particulars : There was no previous debt; no conversation about a loan or a mortgage, and no separate note or obligation to repay. Yet these are but a small and comparatively unimportant part of the broad basis on which the decision in Cranch rests.

That case is strongly distinguished from this in the following particulars:

D. D. Pratt, for the plaintiffs.

A. A. Cole, for the defendant.

The deed, says the Court, is not conclusive either way.

The conveyance to trustees to be by them conveyed to Lyles, is only evidence of the intention of the parties to avoid the forms of mortgage.

Lyles considered it a purchase; Alexander himself a conditional sale.

Conway, the purchaser from Lyles, under the immediate eye of Robert Alexander, made partition of the land with Charles Alexander, without objection from Robert.

During the space of nearly three years, in daily sight of Robert Alexander, Conway made large and valuable improvements on the land.

In his will, while disposing of all his other property, Robert Alexander malíes no allusion to this land.

The price paid by Lyles to Robert Alexander was but a trifle below the real value.

The deed from the trustees to Lyles, after the time to redeem had elapsed, was, as expressly found by the Court, very probably made with Robert Alexander's consent.

In all these marked and conclusive particulars—the deed, the partition, the improvements, the price, the long acquiescence, the will, and the presumed consent to the trustee deed—-the case in Cranch is distinguished from that at bar. The decision there is not placed upon any one of these considerations, but on the force of all combined. And yet the opinion discloses that some of the judges hesitated. Applying the principles recognized in that case to this, and it is a strong authority favorable to the transfer here being a mortgage, and not a conditional sale.

Per Curiam.

The decree is affirmed with costs.  