In Cake v. Shull, 45 N.J. Eq. 208, and also in Sanger v. Meservey, 80 Iowa, 158, a judgment deciding a deed to be a mortgage was reversed for want of sufficient evidence; and in each of those cases the evidence in support of the finding was vastly stronger than in the case at bar.Summary of this case from Sheehan v. Sullivan
D. J. Pancoast, for complainant. Thomas E. French, for defendant.
On bill for discovery and to redeem.
D. J. Pancoast, for complainant. Thomas E. French, for defendant.
BIRD, V. C. At the conclusion of the arguments announced in the following opinion, I find, in this case, that the complainant, being indebted upon a promissory note in the sum of $367.43, and finding himself financially embarrassed so that he was unable to pay, applied to the defendant, his nephew, Mr. Shull, for aid. I think the testimony bears me out in the conclusion that Mr. Cake desired a loan of the defendant, and offered this mining property, that is, the stock of the mining property, as security for the loan. It is very clear from the testimony of both of the parties that Mr. Shull refused to make any loan at first, and it may be said that he refused to have anything to do with it until Mr. Cake visited him two or three times. The defendant, Mr. Shull, desires to impress the court with the conviction that a loan was not spoken of at all. The tenor of his answer would seem to lead me to a different conclusion. Mr. Cake also very emphatically says that he did apply to him for a loan; and the testimony of Mr. Shull's partner, Mr. Wireback, would seem to remove the doubt, if there was any, from the mind of the court upon this subject entirely. If a loan had not been spoken of, clearly Mr. Wireback, so intelligent a witness as he shows himself to be, and stating what he does remember with so much distinctness, would not have been led to the conclusion that he was, when he said he was unable to tell whether it was a loan or a sale. But, in legal parlance, it seems to me, independent of the postal-card and the letter, Mr. Wireback gives us such a statement as to show the court the path of duty very plainly. Mr. Wireback said, very distinctly, that after Mr. Shull had refused time and again to have anything to do with the matter, stating that he would not buy this mining stock out and out, but that he would advance the money to him on an absolute bill of sale of the mining stock. Now, it is well understood from the books, that, if a loan is made, the strong presumption is that whatever was given between the parties by way of security for that loan remains a loan; in other words, if once a mortgage, it is always a mortgage; and, to determine whether an instrument be a mortgage or otherwise, great force is always given to the consideration of the question whether the transaction involved a loan or otherwise. And that view of this case aids me materially in determining that Mr. Cake desired a loan. There can be no doubt but that there was a threat upon thepart of the holder of the note to offer it for sale, and Mr. Cake undoubtedly-supposed it might, in some way, be sacrificed, and that induced him to seek this aid. So that, relying upon what passed in the office, as detailed by Mr. Cake himself, and as the same is very clearly expressed by Mr. Wireback, I can see no other conclusion to be arrived at, in the first instance, than that a loan was talked of. Taking that as a basis and as a starting point, then there is a fair and definite explanation of Mr. Wireback's further statement that he (Shull) said he would advance him the money if he would make him an absolute bill of sale. In such case, when it appears that the transaction really represented a loan, the court will almost universally declare the instrument given as a security a mortgage, although it be absolute on its face. See Roddy v. Brick, 42 N. J. Eq. 218, 6 Atl. Rep. 806. Now, the postal-card impresses me so strongly in that directiou that I cannot relieve my mind from the conviction that Mr. Shull had nothing else in his mind than relief from this loan. It does seem to me that if he had had in his mind an offer of Mr. Cake to purchase back the stock, that he would have adverted to it as an offer to buy. I do not understand how he could use any such expression as that which is used in the postal-card, if he had reference to an ordinary transaction of sale and purchase. But the letter is still stronger in the same direction. It is said by the defendant's counsel that Mr. Shull is a plain business man; and that he used the word "redeem," but did not use it in its ordinary technical sense. Well, the mere fact that Mr. Shull, a plain business man, uses such a term, shows that he used it for a purpose. How would a plain business man ever come into the conception of such a term as that,—a technical term,—if he did not use it in a technical sense? I think it is impossible to get away from the conviction that it was in just that sense in which he used that word that is commonly understood by those who talk about such things. He used the word "redeem," showing that Mr. Cake undoubtedly had some right, by an agreement between the parties, to get the paper and the stock which Mr. Shull held back. If it had not been so, Mr. Shull being a plain business man, he never would have dreamt of using the word "redeem." If he had reference to some existing agreement which had its origin after the date of this assignment, he would have said, "You promised to buy back." He would not have said in the postal-card, as he did, "Relieve me of this, by paying the amount due;" but he would have asked for the $600 which he promised to pay him at the expiration of a given time. There seems to be no reason why I should hesitate about this matter.
Now, as to the question of costs. The rule of law is very well settled that, where a party comes in to redeem, he must pay costs, just as he pays costs upon a bill to foreclose, unless the defendant has been guilty of some wrong on his part. In this case the defendant is clearly in the wrong. He not only sold the stock in question for a much larger sum than was due to him, but, when inquired of by Cake, refused to give him any information whatever upon the subject, so that the complainant was obliged to file his bill for a discovery of the facts which the defendant possessed and concealed from Cake. In such case the defendant must pay costs. Having sold the stock, it became his duty to account. Beyond the amount of his loan and interest, the amount in his hands belonged to the complainant.