#### Hart vs. Burton,

^Covenant. Case 105.

Error to the Mercer Circuit; Kei.i,ey, Judge.

*Conditional sale. Mortgage. Pawn or Pledge. Redemption. Construction.*

When a writing states _lh<> consider -fioij oF th« didiv”-ry of a slave, to bo ¡i Toair; of mun-'y, and lliuf file ■stave was de« TTveied to the *323«iel!,<le.rí’s1a Curit>, the contract-isa mortSaSe ol'

*322May 3.

Chief Justice Robertson

delivered the opinion of the Court.

This is an action of covenant brought by Charles Hart, against Charles F. Burton, on the following writing: “Borrowed from Charles Hart Senr. $275, for which I have placed in his hands as security, a negro girl: should I not pay said sum of money by the 20th inst. the said girl is to lie the absolute property of said Hart, and I bind myself to give a bill of sale when demanded.

> (Signed) C. F. BURTON.” “Feb. 9th, 1827.”

The declaration averred that the slave had died in April, 1827, without the plaintiff’s fault, and charged, as a breach of the covenant, the non-payment of the $275 on the 20th of February, 1827, or since.

The circuit court, being of opinion that covenant could not be maintained, sustained a demurrer to the declaration, and thereupon gave judgment in bar of the action.

In revising the judgment, two questions are presented for consideration: 1st. Does the writing import a conditional sale, or only a pawn or mortgager 2d. If the legal effect of the contract be only a security for the repayment of money loaned, is there any covenant to pay the money on the 20th of February, 1827? These are legal propositions, and therefore must be decided at law, as they should be in equity, according to the actual import of the writing, when tested by the fixed rules of law and reason.

I. We cannot construe the writing to be *legal*evidence of a conditional sale. The parties, and especially the plaintiff, may have intended that the contract should become a sale on the non-payment of the $275 within the *eleven days*allowed for the reimbursement of the loan. But as the writing states the consideration to bea loan of money, and shows expressly, that the slave was delivered to the lender. *323as a collateral security, the contract, according to legal intendment, is a pawn or mortgage. It was certainly so at, and immediately succeeding its pletion; and the maxim, “once *a mortgage always*mortgage, is as legal as it is equitable, and applies to all collateral securities, as well to mere pledges as to technical mortgages: See Edrington vs. Harper, III. J. J. .VlarshalPs Reports, 353, and Brown vs. Bemont et al. VIIÍ. Johnson, 75.

The right oí redemption " attaches e-~ •rTv'ag'VRmt■ *once a nusrt*~*trae, than °‘loe a Pawn * The common law rfiC0Sm^est preventing °r the redemptioh of pawn«r

Y71'01,6 • ¡tern, thi party has a to reithe ether has a ?ue ney Jeatffof a slave,wor(— ^agoii-er— nawnodj. *324without culpable con-__ duct '*n the part of mort or ph w-' pp¿, flo^s not aiT’ot that riirhf.

*323It is not material whether this be a mortgage or a pawn. The right of redemption attaches equally to both, and it is as difficult to transmute the one as the other into a sale, by the operation of the original contract. Though anciently at Rome, the ereditor and debtor were permitted, by the *lex commis-' soria,*to make an agreement at the date of the pledge, whereby it would, on a prescribed contingency, come the absolute property of the pawnee; such a power was not indulged, even at Rome, since the days of Constantine, who abolished the law by which it had been sanctioned. Every agreement for preventing redemption of pawns is proscribed by the common law as emphatically as are similar agreements in mortgages of real estate. Wherefore, whether the contract in this case be deemed a pledge or a mortgage, the same rules of law apply to it,, and produce the same effect. The same contract which made the slave a pledge for money borrowed,' did not, *proprio vigore,*make her the absolute property of the pawnee or mortgagee. If it were *ab origine,*a pledge or mortgage, it continued to be so; and whatever may have been the actual intentions of the parties, the deduction of law from *the fact of loan*and *of security,*is that the contract wasjnot a sale, but a pledge or mortgage only. #

Burton might surely have redeemed, even after the eleven days; and as he had the right to,-redeem, Hart had correspondent rights, and may maintain a suit for his money without attempting a foreclosure. We cannot admit that, if one party had a right treat the contractas a mortgage, the other shall not have a similar tight; their rights must be equal and reciprocal. The contract is a mortgage or not a mortgage as to both parties. If the contract be *324considered a mortgage, the death of the slave did not affect the mortgagee’s right to sue for the mone\ loaned. If it be a pledge only, the death did not affect any legal right which otherwise he may -have had to sue for the amount loaned, unless tiie death resulted from his culpable negligence, or was occasioned by liis improper conduct; and the deilaration negatives any such delinquency.

The words ¿•diould I not pny «aid sum oTmorjfty by the _20th inst. in an in«trumen, specif i nVf.fi e sub-sender had cfiTorrowed2^ thb "motley^ constitute an ospreíp oovafíaht toJte-"' fund th a «money.

Any words -which evince aiT agreement •will consti-* tu*e nn express cove-' «atrfrwlieñ - inserted .specialty.

uB^rrowed” imp'oft' nn dbisr'ation to retur*» the thiny borrowed or its vr.ilae*

II. The writing imports a covenant to pay the $275 on the 20th of February, 1827. As the contract was not, according to its legal operation, a sale, a contract to refund the money must be presumed; and we are of opinion *thnt*sur h a *contract*is expressed by the writing itself, when properly 'construed. rI here is no covenant, *in totidem*virbis, •to pay $276 on the 20th of February,. ’27, or at any other time. • But the words, when sensibly and practically interpreted, clearly import a covenant to pay tire money which was loaned. And as language *expresses*that which is *rightly understood*by it, the e-fore, if the writing in this case, when properly understood, means that the money wasto he refunded, there is, of course, an *express covenant*to that effect.

Any words which, literally or constructively, evince an agreement, will amount to an agreement, and will, of course, be an express covenant when inserted in a specialty. Hence a recital (in a deed) of an agreement, will amount to an express covenant, her ause it is an acknowledgement, by deed, of the existence of such agreement. So too, a similar acknowledgement of a sale of *land*would be deemed .an express covenant to convey the legal title, because the act of sidling carries with it, as a natural and wsual consequence, an obligation to make a title. The principle is plain and its application is easy; we shall, therefore, not exemplify further: See Wheatons Selwyn, 343-4; Ba. Ab. Covt. B; Beal’s adr. vs. Schoal’s exr. I. *M*arshall, 476.

“BoiTwed” imports necessarily *an obligation*to return the thing borrowed, if it be loaned for use, or to return its kind and value if it be loaned for consumption. Therefore, according to authority, analogy and reason, as tire word “borrowed” in the *325writing signed by the defendant, imports nri a-knnwleUgeu.ent by him, that lie liad agreed to menu the amount borrowed, or was under a legal obligation to do so, the writing contains an express covenant to pay it at the time designated, t'o-wit: the 2Udi of February, 1827. *"This is to witness that J have borrowed £ÍQfrom C.Dd’*(Signed) A. B., is a covenant to pav the £10. Ba.Ab. Covi. B.

Implied *corr**Mtnlsii'h NgitfTnHWnTUUSfToV*T?ofivr-. cal'torn.45, *<t>*pKoTTTo iv* 1 estate; u u->\>n:inr which words import according to their ordinary sigti'fic.*tton and gram maticaJ u sé, is an ex»* ’jirc^cove-» naiit.

"Dii-seni.

*Cunningham,*for plaintiff; Harlan, for defendant.

“ í/ipifed” covenants apply only to real estate But there is no analogy bet.weep them and such as this. They are covenants which are not inleried from the words, according to their popular or grammatical import, but are deduced by operation ol law as arbitrary, and merely legal consequences, flowing from certain techuhai terms which do not, of themselves, in their common use, mean what they are thus made to imply; lor example, the law implies a warrrnty from the words “demise and grant,” when used in a lease, though they, m fact, no more import a warranty than “sell and convey” would in a deed, bargain and sale.

A covenant which the words import, when understood according to their common practical or grammatical signification, is not an “implied,” hut is an express covenant. Such is the covenant in this case; for if, as we have decided, the contract was not a conditional sale, the consequence seems not only rational, hut almost inevitable, that it contains a covenant to refund the money which the word *“6arrow-ed,” ew vi termini,*imports.

Wherefore, it seems to this court, that the circuit court erred in sustaining tiie demurrer to the plaintiff's declaration; and therefore, the judgment is reversed and the cause remanded tor further proceedings consistent with this opinion.

*Judge*Underwood

*delivered the following dissent from the opinion of the Court.*

In this case 1 think the circuit court correctly' sustained the demurrer to the plaintiff’s declaration. According to the contract between the parties, if 3urton did not repay the borrowed money on or before the 20th of February, the negro girl because *326“the absolute property of Hart, and Burton bound himself to give Hart a bill of sale at any time afterwards, when called on.” The negro died in April in the possession of Hart, to whom she was delivered as a pawn in the first instance, and now he wants to throw the loss on Burton, contrary to the express stipulation in the contract, that the negro was absolutely his from-and after the 20th of February. He does not pretend, in his declaration, that he called on Burton for a bill of sale, and that he refused to execute it. !t does not appear, therefoie, that Burton has violated his contract in any respect, unless it can be shown that it was his duty, contrary to the express provisions of his contract, to return the money which he had received; in other words, to pay for a slave which died tiie property of Hart. Why shall he lie made to pay in direct opposition to the contract? No reason can he assigned for it, unless it be, that the contract should be regarded as a mortgage, to which an equity of redemption was attached in favour of Burton, and which would enable him to redeem, at any time, notwithstanding his express covenant, that the slave should be the absolute property .of Hart, and that he would confirm the title by bill of sale if required, in case he did not pay the money on the 20th of February. It is not possible that tiie parties could have shown more clearly than they have done, an intention on the part of Burton, to make his pawn irredeemable, in case be did not pay the money on the day. Burton is not asserting any right to redeem, and it is not necessary to decide, whether he would be estopped by the terms of his deed, to assert such a right. However that may be, I am clear Hart has no right to claim a return of the money that advanced. He stipulated to take an absolute title to the slave, unless the money was paid him on a named day. He did get such a title by the terms of the contract. If he feared it was not sufficient, it was his duty to call on Burton for a confirmation of it, He failed to do this, waited till the slave died, and now wishes to evade so much of the contract as gave Burton the right to confirm his title, if any confirmation was necessary.

Dissent.

*327Dissent.

The equitable right to redeem pawned or mortgaged property, contrary to the stipulations of the contract, is an innovation by the chancellor, upon the doctrines of the common law. It was designed to prevent the hardships and oppressions which usurers and money lenders were in the habit of inflicting upon those whose needy circumstances required the use of money. Now, I think the reasons upon which this whole doctrine is founded, show that Hart has no right to avail himself of the doctrine in this case. If he lent *$275*and took possession of the slave as a pawn to secure its return, and the services of the slave were worth more than the interest of the money, he was guilty of violating the law, as a usurer. That the services of the slave were at least equal *to the*interest, and that the one was to be set off against the other, I infer from the fact, that there is no stipulation to pay interest in the contract. That the slave was equal in value to the sum advanced, I infer from the fact, that Hart accepted her as ample security, and showed an anxiety by the terms of his bargain, to make his title absolute. I, therefore, say to Hart, the doctrine of redemption does not apply in *your*behalf. The object *of*that doctrine is to shield^the necessitous from oppression, *and it*shall not be perverted to enable yon to throw a dead negro, contrary to your contract, upon the hands of the borrower of your money; when if the negro had lived, you would have used the contract to prevent a redemption, and would have reproached Burton with meanness, if be had failed to execute the bill of sale upon request. *The doctrine of redemption*shall not be a sword in your hands. I would, therefore, in all cases like this, hold the lender to his bargain. There is no usury or oppression operating upon him, which would justify the chancellor’s interposition in order to restrict the rigour of the common law rule; much less can I perceive any principle of the common law, which can justify a recovery, in an action at law, directly in the.face of the contract, and in contravention of it. Here the parties have agreed, on a certain event, that the money shall be Burton’s and thesjave Hart’s absolute property.' Yet by the opin*328ion overruling the demurrer, the common law judge is made to decide, that Burton shall not have I he money, nor shall the slave be Hart’s absolute property; thus setting aside tlie contract made between the parties, and substituting by implication, a new contract in opposition to it.

Dissent.

The contracts of men should be respected and enforced in courts of justice, according to the intention of the contracting parties, unless they be *malum in*sb, *malum prohibitum,*or contrary to some settled principle of public policy. Now I cannot perceive any thing in the contract between Hart and Burton positively vicious, nor am [.acquainted with any principle of law which prohibits *the making*of such a contract. There is a principle of policy, I admit, which has secured to mortgagors and pawners the right to redeem, and in the ordinary cases of mortgages and pawns, I grant, that there should be reciprocity in the rule; and whenever in such cares, the mortgagor or pledger could redeem, the mortgagee or pledgee should have his money, notwithstanding the destruction of the thing mortgaged *or*pledged. In such cases as these, the mortgage or pledge is no more than a security for the money lent. But in the present case it is perfectly obvious that the parties intended something more than a mere security. They intended a sale, upon condition the money was not paid on the day. Is it true then, that once a pawn, always a pawn; once a mortgage, alwas a mortgage? Shall the. plaintiff, Hart, avail himself of any such maxim,' to change the character of the contract from what it so obviously is, and thereby convert an absolute into a redeemable estate? So far as considerations, drawn from public policy can influence the case, (and it should be re me tribe red that such considerations, gave rise to the right to redeem,) I am satisfied they are all against Hart, and Í do not admit that the maxims alluded to are applicable in his behalf. In Bacons Abridgement, Title mortgage, letter B., many cases are stated, where, if the money is riot paid within a *time*limited, the estate becomes absolute, and' I observe in some of the cases the grantor stipulated against his right in equity to redeem the premises in *329case he failed to pay on the day. I do not see it noticed bv the coart, and such stipulation declared illegal or inoperative. I moreover notice in cases, that the want of a covenant on the part of the mortgagor, binding himself to repay thepnoney advanced, is a strong circumstance to prevent him from asserting a right to redeem where he fails to pay the money on the day. Now the opinion has deduced a covenant to pay, in this case, from the acknowledgement by Burton, that he “borrowed” the money. If there was. nothing upon the face of the contract incompatible with the deductions made in the opinion, I am not prepared'to say that, these deductions would be objectionable in an ordinary case of *borrowing money,*and the execution of an instrument merely acknowledging that fact. But when, as here, the covenant is to execute a bill of sale upon request, confirming the title, in case the money is mot paid within the limited time, it does seem to me that the idea of an obligation or covenant to return the money is completely negatived. It is excluded by the stipulation to do an act incompatible with it; and yet my brethren have made Burton covenant to repay the money.

Dissent

I therefore look upon this case as falling within *the*principles *recognized in*Floyer vs. Levingston 1 P. Williams 268, Miller vs. Less, 2 Atk. 494, Tasbury and McNamara vs. Ecklin &c. 4 Brown’s Pari. Ca. 142, in all of which the right of the mortgagee to pay a consideration for and to stipulate against the assertion of an equity of redemption, was recognized. In those cases lapse of time constituted a consideration hostile to permitting redemptions. I cite them to show that there is nothing illegal in contracting to surrender the right to redeem *real estate*much less is there any thing objectionable in such a contract in relation to a chattel.

In Jacob’s law dictionary, title Power, it is shown that there are cases where the pawn cannot be redeemed. Strange, 919, is cited for this principle “where money is lent on a pledge, the borrower is personally liable to the payment, unless there be an agreement to the contrary.” Such agreement ex *330jsts in this case, according to iny in d r larding of transaction, and therefore Burton is not peisorr? ally liable, as the opinion decides.