#### Pennington v. Hanby and Others.

Argued Wednesday Dec. 8tti, 1813.

I. Mortgage — What Constitutes — Redemption* — Case at Bar. — J. M. having the equitable title to a tract of land, sold it to I. P. and received of him part of the price, but finding some difficulty in getting the balance, he made another sale of the same land to J. H. upon condition thathe would advance that balance, and give I. P. six months to pay it to him; in which event, I. P. was still to have the land; otherwise it was to belong to J. H. The contract so made was approved by I. P. who accordingly promised to pay the money to J. H. and, soon after the contract, moved off the land, of which J. H. then took possession, This was adjudged to be a mortgage on the part of I. P.; and that a court of equity should allow him to redeem, notwithstanding he failed to pay the money within the six months; he not having treated with J. H. fora sale of his title, nor entered into any discussion with him concerning the adequacy of the sum alleged to have been intended as the price or consideration therefor; and the said land being so far more valuable than the said consideration, as to leave no doubt that the contract in question was intended to create a penalty or pledge to ensure the punctual payment of the money.

See King v. Newman, 2 Munf. 40, and the cases there cited.

a. Same — Reconveyance to Mos’tgagor. — If a person having the equitable title to a tract of land mortgage it, and afterwards sue for a conveyance of the legal title; (the mortgagee being a party to the suit;) the court ought not to decree a conveyance, without holding the land ultimately bound to satisfy the mortgage, and to be sold to raise the money due, with interest.

3. Decree —Parties to Action. — A decree cannot be made against a widow, (restraining her from conveying her right of dower,) in a suit to which she is not a party as widow, but only as administratrix of the decedent, and guardian of her children.

4. Heirs of Vendor — Conveyance by Warranty.— The heirs of a vendor, retaining the legal title to the land, ought not to be decreed to make conveyance with general but with special warranty *t*neither ought they to be compelled to pay costs.

Upon an appeal from an order of the Superior Court of Chancery for the Richmond district, rejecting- a motion for leave to file a bill of review.

"*The suit was brought in the County Court of Patrick, in behalf of Isaac Pennington against Jonathan Hanby, Joseph Francis, John Mankin, Susannah Marr, administratix, and George I,. W.'Marr, and others, children and heirs of John Marr, deceased. The original bill stated, that the plaintiff purchased a tract of land, containing 250 acres, of John Mankin, who purchased of Joseph Francis, who purchased the same (with some other lands) of John Marr, from whom the said Francis obtained a title-bond ; that the plaintiff paid the full amount of the purchase money to Mankin, who nevertheless sold the same tract of land to Jonathan Hanby, who had full notice of the plaintiff’s equitable right. The prayer of the bill was for a conveyance of the legal title, and for such other decree as might be equitable.

The answer of John Mankin stated, that he sold to the plaintiff the tract of land in the bill mentioned, for 1251. part of which he paid in horse-flesh, and for the balance assigned him bonds or notes on sundry persons, one of which, (a bond of a certain Peter Snyder,) being assigned over by the respondent, was put in suit, and the assignee was cast, on the ground that the said Snyder was not justly chargeable therewith by virtue of the contract between him and the complainant; whereupon, William Bell, the assignee, demanded payment of the amount thereof, and costs, of this respondent, who, not being able to get the money of the complainant, sold the same la¡jad to Hanby, upon condition that he would pay the said debt and costs to Bell, and give the complainant six months to pay up the amount so advanced, and, in case he did not, then the said tract of land should belong to the said Hanby; that the complainant expressed his satisfaction at the said contract, and said that he would pay up the money agreeably thereto, by the sale of a tract of land in Carolina, but afterwards refused and failed to pay the same; that, soon after the said contract, the complainant moved off the said tract, and Hanby took *62possession thereof, and had ever since retained the same.

The answer of Hanby was to the same effect with that of Mankin.

';;'The children of Marr, by their guardian, consented to make a conveyance under the court’s direction. No answer was filed by the defendant Francis ; an order of publication was made as to him, but does not appear to have been executed. It appeared by the exhibits, that the title bond executed by Marr, bound him to make a good and lawful right in fee simple, “to all his remaining tract of land upon little Dann River, Elk Creek, Turkey Cock Creek, and Sandy Creek, known by the name of Bell’s order; excepting one thousand acres to Shadrach Go wen, one hundred and fifty acres to Warham Easley, two hundred to William Cloud, and fifty acres to John Marshall ; that Joseph Francis assigned “all his right and title of the balance of the within bond unto John Mankin (1) and that Man-kin assigned, in like manner, to Hanby.

The County Court decided that Pennington had the equitable right to the tract of land mentioned in his bill, containing 250 acres ; and decreed that the defendants, children of John Marr, as they respectively arrive at the age of twenty-one years, convey to him in fee simple, the said tract of land ; that Jonathan Hanby and John Mankin do relinquish by deed their said claims to the same ; that Thomas Hardeman and Susannah his wife, (who was widow of John Marr) be restrained from conveying by deed or otherwise, their right of dower in the said lands, to any person but the said Pennington ; (2) and if there be any surplus of lands in the condition of the said John Marr’s bond referred to, over and above the said 250 acres, that the aforesaid heirs of John Marr, as they respectively arrive at the age of twenty-one years, convey the same to Jonathan Hanby, (who was complainant in a suit against Joseph Francis, John Mankin, Susanna Marr, widow of John Marr, and the children and heirs of the said Marr, which suit was heard together with this;) that the said Pennington *recover his costs (without saying of whom ;) and that Hanby recover his costs of the defendants, Marr’s heirs and John Mankin.

Upon an appeal, the chancellor reversed the decree, and adjudged that Pennington’s bill be dismissed with costs.

The bill of review was presented to obtain a reversal of this decree of dismission; the plaintiff suggesting that, by the proceedings, it appeared he had an undoubted equitable title to the land in controversy ; that his equity was prior in point of time, and therefore preferable to that of Hanby, who had not the legal title, and had full notice of the plaintiff’s equity ; that, admitting Hanby’s purchase to be valid, he could only stand in the place of Mankin, and claim as having a lien on the land for the *money advanced;*that, if the plaintiff failed in paying at the day, he only stood in the situation of a mortgager after the period of payment had passed, and was entitled in equity to redeem ; whereas, by the said decree, he was barred of relief altogether. •

Chancellor Taylor refused leave to file the bill of review; “being of opinion that, as this cause in the court below was set down for hearing without any replication to the answers, they should be taken as true ; but, if they should not, yet the evidence in the cause proves that, notwithstanding Pennington’s prior equitable right to the absolute estate, he consented to pay Bell in six months, or that Hanby might do it and take the land : — Pennington failed, and Hanby complied *:*— Pennington yielded the land, and Hanby took it: — so that Hanby took Pennington’s place by his own consent, and ought to be allowed to hold it, upon this principle of equity, that where there are two persons, one of whom has been guilty of neglect, and the other has not, and one must be a sufferer, it shall fall on him who produced the mischief.”

Friday, January 14th, 1814.

*

Mortgage — Conditional Sale — How Determined. — In determining whether a particular transaction was a conditional or absolute sale, or a mortgage, if there be no evidence other than the papers executed, to show directly what was the intention of the parties at the time of the transaction, the following circumstances are regarded as having great weight, if the alleged price given for the property was a reasonable price, it is a circumstance tending to show that it was a sale and purchase at a price fixed by the parties at the time; if, however, the price is grossly inadequate, it raises a strong presumption that the real understanding of the parties was, that the vendor should have a right to redeem, and that the transaction was really a mortgage. The fact, that by the papers executed no such right exists, will be considered a matter of no importance, if it is shown by proof or surrounding circumstances, that a security or pledge for a debt was intended; for a party is never allowed to take from his debtor by any form of contract his right to redeem. Davis v. Demming, 12 W. Va. 282, citing principal case, Chapman v. Turner, 1 Call 280; Thompson v. Davenport, 1 Wash. 128; Scott v. Britton, 2 Yerg. 215; Bennett v. Holt, 2 Yerg. 96; King v. Newman, 2 Munf. 40; Holdridge v. Gillespie, 2 John. Ch. 30; Clarke v. Cowan, 2 Cow. 325; Horn v. Keteltas, 46 N. Y. 605. To the same effect, the principal case is cited in Lawrence v. Du Bois, 16 W. Va. 461; Hoffman v. Ryan, 21 W. Va. 430.

In Klinck v. Price, 4 W. Va. 9, Maxwell, J., who delivered the opinion of the court, said: "Without referring to the evidence in detail, it is clear the proofs in the record show that the conveyance was made to secure the payment of money to Klinck. and is therefore, in effect, a mortgage. Ross v. Norvell, 1 Wash. 14; Thompson v. Davenport, 1 Wash. 125; Robertson v. Campbell, 2 Call 421; Chapman v. Turner, 1 Call 280; King v. Newman. 2 Munf. 40; Dabney v. Green, 4 H. & M. 101; *Pennington v. Hanby,*4 *Munf.*140; Bird v. Wilkinson, 4 Leigh. 266.”

In discussing the distinction between a conditional sale and a mortgage, Hyde v. Nick, 5 Leigh 343, and *foot-note*to Robertson v. Campbell, 2 Call 421, also cite the principal case.

See also, *foot-note*to Chapman v. Turner, 1 Call 280; monographic *note*on “Mortgages” appended to Forkner v. Stuart, 6 Gratt. 197.

(1)

 Note. Under these circumstances, according to the case of Edgar v. Donnally and Jones, 2 Munf. 387, Joseph Francis was not a necessary party to this suit. — Note in Original Edition.

(2)

 Note. The widow of John Marr was a defendant to Pennington’s bill, as administratrix and guardian, hut not in her own right. — Note in Original Edition.

The following opinion of the court was delivered by

JUDGE ROANE.

“The court is of opinion that the appellant, in assenting to the agreement made by Man-kin with the appellee Hanby, touching the land in controversy, to which he had the equitable *title, not having treated with the said Hanby for a sale thereof, nor entered into any discussion with him as to the adequacy of the sum alleged to have been intended as the price or consideration therefor, and the said land being so far more valuáble than the said consideration, as to leave no doubt that the contract in question was intended to create a penalty or pledge, to ensure the punctual payment of the money ; the said contract ought to be taken at most to have purported such penalty or pledge, and not a conditional sale of the land ; any words used by the appellant seeming to the contrary notwithstanding. And, however the case might have been if the appellant had surrendered up the premises to the appellee Hanby ; as explaining the agreement to have been for a conditional sale, and not for a penalty or pledge, or as varying the agreement in this particular ; nothing of that kind appears in this case, but only that the appellant left the premises, and the said appellee Hanby entered upon and occupied the same.”

“The court is further of opinion, that the first decree of the Chancellor was correct, so far as it reversed the decree of the County Court, which was erroneous, at least, in the following particulars; — 1st, in not holding the land in question, ultimately bound for the payment of the money advanced by the appellee Hanby for the use of Pennington, and to be sold to raise that money, with interest, if not paid; — 2dly, in decreeing against the widow of Marr, who is not made a defendant to the bill; and 3dly, in decreeing the heirs of Marr to convey with general warranty a certain quantity of land, and to pay costs ; they only being bound to convey, with special warranty, the residue of the land in the bond mentioned, after the sales that had been made before the sale to the ^appellant: but that the said *63first decree was erroneous in dismissing the bill, instead of reforming the decree of the County Court in the foregoing particulars.”

“On these grounds, and because this court differs .from the Court of Chancery in its construction of the contract in question, as stated in the order rejecting the bill of review, the court is of opinion that the said order is erroneous ; therefore it is decreed and ordered that the same be reversed and annulled, and that the appellees Hanby and Mankin pay to the appellant his costs by him expended in the prosecution of his appeal aforesaid here. And it is ordered that the cause be remanded to the said Court of Chancery, with directions for that court to allow and receive the said bill of review, in order to a final decree.”