#### *Roberts’s Administrator v. Cocke, Executor of Thompson.

April, 1882.

Hortgage — Conditional Sale — What Constitutes† — Case at Bar. — where A borrows money of B, to be repaid on a given day. and delivers to B, a negro man, declaring by writing that the negro is so delivered “in order to pay the interest thereon and to secure the payment of the principal” at the time stipulated, &c. "the labor of the said negro to be for the interest of the money,, and if the said A shall fail to repay the said sum of money on or before” the day stipulated, “then the said B, is to have a good title in fee simple to the said negro. If the said negro shall die before" the day stipulated, “it is to he the loss of the said A the court were divided whether this instrument should be considered a mortgage or conditional sale ; one judge regarding it as a mortgage ; another considering it as a mortgage upon its face, hut rendered a conditional sale by the attendant circumstances ; and a third viewing it as a conditional sale.

Adversary Possession — What Constitutes.‡ — Qu. What shall he considered an adversary possession:-'

Chancery Practice — Interlocutory Decree — Opening— Newly Discovered Evidence.§ — It is error in the chancellor to refuse an application to open an interlocutory decree, founded upon affidavits of a discovery of important matter since such decree was rendered.

William Thompson filed his bill in chancery, in the county court of Halifax, against Henry E. Coleman administrator of Daniel Roberts deceased, stating, that in the year he (the said Thompson,) borrowed of Daniel Roberts deceased, the sum of 1001.; and to secure the payment thereof and to pay the interest, he put a certain negro man named Jerry, in pawn or pledge with the said Daniel Roberts; that the said Thompson not being able to redeem the said negro at the time appointed, was obliged to leave him in the possession of the said Roberts; that Roberts is since dead and Henry E. Coleman has administered on his estate: that the hire of the said negro is worth 201. per year, and amounts to a sum sufficient to discharge the debt and interest aforesaid, and leave the said Coleman administrator as aforesaid, indebted to the_ said_ Thompson: that the said Coleman in his representative character, has refused to account with the complainant *and to deliver up the said negro man, pretend*53ing that the complainant has not a right to redeem him. He therefore prays, that the defendant may be compelled to set forth the title by which he withholds the possession of the said slave; whether he has not , an instrument of writing in his hands containing the contract aforesaid; that he may deliver the-said slave to the complainant, and account for his hire, Sec.

Coleman, in his answer, says, that as administrator he took possession of the personal estate of Daniel Roberts deceased, among which was the slave Jerry: that he retained peaceable possession of the said slave, until the day of , when in obedience to an order of the county court of Halifax, he delivered the said slave and all other personal property of his intestate, into the possession of commissioners, to be divided among the wife and children of the said Daniel Roberts deceased; that the said slave was allotted to the children and delivered to their guardian, who has retained possession ever since, as the respondent believes, without any demand being made on the part of the complainant, until the commencement of this suit, or a very short time before; that before the institution of the suit he had fully administered the assets of his intestate, except three bonds, due from the guardian of the orphans: that he knows nothing of the origin of his intestate’s title to the said slave, and before he delivered up the estate as aforesaid, he had no notice of the complainant’s claim; that among the papers of his intestate, he found an instrument of writing, purporting to be a conveyance of a slave named Jerry from the complainant to his intestate; that this paper purports upon its face to be a conditional sale and not a mortgage; that his intestate and those claiming under him, have had adverse possession of the said slave, from the 1st day of March, 1798; by which the complainant’s claim (if he ever had any) is barred by the act of limitations, &c.

The writing mentioned in the foregoing answer, is in *these words: “William Thompson junior, borrows of Daniel Roberts, the sum of one hundred pounds to be repaid on or before the first day of March next. The said William Thompson, in order to pay the interest thereon and to secure the payment of the principal at the time. stipulated, doth deliver to the said Daniel Roberts, a negro man named Jerry. The labor-of the said Jerry, to be for the interest of the money; and if the said William Thompson, shall fail to re-pay the said one hundred pounds, on or before the first day of March next, then the said Daniel Roberts is to have a good title in fee simple to the said negro. If the said negro shall die before the said first darr of March, it is to be the loss of the said William Thompson. This agreement entered into the 22nd day of August, 1797, and signed in presence of John B. Scott, William Roberts and John Clarke.” (Signed) “WilliamThompson,junr.” (seal.)

The complainant afterwards, by an amended bill, made the widow and infant children of Daniel Roberts deceased, parties to the suit, and prayed that they might say how long the said negro Jerry has been in their hands, and that they might account for his hire during their possession.

The new defendants say in their answer, that they have been in peaceable and quiet possession of the said slave, and have used him as their own property, for near fourteen years; and they therefore rely on the statute of limitations, as being a complete bar to the complainant’s claim.

Many depositions were taken to prove the declarations of the original parties respecting the nature of the contract; the sums of money for which the slave had been hired while in the possession of Roberts; that the money was tendered by Thompson a few days after the stipulated time, and refused by Roberts, because the sale had become absolute by Thompson’s failure to pay the money at the day appointed; the value of the. negro, &c. *The county court dismissed the bill, and an appeal was taken to the superior court of chancery for the Richmond district.

The chancellor decreed, that the appellant had a right to redeem the said slave upon the payment of the principal money, with interest, and to have an account of his profits; since, the time which has elapsed, is no bar to the same. For which reasons he reversed the decree of the county court; and retaining the cause, by consent of parties, he decreed that the appellees render an account of the profits of the said slave, since he came to the possession of the said Daniel Roberts deceased in his lifetime, before one of the commissioners of the court; and that the defendant Coleman, should render an account of his administration of the estate of his intestate.

The suit abating by the death of the complainant, was revived in the name of John R. Cocke, as his executor.

The commissioner reported a balance due the complainant of $1,437.38; and that Henry E. Coleman, was indebted to the estate of Daniel Roberts deceased, in the sum of $1,222.03.

The defendant Coleman presented a petition to the court for a re-hearing, accompanied with two affidavits, stating that since the interlocutory decree wes pronounced, he had discovered new and important testimony, of which he had no knowledge when the decree was rendered; that he expects ' to prove, that after the time had expired within which the said William Thompson, by agreement, should have redeemed the said negro, the said Thompson, in consideration of the sum of ten pounds paid by Daniel Roberts, agreed to release all claim to the said negro Jerry; which sum was accordingly paid. But this petition was over-ruled by the court, because the matter set forth in the said petition and affidavits was not stated with sufficient certainty. Whereupon the chancellor decreed, that the said defendant Coleman should pay $1,222.03 cents, being the amount of assets reported to be in his hands, *with interest on $737.46 cents from the 2nd of January last *54until paid; and that the other defendants should pay to the plaintiff the sum of $215.35 cents being the balance of principal money for hire, with like interest from the 15th day of October, until paid.

From this decree, the defendants appealed to this court.

Leigh, for the appellants. '

Hay, for the appellee.*

†

Mortgage — Conditional Sale — Distinction between. —In discussing the distinction between a mortgage and a conditional sale, Hyde v. Nick, 5 Leigh 343; Kroesen v. Seevers. 5 Leigh 441, and Moss v. Green, 10 Leigh 267. cite the principal case.

See further, on this subject, monographic *note*on “Mortgages” appended to Forkner v. Stuart, 6 Gratt. 197.

‡

 Adversary Possession. — On this subject, see mono-graphic *note*on “Adversary Possession” appended to Nowlin v. Reynolds, 25 Gratt. 137.

§

Chancery Practice — Method of Staying Proceedings. —Whenever an order is proper to stay proceedings in a chancery cause, the party must apply to the court upon petition in the chancery suit, and' cannot file an original bill for that purpose. Smith v. McLain, 11 W. Va. 667, citing principal case. See principal case also cited in Moore v. Hilton, 12 Leigh 26; Manion v. Fahy, 11 W. Va. 494.

*

It is unnecessary to give the argument in this case, as it was discussed by the court, and as the opinion of the court only embraced some of the points made in the argument. The cases referred to at the bar, were Chapman v. Turner, 1 Call 380, Judge Roane’s opinion ; on the point of adverse possession, 1 Call 419, Harrison v. Harrison &c. and Dickey v. Dickenson &c. (not reported) decided February 19, 1819 ; 4 Mun. 504, Garland v. Enos; as to interest on hire, Bland v. Baird, 5 Mun. — Note in Original Edition.

JUDGE CO ALTER:

April 5

There are two questions presented by the_ record in this case; 1st. Was the transaction in the nature of a mortgage, or a conditional sale? 2nd. If the former, or if there is a doubt on the subject, ought the party to be permitted now to redeem, under all the circumstances of the case?

I think there is at least considerable doubt as to the real intention of the parties, and the true nature of the transaction; especially when the peculiar provisions of the written instrument are taken in connection with the cotemporaneous and subsequent conduct of the parties.

Upon the face of the writing alone, this case is perhaps more like a conditional sale, than that of Chapman and Turner. , In both- cases, .the labor was to stand for the interest until the day of re-payment, when the principal alone was to be returned. In both, the value of the property was little more than the money advanced. In this case there was, perhaps, less inequality than in that. But in this case there is this peculiar feature; the co.ntract provides expressly that in the case of the death of the *slave, before the day of re-payment, the loss was to fall on the party who received the money; the necessary implication from which is, that if he died after the day, he died the property of the other party, who it was said was then to have the fee. This risque is incompatible with the idea of a mortgage, and is one which, considering it as a mortgage, a court of equity would either have to relieve against, as altogether unconscionable; or if that court could not annul this part of the contract, at least when applied to for permission to redeem, it could well say to such application, especially after a great lapse of time; “this condition imposed a risque against which you cannot indemnify, and as redemption is permitted on the ground that you can indemnify; it will be denied in 'this case.”

Whether we consider it a conditional sale or a mortgage, neither party expected a redemption after the day; otherwise, this risque would no more have been thrown on the party after, than before, the day.

In the case of Chapman and Turner, the answer explained the nature of the transaction, so as to change it from what it might otherwise have appeared from the writing. Had Turner been dead, that case would perhaps have been considered a mortgage, to the ruin of his family, when in truth it was no such thing.

But the doubt here, arising from the paper itself, is not removed, but increased,, by the cotemporaneous acts of the parties,, and the long acquiescence. Some time after the day of payment, the party either offered the money, believing that he had a right then to redeem; or thinking he had no such right, unless the other would agree to it, held a conversation with him on the subject, and finding he would not, never offered the money.

I think from the evidence, that this latter was most probably the fact. If so, how can we say whether this opinion arose from a knowledge that it was a conditional sale, or from a mistaken idea, that though if it was a *mortgage, he had no right to redeem after the day; and especially when the property was to be thenceforth at the risque of the mortgagee? for, if the slave had died the next day, he having refused the money, no court would have decreed it to him, as his declaration united to the acquiescence of the other party, would, in that event, have forever stamped upon the transaction, the character of a conditional sale.

But if he thought it a mortgage, and that he had a right to redeem, he was apprized of the opposite construction, and acquiesced therein, until after the death of the-party. He either did so, because; having received a good price for his slave, he was unwilling to risque a suit; or he intended, at some future day, when, if the slave lived, his hires might amount to, or exceed the debt and interest, to bring his suit to redeem: well knowing, that should the slave die in the mean time, it would be no loss to hirn, but to the other party. If he really intended to abandon his right to redeem, if he had it, I can see no reason why, under all the circumstances, he should now be permitted to re-assert it, especially, as before stated, he cannot make compensation for the risque run as aforesaid. And if he never intended to abandon, but merely lie by, to take all advantages and throw every risque on the other party, I think such unfair conduct ought not to make him1 a favorite of a court of equity.

I well recollect that such conduct, unaccompanied too by any stipulated risque, as in this case, had great weight in turning the scale in the case of Dickey and Dickenson, (a) Circumstances of this kind, if not decisive of the question of conditional sale or not, are at least well calculated to create doubts upon that subject; and when doubts exist, or where to permit redemption would be hard and unconscionable, as in this case, they at least afford good ground to conclude that the right to redeem was *waived; especially when the money advanced was a reasonable and adequate price for the property. For these reasons, I am for reversing the decree of the chancellor and affirming that of the county court.

Were I of a different opinion, I think.. *55the decree ought to have been opened to admit the new matter of defence stated in the petition for that purpose.

JUDGE CABELL:

There is no particular form of expression which will necessarily determine a conveyance to be a mortgage, or a conditional sale. It must always depend on the intention of the parties. In the total absence of all extraneous circumstances, the instrument must be judged of by itself. But an instrument which, in its form, imports to be an absolute conveyance, may be determined to be a mortgage, whilst another, importing on its face to be a mortgage, may be determined to be a conditional sale, according to the intention of the parties, as evinced by testimony aliunde. Ross v. Norvell,(b) affords an instance of the former; and Chapman v. Turner,(c) affords an instance of the latter. If the instrument now before us were to be judged of by itself, abstracted from the circumstances detailed in the evidence, I should be of opinion that it is a mere mortgage. According to its terms, it is a borrowing of money. Nothing is said about the sale or the price of the negro. He was received by Roberts as a security for money borrowed. His labor was to be for the interest of that money, and his life was to be at the risque of the borrower until the day appointed for re-payment of the principal. It is unquestionably true, as contended by Mr. Leigh, that on default of payment at the day, the parties intended the risque to be thereafter on Roberts. That was the necessary result of the declared intention of *the parties, that after such default, the negro was to become the property of Roberts. But that may have been intended as a mere forfeiture, or as a restriction on the right of redemption; which, if the transaction be really a mortgage, equity will not tolerate. Such is the opinion which I should form on the instrument itself.

But the circumstances exhibited in the testimony are not such as to justify the inference of a court of equity. Notwithstanding the form of the instrument, the parties may have intended a sale and not a security; and the sum advanced by Roberts may have been the agreed price of the negro. The testimony shews it was not more than his fair value. But, as both parties intended that Thompson might, and as both of them, probably, expected that he would, regain the negro by repaying the price within the short period allowed for that purpose, (in which event the practical operation of the transaction would rather resemble a loan than a purchase,) it is not surprising that, regardless of technical language, they gave to a contract which was really a purchase, the forms of a loan. It is in proof that the money not being repaid at the day, Roberts refused to receive it thereafter, and claimed the negro as his own. This could only be justifiable, in law, on the ground of the transaction having been intended by the parties as a sale and not a mortgage. Thompson, with the full knowledge of this pretension on the part of Roberts, silently acquiesced in that pretension for more than ten years. We cannot suppose so long an acquiescence proceeded from ignorance that the law authorised him to enforce a redemption, in case the contract had been no more than a_ mortgage. This acquiescence, when taken in connection with the fact, that, although Roberts survived the transaction for many years, he was permitted to die before the suit was brought, cannot, according to the evidence in this cause, be satisfactorily accounted for on any other consideration than a conviction on the part of Thompson, that Roberts had it in his power, by shewing *the real character of the transaction, effectually to oppose his demand. Under such circumstances, every thing that can fairly be presumed, ought to be presumed against the complainant. I am therefore, of opinion, on the merits, to reverse the decree of the chancellor, and to affirm that of the county court.

But, if my opinion on the merits, as disclosed by the evidence exhibited in the record, had been different, I should still have thought the court of chancery erred in refusing to open the interlocutory decree, so as to allow the appellants the benefit of the newly discovered fact stated in the petition of Roberts’s administrator.

JUDGE BROOKE:*

Upon the face of the contract in this case, it was a pledge or pawn of the slave Jerry, and not a conditional sale. There is nothing in it that intimates a price to be given, which is essential in a sale. The expression in the contract, that if the said, negro died before the first day of March next, it is to be the loss of the said Thomp-; son, means nothing more than what would, have been the effect of an irredeemable, forfeiture, which, though intended by the parties, _ a court of equity will not permit. The object was to borrow money; and the slave was delivered to the lender to‘ keep down the interest until the day of payment. The fact proved, that the value of the property and the money lent, were nearly, equal, does not affect the case, as no treaty for a sale is proved. The inference from the fact, that Thompson tendered the' money a short time after the day of pay-, ment^ is against the idea that he considered it a conditional sale; though that is" somewhat accounted for by the fact, that he was absent on a journey, at the day of payment. However that may be, the refusal of Roberts to receive the money, on the *ground that it was a sale, was full notice to Thompson, that his right to redeem was denied by, Roberts; and though I am not prepared to-say, that the possession of Roberts was thereby converted into an adversary possession, to which the act o'f limitations would apply, I am of opinion, that Thompson ought to have asserted his right at an earlier day; and that it would be unjust *56after the lapse of thirteen years, and after the death of Roberts, to permit him to redeem. I think, therefore, that the decree of the chancellor ought to be reversed, and the decree of the county court affirmed.

(a)

 See the last note.

(b)

*1*Wash. *H.*

(c)

1 Call, 280.

*

Tudge Roane absent, from the continuance of that cause which has for so long- a time deprived the public of his important services. — Note in Original Edition.