Case Name: Cherry, Caldwell & Co., et al. vs. Arthur Bowen
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1857-04
Citations: 4 Sneed 415
Docket Number: 
Parties: Cherry, Caldwell & Co., et al. vs. Arthur Bowen.
Judges: 
Reporter: Tennessee Reports
Volume: 36
Pages: 415–419

Head Matter:
Cherry, Caldwell & Co., et al. vs. Arthur Bowen.
1. Redemption. Right of, how regarded in a Court of Equity. The waiver of the equity of redemption in a mortgage of real estate, or deed of trust of the nature of a mortgage, is, in the view of a Court of Equity, not binding upon the mortgagor.
2. Same. How equity of excluded. Act of 1833, ch. 47, § 2. The equity of redemption in this State, in the case of conveyances in the nature of a mortgage, can only be excluded by the decree of a Court of Chancery, pursuant to the act of 1833, ch. 47, \ 2.
3. Cases cited. Burrow vs. Henson, 2 Sneed, 668, approved.
EROM SHELBY.
The defendant, being largely indebted to the complainants by note at twelve months, dated the 23d of June, 1854, conveyed on that day to a trustee a lot of ground in the city of Memphis to secure said indebtedness. This conveyance was by an instrument under seal, signed by both parties, and by the trustee, who is also party complainant. By the conveyance, the trustee was empowered and required, upon the failure of defendant to discharge said debt at maturity, to sell said lot, after designated notice, to the highest bidder for cash, and to execute a conveyance in fee simple to the purchaser; the defendant expressly waiving in said deed his equity of redemption and right of re-purchase. It also purported to contain indemnity to the complainants for any future advancements to the defendant, which, as the deed recites, might possibly be made, within twelve months from the sale thereof, not in all to exceed $15,000, inclusive of the existing debt. This deed of trust was executed, witnessed, and left in the hands of the defendant for probate, with a view to registration. The defendant afterwards refused to acknowledge said deed for registration, and refused also to surrender the same for that purpose to the complainants, assigning as a reason therefor that he had been overreached by the complainants in adjusting the terms of said deed: that he had signed the same in ignorance of the fact that his equity of redemption was waived therein; that this important feature of the deed had been covinously concealed from him by the complainants; and that the deed imposed upon the complainants no obligation for future advances, which he insisted was the verbal understanding between the parties. The complainants thereupon, on the 29th of June, 1854, filed this bill in the Chancery Court at Memphis, to have said deed set up and established, praying, among other things, that the ground so conveyed should be attached; for injunction against any conveyance of the same by the defendant; and that the same be sold under the provisions of said deed, and the proceeds applied as therein provided. Writs of attachment and injunction were issued in obedience to the prayer of the bill. The answer of the defendant, among other things, admits the debts and the signing of the deed, but avers that the instrument did not correctly interpret his intentions in the premises; that he did not intend to relinquish his right to redeem or re-purchase the lot in the event of a sale; that an express inducement and condition of his signing the instrument was the supposed obligation on the part of the complainants to make him further advances of money, which the instrument does not contain. In this respect he alleges that he was deceived bj the complainants; that he was induced to believe that the deed contained this obligation, whereas it does not; and that he had not relinquished his equity of redemption, which by the terms of the deed he has done; that the note to secure which the deed was executed is usurious, and the property conveyed of great value, worth largely more than the amount of complainants’ debt; and that it is defendant’s chief source of credit in the way of property in conducting his business. He denies therefore that said deed is obligatory upon him, and submits his rights. Upon these issues and the proofs, Chancellor Caruthers, at the November Term, 1856, gave a decree in favor of the complainants, directing a sale of the lot for cash, upon thirty days’ notice, if the debt be not paid within forty days of the date of the decree, a conveyance to the purchaser, and the application of the proceeds as required by the terms of the deed, without right of redemption or repurchase. The defendant appealed.
A. WRIG-ht, for the complainants.
W. T. BROWN, for the defendant.

Opinion:
McKinney, J.,
delivered the opinion of the Court.
The mortgage or deed of trust which the bill seeks to have set up and foreclosed, stipulates in substance that, on failure of the defendant to pay the amount secured by the deed at the time specified, the trustee shall proceed to sell the lot of ground conveyed for cash, " and make to the purchaser of said lot a perfect title thereto, free of all equity of redemption or right of re-purchase on the part of said Bowen or any one claiming under him; and which the said Bowen, in the event of a sale, expressly waives, releases, and gives up, so that the purchaser may get a full and perfect title."
The decree of the Chancellor gives full effect to this stipulation, and directs a sale for cash, cutting off the right of redemption. This is contrary to an ancient and cherished principle of equity, said to be borrowed from the civil law, which is thus stated by Mr. Story, (Bq. Ju., vol. 2, § 1019:) " So inseparable, indeed, is the equity of redemption from a mortgage, that it cannot be disannexed even by an express agreement of the parties. If, therefore, it should be expressly stipulated that, unless the money should be paid at a particular day, or by or to a particular person, the estate should be irredeemable, the stipulation would be utterly void." In the civil law, such a condition was regarded as oppressive and unjust. The reason is apparent: the pressure of necessity on the part of the mortgagor, and the influence and advantage over him which, from his situation, the mortgagee must necessarily possess, enables a relentless money-dealer to dictate his own terms. In this State, the right of redemption cannot be excluded in the case of mortgages and deeds of trust of the same nature, except by the decree of a Court of Equity, pursuant to the act of 1833, ch. 47, § 2. See Burrow vs. Henson, 2 Sneed, 658.
The decree will be modified in this respect.
Act or 1833, ch. 47, $ 2: "In all cases where land or interest in lands is directed to be sold by order of the Court of Chancery founded on a foreclosure of a mortgage, deeds of trust, or any other case where the specific land to be sold is mentioned in the decree, upon the appli cation of the complainant, the Court shall be empowered to order the property to be sold, on a credit of not more than two years nor less than sis months; and when the sale is made by the master or commissioner, and confirmed by the Court, no right of redemption or repurchase shall exist in the debtor or other creditor, but the title of the purchaser shall be absolute, and the Court may order the surplus of the purchase-money or the bonds or notes taken therefor, over and above what is necessary to pay the debt due to the complainant, to be paid to the debtor or other creditors who may be legally or equitably entitled thereto."