Case Name: Asa H. Waters vs. Abraham G. Randall
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1843-10
Citations: 6 Met. 479
Docket Number: 
Parties: Asa H. Waters vs. Abraham G. Randall.
Judges: 
Reporter: Massachusetts Reports
Volume: 47
Pages: 479–484

Head Matter:
Asa H. Waters vs. Abraham G. Randall.
A. conveyed several tracts of land to B., by an absolute deed, and B. at the same time gave a bond to A. conditioned to reconvey the lands to him, on his paying B. certain sums due to him from A., and saving him harmless from certain liabilities assumed by him for A.; The value of each tract of land was estimated in the condition of the bond, and it was also therein provided that A. should remain in possession of the lands, and receive the rents and profits, so long as he should save B. harmless, &c It was also provided, in the condition of the bond, that B., if he should be obliged to meet and discharge the liabilities incurred by him for A., might take possession of such portion of said lands, according to such estimated value, as should be equal to the debt or liability so discharged by B.: B. was obliged to pay a certain sum for A., and thereupon brought a writ of entry, in this court, to recover certain parcels of said lands, equal in value, according to said estimate, to the sum thus paid by him. Held, that the deed and bond constituted a mortgage, and that as the writ of entry was to foreclose a mortgage, this court had no jurisdiction of the case.
Writ of entry to recover two parcels of land in Millbury, Trial before Dewey, J.
The demandant having proved the execution of a deed, dated October 14th 1839, whereby the tenant quitclaimed to him the demanded premises, the tenant gave in evidence a bond, made to him by the demandant, of even date with that of said deed, the condition of which bond was as follows :
“ Whereas the said Randall is indebted to the said Waters, and is desirous of securing him; and whereas the said Waters is indorser for the said Randall on the following notes of hand; ” [all specially described;] “ and whereas the said Randall also wishes to secure the said Waters for any existing and all future indorsements or liabilities, which he may make for the accommodation of the said Randall, and for any moneys which he may lend him — a record of which indorsements and liabilities shall be regularly made and annexed to this instrument— and in order to secure the said Waters, as aforesaid, the said Ran dall has this day conveyed by deed of quitclaim the following real estate,” [describing the several parcels, as described in said deed, and stating the value of each parcel, as estimated by said Randall; the whole value, as thus estimated, being $ 8900:] “ Now, therefore, if the said Waters shall well and truly recon* vey to the said Randall said real estate, when said liabilities, or any portion of said liabilities, equal to the estimated value aforesaid of any one parcel of said real estate, are cancelled and discharged by said Randall, and shall permit the said Randall to use and occupy said estate, and receive the rents and profits accruing from the same, so long as he saves him harmless from said liabilities, (but when he is obliged to meet and discharge said liabilities, in behalf of said Randall, said Waters may take immediate possession of such portion of the above real estate, according to said estimated value, as is equal to the debt and liability so cancelled by him;) then this obligation shall be void ; otherwise remain in full force and virtue. It is understood that the estimate of the value of the above parcels of land is made with the present incumbrances upon them.”
The tenant thereupon contended that the demandant’s title to the demanded premises was that of a mortgagee, and that the supreme judicial court had no jurisdiction of the case.
The demandant then offered to prove that he had paid for the tenant a larger sum than the value of the lands demanded in this suit, towards the debts mentioned in the condition of the bon._; and he therefore insisted that he had become the owner, absolutely, of the demanded premises. The judge refused to receive the proof thus offered, and ordered the action to be dismissed, with leave to the demandant to move to have it restored and a new trial had.
Washburn, for the demandant.
It is undoubtedly true, that an absolute deed, with a simultaneous bond, conditioned merely to reconvey, on the performance of certain terms, is a mortgage. Erskine v. Townsend, 2 Mass. 493. But this is not such a case. Besides the stipulation to reconvey, there is also a stipulation, in the condition of the bond, that the demandant may take possession of such portion of the land as is equal in value to the amount of the debt paid by him for the tenant. And as this value is fixed by the agreement of the parties, the tenant loses nothing by way of penalty. A power, given to a mortgagee to sell the mortgaged land, is valid. Eaton v. Whiting, 3 Pick. 484. Kinsley v. Ames, 2 Met. 29. A fortiori, is the agreement valid in the present case, which is that of a conditional sale to the demandant, and not a mortgage. In Trull v. Skinner, 17 Pick. 213, it was held that where a bond of de-feasance was cancelled by agreement of parties, the mortgaged estate became absolute in the mortgagee.
Bacon, for the tenant.
The deed and bond constitute a mortgage, and this court therefore has no jurisdiction of the present suit. St. 1840, c. 87, <§> 1. Ingalls v. Richardson, 3 Met. 340. An equity of redemption cannot be severed from a mortgage, even by the express agreement of the parties. 2 Story on Eq. § 1019. But the parties, in this case, have not agreed that the demandant should hold the land irredeemable on his being obliged to pay money for the tenant. The agreement is, that the de-mandant, in such case, may take possession of the land; but he has not agreed to take the land in discharge of his claims. He may still sue the tenant on those claims. See Kelleran v. Brown, 4 Mass. 444.

Opinion:
Hubbard, J.
This was a writ of entry to recover two parcels of land described in the demandant's writ. To establish his title, he gave in evidence a deed of the tenant, dated October 14th 1839, conveying the lands to him. By way of defence to this action, the defendant offered in evidence a bond, made to him by the demandant, bearing even date with the deed, and thereupon contended that the demandant's title was that of a mortgagee, and therefore that this court could not sustain the action; the court of common pleas having exclusive jurisdiction thereof, by force of St. 1840, c.,87, §> 1, which provides that the supreme judicial court "shall hereafter have original and exclusive jurisdiction of all writs of entry, except for the foreclosure of mortgages," the jurisdiction over which is conferred upon the court of common pleas The demandant then offered to show that he had paid for the tenant, towards the debts mentioned in the condition of the bond, a larger sum of money than the value of the lands demanded, and therefore contended that he had become the absolute owner of the lands, and so this court had jurisdiction. The presiding judge rejected the evidence, and ordered the action to be dismissed for want of jurisdiction, with leave to the demandant to have the action restored, and a new trial had, if the evidence ought to have been admitted.
[Here the judge recited the condition of the demandant's bond to the tenant, as above set forth.]
It is admitted by the demandant's counsel, that if the de-mandant, by reason of the payments he has made, has not a right to the possession of the lands demanded, as the absolute owner thereof, discharged of all right of the tenant to redeem the same, this action cannot be maintained ; and the ground assumed by the demandant is, that this contract was made with a double aspect; the one, as a security for moneys due, and for outstanding liabilities, and for liabilities that might be incurred ; and the other, upon what terms, as to price, the de-mandant might, if he chose, become the absolute owner of the property, or of specific portions of it. And we have no doubt that conditional agreements may be made for the purchase of lands, and that sale of estates also, upon good consideration, may take place, in which the vendor may contract for the repurchase of the same. But such contracts must be bona fide, and not a mere cover for a loan of money.
If this were a conditional agreement for the purchase of the estates, as the demandant contends, it might then be doubted whether the action could be sustained without proof being offered by the demandant of his having agreed to take the estate at the estimated value, and of his surrendering, or offering to surrender to the tenant, notes or securities equal in value to the same. But, in the light in which we view this contract, it is unnecessary to consider this question. The bond, given at the time of making the deed, is an instrument of defeasance, and the land is therefore held in mortgage ; and the stipulation? in the bond do not affect or alter the character of the conveyance. The law has always contemplated with jealousy any attempt to evade its provisions in respect to the right of redemption of estates conveyed for security. And while, by reason of a breach of the condition of the deed, the estate becomes absolute in the mortgagee, in law, yet equity has always preserved to the mortgagor a right of redemption of the mortgaged premises. The provision in the present case between the parties was, that Randall should continue in possession, so long as he saved Waters harmless from his liabilities. And on the other hand, when Waters should be compelled to meet and discharge any of such liabilities, then, by said agreement, he might take immediate possession of the estates, according to the estimated value, to such an extent as should be equal to the debt or liability so paid or cancelled by him ; or, in other words, so fast as he pays money for Randall, which is not forthwith repaid, he may take possession of so much of the mortgaged property as shall be equal to such advance, agreeably to their estimate of value. And so, when an amount equal to the whole value shall have been advanced for Randall, then Waters will be entitled to the whole estate. But this stipulation does not change the nature of the instrument, but is a mere provision for his obtaining possession of the mortgaged premises ; and while the estate thus becomes absolute in him at law, it is merely the commencement of his foreclosure in equity. If it were otherwise, a new description of conveyance would be created, to be treated as a mortgage, or not, at the option of the money lender; for here is no obligation on his part to take the estate, and cancel the debts and liabilities, but only a right so to do; and in this manner the statute of mortgages would be broken in upon at pleasure, and new evasions of the laws against usury would spring into being. And though the transaction in the present case may have been made in perfect fairness, as it regards the full value of the premises mortgaged, so that the tenant would not be injured by the demandant's becoming the present absolute owner of the estates, at the agreed prices, yet we cannot treat it in any other light than a mortgage. And though mortgages are made with a power also, on the part of the mortgagee, to sell the mortgaged premises — like the case of Eaton v. Whiting, 3 Pick. 484; and though a separate deed of defeasance, made at the same time with the absolute deed, may afterwards, upon sufficient consideration, be cancelled as between the parties, in such manner as to give an absolute title to the mortgagee — the rights of third parties not having intervened — as was decided in the cases of Trull v. Skinner, 17 Pick. 213, and Harrison v. Phillips Academy, 12 Mass. 465; yet I believe no case can be found, in which it has been determined that the mortgagee can, by force of any agreement made at the time of creating the mortgage, entitle himself, at his own election, to hold the estate free from condition, and cutting off the right in equity of the mortgagor to redeem. Such an agreement would not be enforced as against a mortgagor ; nor is it to be confounded with a sale upon condition. Under these views, we are of opinion that the relation of these parties is that of mortgagee and mortgagor, and consequently that this court has no jurisdiction of the suit. The same must therefore stand dismissed, with costs for the tenant.