Court Opinion

ID: 7895262
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:52:06.626052+00
Date Added: 2024-06-11T16:32:03.311676
License: Public Domain

Robinson, J.,
delivered the opinion of the Court.
The question in this appeal is whether the sum' of $28,375, paid to George H. Williams as executor of Henry W. Baxley, by the executors of Philip S. Chappell, is to be treated as real or personal estate ?
It appears that Baxley sold to Philip S. Chappell and Allston A. Perry the land from which the money in question was ultimately derived, for $54,607—$29,607 was to be paid in cash, and the remaining $25,000 in five years, with interest on said sum payable semi-annually.
Baxley also agreed to execute to any person purchasing a part of said land from Chappell and Perry to the value of $5000, a conveyance of such aliquot part of said land upon the payment of such sum to him by Chappell and Perry.
The agreement further set forth an undertaking that Baxley would consummate the sale as soon as the proper papers could be prepared; and that his wife would unite therein for the purpose of releasing her dower.
The agreement was dated August 26th, 1865, and the credits upon it show the payment by Chappell and Perry of $29,607.
The agreement thus executed became a binding contract for the sale of land, capable of being enforced. Under it, *239Chappell and Perry would he treated in equity as the owners of the land, and Baxley would he treated as the owner of the money due on the purchase. As purchasers they could have devised it as land even before a conveyance, or in case of intestacy, it would have descended to their heirs-at-law. Rose vs. Watson, 10 House of Lords Cases, 678; Seton vs. Slade, 7 Vesey, 264-274; Story’s Equity Jurisprudence, sec. 790.
On the other hand the $25,000 balance of purchase money belonged to Baxley, and upon his death would have formed a part of his personal estate.
This we understand to he conceded by the counsel for the appellant.
It appears however that on the 22nd of September following, Baxley and wife leased to Chappell and Perry the same tract of land for five years upon the payment of the yearly sum of fifteen hundred dollars as rent, the same to he paid semi-annually, with a covenant in the lease on the part of Baxley to convey to the lessees the reversion at any time within five years, upon the payment by them of $25,000.
Shortly after the execution of the lease, Baxley went to Europe, and continued to reside there for several years after the expiration of the time within which the lessees had the right to purchase the reversion. It appears, however by the proof, that Baxley was willing to accept the payment of the $25,000, both during and after the expiration of the term, and to convey the same to the lessees in fee, hut the latter insisted that his wife should join in the conveyance; and this, owing to the relations then existing between him and his wife, Baxley refused to procure.
It is now contended, that bv the execution of the lease, the ownership in the land which Chappell and Perry acquired under their purchase of August 26th, was surrendered ; and that they are no longer to he treated in equity, as the owners of the property and entitled to a *240conveyance of the same upon the payment of the balance of the purchase money, but are merely lessees, with the privilege of purchasing the reversion at any time within five years upon the payment of $25,000. And that Baxley is to he treated as being no longer entitled to the balance of the purchase money under the original agreement, but as the owner, in fact, of the fee. And that the money which was paid by Chappell’s executors to the executor of Baxley, with the consent of all parties interested, must therefore he treated as personal estate.
Now if this question depended solely upon the face of the lease, there might he some ground to support this contention.
But no question is better settled, than that in cases of this kind, Courts of equity will regard the substance and not the mere form of agreements and other instruments, and will give them the precise effect which the parties intended, no matter how or in what form, that intention may he expressed. So the question then resolves itself into this, did the parties, by the execution of the lease of September 22nd, mean to surrender the rights acquired respectively by them, under the original agreement of the 26th of August ? And in considering this question, it does strike us, to say the least of it, as unreasonable to suppose that Chappell and Perry, after having purchased a valuable tract of land near the City of Baltimore for the sum of $54,000, and after having paid $29,000 on account of the same, and being entitled to a conveyance in fee, upon the payment of $25,000, the balance of the purchase money, should within a few weeks afterwards agree to surrender all their rights thus acquired; and in lieu thereof, to accept a lease of the same property for five years, upon the payment of a yearly rent of fifteen hundred dollars, with the privilege of purchasing the reversion within that time, upon the payment of $25,000. The record entirely fails to show any consideration or inducement on their part to sustain this construction of the lease.
*241But we are not left to the reasonableness or unreasonableness of the acts of the parties for the purpose of ascertaining their intention. Their declarations and admissions, both oral and written, show conclusively that all the parties to the lease of September 22nd, regarded it merely as security for the payment on the part of Chappell and Perry of the $25,000, the balance of purchase money due on the agreement of August 26th.
The testimony of the attorney, confidential friend and executor of Baxley, shows that the latter was willing at any time after the expiration of the term limited by the lease, to accept the payment of $25,000, and to execute a conveyance of the fee to Chappell and Perry. If the latter had no interest in the property except under the lease, and they had by their own default forfeited the right to purchase the reversion within the time limited, it is strange that Baxley should be willing to convey to them property worth $54,000 for the sum of $25,000.
But in addition to this, we have the written declarations of Baxley himself, that he considered the lease merely as a security for the payment of the $25,000, balance due on the purchase of August 26th.
In his draft on Chappell and Perry for the payment of the half year’s rent under the lease, he says:
“Pay to George H. Williams, Esq., attorney, seven hundred and fifty dollars, semi-annual interest on deferred payment for farm due February 26th, 1867.” Then again by his draft of August 26th, 1868, he speaks of it “as semi-annual interest due upon farm in Baltimore County purchased of me.” And then in a subsequent draft as interest “payable on account of credit purchase of Baltimore County farm.”
There is no claim or demand for rent due under the lease, but in each draft the demand is for interest due by Chappell and Perry on account of purchase money.
*242(Decided 20th June, 1879.)
We are of opinion, therefore, that the lease must be considered as a mere security for the payment of the $25,000, due by Chappell and Perry under the purchase of August 26th, and that this amount, together with the interest thereon paid by Chappell’s executors to the executor of Baxley, must be considered as personal estate to be distributed as such.

Decree affirmed.