Court Opinion

ID: 6235058
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:30:36.266139+00
Date Added: 2024-06-11T08:58:01.038844
License: Public Domain

Chief Justice Agnew
delivered the opinion of the court, October 12th 1875.
The argument of plaintiffs in error in this case is learned and able, and its general positions incontrovertible. But its point of failure to convince lies in the interpretation of the deed from James Wilson and wife to Benjamin R. Morgan, of the 20th of August 1796. This instrument has certain characteristics of a mortgage, yet it is not a mortgage purely. It is a conveyance in trust for the payment of certain debts of Judge Wilson, and for are-conveyance of the excess only. Its principal intent is to make payment in lands, and its secondary intent is to return those lands only not necessary for this purpose. It is not a mere security for payment —but a mode of making actual satisfaction. As to the surplus land, if there should be any, it partakes of the nature of a mortgage. An analysis of the deed will exhibit this. The first part of the deed is a distinct and absolute conveyance of all Judge Wilson’s lands in Northumberland and Huntingdon counties, except his estate of Wilsonville of about 150,000 acres. This mode of conveyance in gross of all his lands within these limits assists in understanding the remainder of the deed. It exhibits the fact that the parties were uninformed of the real extent and value of the property as a means of satisfying these debts, and therefore resorted to the mode adopted of providing for the subject. Hence, next follows an express trust, the terms of which are specifically stated. The first provision of this trust is, that Morgan shall, within four months after Wilson shall have furnished the requisite muniments of title, select therefrom such part of the lands at a reasonable price agreed upon between them, or, if they cannot agree, at a valuation made by Morgan, as will amount to double the value of the whole of the debts then existing. Several matters are noticeable in connection with this provision. First, it contemplated a full delivery of the title-papers to Morgan, a feature not common in the case of a simple mortgage, in which no beneficial estate passes : Guthrie v. Kahle, 10 Wright 331. This connects itself with the subsequent provision evidencing that Morgan himself was to take out the patents. The next noticeable matter is, that it distinctly grants to Morgan a right to select the lands intended to be appropriated to the debts. The last matter is, that the provision necessarily involved the right on the part of Morgan to take all the lands conveyed, if, at the valuation, all shall be found necessary to pay the debts. The parties thought there might, or even would be an excess, but this was clearly unknown, while the deed conveyed all, and carried the right to all, if necessary to carry out the main intent, viz.: satisfaction of the debts, so that the re-conveyance was evidently dependent on the fact of there *96being an excess. After this provision came that which it is argued gives to the instrument the character of a mortgage. It provides that Wilson shall, within thirty days after notice of the valuation made by Morgan, be entitled to a re-conveyance of all the lands granted, on payment of the whole of the then existing debts, and the expenses incurred in selecting and conveying the lands. If this provision stood alone, as the final conclusion of the parties, it would be difficult to resist the inference that the instrument was simply a mortgage. But it is followed by inconsistent provisions, which, in connection with what had preceded, prove that this was not the main intent, but that it was a provision intended for the protection of Wilson against an undervaluation by Morgan — a sort of locus penitentice to preserve his interests. But if Wilson failed for thirty days to pay the whole amount of the existing debts, then Morgan should re-convey to Wilson all the lands except the quantity so selected. Now as to the lands selected, it is clear there was to be no re-conveyance, but they were to be held by Morgan as the means of paying the debts and expenses. Here we have a return to the first provision of the trust, to wit.: satisfaction, not security. These lands were not mortgaged, but were to be held by Morgan as the means of satisfaction. But as Morgan was allowed for his protection to select double the quantity of lands, which, at the valuation, would pay the debts and expenses, another provision became necessary for the protection of Wilson, viz.: that Morgan should re-convey all of the selected lands not required to pay the debts and expenses, making him the judge, however, of the lands he should retain, so that he should keep in his own hands what would, without doubt, enable him to satisfy the debts and expenses. The language is, “And shall in like manner re-convey to him within three months after patents shall have been obtained for the quantity so selected, such part thereof as he, the said Benjamin, may think fit, as at the said valuation shall remain after satisfying all the debts of the said James,” &c. Then follows a provision for further assurance to Morgan for the lands so retained. The expression “ after satisfying all the debts of the said James,” and the clause for further assurance, evince the intent of the parties with great clearness, that whatever lands were found to be necessary to pay the debts and expenses were not to be re-conveyed, but were to be held by Morgan to fulfil the purpose of the deed, which was satisfaction of Wilson’s debts. What might be called the mortgage clause of the instrument clearly did not apply to them, but applied only to the excess not required to fulfil the main purpose of the parties. Thus the deed was framed to protect the interests of both parties. But suppose it should turn out that the lands at the valuation were insufficient to pay the debts and expenses, what then ? And it must be remembered that expenses here was no unmeaning or trivial affair. The selection involved a thorough examination of hundreds of tracts of wild mountain land, *97in a region of country to a great extent uninhabited and unimproved. Surveyors, chain-carriers, and horses were to be hired, provisions and tents found, and all that a wild country required to subsist and shelter men, and besides all these expenses a patent fee of ten dollars for every tract. If, then, it took all the lands conveyed to pay the debts and expenses, it is clear the main intent of the deed was that all should go in satisfaction. Now unless we hold that parties are incompetent to deal with their own so as to ■answer their just and lawful purposes, we must declare that this deed contained a lawful and competent arrangement to afford satisfaction of Judge Wilson’s debts. The parties dealt about a subject to a great extent unknown to them, and liable to unforeseen contingencies, and they made every provision in the deed which seemed to be necessary to protect the interests of each, and yet to result in what was their clear and main intent, to wit: to provide for payment of these debts in lands. Both law and equity will therefore sanction this intent. But if the real intent had been merely a pledge of land as a security for the debts, then “ once a mortgage always a mortgage.” This, however, means to protect the straitened debtor who needs the usé of money, against a grasping creditor who would take advantage of his necessity. But there is no principle of law or equity which forbids a conveyance of land in satisfaction of a debt, and the fact that the nature of the subject requires various provisions to protect their mutual interests does not clash with this right. Such was the judgment of Justice Duncan, in Stoever v. Stoever, 9 S. & R. 446, and of Chief Justice Marshall, in Conway’s Ex’rs. v. Alexander, 7 Cranch 218. The last case is a strong precedent. In Spering’s Appeal, 10 P. F. Smith 210, it is decided that when the transaction is a sale for a fair pi’ice, and not a loan on security, it will be held valid as a sale, notwithstanding an agreement to reconvey within a limited time. In this case then there was nothing to forbid an arrangement by which as many lands should be taken in payment of Wilson’s debts as should be found necessary for this purpose, and that those not so found necessary should be held in trust to be re-conveyed. They were dealing about an uncertain and, to a great extent, unknown subject — wild mountain lands — without a market value, and liable to a large expense to make them known, and to render them available. In considering the intent of the parties, a court will look at all the surrounding circumstances in a case like this, not giving too much weight to form, unless the writing on its face is clearly a mortgage, when the rule is not to receive parol evidence to contradict the writing: Wharf v. Howell, 5 Binn. 499; Stoever v. Stoever, supra; Kunkle v. Wolfersberger, 6 Watts 126 ; Kerr v. Gilmore, Id. 408 ; Hiester v. Madeira, 3 W. & S. 386; Wilson v. Shoenberger, 7 Casey 295; Todd v. Campbell, 8 Id. 250; Haines v. Thomson, 20 P. F. Smith 434; Sweetzer’s Appeal, 21 Id. 264. *98In the case of a deed absolute on its face, or where it is very doubtful, when the attempt is to convert it into a mortgage by extrinsic facts, it is evident that all the circumstances should be given their full weight, as well those in favor of the absolute character of the conveyance, as those of its defeasible. So far as the facts have come down to us in this ancient case, they concur in giving this deed the interpretation we have placed upon it. In the year 1796 these lands were unimproved, lay in large bodies, and were of little value — the mountain lands especially being wild and quite inaccessible. Market value they certainly had not. Judge Wilson was a land speculator of the most extensive kind, taking up the wild lands of the state by hundreds of thousands of acres. Wilson’s speculations had run him largely in debt, leaving him without the means of payment, except in this unproductive property. From the nature of these lands, their situation and unproductiveness, the sparseness of population, and the very primitive condition of manufactures and commerce in 1796, it is very evident that Wilson himself knew little of the value of his property. Indeed, the terms of the deed very clearly lead to this belief. Hence, the deed was not for a defined quantity, but for all his lands in the two counties, and their value left to subsequent inquiry and estimate. For this purpose Morgan had four months after the delivery of the title-papers for selection, and additionally was to have double the valuation to cover the debts and expenses. That the parties afterwards found the lands inadequate to payment, and, in consequence, suffered all to fall under the absolute features of the deed, are deductions irresistibly arising upon the subsequent facts and the entire history of the case. Otherwise it would be impossible to account for the conduct, both of Wilson and his son, Bird Wilson, and of Morgan. The valuation of the lands in Huntingdon county, found among the papers delivered to Mr. Savage, upon his purchase of some of these lands from Morgan, is a strong circumstance to begin with. This paper is identified by Bird Wilson, on the 21st of March 1797, who subscribed thereupon his acknowledgment that he had received a copy for his father. How much more documentary evidence there may have been, it is impossible now, after the lapse of three-quarters of a century, to know; but this paper has survived the tooth of time, and gives form and consistency to the after facts.
Additionally, we learn that General Lee, the other creditor named in the deed, and Morgan divided the lands. As early as 1796 Morgan began to be assessed with the taxes upon them, as far assessments were made at that early time, when much of the wild mountain land escaped assessment. In 1800, Morgan began to convey the lands to purchasers; continuing sales down to the time of his death in 1840, and after his death, his executor closed out the whole by sales. Throughout this time Morgan controlled all these lands, appointing agents to survey and take care of them. *99and to sell them, paying taxes when assessed to him, and doing all those acts which indicate the ownership and control of such lands; and such possession as from their nature they were susceptible of. During all this time, there was a corresponding dereliction of all claim, control, possession and attention to these lands on part of Judge Wilson and his heirs. Judge Wilson died in 1798, but his son Bird Wilson was a full-grown man, and must have been partially familiar wnth his affairs, Bird having died in 1859, at the age of eighty-two years. Judge Wilson left but two children, a son and a daughter. Bird, the son, not only abandoned, but disclaimed all interest and title in this property. His sister and her husband never claimed title, while her daughter, Miss Hollingsworth, evidently had no knowledge or belief of title in her grandfather. Bird Wilson, to enable her to sell a mere speculative claim, conveyed to her for the consideration of one dollar, while she conveyed all her interest in this vast domain, consisting of hundreds of thousands of acres, for the pitiful sum of $5000, of which she was to get but one-third, leaving the speculator who suggested and got up the sale to reap the profits of the other two-thirds. Without enumerating all the facts, or dwelling upon them, there was ample evidence justifying the presumption that the parties finding the lands insufficient for the payment of the debts of Judge Wilson, suffered all to fall within the absolute intent or feature of the deed. That Morgan so understood it, is proved by his averment in his deed to John Savage, made on 22d September 1834, in these words: “ And whereas, said lands, at a valuation made in pursuance of the provisions and conditions contained in the said indenture (Wilson’s deed), have proved insufficient to satisfy the debts therein enumerated, and become absolutely and unconditionally vested in the said Benjamin (Morgan) in fee simple.” This recital is not evidence, per se, against the heirs of James Wilson, but as an allegation of the other party consistent with and supported by the facts, it has weight as a circumstance. It was an averment made while exercising control over these lands, and as a part of the res gestee of the transaction, gave it character.
Therefore, as a just and indeed irresistible conclusion from all the facts that these lands have passed absolutely to Morgan by the very terms of his deed, and to answer its main intent, it becomes unnecessary to resort to a presumption of release or extinguishment of the equity of redemption, there being none; or to the bar of the Statute of Limitations. Hence, it is unnecessary to discuss the doctrine of constructive possession or the kind of possession necessary to give effect to the bar of the statute. The court below thought the deed was a mortgage, and used the facts referred to as a means of raising the presumption of a release of the equity of redemption. The result, however, is the same, as we *100view the deed, viz., as a trust for the payment of Wilson’s debts, with a provision for the reconveyance of the excess only, and the facts relied on by the court below show that there was no excess, and that the lands conveyed passed under the absolute terms of the deed. Judgment affirmed.