Court Opinion

ID: 3937225
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:01:38.999322+00
Date Added: 2024-06-11T12:19:01.981929
License: Public Domain

A closer scrutiny of the instrument executed by William T. Evans to Charles Chamberlain, dated June 11, 1841, satisfies us that we were in error in holding that it was a conditional sale and not a mortgage. It is in the usual form of a mortgage. It consists of a conveyance of the certificate and the land to be located thereunder, coupled with a condition of defeasance. The conditions to be performed in order to defeat the conveyance are, first, that the grantor shall convey unto the grantee one-third of the land, to be located within three months from the time when the patent should issue, and should within twelve months repay to him the sum of $250. "The usual proviso in a legal mortgage is that upon the payment of the debt or the performance of the duty named 'then this deed shall be void.' * * * If it appear from the whole instrument that it was intended to be a security for the payment of a debt or the performance of a duty it is a mortgage, although there be no express provision that upon the fulfillment of the condition the deed shall be void.' Jones on Mortgages, sec. 242. In the instrument under consideration there is such an express provision and there is also a duty to be performed, namely, the grantee is to execute to the grantor a deed to one-third of the land within a certain time after the patent shall issue. Was there not also a debt to be paid? We have nothing to guide us in determining the question but the face of the instrument itself. At this late day it is not to be expected that the facts accompanying the transaction could be proved. If the provision concerning the repayment of the money had been for $250 merely, it would not necessarily have indicated the existence of a debt. But it is stipulated in effect that if the money is not repaid within the period of twelve months from the time the patent should issue it shall bear interest; and this provision evinces that the instrument was not intended to evidence a sale which was to become absolute in the event the grantee failed to pay the money within the twelve months named, but a mortgage to secure, in addition to a conveyance of a third interest in the land, the payment of a debt which might continue to exist and should begin to bear interest after that period had elapsed. The fact that the money which is to be paid is to bear interest is always a circumstance which indicates the existence of a debt and hence a mortgage; and we think the inference of a mortgage becomes almost conclusive when it is expressly stipulated that the sum to be paid is to bear interest after the day on which the condition is to be performed by the payment of the money. The fact also that at the time the instrument under consideration was executed the grantor executed to the grantee a power of attorney to procure in his name the duplicate certificate and the patent to the land, tends to show *Page 329 
that instead of a sale a mere lien upon the certificate and the land to be located thereunder was intended. If the purpose of the parties was to make a sale of the certificate defeasible upon conditions which were not to happen until the patent had issued, no power of attorney was necessary to enable the purchaser to act. But perhaps but little importance should be attached to this circumstance, because the practice in these matters was not settled and we do not know what authority may have been deemed necessary at that early day.
In doubtful cases the courts incline to hold a conveyance a mortgage rather than a conditional sale; and we think the court below erred in not so holding the instrument under consideration. For this error the judgment must be reversed. As to the other points raised by the motion for a rehearing we adhere to the rulings announced in the former opinion.
The judgment is reversed and the cause is remanded.
Reversed and remanded.
Delivered March 20, 1891.