Cake v. Shull

• Decision Date: 23 January 1889
• Citation: 16 A. 434,45 N.J.E. 208
• Parties: CAKE v. SHULL.
• Court: New Jersey Supreme Court

16 A. 434

45 N.J.E. 208

CAKE

v. SHULL.

Court of Errors and Appeals of New Jersey.

January 23, 1889.

(Syllabus by the Court.)

Appeal from court of chancery; BIRD, Vice-Chancellor. 13 Atl. Rep. 666.

Mr. French and S. H. Grey, for appellant. Mr. Pancoast, for respondent.

DIXON, J. The complainant seeks to have a certain bill of sale, dated May 5, 1886, made by herself to the defendant, for one-sixth interest in the "Mann Mining Property of North Carolina," adjudged to be a mortgage for the loan of $320, and to obtain a decree against the defendant for the difference between that sum and $1,692, the price for which the defendant sold the same in October, 1887.

The right of a court of equity to declare a deed or bill of sale, which is absolute on its face, to be a mortgage, is clear, as is also the competency of parol evidence to prove the fact. The question turns upon the actual intention of the parties at the time of the transaction. Crane v. Decamp, 21 N. J. Eq. 414. If that intention was that the instrument should constitute security for the payment of money, or the performance or non-performance of any other act, then it is deemed a mortgage; but, if a real sale was intended, then it takes effect according to its terms, even though a contemporaneous right or privilege to purchase back the property sold was contracted for by the vendor. Gassert v. Bogk, (Mont.) 19 Pac. Rep. 281; Conway's Ex'r v. Alexander, 7 Cranch, 218; notes to Thornbrough v. Baker, 2 Lead. Cas. Eq. 1030. An obligation to repurchase, or any other duty resting on the vendor by the performance of which the property was to revert to him, could ordinarily be conclusive evidence of a mortgage, while the absence of such obligation or duty, either expressed or implied, would be indicative of a sale. Murray v. Riley, 140 Mass. 490, 6 N. E. Rep. 512; Horn v. Keteltas, 46 N. Y. 605. In searching for evidence of intent, the strong probability that parties, who have reduced at least some portion of their bargain to writing, have fully and intelligently expressed their whole bargain in that writing, must not be lost sight of; and therefore it has been rightly said that, where the writing is in form an absolute conveyance, the parol evidence that it was designed to operate as a mortgage only must be clear, unequivocal, and convincing, or the presumption that the instrument is what it purports to be must prevail. Coyle v. Davis, 116 U. S. 108, 6 Sup. Ct. Rep. 314. It is necessary, therefore, to ascertain what intention the testimony in this case discloses. And, first, there is the fact that the contemporaneous writing shows an absolute sale, and nothing suggestive of a mortgage. Secondly. The bill of complaint requires the defendant to answer under oath whether he did not advance to the complainant the consideration of the bill of sale as a loan, and receive the bill of sale as a security for the repayment of that loan; and the defendant answers under oath with a negative, and that, on the contrary, no loan was made, and the sale was absolute. Thirdly. It appears that at the time of this transaction one Whitney held the complainant's note for $320, and also controlled his...