Jeffreys v. Charlton
| Decision Date | 30 January 1907 |
| Citation | 72 N.J.E. 340,65 A. 711 |
| Parties | JEFFREYS et al. v. CHARLTON et al. |
| Court | New Jersey Court of Chancery |
(Syllabus by the Court.)
Bill by Charles H. Jeffreys and others against Selina A. Charlton and others. Decree for complainants.
The bill is filed by complainants, as executor and devisees of Lewis E. Jeffreys", to remove a cloud from the title to certain real estate, which cloud consists of an outstanding agreement dated July 3, 1903, wherein complainants' testator agreed to extend to cross-complainant an option of purchase of the land, upon the terms specified in the agreement, for a period of two years from the date of the agreement Defendant, by way of cross-bill, claims that under the agreement in question she is entitled at this time to an ascertainment of the money due to complainants under the terms of the agreement, and to a conveyance to her by complainants of the land in question upon the payment by her of the amount so ascertained. The agreement in question is an instrument, wherein cross-complainant conveyed to complainants' testator certain real estate, and complainants' testator, in the same instrument, extended to cross-complainant an option of purchase upon the terms stated for a period of two years from the date of the agreement
Bourgeois & Sooy, for complainants. H. W. Lewis, for defendants.
LEAMING, V. C. (after stating the facts). The primary question for determination is whether the transaction in question was operative as a mortgage from cross-complainant to complainants' testator, or whether it was operative as an absolute sale from cross-complainant to complainants' testator, with only an option of repurchase preserved to cross-complainant if the former, cross-complainant's equity of redemption must be preserved to her; if the latter, cross-complainant was obliged to comply with the terms of the option within the period specified.
That part of the agreement wherein the right to repurchase is granted to cross-complainant is, in form, strictly an option; and, if the language of the instrument is to be taken as the sole criterion to determine the rights between the parties, there is no equity of redemption preserved to cross-complainant, in the event of her failure to comply with the terms of the option; but equity is privileged to inquire beneath the external forms, in determining questions of this nature, and the controlling inquiry is whether or not, in view of all the circumstances disclosed, the transaction was an absolute sale, or whether the conveyance to complainants' testator was intended as a security to him for the repayment of the money set forth in the terms of the option. The determination of this question must, to a large extent, depend upon the circumstances of the individual case; for the question necessarily turns, in all such cases, upon the real intention of the parties, as shown upon the face of the writings, or as disclosed by extrinsic evidence. Where a doubt exists, the tendency of the courts, from motives of policy, has generally been in favor of treating the transaction 'as a mortgage security. In the present case death has Intervened to deny to the court the benefit of the testimony of the parties to the transaction touching much that transpired at the time of the execution of the agreement; but sufficient evidence has been produced to disclose, with great fullness, the situation of the parties at the time and the purposes sought to be accomplished by the agreement made.
The property in question, at the time of the agreement, was about to be sold under decree of foreclosure, and the conveyance in question was made to complainants' testator with the view that he should purchase the property at the foreclosure sale and bind himself to convey the property to cross-complainant, providing cross-complainant should, within two years, pay to complainants' testator, for the property, the amount specified in the option. At the date of the agreement there was no indebtedness from cross-complainant to complainants' testator to be secured by this transaction. The agreement executed between the parties in no way bound cross-com...
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