McClurkan v. Thompson

• Decision Date: 13 May 1872
• Citation: 69 Pa. 305
• Parties: McClurkan <I>versus</I> Thompson <I>et al.</I>
• Court: Pennsylvania Supreme Court

69 Pa. 305

McClurkan versus Thompson et al.

Supreme Court of Pennsylvania.

October 3 and 4, 1871.

May 13, 1872.

October 3d and 4th 1871.

Before THOMPSON, C. J., READ, AGNEW, SHARSWOOD and WILLIAMS, JJ.

Error to the District Court of Allegheny county: No. 46, of October and November Term 1870.

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N. P. Fetterman and S. A. Purviance, for plaintiff in error.— If a deed and defeasance bear even date, or are agreed upon at the same time, they constitute a mortgage: Reitenbaugh v. Ludwick, 7 Casey 131; Wilson v. Shoenberger, Id. 295; Kerr v. Gilmore, 6 Watts 405; Brown v. Nickle, 6 Barr 390; Houser v. Lamont, 5 P. F. Smith 311. It is only when the deed and defeasance are executed and delivered at different times, that it becomes the subject of inquiry, whether it is a resale. An express and positive stipulation against its being a mortgage will not make it so: Colwell v. Woods, 3 Watts 188; Kerr v. Gilmore, 6 Id. 405. An equity of redemption cannot be destroyed, being against the policy of the law: Rankin v. Mortimere, 7 Watts 372; Hiester v. Maderia, 3 W. & S. 384; Colwell v. Woods, 3 Watts 188; Harper's Appeal, 14 P. F. Smith 315. The court should have left it to the jury to determine its character: Hiester v. Maderia, 3 W. & S. 384; Kunkle v. Wolfersberger, 6 Watts 130; Wharf v. Howell, 5 Binn. 499.

S. H. Geyer and G. Shiras, Jr., for defendant in error.—It is competent for parties to agree upon a conditional sale. The relation of the parties must be that of borrower and lender to constitute a mortgage. There should be a surviving debt or obligation, as between the parties, which the alleged mortgagee could have enforced. The rule preventing the conversion of a security into a sale is for the protection of the needy debtor against the rapacity of a merciless creditor. This never can be the case where the transaction partakes not of the character of a loan, and the sale is for a fair price: Spering's Appeal, 10 P. F. Smith 210; Williams v. Owen, 4 Mylne & Craig 303; Turner v. Kerr, 44 Missouri 429; Conway v. Alexander, 7 Cranch 218; Flagg v. Mann, 14 Pick. 467; Holmes v. Fish, 9 Missouri 205; Mann v. Moody, 26 Mississippi 184; Glover v. Payne, 19 Wendell 518; Todd v. Campbell, 8 Casey 250.

The opinion of the court was delivered, May 13th 1872, by READ, J.

Cyrus Black was largely indebted to several persons, amongst others to parties who were represented by George S. Selden, and proposed to pay fifty cents in the dollar in full of the claims Selden was employed to collect, and of other creditors who would accept of it, which was agreed to, and Black, on the 1st July 1853, executed and delivered to Marcus Black, his brother, a mortgage for $11,800 with prospective interest, on the property in dispute in this case. The mortgage to be sold and the proceeds applied to the payment in full of the Wells judgment, and a balance of the purchase-money on the property due McGonigle's heirs; fifty per cent. in full of the claims of the creditors that agreed to accept, and the balance to Selden for his services. Kramer & Rahm, with whom negotiations had been entered into to buy the mortgage, declined purchasing it, and Cyrus Black then proposed, if the creditors would take the mortgage as payment, in the same proportion, in full of their claims, he would have it assigned to them. The proposition was accepted, and Marcus Black, mortgagee, at the instance of Cyrus Black, on the 8th August 1853 assigned the mortgage to George S. Selden in trust for said creditors. Selden failed to sell it, and brought suit in trust for creditors, obtained judgment, and on the 24th July 1854 had the property sold on a levari facias, and purchased it for $7000 at the sheriff's sale for the benefit of creditors, and a sheriff's deed was executed and delivered to him. Selden had, before the sale, borrowed money from Kramer & Rahm, with which he had paid the Wells judgment and McGonigle's claim, and had them assigned to himself.

The legal title is thus traced into Mr. Selden, who was simply a trustee for creditors, according to the terms of the assignment to him by Marcus Black. Kramer & Rahm's interest in it consisted of the moneys lent Selden to pay off the two preferences. In March 1855 Selden leased the property to James Mills for one year, and afterwards tried to sell it, and Mills's offer of $10,500, $500 cash and $1000 per year, he declined, because he required a cash payment sufficient to pay Kramer & Rahm the money they had advanced and interest. In 1857, Kramer & Rahm notified him they must have their money, and in the spring of that year Selden, with the consent of creditors, offered the property for sale at public auction, and M. B. Thompson, the defendant in error, was present, but the bidding was not satisfactory, and it was again advertised for sale by order of trustee (Selden), on Tuesday evening, May 19th, at public auction, in pursuance of adjournment. M. B. Thompson bid $4000, and wanted Selden to let him have it at that price, but Selden refused, and informed him that he could not let the property be sacrificed at that, and that he could not, in justice to the creditors, let it be knocked down for less than $7000, unless some arrangement could be made by which he, Selden, could have the privilege of paying him his money with interest within a year, and receive a conveyance of the property. With that understanding...