Stephens v. Sherrod

• Citation: 6 Tex. 294
• Parties: STEPHENS v. SHERROD.
• Decision Date: 01 January 1851
• Court: Texas Supreme Court

6 Tex. 294

STEPHENS

v.SHERROD.

Supreme Court of Texas.

1851.

It matters not what may be the form of a conveyance nor what the circumstances attending its execution, either the grantee or the grantor may allege that it was in substance a security for the loan of money; and where that is alleged and parol evidence is introduced, it is a question of fact for the jury whether it was in substance a loan of money. If a loan of money, then it is a mortgage, and the mortgagor may assert his right of redemption, or, the property being lost without default of the mortgagee, the latter may recover the money loaned, notwithstanding there was no personal covenant or promise to pay embraced in the form which the parties gave to the transaction. (Note 54.)

Where a conveyance and defeasance were dated November 24th, 1846, and the defeasance recited that if the grantor in the conveyance should pay to the grantee by the first day of March, 1848, the sum of money specified as the consideration of the conveyance, then the grantee would return the property (being a slave) and the conveyance--the negro having died in January, 1847: Held, That an action by the grantee to recover the money advanced as for money loaned commenced on the 12th of September, 1849, was not barred by the statute of limitations. It seems that in such a case the statute of two years applies, and commences to run at the period fixed for redemption of the property. But in this case the defeasance recited that the grantee had paid to the grantor the sum of money advanced in full satisfaction for the negro until the 1st of December, 1847.

Appeal from Harrison. The appellee sued the appellant to recover the sum of four hundred and thirty dollars, money loaned. The plaintiff filed the petition on the 12th day of September, 1849, alleging that the defendant, being indebted to one William T. Scott in that sum, requested the plaintiff to pay the same to said Scott, which the plaintiff accordingly did on the 24th day of November, 1846; that the money so advanced was a loan, and that to secure the payment thereof the defendant delivered to the plaintiff a negro man, and at the same time executed and delivered to the plaintiff, by way of mortgage, his bill of sale of the negro, which was set out in the petition and was a bill of sale absolute on its face, purporting to be for the consideration of four hundred and thirty dollars; that as part of the same contract of loan and mortgage, the plaintiff at the same time executed and delivered to the defendant a defeasance, which was also set out in the petition. The defeasance recited the substance of the bill of sale, and that the plaintiff had then paid to the defendant the sum of four hundred and thirty dollars, in full consideration for the negro until the 1st day of December, 1847. It stipulated that if the said Stephens should pay to him, his heirs, &c., said sum of money by the 1st day of March, 1848, “upon said payment as above,” the plaintiff (Sherrod) should return the negro and bill of sale to the defendant (Stephens;) “but if the said Stephens shall not pay said sum of money by the 1st day of March, 1848, the privilege of redeeming said negro shall be forever barred, and the title vested in me by said bill of sale and possession to continue absolute and perfect.” (Signed) J. L. Sherrod. The petition further alleged that on the 16th day of January, 1847, the negro died. The petition makes a claim to interest, alleging that the services of the negro were, by the agreement of the parties, to extinguish the interest upon the money, and that upon the death of the negro the plaintiff became entitled thenceforward to receive interest upon the money loaned. This claim was subsequently abandoned. The petition concluded with the usual averment that the defendant has refused to pay the debt, and with a prayer for judgment therefor.

The defendant answered by a general demurrer, a general denial, and a plea in reconvention, alleging that the negro came to his death by the fault of the plaintiff, and praying judgment against the plaintiff for five hundred dollars, which he alleged was the value of the negro; and further, that the contract between the parties was a conditional sale.

At the trial the plaintiff proved that Scott (the witness, and who was a witness to the bill of sale and defeasance) had possession of the negro under an agreement with the defendant similar to that described in the petition at the time of the contract set forth in the petition; that the defendant owed Scott four hundred and thirty dollars, then due; that the defendant told the witness to let Sherrod (the plaintiff) have the negro, and that he (Sherrod) would pay him the four hundred and thirty dollars, the amount for which he held the negro, which he accordingly did, and received from Sherrod his money. The witness also proved the execution of the bill of sale and defeasance set out in the petition, which constituted also a part of the statement of facts. The witness further testified that he proposed to buy the negro of the defendant, but the defendant said he would not sell him; that the negro was worth seven hundred dollars; and that he died in January, 1847; and that Sherrod (the plaintiff) was not in the habit of lending money.

There was a verdict and judgment for the plaintiff for the principal sum sued for, and interest; the plaintiff remitted the interest; there was a motion for a new trial, which the court overruled, and the defendant appealed.

C. M. Adams, for appellant.

I. A failure to except to the petition or answer does not authorize a judgment upon the petition or answer which discloses no cause of action or ground of defense. (Borden v. Houston, 2 Tex. R., 594, 615.) The petition in this suit does not show any cause of action, because the cause of action relied on and stated appears on the face of the petition to be barred. (Coles v. Kelsey, Id., 552, 556.)

II. The bill of sale and defeasance in this cause constitute a conditional sale. (Hughes v. Edwards, 5 Cond. R., 648; Conway's Ex'rs v. Alexander, 2 Id., 479; 4 Kent's Comm., 145, and note B.)

III. The proviso or condition in the mortgage will not enable the mortgagee to sustain debt for the money or covenant for the non-performance. The performance of the condition, in the absence of a covenant, is optional. (6 Black. R., 163; 7 Watts R., 360.)

W. P. Hill, for appellee.

WHEELER, J.

The questions presented for our consideration which seem to require notice are--

1st. Is the contract disclosed by the record a mortgage? and if so,

2d. Can the plaintiff waive his remedy upon the mortgage, and recover in this action the money loaned?

1. The bill of sale and the defeasance were executed at the same time and in respect to the same subject-matter. They are constituent parts of the same agreement, and are to be considered as but one instrument. They are to receive the same interpretation and to have the same effect as if they had been embodied in the same writing and had formed but one deed. (3 Watts R., 196;6 Id., 408.)

Had the defeasance been inserted in the same instrument with the bill of sale, it probably would not have occurred to any one to question that it was a mortgage, and could be nothing else. “All the cases show” (said the Supreme Court of Pennsylvania in a case cited at the bar) “that an absolute sale and defeasance in the same instrument must be a mortgage and nothing but a mortgage.” (Kerr v. Gilmore, 6 Watts R., 408.) Yet the circumstance that the bill of sale and defeasance are in separate instruments does not change the character of the contract. For, as was said by the same court, “It is well settled that the making of two instruments, a deed and defeasance, at the same time, of the same date, leaves it still a mortgage, precisely as if both were in the same instrument.” (Ib.)

Considering the two parts of the contract, then, as one instrument, it manifestly is a conveyance of property by way of pledge for the security of a debt, the conveyance to become inoperative and ineffectual on payment of the money at the time specified; and this is the substantive definition of a mortgage. (4 Kent's Comm., 133.) “The essence of the defeasance is that it defeats the principal deed and makes it void if the condition be performed.” (Id., 141.) The instrument here shows that money was advanced by the plaintiff for the defendant, to be repaid at a time specified; in other words, it was loaned by the former to the latter; the bill of sale and possession of the negro were delivered to secure the payment of the money, and it was stipulated that the negro and bill of sale were to be restored to the mortgagor; that is, the defeasance was to defeat the bill of sale and operate its revocation upon the payment of the money at the time specified, and this is the essence of the defeasance by which the...