Yarbrough v. Newell

• Decision Date: 31 December 1837
• Citation: 18 Tenn. 376
• Parties: YARBROUGH v. NEWELL.
• Court: Tennessee Supreme Court

18 Tenn. 376

YARBROUGH

v.NEWELL.

Supreme Court of Tennessee.

December Term, 1837.

The bill charges that on the 24th of May, 1831, the complainant being indebted to sundry persons and in need of money, and for fear his property would be sacrificed at execution sale, and owning a negro girl, Caroline, that he knew would be the first seized upon and sold by the officers to satisfy the claims in their hands for collection, he applied to the defendant for a loan or to get him to satisfy his debts, and offered him said negro girl as security for his advances and a small amount due Newell, not in all exceeding $250, which said Newell agreed to; that the transaction was a loan on the one side and a conveyance on the other, with condition that he should have liberty to redeem in six months; that he took from said Newell a paper writing which Newell told him was to bind him to pay $250; that he cannot read or write, and that the paper writing does not contain the true contract between the parties; that he applied to Newell to redeem, and tendered him the money, and he refused to return the negro, alleging the money was not paid within the six months; that said Newell has had possession of said negro ever since.

The defendant, in his answer, expressly denies that the transaction was a mortgage or conditional sale, but says it was absolute and unconditional, and that the two instruments of writing contain the whole contract; that he refused to advance money and take a mortgage on the negro, but stated the sale was absolute, and that, if complainant repurchased her, he must contract for her as any other person.

The facts proved in relation to the question whether this was intended as a mortgage or not, and also in relation to the statute of limitations, are stated in the opinion of the court.

The chancellor's decree was in favor of the complainant.

G. Boyd, for complainant. Courts of equity, in deciding what is or what is not a mortgage, look to the real intention of the parties at the time of making the contract, and they will not permit a conveyance, designed to be a security for money lent or advanced, to stand as an absolute sale of property, whatever its form may be, and parol proof may be introduced to show the real intention and true meaning of the contract. 4 Kent, 142; 3 Yerg. 513, 525;4 Johns. Ch. 167;5 Bin. 69;9 Yerg. 172;2 Id. 215. The depositions in the cause prove beyond doubt that the conveyance from Yarbrough to Newell, though absolute upon its face, was in truth understood between them as a pledge of security for the money to be advanced in payment of Yarbrough's debts. When it is once ascertained that the instrument is to be considered and treated as a mortgage, then all the consequences appertaining in equity to a mortgage are strictly observed, and the right of redemption is regarded as an inseparable incident. 4 Kent, 143; Fonb. Eq. 530, 531.

2. The mortgagor's right of redemption is not barred by the statute of limitations. 3 Yerg. 513, 525. These two cases, decided by our supreme court, are directly in point, and if not overruled must settle the question in this case. See, also, 9 Wheat. 489; 1 Wash. 14; 1 Powell, Mort. 360, a; 4 Cranch. 415, decided upon the Georgia statute of limitations, which may be seen in the same book, at page 367; 1 Hawks, 17.

Wherever there are concurrent remedies in law and equity, and the party sleeps upon his rights till the bar attaches at law, equity will follow the law and refuse relief; but in cases of mortgage and of express technical trusts created by contract, which are the exclusive creatures of a court of chancery, and where the courts of law afforded no redress, the statutes of limitations do not apply. 3 Hay. 152, 58; 1 Yerg. 296;3 Id. 201;7 Johns. Ch. 125; Murray v. Coster, 20 Id.

W. A. Cook, for defendant, contended:

1. That the bill of sale is absolute on its face. To allow parol evidence to contradict it, and to prove that it was intended as a mortgage, is dangerous in the extreme; the evidence, therefore, should be strong, irresistible, and conclusive, particularly where the answer denies positively that a mortgage was intended. Vide Lane v. Dickerson, decided by this court.¹ He insisted that the evidence in this case was not of that character. [The counsel here examined and commented on the testimony.]

2. The complainant's right to redeem is barred by the act of limitations. The defendant has held the slave adversely to the complainant's right more than three years, and, from the situation of the parties, the complainant must have known that the defendant disclaimed any right upon his part to redeem. This right was explicitly denied to complainant's agent. The possession, from such denial, was adverse. Demarest v. Wyncoope, 3 Johns. Ch. 129; Laman v. Jones, 3 Har. & McHenry, 328; Beckford v. Wade, 17 Ves. 99; Lytton v. Lytton, 4 Bro. C. C. 458; Hodel v. Healy, 3 Ves. & Bea. 536; Murray v. Terrel, 4 Yerg. 104; Hughes v. Edwards, 9 Wheat. 489;Elmendorf v. Taylor, 10 Id. 152; Cholmondely v. Clinton, 2 J. & W. 1.

3. Courts of equity act in obedience to the statute of limitations. The same length of time will bar a right in equity that would bar it if the remedy were a legal one. 1 Johns. Ch. 129; 2 Ves. 472; 3 Bro. C. C. 639; 6 Ves. 199; 10 Id. 453; 2 Meriv. 358; 3 Johns. Ch. 137; 2 Sch. & Lef. 607, 630; 1 Swans. 312; 17 Ves. 87; Ang. Lim. 132.

4. Three years' possession, by our act of limitations, vests the right, and does not simply bar the remedy. Our statute in this respect is stronger than the statute of fines, and cuts off all equities. Kegler v. Miles, M. & Y. 426; Porter v. Badget, 4 Yerg. 174; Hardeson v. Hays, 4 Id. 504; Davis v. Mitchell, 5 Id. 281;Lawrence v. Beidleman, 3 Id. 496.

GREEN, J., delivered the opinion of the court.

This bill is brought to redeem a negro girl, Caroline, which complainant alleges he had mortgaged to the defendant to secure to him the payment of certain sums paid by defendant to the creditors of complainant. The answer denies that the negro was mortgaged, and insists that defendant purchased the girl for a full price, and took from complainant an absolute bill of sale. The proof shows that defendant had advanced complainant some money, and that he took an absolute bill of sale for the girl, agreeing to advance other moneys, in payment of complainant's debts, to the amount of $250. It was also agreed that the complainant should be permitted to redeem the girl in six months from the date of the bill of sale. We have no doubt, from the facts in this case, but that the negro was taken by the defendant as a security for the money he had advanced, and, if so taken, it is well settled that the contract shall be valid and effectual as a mortgage as between the parties, although the mortgagee took a deed absolute on its face, and registered it as a deed. Nor does the fact that the defeasance rests in parol alter the question; for, if such was the real understanding of the parties, it may be established by parol evidence. 4 Kent Com. 142; Overton v. Bigelow, 3 Yerg. 513;Hammond v. Hopkins, 3 Id. 525;4 Johns. Ch. 567;Hickman v. Cantrell, 9 Yerg. 172.

2. But, as more than three years elapsed from the time limited in the contract for the redemption to be made, before this bill was filed, it is insisted that the statute of limitations is a bar to the redemption sought. In the case of Overton v. Bigelow, 3 Yerg. 513, this court expressly decided that the statute of limitations cannot be pleaded to a bill to redeem a mortgage.

The right to redeem, says the court, can only be enforced in a court of equity, and in such cases the statute of limitations is no bar. 20 Johns. 525; 4 Kent Com. 180. The cases in the English books are by no means uniform in regard to the application of the statute of limitations to a bill to redeem a mortgage. Twenty years is the time limited by courts of equity within which a mortgage may be redeemed; and, as that is the time fixed by the statute of limitations, it has sometimes been said that the right of redemption...