REED, V. C.

Bill in equity by Carl Rempt against Philip Geyer to enjoin defendant from prosecuting an action of ejectment, to have a deed declared to be a mortgage, and for other relief. Decree for complainant.

Francis Scott, for complainant.

John H. Reynolds, for defendant.

REED, V. C. Carl Rempt was the owner of real estate in the city of Paterson, in this state, upon which there were three mortgages, —the first for $1,600, the second for $1,000, and third for $400. Unless he could raise the money to pay the last two mortgages, his property was threatened to be sold under a ponding foreclosure suit. He applied for assistance to his friend, Philip Geyer. Geyer advanced sufficient money to pay the two mortgages, the accrued interest, and the costs of the foreclosure suit Rempt gave Geyer a deed for the property, taking at the same time, namely, July 24, 1891, a paper signed by Geyer, in which paper it was declared that Rempt had the right to redeem and have reconveyed to him the said premises at any time within six months, upon paying to Geyer all sums of money that he should have paid for or by reason of his ownership of said premises, and interest thereon up to the time of such redemption. To this was added another clause, in these words: "It is expressly understood that time is an essential element in this agreement, and that the right of redemption shall not extend beyond the said term of six months." After the execution of these papers Rempt remained in possession, and is still in possession. In June, 1893, Geyer's attorney sued out a writ in an actionin ejectment, brought to dispossess Rempt. This bill was filed to enjoin this action, and to have the deed declared a mortgage, and to have the amount due upon the mortgage ascertained, and then, upon Rempt's paying such ascertained amount, to have the deed delivered up to be canceled. The answer interposed to this bill is that the deed and accompanying paper constitute a conditional sale, which sale became absolute upon the failure of Rempt to repay the sums mentioned within six months from the execution of the papers.

It is thus perceived that the question litigated at the hearing was whether the transaction wo a a loan, and so the deed was a mortgage, or whether the money was paid as a consideration for the sale with a right to repurchase. I find that the money advanced by Geyer was a loan, and that the deed and defeasance is a mortgage given for its security. Aside from the papers themselves, 1 find the following indications in the testimony which lead me to this result: (1) The money advanced was the exact amount required to relieve the property from the two mortgages, namely, the principal, interest, and the costs of suit. (2) Geyer made no examination of the property at the time of the payment There was no discussion in respect to the value of said property between the parties. Geyer appears to have been satisfied that the equity of redemption was worth more than the sums he advanced, and so made no further inquiry. (3) The vendor remained in possession from the execution of the deed, July 24, 1891, until the action of ejectment, in April, 1893, and is still in possession. (4) While it is obvious it was understood that he was to remain in possession, no amount of rent to be paid by him was fixed. (5) The source from which Rempt was likely to procure the money to repay the amount advanced was discussed. (6) Mr. Ryle was the attorney of Geyer in the transaction. The deed was drawn by his clerk, and the defeasance by himself. The papers were executed in his presence. He filed the original answer, and the answer is framed upon the erroneous theory that the restriction of the right to redeem to a period of six months gave Geyer an absolute title at the end of that time. By an amended answer the present defense was first set up by the present solicitor, after the death of Mr. Ryle.

The main contention of defendant's counsel is that there is no promise to repay the moneys advanced, and therefore there exists no evidence of the relation of debtor and creditor between Rempt and Geyer, which relation is essential to support the theory that the deed is a mortgage. Now, while the existence of a covenant or promise to repay is of great evidential value in fixing upon a deed the character of a security, yet the absence of such covenant or note or express promise is not conclusive that no personal debt exists. If the circumstances show a loan, then an implied promise to repay springs from that fact alone. There should be a decree declaring the deed to be a mortgage, that the amount due upon the mortgage shall be ascertained by reference to a master, and that, upon the payment by Rempt to Geyer of the amount so ascertained within 20 days from the confirmation of the master's report the said dead shall be delivered up to the complainant to be canceled.