Opinion
June Term, 1806.
A creditor agrees with his debtor, after judgment, to levy his execution on the whole of the debtor's property and purchase it in at the sale and hold it as a security for his debt; equity will permit the debtor to redeem the property.
WILCOX, the ancestor, being indebted to Morris in a large sum, confessed judgment for the amount of the debt, upon a special agreement that Morris should levy the execution on all his property, purchase it in at the sale and hold it as a security for the payment of his debt, and that Morris should recover the property when the debt was paid. Morris, by his agent, McClain, purchased in the property and sold a great part thereof to purchasers for a valuable consideration without notice of this trust. Wilcox filed this bill against Morris, McClain and the sub-purchasers, in order to redeem the property sold and to have a reconveyance enforced; also to have an account of the profits and amount of sales, charging that the whole of the debt has been paid. On the hearing of this cause three questions were reserved and sent to this Court: 1. Whether the contract between Wilcox and Morris was in the nature of a mortgage, and the property sold under the execution redeemable. 2. Whether an account stated and liquidated between Wilcox and Morris ought not to be set aside, on account of an imposition alleged to have been practiced on the latter in said settlement, owing to his old age and imbecility of mind. 3. Whether the bill ought not to be dismissed as to McClain and the sub-purchasers, because the first was a mere agent and received money and conducted the business for Morris, the principal, (117) and because the latter were purchasers for a valuable consideration without trust.
From Hillsboro.
The contract between Wilcox and Morris was in the nature of a mortgage, and the property sold under the execution is redeemable. No particular words or form of conveyance are necessary to give to the contract the qualities of a mortgage. It may be laid down as a general rule, subject to few exceptions, that wherever a conveyance or assignment of an estate is originally intended as a security for money, whether this intention appear from the deed itself or any other instrument, it is always considered in equity as a mortgage, and the estate redeemable, even though there be an express agreement of the parties that it shall not be redeemable, or that the right of redemption shall be confined to a particular time, or to a particular description of persons. A court of equity, in applying this rule to particular cases, will often ascertain the fact whether the conveyance was intended as a security for money, however absolute it may appear, and will lay hold of all the circumstances of the transaction to ascertain this fact, such as the value of the estate conveyed and the sum given therefor, the bargainee not being let into the immediate possession of the estate, his accounting for the rents and profits to the bargainor, etc. In the present case there was a special agreement in writing that the complainant should be at liberty to redeem the property when the debt was paid. We are also of opinion that the account referred to ought not to be set aside, there being no evidence of any fraud or imposition practiced on Morris. The suggestion of his old age and imbecility of mind is not sufficient to set the account aside, but leave is given to surcharge and falsify the same. As to the third point, we think the bill ought to be dismissed as to the sub-purchasers without notice of the trust; but as to the representatives of McClain, the agent, the bill ought to be retained, that an account may be taken of the money which he received, (118) great part of which complainant alleges was never by him accounted for to his principal. Let this account be taken and the bill, as to sub-purchasers, without notice of the trust, be dismissed with costs.
Cited: Bunn v. Braswell, 142 N.C. 116.