Sawyer vs. Weaver.

I think there can be no doubt that these were the terms agreed upon between the parties, previous to the execution of the deed.

A deed of trust was given by the purchaser to secure the deferred payments, and the mortgage-debt subject to which the property was sold.

At the time of the transaction there were arrears of overdue interest upon the incumbrance amounting to the sum of $1,300, not known to the purchaser, and this is the subject of the present controversy.

The deed of trust contains the following recital, declaring the intention and object of the parties, and.which the defendant insists obliges the complainant not only to pay the principal of the incumbrance with interest from the date of the sale, but also all the previously-accumulated and overdue interest:

"And whereas there is now an indebtedness on said property of eight promissory notes of S. D. Castleman and said Weaver, each for $1,000, with interest, as will appear by deed recorded in liber No. 604, folio 474; and part of the consideration of this sale is that the said Sawyer should assume said indebtedness, and pay the same, and hold the said Weaver harmless therefrom; and whereas the said parties of the first part are desirous to secure the full and punctual payment of said notes, and all interest, costs, and expenses that may accrue thereon, according to the true intent and meaning of the same."

It appears to me that this recital, fairly construed, shows that no interest upon the incumbrance in question was to be assumed by the purchaser, except such as should afterward accumulate; for it declares the object to be "the full and punctual payment of said notes, and all interest, costs, and expenses that may accrue" (not that have accrued) "thereon, according to the true intent and meaning of the same.".

The recital also declares:

"And whereas there is now an indebtedness on said property of eight promissory notes of S. D. Castleman, each for $1,000, with interest."

The indebtedness here mentioned, it seems to me, is to be understood as meaning a debt of $8,000, bearing interest, and

Sawyer vs. Weaver.

the interest to be assumed by the purchaser, as afterward more clearly defined in the same sentence, was the interest which "may accrue," and therefore only future interest.

I submit that this interpretation is not overstrained, but is that which is most equitable, and certainly most consistent with all the evidence we have as to the intention of the parties.

I think, also, that the question has been, in principle, determined this way by the decision made by Lord Hardwicke, in Roberts vs. Kuffin, 2 Atk., 112, cited with approbation in Roper on Leg., 288. Owen Roberts made his will to the following effect: I give to my son, Thomas Roberts, £200, secured by a mortgage on the estate of Mr. Marriot, and all the messuages, lands, and tenements, for securing the same. The question in the case was whether the legatee took merely the £200, or that sum with interest. The Lord Chancellor said:

"This entitles the devisee to the principal only of the mortgage, and not to the interest from the time of the execution of the will, nor from the death of the testator, or any other time whatever. If a man gives £200, due upon a bond by his will, this does not carry interest incurred in the life-time of the testator."

In the present instance, the deed of trust was given to secure an "indebtedness" of "eight promissory notes of $1,000 each," "with interest;" in other words, a debt of $8,000 with interest, and that interest such only as "may accrue." I cannot see how such language can be made to cover arrears of interest as to which the purchaser was undoubtedly ignorant at the time of executing the deed of trust.

But the counsel of defendant also argued, in support of his position, from the following other terms of the deed of trust: "In case of default or failure in payment of said debts due as aforesaid to the said Weaver or the said Harvey North, or any part thereof, or of any proper costs or charges thereon, or which may accrue thereon, the trustee should make sale of the property on the terms prescribed by the deed; and, after paying the expenses of the sale and trust, shall pay, in the first place, whatever of said debts, interest, costs, and expenses may be due and unpaid at the time of such sale ; secondly, to pay whatever of said debts, interest, costs, and

Sawyer vs. Weaver.

expenses may then remain unpaid, although the same may not then have become due and payable."

Undoubtedly, all the unpaid interest upon the debt was to be paid from the proceeds of the sale; but these provis. ions of the deed shed no light whatever upon the question under consideration.

If it be settled that the object of this deed of trust was not such as to secure the payment of the overdue and unpaid interest in question, then in case of a sale, under its provisions, it must be conceded that no part of the proceeds could be properly so applied. For, as was said by Lord Hardwicke in the case already referred to, "when there is a devise, in express words, the construction in this court is, that subsequent general words shall not extend it further than the natural meaning of the preceding ones will do."

It seems to me, therefore, that on the very face of this deed the claimant is entitled to the relief he asks. Dehors the deed, I think the evidence in the cause is still more convincing, but I do not care, in a dissenting opinion such as this, to go over that ground, as the opinion of the court determines that the parties are bound in this case by their solemn deed, and I am willing to take position upon the ground it has selected.

It is to be borne in mind, however, that the present issue is between Sawyer and Weaver only as to the construction of their contract as between themselves.

The question would be widely different, as between Sawyer and the party entitled to the first incumbrance, if a sale were to be made under it. No contract entered into between Sawyer and Weaver could impair that security to the full extent of all the debt and interest from the beginning.

Peugh vs. Davis.

SAMUEL A. PEUGH vs. HENRY S. DAVIS.

IN EQUITY.-No. 1713.

I. Parol testimony is admissible for the purpose of showing that a deed of real estate, although absolute on its face, was really intended as a security for money loaned.

II. But the testimony of three witnesses, aside from the complainant, as to admissions made by the purchaser that the vendor is still indebted to him for the money two of them being contradicted, will not prevail against the absolute sale expressed on the face of the deed, where the allegations of the bill, that it was intended as a security, are positively denied by the answer, and where also the attorney who prepared the deed under the direction of both parties, as well as the defendant, both testify that the transaction was an absolute purchase, and also where there is a receipt signed by the vendor, expressing the consideration to be for the purchase of the land.

III. Where it is difficult to say from the testimony in the case that the mortgagee has not paid for the property all it was worth at the time of the purchase of the equity of redemption; and where the bill contains no allegations that the sale was procured by fraud or undue influence, a court of equity will not disturb the validity of the deed.

STATEMENT OF THE CASE.

This is a bill in chancery to redeem certain lands which the complainant had conveyed to the defendant by a deed absolute on its face, but which he alleges was only a security for money lent him by the said defendant.

The bill sets forth, in substance, that in the month of March, 1857, the complainant borrowed of the defendant $2,000 for sixty days, and executed to him a deed to squares numbered 910 and 911, in this city, with the express understanding that, if the loan was repaid at the expiration of sixty days, the deed should be returned to the plaintiff, and should not meanwhile be recorded; that the amount of the loan and interest was paid within the sixty days, and the deed surrendered by the defendant.

The bill then proceeds to state that afterwards, in the month of July, in the same year, (1857,) the complainant borrowed

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Peugh vs. Davis.

from the said Davis the sum of $1,500 for sixty days, and delivered to him the same deed as security for the repayment of said loan, and that it should not meanwhile be recorded, and should be void on repayment of the debt; that at the end of sixty days complainant obtained an extension of sixty days longer time, and borrowed $500 more, and executed a further instrument of similar tenor and effect to the deed he had already delivered.

And complainant alleges that both the original deed and the second instrument just mentioned were both intended as a mere security for the payment of the two sums last bor rowed, and were to have no other effect or operation.

It is also alleged that on all these loans a higher rate of interest was required than the legal rate, and that the present value of the property so conveyed is $30,000.

The complaint concludes by praying for a surrender of the conveyance and of the bond, and offers to pay the sum of $2,000, with legal interest thereon from the time it was borrowed.

The defendant, in his answer, asserts that the second loan of $1,500 was made with the understanding that if it was not paid at the end of sixty days the defendant might then have the deed recorded and the land was to be his. That at the maturity of such indebtedness the complainant refused to pay the same, although defendant repeatedly offered to accept the principal of such debt in full discharge thereof, and to reconvey the property mentioned in the deed; and on the 7th day of September, 1857, two months after the debt matured, defendant recorded said deed according to the previous agreement.

The answer further states that complainant afterwards offered to sell the defendant his interest in the property, if the defendant would pay him the further sum of $500, making in all $2,000. That the defendant for some time refused to pay him any further sum, stating that he objected to said purchase, for the reason that there were outstanding tax titles against the property, upon which ejectment suits had been commenced and were then pending. That the complainant thereupon offered and agreed, in consideration of the sum of $500, to release to defendant his equity of redemp