That there was no agreement in the defeasance for the payment of the debt, is a circumstance entitled to considerable weight, as tending to show that the conveyance was not intended as a mortgage, and that the relation of debtor and creditor did not exist. But it is only one of several circumstances to be considered, and is not conclusive; and the judgment of the court below upon the question of fact, the decision of which involved the consideration of this and the other circumstances, and the whole evidence, is conclusive. In Conway's Exr's v. Alexander, 7 Cranch, 218, Ch. J. Marshall says: "The want of a covenant to repay the money is not complete evidence that a conditional sale was intended, but is a circumstance of no inconsiderable importance." And see per Putnam, J., Flagg v. Mann, 14 Pick. 467. The question in this as in every case was, whether the contract was a security for the repayment of the money, or an actual sale, and the evidence fully sustains the judgment of the court below that it was a mere security. The judgment is favorable to the defendant. The security might properly have been invalidated for usury, and the plaintiff had judgment for the proceeds of the sale of the lands without deducting the money lent. But equity has been done. The defendant has been repaid the money loaned, with interest, and the plaintiff has judgment for the residue of the purchase-money for which the mortgaged premises were sold, and the plaintiff does not complain.
132 New York, 524. - 1892
Landon, J. - The agreement, which antedated the deeds by one day and expressed their intent and purpose, should be read in connection with them. Thus read, the deeds are shown to have been given by Lucilia Tracy to Howland, Smith and Tracy " for the purpose of securing and in consideration of said loan of $8,240 " made by the grantees to the grantor, and " that the said deed ... is a security for the said loan for a term not exceeding one year from the date of said deed, . . . and that upon the payment of said sum of $8,240, with interest, within or at the expiration of one year by the said Lucilia . . . the said Howland, Smith and Tracy are to reconvey said premises to said Lucilia, . . . and in case said sum of $8,240 shall not be repaid during or at the expiration of one year as aforesaid, then it is understood and agreed that the said deed . . . is to become and be a deed absolute, and the said Howland, Smith and Tracy are to become and be the owners in fee simple absolute."
The deeds are thus clearly shown to have been intended as mortgages. This conclusion is also inferable from the facts. The premises at the date of the deeds were worth $30,000. The judgments against the premises were by the terms of the agreements to be paid from the money loaned, and presumably were either paid or their amount retained by the grantees from the $8,240. The amount of the outstanding mortgages against the premises was $7,000. It is not presumable that Lucilia Tracy intended to sell property worth $30,000 for $15,240. The grantor remained in possession of the premises for about two years after the delivery of the deeds. She was embarrassed and straitened for money. Stress is laid by the defendants upon the fact that the grantor did not expressly covenant to repay the money. The cases are to the effect that this is one of several circumstances to be considered; Horn v. Keteltas, 46 N. Y. 605; Morris v. Budlong, 78 Id. 552; Brown v. Dewey, 1 Sand. Ch. 57; and here it is to be considered in connection with the repeated statement that the money to be advanced by the grantees is a loan and that "said deed is a security for said loan for a term of not exceeding one year," and that upon repayment the grantors should reconvey to the grantor. It is plain that repayment of the loan was-contemplated; nothing is said of the repayment of purchase-money, and there is nothing in the agreement indicating that the money advanced by the grantees was purchase-money, except that in case said sum of $8,240, previously termed a loan, should not be repaid at the expiration of one year, "then it is understood and agreed that the said deed is to become and be a deed absolute," thus clearly indicating that at the date of the transaction said sum was not purchase-money and said deed was not a deed absolute, but was to become so in case of nonpayment of the loan. Clearly upon the undisputed facts the deeds were a mortgage to secure the money loaned, and the trial court erred in refusing the plaintiff's request to so find. The agreement that the nonpayment of the loan within the time specified should convert the mortgage into an absolute deed did not have that effect. The agreement to turn a mortgage into an absolute deed in case of default is one that finds no favor in equity. The maxim " once a mortgage always a mortgage" governs the case. Horn v. Keteltas, supra; Murray v. Walker, 31 N. Y. 400; Carry. Carr, 52 Id. 251; Remsen v. Hay, 2 Edw. Ch. 535; Clark v. Henry, 2 Cow. 324; Morris v. Nixon, 1 How. (U. S.) 118; Villa v. Rodriguez, 12 Wall. 323, 4 Kent's Com. 143. Since the deeds were a mortgage the title did not pass to the grantees, but remained in Lucilia Tracy. Barry v. Hamburg B. Fire Ins. Co., no N. Y. 1; Thorn v. Sutherland, 123 Id. 236; Shattuck v. Bascom, 105 Id. 39.
The levy under the plaintiff's attachment was, therefore, upon Mrs. Tracy's land, to which she had the legal title. It was not merely an attempted levy upon her equitable right to obtain title. As against Howland, Smith and Tracy the levy was valid and the judgment and execution which followed the attachment became a specific lien upon the land itself, and the land could be sold upon Execution.
Howland, Smith and Tracy conveyed the premises before the attachment was issued to the defendant, the New York Baptist Union for Ministerial Education. This defendant by its answer admits that $3,000 of the purchase-money, with interest from January 1, 1883, remains unpaid, and that $1,550 of the principal of one of the mortgages upon the premises given by Mrs. Tracy also remains unpaid. This defendant in order to maintain the defense that it is a bona fide purchaser without notice of plaintiff's rights, must have paid all the purchase-money. Sargent v. Eureka S A. Co., 46 Hun, 19; Harris v. Norton, 16 Barb. 264; Jewett v. Palmer, 7 Johns. Ch. 61; jackson ex dem v. Cadwell, 1 Cow. 622; Boone v. Chiles, 10 Peters, 179; Patton v. Moore, 32 N H. 382.