Murray v. Riley

Devens, J.

The Superior Court having found as a fact that the deed and the bond to reconvey were not intended to, and did not, constitute a mortgage, such finding will not be here revised, unless, as matter of law, it could not properly have been made. Sheffield v. Otis, 107 Mass. 282. Edmundson v. Bric, 136 Mass. 189.

Whether the transaction by which the defendant conveyed to the plaintiff the premises in question, receiving in return an agreement to reconvey on the performance of a certain condition, was a mortgage or a sale, depended on the intention of the parties, to be ascertained from the whole character of the transaction, as well as from the expressions in the instruments themselves. Undoubtedly those expressions might be so clear in the conveyance as to leave nothing for construction, as if the whole contract had been embraced in an ordinary mortgage deed, with the usual provisions, showing that such conveyance was in truth only security for a loan. Where it appeared from an instrument, executed contemporaneously between grantor and grantee, that the grantor had a right to “ redeem ” the estate, and agreed to “ refund ” the money advanced, it was held to be necessarily a mortgage. Bayley v. Bailey, 5 Gray, 505. Where it was agreed that, if the party entitled to reconveyance should fail to *493pay at the time specified, the deed should be absolute, “with no further right of redemption,” it was also held that the intent to make a mortgage was clear, as a right of redemption necessarily implied that a mortgage interest was all that was conveyed. Murphy v. Calley, 1 Allen, 107.

Where language is not explicit, and does not control the circumstances attending the transaction, it is competent to determine from them, and the expressions used in regard to them, what the intention is. Conversely, it may thus be shown that a deed absolute in form is really a security for a loan. Flagg v. Mann, 14 Pick. 467, 480. Campbell v. Dearborn, 109 Mass. 130, 141. Hassam v. Barrett, 115 Mass. 256.

The plaintiff in the case at bar had held an earlier mortgage on this property; the defendant had made a second mortgage thereon to another person, and owed debts for which his equity of redemption was under attachment. The second mortgage and these debts were paid by the plaintiff. The deed was then made to the plaintiff, who, on the same day, gave the bond to reconvey on payment of a specified sum. There was no agreement by the defendant to pay the money for reconveyance, nor are there any expressions to be found in the bond which indicate that there was any loan of money for which the deed was held as security.' Where the intent that a transaction shall constitute a mortgage is not clear, the fact that there is no collateral undertaking to pay the money is important. As, in such case, the holder of the estate must bear the loss if property depreciates, it is equitable that he should have the profit arising from any subsequent advance in the value of the estate, if the terms of the bond are not complied with.

The court might properly have found that the transaction as to the deed and bond was not intended to, and did not, operate as a mortgage.

But if the transaction could have been treated as a mortgage, the finding of the court in favor of the plaintiff was still correct. Even if the only title of the plaintiff was that of mortgagee, it was proved that the defendant became his tenant at will at the expiration of the time mentioned in the bond, and agreed to pay, and did pay, rent for the premises, and that the relation of landlord and tenant existed between them at the date of the writ; *494and, further, that a formal notice to quit for nonpayment of rent had been served on the defendant. There was nothing inconsistent between this relation and that of mortgagor and mortgagee. If any part of the mortgage debt remained due, the mortgagee would take the rents recovered in trust for, and to apply towards, its payment. Whether, in the absence of any agreement for payment, the mortgagee may maintain an action against the mortgagor for use and occupation of the mortgaged premises, has been doubted, but that he may maintain such an action upon a contract to pay therefor has not been questioned. Morse v. Merritt, 110 Mass. 458.

Upon the findings that the relation of landlord and tenant existed, and that the proceedings necessary to eject a tenant for nonpayment of rent had taken place, judgment was properly rendered for the plaintiff.

Exceptions overruled.