Moore, C. J.
The only question of difficulty in this case is to determine whether the deed of the 18th of May, 1860, from the appellants to Slater, together with the simultaneous agreement between said parties and Hill, is a mortgage or, a conditional sale. The legal distinction between these contracts, and the consequences which result from them, are obvious and well defined. But the circumstances from which such contracts have-their origin, and the object generally intended to be attained by at least one of the parties to them, being frequently so nearly similar, it is often a matter of considerable embarrassment to say to which of these different classes of contracts a particular transaction properly belongs. The "contract which gives rise to the present suit is certainly not free fr&m the usual embarrassment and uncertainty encountered in the construction of similar agreements.
An inspection of the two instruments to which we have referred, which are evidently to be viewed as parts and parcels of one entire transaction, and a consideration of the facts and circumstances connected with the contract, show that many of the badges or indices which point to and characterize a mortgage are connected with this transaction, while others, strongly indicative of a conditional sale, are equally obvious.
There was unquestionably a pre-existing debt, which originated in a borrowing and lending on excessively usurious rates of interest. (Edrington v. Harper, 3 J. J. Marsh., 353.) And as the lender is less influenced by the pressure of circumstances which control the judgment and will of the borrower, the leaning of the courts in such cases has generally been to construe agreements under such [340]*340circumstances as mortgages. (Conway v. Alexander, 7 Cranch, 218.) The money previously loaned had been advanced on the security of the same property to which the contract refers. It had been dealt with as sufficient security for the money originally loaned. For this reason, as well as the testimony in respect to its value, we must conclude that it was at the time worth considerably more than the money advanced upon it. It was appellant’s homestead, and the enormous interest which they were paying shows a great unwillingness to consent to its sale; and possession remaining with appellants is also a circumstance indicating a mortgage. (Skinner v. Miller, 5 Lit., 84; Hudson v. Isbell, 5 Stew. & Port., 67; Caldwell v. Woods, 3 Watts, 197; Wheeland v. Swartz, 1 Yates, 583,) It is also to be observed, that no acknowledgment of tenancy is alleged to have been asked or promised at this time. The dispute on this point seems to have arisen between the parties on the subsequent extension of time by appellee. But if the contract with Slater was a mortgage,! the subsequent extension of time for its payment will not change its character; for if ever a mortgage, it must continue so, (Clark v. Henry, 2 Cow., 324,) unless the contract is abrogated and extinguished by a new contract, supported by an adequate consideration. ISTor would the acceptance of a lease of the premises by appellants, it is held by high authority, have conclusively shown the transaction to be a conditional sale. (Kunkle v. Wolfersberger, 6 Watts, 126.)
On the other hand, however great may have been the disposition manifested sometimes by courts to construe all agreements, coupled with a stipulation for a ré-conveyance upon payment by a future day,- as mortgages, it is now well settled, that the power of individuals capable of acting for themselves to make such contracts cannot be denied. And when the facts show that this is the character of their agreement, it must be upheld and enforced as readily as any other [341]*341contract. (Conway v. Alexander, 7 Cranch, 218.) Hor does the fact that there was an existing debt at the date of the contract repel the presumption which may arise from other facts that the contract was a conditional sale. The question in such case is, was the old debt surrendered or canceled at the time of the conveyance ? (Holmes v. Grant, 8 Paige, 243.) In this case, if the old debt was not satisfied, the existing security for it by the judgment was certainly released. And the fact that the more speedy and efficient security by the judgment and order of sale, if the new contract was still a mere extension of time for the payment of the money loaned, was surrendered for the less efficacious security of a mortgage upon the same property, embarrassed, too, with the question whether, after the satisfaction of tire judgment, the mortgage could be enforced against the homestead if it were contested, is of much weight in favor of the construction insisted on by appellee. It is also a circumstance that the amount paid for the delay, if a loan, was less than the previous interest, and that it is admitted that this amount was fixed by Slater, and afterwards by appellee, when he gave the last extension, upon an estimate of the rent of the property. Where was the necessity of changing the nature of the security, or in this circuitous manner fixing the deduction of interest, if there was to be a mere continuing loan ?
Other circumstances might be adverted to, tending to support the respective conclusions insisted upon by the parties. Enough has been said, however, to show the embarrassment and difficulty in the proper solution of the question for determination. It i's quite evident that the jury could not so determine, unless the true point at issue was precisely and clearly presented to their consideration. If this has been done, their verdict should not be disturbed, but if it has not, a new trial should be granted.
The instruments before the court purport to operate as a conditional sale. The marked test or criterion for aseer[342]*342taining whether this is their effect, or whether they are a mere mortgage, is by determining whether the relation of debtor and creditor still exists between the parties. As is said in Robinson v. Cropsey, 2 Edw. Ch., 138, “If the deed or conveyance be accompanied by a condition or matter of defeasance expressed in the deed, or were contained in a separate instrument existing merely in parol, let the consideration for it have been a pre-existing debt or a present advance of money to the grantor, the only inquiry necessary to he made is, whether the relation of debtor and creditor remains, and a debt still subsists between the parties. Eor if it does, then the conveyance must be regarded as a security for the payment, and be treated in all respects as a mortgage. (Slee v. Manhattan Company, 1 Paige, 56.) On the other hand, when the debt forming the consideration for the conveyance is extinguished at the time by the express agreement of the parties, or the money advanced is not paid by way of loan, so as to constitute a debt and liability to repay it, but, by the terms of the agreement, the grantor has the privilege of refunding or not, at his election, then it must be deemed purchase-money, and the transaction will be a sale on condition, which the grantor can defeat only by a re-purchase or performance of the condition on his part Avithin the time limited for the purchase, and in this Avay entitle himself to a re-conveyance of the property.” (See also Poindexter v. McCannon, 1 Dev. Eq., 377; McGee v. Cutchins, 33 Miss., 673.)
But when the transaction grows out of a pre-existing debt or loan of money, it must clearly appear that such debt is extinguished, or it will be held that the new arrangement is a mere change in the security. (Dougherty v. McColgan, 6 Gill & Johns., 275.)
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Moore, C. J.
The only question of difficulty in this case is to determine whether the deed of the 18th of May, 1860, from the appellants to Slater, together with the simultaneous agreement between said parties and Hill, is a mortgage or, a conditional sale. The legal distinction between these contracts, and the consequences which result from them, are obvious and well defined. But the circumstances from which such contracts have-their origin, and the object generally intended to be attained by at least one of the parties to them, being frequently so nearly similar, it is often a matter of considerable embarrassment to say to which of these different classes of contracts a particular transaction properly belongs. The "contract which gives rise to the present suit is certainly not free fr&m the usual embarrassment and uncertainty encountered in the construction of similar agreements.
An inspection of the two instruments to which we have referred, which are evidently to be viewed as parts and parcels of one entire transaction, and a consideration of the facts and circumstances connected with the contract, show that many of the badges or indices which point to and characterize a mortgage are connected with this transaction, while others, strongly indicative of a conditional sale, are equally obvious.
There was unquestionably a pre-existing debt, which originated in a borrowing and lending on excessively usurious rates of interest. (Edrington v. Harper, 3 J. J. Marsh., 353.) And as the lender is less influenced by the pressure of circumstances which control the judgment and will of the borrower, the leaning of the courts in such cases has generally been to construe agreements under such [340]*340circumstances as mortgages. (Conway v. Alexander, 7 Cranch, 218.) The money previously loaned had been advanced on the security of the same property to which the contract refers. It had been dealt with as sufficient security for the money originally loaned. For this reason, as well as the testimony in respect to its value, we must conclude that it was at the time worth considerably more than the money advanced upon it. It was appellant’s homestead, and the enormous interest which they were paying shows a great unwillingness to consent to its sale; and possession remaining with appellants is also a circumstance indicating a mortgage. (Skinner v. Miller, 5 Lit., 84; Hudson v. Isbell, 5 Stew. & Port., 67; Caldwell v. Woods, 3 Watts, 197; Wheeland v. Swartz, 1 Yates, 583,) It is also to be observed, that no acknowledgment of tenancy is alleged to have been asked or promised at this time. The dispute on this point seems to have arisen between the parties on the subsequent extension of time by appellee. But if the contract with Slater was a mortgage,! the subsequent extension of time for its payment will not change its character; for if ever a mortgage, it must continue so, (Clark v. Henry, 2 Cow., 324,) unless the contract is abrogated and extinguished by a new contract, supported by an adequate consideration. ISTor would the acceptance of a lease of the premises by appellants, it is held by high authority, have conclusively shown the transaction to be a conditional sale. (Kunkle v. Wolfersberger, 6 Watts, 126.)
On the other hand, however great may have been the disposition manifested sometimes by courts to construe all agreements, coupled with a stipulation for a ré-conveyance upon payment by a future day,- as mortgages, it is now well settled, that the power of individuals capable of acting for themselves to make such contracts cannot be denied. And when the facts show that this is the character of their agreement, it must be upheld and enforced as readily as any other [341]*341contract. (Conway v. Alexander, 7 Cranch, 218.) Hor does the fact that there was an existing debt at the date of the contract repel the presumption which may arise from other facts that the contract was a conditional sale. The question in such case is, was the old debt surrendered or canceled at the time of the conveyance ? (Holmes v. Grant, 8 Paige, 243.) In this case, if the old debt was not satisfied, the existing security for it by the judgment was certainly released. And the fact that the more speedy and efficient security by the judgment and order of sale, if the new contract was still a mere extension of time for the payment of the money loaned, was surrendered for the less efficacious security of a mortgage upon the same property, embarrassed, too, with the question whether, after the satisfaction of tire judgment, the mortgage could be enforced against the homestead if it were contested, is of much weight in favor of the construction insisted on by appellee. It is also a circumstance that the amount paid for the delay, if a loan, was less than the previous interest, and that it is admitted that this amount was fixed by Slater, and afterwards by appellee, when he gave the last extension, upon an estimate of the rent of the property. Where was the necessity of changing the nature of the security, or in this circuitous manner fixing the deduction of interest, if there was to be a mere continuing loan ?
Other circumstances might be adverted to, tending to support the respective conclusions insisted upon by the parties. Enough has been said, however, to show the embarrassment and difficulty in the proper solution of the question for determination. It i's quite evident that the jury could not so determine, unless the true point at issue was precisely and clearly presented to their consideration. If this has been done, their verdict should not be disturbed, but if it has not, a new trial should be granted.
The instruments before the court purport to operate as a conditional sale. The marked test or criterion for aseer[342]*342taining whether this is their effect, or whether they are a mere mortgage, is by determining whether the relation of debtor and creditor still exists between the parties. As is said in Robinson v. Cropsey, 2 Edw. Ch., 138, “If the deed or conveyance be accompanied by a condition or matter of defeasance expressed in the deed, or were contained in a separate instrument existing merely in parol, let the consideration for it have been a pre-existing debt or a present advance of money to the grantor, the only inquiry necessary to he made is, whether the relation of debtor and creditor remains, and a debt still subsists between the parties. Eor if it does, then the conveyance must be regarded as a security for the payment, and be treated in all respects as a mortgage. (Slee v. Manhattan Company, 1 Paige, 56.) On the other hand, when the debt forming the consideration for the conveyance is extinguished at the time by the express agreement of the parties, or the money advanced is not paid by way of loan, so as to constitute a debt and liability to repay it, but, by the terms of the agreement, the grantor has the privilege of refunding or not, at his election, then it must be deemed purchase-money, and the transaction will be a sale on condition, which the grantor can defeat only by a re-purchase or performance of the condition on his part Avithin the time limited for the purchase, and in this Avay entitle himself to a re-conveyance of the property.” (See also Poindexter v. McCannon, 1 Dev. Eq., 377; McGee v. Cutchins, 33 Miss., 673.)
But when the transaction grows out of a pre-existing debt or loan of money, it must clearly appear that such debt is extinguished, or it will be held that the new arrangement is a mere change in the security. (Dougherty v. McColgan, 6 Gill & Johns., 275.)
By the first clause of the charge given by the court, the jury were instructed to find a verdict for appellants, if the deed to Slater was executed in consideration that further time would be given to pay the judgment against [343]*343them, and with the mutual agreement between the parties that said judgment was then and should remain an existing debt. The mind of the jury, in our opinion, may have been misled by the phraseology of this charge from the true issue for their determination. The question for inquiry was not whether the judgment had been extinguished or discharged. Evidently it had been. The true question was, had appellant’s debt been paid by the sale of the house and lots? Although the judgment was satisfied and discharged, if, in doing this, the debt, for which the judgment originally stood as a security, was still in force against appellants, then there was a mere change of his security by the creditor, and appellee was not in that event entitled to the property. Nor is it material what the papers themselves may say on the subject. The question is, what in fact was the contract and agreement of the parties? If by it there was a continuing obligation against the appellees for the debt, the transaction must be declared a mortgage, although it was expressly stated in the deeds that the debt was fully satisfied, and that it was expressly understood and agreed that the contract was intended as a conditional sale, and not a mortgage. For whether it is the one or the other, depends upon the construction placed by the law upon the real agreement between the parties, and not on what they have said about it. By the clause of the charge to which we have referred, the jury most probably understood that they should find against the appellants, unless the judgment was still in force against them.' It is true, in the subsequent part of the instruction, in presenting the grounds upon which a verdict might be found for appellee, the rule was more correctly indicated, but still the erroneous instruction which was furnished as a guide in determining appellants’ right to a verdict was left uncorrected, unless the jury were able to do this from an analysis of the entire charge. This it is hardly to be expected they should do. We cannot say [344]*344therefore that they were not misled by the erroneous instruction which was given them. If there was merely an omission to give the jury full and complete instructions, as none were requested by appellants, they would be precluded from complaining; but, as we have said, the instruction given may have misled the jury, by presenting an erroneous and improper rule to guide them in their conclusion. The defect in the charge is one of commission, and not of omission.
We deem it unnecessary to advert to any other question in the case. If the contract is proved to be a loan, there would seem no difficulty in following the requirements of the statute regulating interest in settling the account between the parties. We will not therefore protract this opinion to greater length, by attempting to anticipate any question which may possibly arise upon such hypothesis.
The judgment is reversed, and the cause
Remanded.