Scott, White & Co. v. Henry

8 Ark. 112
CourtSupreme Court of Arkansas
DecidedJanuary 15, 1852
StatusPublished

This text of 8 Ark. 112 (Scott, White & Co. v. Henry) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Scott, White & Co. v. Henry, 8 Ark. 112 (Ark. 1852).

Opinion

Mr. Justice Walker

delivered the opinion of the Court.

The material facts deduced from the record are, that Herró and Thomas E. Wilson obtained judgment in the Crawford circuit court against John Dillard, for the sum of $3,800, with aa agreement of record that $950 thereof should be collected at the end of 6, 12, 18 and 24 months: that Paschal, who was the attorney for Wilson, held claims for collection against him, for the payment of which he took an assignment from Wilson of the first two instalments on said judgment: that execution issued thereon, which was levied^ on the estate of Dillard, amongst which were two slaves, Mingo and Anderson: that at the sale of this property, Paschal became the purchaser, under an agreement with Dillard, made with the assent of Wilson and other creditors, that he (Dillard) should have the privilege of redeeming the property within tvyelve months: that Dillard died without complying with the terms agreed upon, and thereafter an agreement was made with Wilson, extending the privilege to him; in the mean time, and before Wilson had taken steps to redeem, he hired the slaves of Paschal, and before the expiration of the hire, Paschal addressed to him a letter, urging the propriety and necessity of disposing of the slaves at once, saying that he purposed making the slaves bring $1,000, and then made to Wilson the following proposition: “Give me the acceptance of Scott, White & Co. at 8 per cent., due at six months, for $750, and you remit on the third instalment of your judgment $250, (one thousand dollars.) "As they have priority on the best property, you see the advantage I am disposed to extend to you. Now to secure Scott, White & Co., you can easily hire them the negroes for their boat, at $30 per month, and let the bill of sale be made to them, besides giving them any other collateral security you can.”

This letter bears date the 7th January, 1847. On the 16th of that month, Ogden, as agent for Paschal, executed to Scott, White & Co. an absolute bill of sale for Anderson and Mingo, for the consideration of $750, which, after deducting Paschal’s account with that firm of about $104, was settled by a draft upon the terms proposed in Paschal’s letter to Wilson. Ten days after this, Paschal ratified the act of Ogden, by his written approval on the back of the bill of sale, and at the same time, the firm, by White, one of its members, executed to Wilson their covenant, reciting the bill of sale, by which the firm was bound to re-convey the negroes to Wilson, or to such other person as he should name, upon the payment of the $750, with 8 per cent, interest, and agreed that the hire of the negroes, after deducting expenses, should be thug applied. And thereupon, Wilson delivered the obligation of a steam boat Captain for Anderson and for his hire to Scott, White & Co., and in -a few days after that also delivered Mingo, in whose possession they still remain.

There is much evidence tending to explain the nature of the transaction, which may be more appropriately introduced in connection with the particular acts to which it relates, as they arise in the further investigation of the case.

The main question to be determined is, whether the sale of the slaves to Scott, White & Co. was an absolute sale of the property or a mortgage. Did Scott, White & Co. purchase the slaves for themselves, and as their own property, or was the bill of sale, though absolute on its face, intended to secure them against loss for the sum of money advanced towards their purchase, or for that and as security for the payment also of the debt alleged to have been due from Wilson to them? If the former, then the slaves are theirs; but if the latter, then no matter what language may have been employed in expressing the terms of the contract, it will be held and treated as a mortgage. Bright & Taylor v. Waggle & Aikin, 3 Dana Rep. 352. 2 Story’s Com. Eq. 287. Johnson v. Clark, 5 Ark. Rep. 336. Blakemore v. Byrnside, 2 Eng. 505. 1 S. M. Ch. Rep. 372. 4 John Ch. Rep. 166.

And for the purpose of ascertaining the true intention of the parties, it is a well established rule, that the courts will not be limited to the terms of the written contract, but will consider all the circumstances connected with it; such as the circumstances of the parties, the property conveyed, its value, the price paid for it, defeasances verbal or written, as well as the acts and declarations of the parties, and will decide upon the contract and the circumstances taken together. Oldham v. Hally, 2 J. J. Mar. 114. Thompson v. Davenport, 1 Wash. 125. Craft v. Ballard, I S. M. Ch. Rep. 372. Hechman v. Cantrell 9 Yerg. 172.

A few examples may serve to illustrate these rules, and show the extent td which the courts have gone under various stated cases.

In the case of Craft v. Ballard, 1 S. & M. (Miss.) Ch. Rep. 372, it is held to be “ a well established rule upon both principle and authority, that an absolute deeed may be converted into a mortgage by parol evidence, showing that it was intended as a mortgage and that the grantor will be let into all the rights and privileges of a mortgagor.”

In the case of Strong and others, Trustees of Mitchell v. Stewart, 4 John. Ch. Rep. 166, a-bill to redeem having been’filed, the contract set up was an absolute sale, alleged in the bill however to have been in fact given to secure a loan. The answer positively denied the loan. Parol proof was admitted to prove the nature of the transaction. Chancellor Kent said: “On the strength of the authorities, and on the proof of the loan and of the fraud on the part of the defendant in attempting to convert a mortgage into an absolute sale, I shall decree an existing right in the plaintiff to redeem.”

In the case of Secrest v. Turner, 2 J. J. Mar. 471, Secrest let Turner have a sum of money, whereupon Turner made him a bill of sale for a negro boy’, and delivered him to Secrest; and at the same time Secrest executed to Turner an instrument in the nature of a defeasance, whereby he agreed to restore the boy to Turner, provided Turner should, by a given day, pay to him a certain sum therein named for the boy. The court said: “But in this ease there was no debt, Turner was pressed for money, Se-crest had it; he advanced it in depreciated paper, and simultaneously with the advance of the money and the execution of the bill of sale, he covenanted to re-deliver the boy on the payment of a much larger sum than he had given. Courts of Equity will be inclined to construe contracts to be mortgages rather than sales, whenever their real character may be doubtful; ” and accordingly decided this contract a mortgage.

In the case of Oldham v. Hally et al., 2 J. J. Mar. 114, where an absolute conveyance for lands was made and the consideration paid in cash, with a defeasance to re-convey if the consideration money should be repaid within twelve months with interest thereon, the court said: “ The first question for consideration, and that upon which, in a great degree, all others depend, is the true nature of the contract set out. Is it a mortgage or is it a sale upon condition ? The solution of this question when it occurs, depends upon the circumstances of each case and the sound discretion of the court.”

We might multiply decisions establishing the rules which require that courts should look to all the circumstances connected with the contract,in order to determine its true character, but these may suffice.

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