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could never be proved but by parol evidence, consequently it must be received."1 But where through mistake of law, or

Baker, pp. 605 [*874] et seq.; Hare & Wallace's notes to s. c. pp. 624 [*894] et seq.

"The rule has been frequently recognized in Massachusetts, where, until 1855, the courts have held their jurisdiction of foreclosure and redemption of mortgages to be limited to cases of a defeasance contained in the deed or some other instrument under seal. Erskine v. Townsend, 2 Mass. 493; Killeran v. Brown, 4 Mass. 443; Taylor v. Weld, 5 Mass. 109; Carey v. Rawson, 8 Mass. 159; Parks v. Hall, 2 Pick. 206, 211; Rice v. Rice, 4 Pick. 349; Flagg v. Mann, 14 Pick. 467, 478; Eaton v. Green, 22 Pick. 526. The case of Flagg v. Mann is explicit, not only upon the authority of the court thus to deal with the written instruments of the parties, but also upon the point of the competency of parol testimony to establish the facts by which to control their operation; although, upon consideration of the parol testimony in that case, the court came to the conclusion that there was a sale in fact, and not a mere security for a loan.

"By the statute of 1855, c. 194, § 1, jurisdiction was given to this court in equity in all cases of fraud, and of conveyances or transfers of real estate in the nature of mortgages.' Gen. Sts. c. 113, § 2. The authority of the courts under this clause is ample. It is limited only by those considerations which guide courts of full chancery powers in the exercise of all those powers.

"If, then, the advantage taken of the borrower by the lender, in requiring of him an agreement that he will forego all right of redemption in case of non-payment at the stipulated time, or an absolute deed with a bond or certificate back, which falsely recites the character of the transaction, representing it to be a sale of the land with a privilege of repurchase, be a sufficient ground for interference in equity by restricting the operation of the deed, and converting the writings into a mortgage, contrary to the expressed agreement, it is difficult to see why the court may not and ought not to interpose to defeat the same wrong, when it attempts to reach its object by the simpler process of an absolute deed alone. In

1 Baker v. Paine, 1 Ves. 457; Towers v. Moor, 2 Vern. 98; Langley v. Brown, 2 Atk. 203; Townshend v. Stangroom, 6 Ves. 328; Taylor v. Radd, 5 Ves. 595, 596, n.; Henkle v. Royal Insurance Co. 1 Ves. 318; Rogers v. Earl, 1 Dick. 294; Barstow v. Kilvington, 5 Ves. 593; Hunt v. Rousmanier, 8 Wheat. 174; Gower v. Sternes, 2 Whart. 75; Keisselbrock v. Livingston, 4 Johns. Ch. 144; Peterson v. Grover, 20 Me. 363; Newson v. Bufferlow, 1 Dev. Eq. 379; Goodell v. Freed, 15 Vt. 448; Harrison v. Howard, 1 Ired. Eq. 407; Blanchard v. Moore, 4 J. J. Marsh. 471; Perry v. Pearson, 1 Humph. 431.

carelessness or inattention, an important provision is omitted from a deed, and no fraud is charged or proved, parol evidence each case the relief is contrary to the terms of the written agreement. In one case it is against the express words of the instrument or clause relied on as a defeasance, on the ground that it was oppressive, and wrongful to withhold or omit the formal defeasance. In strictness, there is no defeasance in either case. The wrong on the part of the lender or grantor, which gives the court its power over his deed, is the same in both. For they who take a conveyance as a mortgage without any defeasance are guilty of a fraud.' Cotterell v. Purchase, Cas. temp. Talbot, 61. See also Barnhart v. Greenshields, 9 Moore, P. C. 18; Baker v. Wind, 1 Ves. Sen. 160; Mahlor v. Lees, 2 Atk. 494; Williams v. Owen, 5 Myl. & Cr. 303; Lincoln v. Wright, 4 De Gex & Jones, 16.

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"As a question of evidence, the principle is the same. In either case the parol evidence is admitted, not to vary, add to, or contradict the writings, but to establish the fact of an inherent fault in the transaction or its consideration, which affords ground for avoiding the effect of the writings by restricting their operation, or defeating them altogether. This is a general principle of evidence, well established and recognized, both at law and in equity. Stackpole v. Arnold, 11 Mass. 27; Fletcher v. Willard, 14 Pick. 464; 1 Greenl. Ev. § 284; Perry on Trusts, § 226.

"The reasons for extending the doctrine, in equity, to absolute deeds, where there is no provision for reconveyance, are ably presented by Hare & Wallace in their notes to Woollam v. Hearne, 2 Lead. Cas. in Eq. (3d Am. ed.) 676, and to Thornbrough v. Baker, 3 ib. 624. See also Adams, Eq. 111; 1 Sugd. Vend. (8th Am. ed.), Perkins's notes, pp. 267, 268, 302, 303. The doctrine thus extended is declared, in numerous decisions, to prevail in New York; also in Vermont and several other States. Mr. Washburn, in his chapter on mortgages, § 1, has exhibited the law as held in the different States, in this particular; and the numerous references there made, as well as by the annotators in the other treatises which we have cited, render it superfluous to repeat them here. 2 Washb. Real Prop. (3d ed.) 35 et seq.

"Upon the whole, we are convinced that the doctrine may be adopted without violation of the statute of frauds, or of any principle of law or evidence; and, if properly guarded in administration, may prove a sound and salutary principle of equity jurisprudence. It is a power to be exercised with the utmost caution, and only when the grounds of interference are fully made out, so as to be clear from doubt.

"It is not enough that the relation of borrower and lender, or debtor and creditor, existed at the time the transaction was entered upon. Negotiations, begun with a view to a loan or security for a debt, may fairly terminate in a sale of the property originally proposed for security. And if, without fraud, oppression, or unfair advantage taken, a sale is the real

cannot be received against the denial of the defendant in his answer to reform, vary, or defeat the instrument.1

Parol

result, and not a form adopted as a cover or pretext, it should be sustained by the court. It is to the determination of this question that the parol evidence is mainly directed.

"The chief inquiry is, in most cases, whether a debt was created by the transaction, or an existing debt, which formed or entered into the consideration, continued and kept alive afterwards. If the purchaser, instead of taking the risk of the subject of the contract on himself, takes a security for repayment of the principal, that will not vitiate the transaction, and render it a mortgage security.' 1 Sugd. Vend. (8th Am. ed.) 302, in support of which the citations by Mr. Perkins are numerous. But any recognition of the debt as still subsisting, if clearly established, is equally efficacious; as the receipt or demand of interest or part payment. Eaton v. Green, 22 Pick. 526, 530.

"Although proof of the existence and continuance of the debt, for which the conveyance was made, if not decisive of the character of the transaction as a mortgage, is most influential to that effect, yet the absence of such proof is far from being conclusive to the contrary. Rice v. Rice, 4 Pick. 349; Flagg v. Mann, 14 Pick. 467, 478; Russell v. Southard, 12 How. 139; Browne v. Dewey, 1 Sandf. Ch. 56. When it is considered that the inquiry itself is supposed to be made necessary by the adoption of forms and outward appearance differing from the reality, it is hardly reasonable that the absence of an actual debt, manifested by a written acknowledgment or an express promise to pay, should be regarded as of more significance than the absence of a formal defeasance. It of course compels the party attempting to impeach the deed, to make out his proofs by other and less decisive means. But as an affirmative propo

sition it cannot have much force.

66

"A mortgage may exist without any debt or other personal liability

1 Lemon v. Whitely, 4 Russ. 423; Irnham v. Child, 1 Bro. Ch. 92; Portmore v. Morris, 2 Bro. Ch. 219; Rich v. Jackson, 4 Bro. Ch. 614; 6 Ves. 334, n.; Jackson v. Cator, 5 Ves. 688; Hare v. Sherwood, 1 Ves. Jr. 241; Anon. Skin. 159; Mortimer v. Shortall, 2 Dr. & W. 363; Alexander v. Crosbie, Llo. & Goo. 145; London R. Co. v. Winter, 1 Cr. & Phil. 57; Garwood v. Eldridge, 1 Green, Ch. 146; Lyon v. Richmond, 2 Johns. Ch. 60; Wheaton v. Wheaton, 9 Conn. 96; Hunt v. Rousmanier, 1 Pet. 1; Parkhurst v. Van Cortlandt, 1 Johns. Ch. 282; Westbrook v. Harbeson, 2 McCord, Ch. 112; Dwight v. Pomroy, 17 Mass. 303; Robson v. Harwell, 6 Ga. 589; Chamness v. Crutchfield, 2 Ired. Eq. 148; Movan v. Hayes, 1 Johns. Ch. 339; Ratcliff v. Ellison, 3 Rand. 537; Richardson v. Thompson, 1 Humph. 151.

evidence, however, is not favorably received by courts in any case, and they will not act upon it against written instruments, unless it is exceedingly clear and certain, and uncontradicted by other evidence. In Pennsylvania, however, a different rule prevails, and parol evidence of the verbal agreements and stipulations upon the faith of which the contract was made, is received in evidence to control its operation or to explain its meaning.2

of the mortgagor. If there is a large margin between the debt or sum advanced and the value of the land conveyed, that of itself is an assurance of payment stronger than any promise or bond of a necessitous borrower or debtor. Hence inadequacy of price, in such case, becomes an important element in establishing the character of the transaction. Inadequacy of price, though not of itself alone sufficient ground to set in motion chancery powers of the court, may nevertheless properly be effective to quicken their exercise, where other sufficient ground exists: Story, Eq. §§ 239, 245, 246; and in connection with other evidence may afford strong ground of inference that the transaction purporting to be a sale was not fairly and in reality so. Kerr on Fraud and Mistake, 186 and note; Wharf v. Howell, 5 Binn. 499.

"Another circumstance that may and ought to have much weight is the continuance of the grantor in the use and occupation of the land as owner, after the apparent sale and conveyance. Cotterell v. Purchase, Cas. temp. Talbot, 61; Lincoln v. Wright, 4 De Gex & Jones, 16.

"These several considerations have more or less weight, according to the circumstances of each case. Conway v. Alexander, 7 Cranch, 218; Bentley r. Phelps, 2 Woodb. & Min. 426. It is not necessary that all should concur to the same result in any case. Each case must be determined upon its own special facts; but those should be of clear and decisive import." So, if it is necessary for an absolute grantee to come into a court of equity for relief as for a loss of the deeds, the court can compel him to do equity, as to make a settlement upon parties entitled to a settlement by a parol understanding. Phillips v. Phillips, 50 Mo. 603.

1 Barrow v. Greenhough, 3 Ves. 154; Townshend v. Stangroom, 6 Ves. 334; Shelborne v. Inchinquin, 1 Bro. Ch. 341; Miller v. Cotten, 5 Ga. 346. See the whole matter elaborately discussed and all the authorities collected in notes to Woollam v. Hearne, 2 Lead. Ca. Eq. 684; Barkley v. Lane, 6 Bush, 58; Collier v. Collier, 30 Ind. 32; Lingenfitter v. Richings, 62 Pa. St. 128.

2 Chalfant v. Williams, 35 Pa. St. 212; Clark v. Partridge, 2 Barr, 13; 4 Barr, 166; Oliver v. Oliver, 4 Rawle, 141; Rearich v. Swinehart, 1 Jones, 238; Christ v. Diffenbach, 1 Serg. & R. 464.

§ 227. The right of a party who has been defrauded of the title to his land is not a mere right of action to set the deed aside, but it is an equitable estate in the land itself, which may be sold, assigned, conveyed, and devised.1 In the view of a court of equity, he is still the owner of the estate, subject to repay whatever money or other property he may have received from the fraudulent grantee. And so the equitable interest of a purchaser under a contract of sale is of that character that it may be assigned or devised.2

§ 228. Time does not bar a direct trust where the relation of trustee and cestui que trust is admitted to exist, but diligence must be used to establish a constructive trust on the ground of fraud. A court of equity will refuse its aid to stale demands, where a party has slept upon his rights, or has acquiesced for a great length of time. And so a constructive trust will be barred by long acquiescence, although the fraud was evident and the relief was originally clear. It is difficult

1 Stump v. Gaby, 2 De G., M. & G. 623; McKissick v. Pickle, 4 Harris, 140; Kane County v. Herrington, 50 Ill. 232.

2 Stump v. Gaby, 2 De G., M. & G. 623; Morgan v. Halford, 1 Sm. & Gif. 101; Cogswell v. Cogswell, 2 Edw. Ch. 231; Malin v. Malin, 1 Wend. 625; Clapper v. House, 6 Paige, 149; Kent v. Mehaffey, 10 Ohio St. 204.

Smith v. Clay, 3 Bro. Ch. 639, n; Cholmondeley v. Clinton, 1 J. & W. 151; Chalmer v. Bradley, ib. 59; Beckford v. Wade, 17 Ves. 97; Portlock v. Gardner, 1 Hare, 594; Hawley v. Cramer, 4 Cow. 117; Dobson v. Racey, 3 Sandf. Ch. 61; Powell v. Murray, 2 Edw. Ch. 644; 10 Paige, 256; Piatt v. Vatier, 9 Pet. 405; McKnight v. Taylor, 1 How. 161; Wagner v. Baird, 7 How. 234; Veasie v. Williams, 8 How. 134; Hallett v. Collins, 10 How. 174; Hough v. Richardson, 3 Story, 659; Gould v. Gould, 3 Story, 516; Peebles v. Reading, 8 Serg. & R. 484; Irvine v. Robertson, 3 Rand. 549; Colman v. Lyne, 4 Rand. 454; Anderson v. Burchell, 6 Gratt. 405; 2 Story's Eq. Jur. § 1520, notes.

Bonny v. Ridgard, cited 4 Bro. Ch. 138; Andrew v. Wrigley, 4 Bro. Ch. 124; Blennerhassett v. Day, 2 B. & B. 118; Gregory v. Gregory, Cowp. 201; Jac. 631; Selsey v. Rhoades, 1 Bligh (N. s.), 1; Champion v. Rigby, 1 R. & M. 539; Ex parte Granger, 2 Deac. & Ch. 459; Collard v.

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