Wallace v. Johnstone - 129 U.S. 58 (1889)
U.S. Supreme Court
Wallace v. Johnstone, 129 U.S. 58 (1889)
Wallace v. Johnstone
Argued November 23, 1888
Decided January 14, 1889
129 U.S. 58
A deed of lands, absolute in form, with general warranty of title and an agreement by the vendee to reconvey the property to the vendor or to a third person, upon his payment of a fixed sum within a specified time, do not of themselves constitute a mortgage; nor will they be held to operate as a mortgage unless it is clearly shown, either by parol evidence or by the attendant circumstances, such as the condition and relation of the parties or gross inadequacy of price, to have been intended by the parties as a security for a loan or an existing debt.
The fact of a collateral agreement by the grantee in a deed of real estate to reconvey to the grantor on the payment of a sum of money at a future day is not inconsistent with the idea of a sale.
Whether the transaction in dispute was a sale or a mortgage is a question of fact, to be determined from the proof, and here the proof shows it to have been a sale.
The case is stated in the opinion of the Court.