Morris v. Executor of Nixon
42 U.S. 118 (1843)

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U.S. Supreme Court

Morris v. Executor of Nixon, 42 U.S. 1 How. 118 118 (1843)

Morris v. Executor of Nixon

42 U.S. (1 How.) 118

Syllabus

A deed, absolute on the face of it, declared to be a security for money loaned.

Where a bill substantially charges that there is a fraudulent attempt to hold property under a deed, absolute on the face of it, but intended as a security for money loaned, evidence will be admitted to ascertain the truth of the transaction.

Where there is proof of parties meeting upon the footing of borrowing and

Page 42 U. S. 119

lending, with an offer to secure the lender by a mortgage upon particular property, if a deed of the property, absolute on the face of it, be given to the lender, and the lender also take a bond from the borrower, equity will interpret the deed to be a security for money loaned, unless the lender shall show, by proofs, that the borrower and himself subsequently bargained upon another footing than a loan.

Where a loan is an inducement for the execution of a deed which is absolute on the face of it, though the loan is not recited as the consideration of the deed, or as any part of it, if the lender or grantee in the deed treats it substantially as the consideration, or a part of it, equity will declare the deed to be a security for money loaned.

The answer of one defendant in equity is not evidence in behalf of another defendant.

If, in equity, it is admitted or proved that one of the documents in a transaction was not intended to be what it purports, it subjects other documents in the same transaction to suspicion.

On 2 January, 1812, Jonathan Williams and Thomas Morris (the complainant) purchased from the Bank of North America a parcel of land upon the Schuylkill river, near the City of Philadelphia, for the sum of $80,000; $20,000 of which was to be cash, and the remaining $60,000 was divided into three payments of $20,000 each, which were to become due on 25 March, 1814, 1815, and 1816, respectively. The parties gave their joint and several bonds for these sums, with a warrant of attorney to confess judgment, and a mortgage upon the property. It afterwards appeared that Morris was not exclusively the owner of his moiety.

On 27 June, 1812, Morris gave a power of attorney to Thomas Biddle and Henry Nixon, to manage the property for him.

In 1815, Williams died intestate, leaving Henry J. Williams and Christine, the wife of Thomas Biddle, his heirs at law.

In April, 1816, Morris and the representatives of Williams executed a power of attorney to Biddle and Nixon, authorizing them to enter into and take possession of the property, sell or lease it, receive the money, execute deeds &c.

Under this power, they accordingly took possession, and exercised all manner of ownership over it.

A great number of letters between the parties were given in

Page 42 U. S. 120

evidence, running from this time to the year 1822, relating to the condition and prospects of the property. One of the bonds had been paid out of the proceeds of sales, and considerable payments made on account of another. The third was wholly unsatisfied.

In 1822, Morris, residing in New York, applied to Nixon for a loan, under the circumstances stated so particularly in the opinion of the court that it is unnecessary to mention them here. Nixon declined making a loan, but took from Morris a deed, absolute upon the face of it, conveying the whole of Morris' interest to Nixon, and reciting that Nixon had always been interested in the purchase to the extent of three-sixteenths of the whole, or three-eighths of Morris' moiety. Nixon then loaned to Morris $5,000, for which he took his bond.

The deed also recited that there had been allowed to Nixon for his agency, the sum of $2,000; one-half of which, or $1,000, had been paid by the representatives of Williams, but paid to Morris; and five-eighths of the other $1,000 (or $625), were justly chargeable to Morris; thus bringing Morris in debt to him $1,625, which was released in the deed. It also contained other recitals, which are mentioned in the opinion of the court.

In 1836, Morris filed a bill on the equity side of the Circuit Court of the United States for the Eastern District of Pennsylvania, against Nixon and other parties, alleging that the deed was only a security for the money loaned; that, at the time of its execution, there was not, between himself and Nixon, any contract, agreement, understanding, or negotiation for a sale; that Nixon had furnished no account of his agency, and praying for an account and general relief. The parties all answered, and in April, 1841, the circuit court, after a hearing, dismissed the bill with costs. The complainant appealed to this Court.

Page 42 U. S. 122

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