Peugh v. Davis - 96 U.S. 332 (1877)
U.S. Supreme Court
Peugh v. Davis, 96 U.S. 332 (1877)
Peugh v. Davis
96 U.S. 332
1. A deed of lands absolute in form, when executed as security for a loan of money, will in equity be treated as a mortgage, and evidence, written or oral, tending to show the real character of the transaction is admissible.
2. An equity of redemption is so inseparably connected with a mortgage that it cannot be waived or abandoned by any stipulation of the parties made at the time, even if embodied in the mortgage.
3. A subsequent release of the equity of redemption to the mortgagee must appear by a writing importing in terms a transfer of the mortgagor's interest, or such facts be shown as will estop him from asserting any interest in the premises, and it must be for an adequate consideration.
4. In determining whether a transaction was intended to operate as such release, the fact that the then value of the property was greatly in excess of the amount paid and of that originally secured, and the fact that the mortgagor retained possession and subsequently enclosed and cultivated the land, are strong circumstances tending to show that a release was not intended.
5. Where a deed, absolute in form, was made as security for a loan, papers thereafter executed, which refer to the transaction as one of purchase will be considered in connection with the deed, and will not be regarded in a court of equity as any more conclusive of a subsequent release than the form of the original instrument was of a sale of the property.
This was a suit in equity, brought June 28, 1869, to redeem certain real property in Washington City. The defense consisted in an alleged release of the equity of redemption, to establish which, in addition to the testimony of the parties, the defendant relied principally upon the following papers:
"Whereas the undersigned, Samuel A. Peugh, of the City of Washington in the District of Columbia, having heretofore sold and conveyed to Henry S. Davis, of the said city, two certain squares of ground in said city, the same being squares numbered nine hundred and ten (910) and nine hundred and eleven (911) in the said city, the said sale and conveyance having been by the said Peugh made with full assurance and promise of a good and indefeasible title in fee simple, though the said conveyance contains only a special warranty, the said conveyance to said Davis bearing date on the fourth day of March, A.D. 1857, and being recorded on the seventh day of September, A.D. 1857."
"And whereas the title to the said squares so conveyed as aforesaid to said Davis having been now questioned and disputed, the said Peugh doth now, for himself, his heirs, executors, and administrators,
promise, covenant, and agree to and with the said Henry S. Davis, his heirs and assigns, in the manner following -- that is that he, the said Samuel A. Peugh, and his heirs shall and will warrant and forever defend the said squares of ground and appurtenances as conveyed as aforesaid unto the said Henry S. Davis, his heirs and assigns from and against the claims of all persons whomsoever."
"And further that the said Peugh and his heirs executors and administrators shall and will pay and refund to said Davis, his heirs or assigns, all and singular the loss, costs, damage, and expenses, including the consideration in said deed or conveyance, which or to which the said Davis, his heirs or assigns, shall lose, incur, pay, or be subject to, by reason of any claim or litigation against or on account of said squares of ground, or either of them."
'And for the full and faithful observance and performance of all the covenants and agreements aforesaid, and for the payment of all the sum or sums of money as therein provided, in the manner prescribed as aforesaid, the said Samuel A. Peugh doth hereby bind himself, his heirs, executors, and administrators, and each and every of them, firmly by these presents.
'In testimony whereof, the said Samuel A. Peugh doth hereto so set his hand and seal on this ninth day of February, in the year of our Lord 1858.
"S. A. PEUGH [SEAL]"
"Signed, sealed, and delivered in the presence of"
"WM. H. WARD"
"WASHINGTON, D.C., Feb. 9, 1858"
"Received of Henry S. Davis $2,000, the same being in full for the purchase of squares Nos. 910 and 911 in the City of Washington."
"$2,000 S. A. PEUGH"
The other facts sufficiently appear in the opinion of the Court.
The decree at special term dismissing the bill was at general term affirmed, and the complainant appealed to this Court.