Page:Harvard Law Review Volume 4.djvu/27

11 THE STORY OF MORTGAGE LAW. 11 sity of two distinct sets of tribunals to cover the whole field of the respective rights of the parties. Still another scheme of conveyance was devised. It made use of two instruments. The first was a deed of the land from the debtor to the creditor, absolute in form. Concurrently with it the creditor gave to the debtor a bond, which came to be known as a bond of defeasance, agreeing that if a certain sum of money, for instance, were paid by a certain day, the deed should become in- operative ; or, to use another form, that the grantee, the creditor, would reconvey. It was attempted by this devise to make the transaction operate as a sale of land, with an option of buying back.^ If it could so operate, the debtor's rights would be lost immediately upon default. The courts of equity, however, de- cided in England, and it was very early decided in this country at law, that such a transaction, if intended in fact for mere security, was nothing but a mortgage. In this country a distinction has been made, but, as it seems to the writer, upon not very satis- factory grounds, to the effect that if the defeasance is not sealed, it operates only in equity to turn the deed into a mortgage, having no broader effect, therefore, in this respect, than a mere oral agree- ment of defeasance,^ Still another form of conveyance was tried. The land was con- veyed to the creditor or to some third person upon the trust that it was to be availed of by holding it to the creditor's use, or by selling it, in case of a failure to pay the sum secured, and paying the debt from the proceeds. This form of security attained great popularity, and is now in use in a large number of our States, and it is used in all the States for bonded debts. As a device to avoid the law of mortgage, however, this scheme failed ; for the courts decided that a deed, in form a trust deed, but given in fact as se- curity, did not convey a trust estate, but was a mortgage, and gave nothing but a mortgagee's estate.^ This left several forms of conveyance in use, no one of them pro- fessing to create a mere lien, all diverted from their original office, all warped away in operation from their language, all nevertheless, diverse as they were, resulting in one and the same contract. 1 See Moyle, Imp. Just. Inst, vol. i. pp. 315, 316. » See Alison, in re, 11 Ch. D. 284; Locking v. Parker, L. R. 8 Ch. 3c; Teal ». Walker, 11 1 U. S. 242.
 * Kelleran v. Brown, 4 Mass. 443. See Stocking v. Fairchild, 5 Pick. 181.