Packard v. Corporation for Relief of the Widows & Children of the Clergy of the Protestant Episcopal Church

Page, J., delivered the opinion of the Court. On the twentieth of June, 1853, John Eager Howard and Garrett Brown, in consideration of the sum of $4,500, conveyed to Franklin Wilson certain property situate in Baltimore City. The deed contains the following statement: “Whereas the said John Eager Howard did heretofore agree to lease unto the said Garrett Brown, the property hereinafter described, for the term of ninety-nine years renewable forever; and whereas, the said John Eager Howard hath, at the request of the said Garrett Brown, sold and agreed to convey said property to the said Franklin Wilson, at and for the sum of $4,500, the said Garrett Brown joining in the execution hereof, for the purpose of conveying and assuring to said Franklin Wilson, all his estate and interest under said agreement to lease. Now, &c.” On the same day Wilson and wife, in consideration of the sum of one thousand dollars to them paid hy Garrett Brown, and the payment of the rent and “performance of the covenants, conditions, and agreements” mentioned in the indenture, to be paid and performed by said Brown, conveyed the said property to Garrett Brown, to have and to hold the same, “from the day next before the day of the date of these presents, for and during and until the end of the term of ninety-nine years, * * yielding and paying therefor the yearly rent of two hundred and ten dollars, accounting from the 20th day of June, 1853, and payable thereafter in quarterly instalments * * * during the continuance of this demise; and that free and clear of all deductions for taxes, &c.” The deed contains the covenants usual in leases, and among others, the fol ²⁴³ lowing: “The said Franklin Wilson, &c., * * * * shall and will at any time after the expiration of ten years from the date hereof and within one year thereafter, and during the continuance of this demise * * on payment to him by said Brown, of the sum of three thousand five hundred dollars, and all arrears of rent, &c., execute to the said Brown, &e., a deed of and for the reversion and fee of and in the said property, free from the rent reserved and the said covenants and all incumbrances suffered by tlie said Wilson, &c.

By an agreement of parties, it also appears, that by certain mesne conveyances specially set out in the record, the leasehold estate has become vested in the complainant, and by deed of Franklin Wilson and wife, bearing date the third day of October, 1861, in consideration of the sum of three thousand dollars, the respondent became entitled to the reversion, “with the right to collect the ground rent at the times above stated, and with the usual covenants. ” The parties also agree “that in the general assessment of property in Baltimore City, made in the year 1852, a lot, of which the property referred to in this cause is a part, was assessed to John Eager Howard as vacant ground, and taxes were paid on it accordingly in the years 1852 and 1853: and that during the year 1853 improvements on this lot were assessed to G. Brown at §1,000 for taxation in 1854; and that the taxes on the improvements were first paid for the year J854, and the property was then transferred to the name of Garrett Brown.” Upon this state of facts it is contended by the appellant, first, that the deed from Franklin Wilson and wife to Garrett Brown should be construed to be a mortgage; or, second, that by a proper construction of the covenant for redemption, the complainant has a right to redeem at any time during the continuance of xhe lease, after the expiration of ten years from the date thereof; and that in either view of the case she should he allowed to ²⁴⁴ redeem immediately upon the payment to the defendant of three thousand five hundred dollars aud all accrued rent or interest. We will first consider the second of these contentions. The covenant to he construed is in these words: “That the said Franklin Wilson, his heirs or assigns, shall and will ai any time, after the expiration of ten years from the date hereof, and within one year thereafter, and during the continuance of this demise, at the request, &c.,” of Brown, and on his paying $3,500 and all accrued rent, &c., execute a deed to Brown of the reversion and fee of the said property, &c. The complainant contends that under a proper construction of this clause, the words, “and during the continuance of this lease,” enlarge the period of redemption from one year after the expiration of the first ten, to any time after the expiration of ten years from the date of the lease.

In construing written instruments, it is a familiar rule, that it is the intention of the parties which must he sought for, and this intention is to be collected from the whole deed, and given effect, if not repugnant to some principle of law. Buchanan’s Lessee vs. Steuart, 3 H. & J., 329 ; Hope vs. Hutchins, 9 G. & J., 77 . If the intention of the parties is plainly manifest upon the face of the instrument, there is no room for interpretation. Md. Coal Co. vs. Cumb. & Penn.

R. R. Co., 41 Md., 343 . If there is any doubt about-the matter the deed is to he construed most favorably for the grantee. Howard vs. Rogers, 4 H. & J., 278 . Construing this clause in accordance with these fundamental rules, we are unable to adopt the contention of the appellant.

The usual and ordinary function of the word “and” is to join the sentence which follows it, to the one which precedes, and we find no reason why the parties did not intend to employ it according to its natural acceptation. Its effect, therefore, in its use in ²⁴⁵ this clause, was to make these several sentences cumulative, so that the redemption should not occur, unless three conditions existed, viz., it must be after the expiration of ten years from the date of the lease, within one year thereafter, and during the continuance of the lease. The words “and during the continuance of the lease” were evidently inserted out of abundant caution, to prevent a claim to the right of redemption being set up, even though under preceding covenants, or from any cause whatever, the lease had terminated. Such a thing was indeed impossible.

And the words themselves may therefore be surplusage, but to construe them as providing for the right of redemption at the will of the lessee at any time after the expiration of the ten years, would require the absolute nullification of the words “and within one year thereafter.” And indeed we see no reason why if the construction claimed by the appellant is to be permitted to override the second clause of the covenant, it should not also have the same effect as to the first, and we would then have the singular result of converting the lease into one redeemable at any time after its date, at the pleasure of the lessee. It is impossible to suppose that the parties meant, after providing in clear language for the redemption within one year after the exjfiration, of the ten, to add a clause which would render entirely useless the privilege so carefully granted. It is far more reasonable to suppose these Avords were inserted out of excessive, though perhaps unnecessary caution. We agree with the learned Judge below when he says in his opinion: “To adopt the plaintiffs’ construction AAmuld be to give to the word ‘and’ a forced and unnatural meaning, and to create an inconsistency where none exists; * * while by giving to ‘and’ its usual meaning, the whole language can stand together and full effect be given to every provision.” We are of the opinion, therefore, that, upon a fair and ²⁴⁶ proper construction of this covenant, this lease was not redeemable at the pleasure of the tenant from its date, or after the expiration of ten years, hut only within one year after the expiration of ten years from the date of the deed.

We come now to the other question presented by this record: Ought this lease, under all the circumstances brought to our attention, to he construed as a mortgage, and the appellant allowed to redeem upon payment of $3500 and accrued rents? Upon its face it is an 'ordinary lease for ninety-nine years, renewable forever, redeemable at any time within one year after the expiration of ten years from its date, with the covenants usual in instruments of that kind; and unless the Court can find from all the circumstances of the case, that it was not intended by the parties to be what it purports, but was in fact a mere security for the payment of money loaned, it must retain the character which the parties who made it chose to impress upon it. It is true that a ground rent redeemable at a definite future is in Baltimore “a common and ordinary form of securing a loan of money,” and also has many features in" common with those of a mortgage; indeed, is often “practically nothing more than a mortgage to secure a principal sum, the interest of which is placed in the form of an annual rent.” Posner Brothers vs. Bayless, 59 Md., 60 . But notwithstanding this, the legal effect of a lease is not the same as that of a mortgage.

In the former case, the lessee purchases his estate upon the consideration of an annual rent, with the privilege of buying in the reversion at the time and for the amount stipulated in the instrument. There is no obligation upon the lessee to redeem, and he cairn ot do so, except strictly in accordance with the terms of his contract; and if he should fail either by neglect or refusal, to buy in the reversion, the lessor has no ground for ²⁴⁷ complaint, because the relation of debtor and creditor, except as to the payment of the stipulated rent, does not exist between them. In the case of a mortgage however, the relation of debtor and creditor is an essential condition, and the instrument is executed by the debtor in favor of the creditor, for the sole purpose of securing the indebtedness. The estate granted is absolute in form, but subject to a proviso by which the conveyance is to become void upon payment to the creditor of the amount due him.

Such a grant dn a Court of equity is always regarded as a mere security for the