Monday, January 6, 2014

Peugh v. Davis case brief

Peugh v. Davis case brief summary
96 U.S. 332 (1877)

Plaintiff borrower appealed a decision of the Supreme Court of the District of Columbia, which, at special term dismissed the bill, and, at general term affirmed the dismissal. The borrower brought the action in equity to redeem certain property from his alleged mortgage with defendant lender.

The lender provided a loan to the borrower to purchase two land parcels, secured by a deed of the parcels which was absolute, purporting to be made upon a sale of the property for $2,000. This loan was paid, and the deed returned. The borrower later obtained a $1500 loan with the same security, but when the loan went unpaid, the lender placed the deed on the record and a party claiming the parcels under a tax title brought two actions for their recovery. The borrower did not repay the loan upon the lender's request. The next month, the lender provided $500 more, and the borrower executed a title warranty and guaranty to pay the lender's costs and expenses, and gave a receipt for $2000, purporting to be the full purchase price of the land. The borrower brought an action to redeem the property. The lender claimed that the money was paid for a release of the equity of redemption.

The lower court dismissed the action.


  • On appeal, the Court reversed, concluding that the borrower never conveyed his interest in the property except as security for the loan and that the deed was a subsisting security, so the borrower, therefore, had the right to redeem the property from the mortgage.

The Court reversed the lower court's decision dismissing the bill, and remanded the cause for further proceedings.

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