Practice point: Real Property Law § 320 provides, in pertinent part, that a "deed
conveying real property, which, by any other written instrument, appears
to be intended only as a security in the nature of a mortgage, although
an absolute conveyance in terms, must be considered a mortgage." In determining whether a deed was intended as
security, examination may be made not only of the deed and a written
agreement executed at the same time, but also of oral testimony
bearing on the intent of the parties and to a consideration of the
surrounding circumstances and the parties' acts.
Student note: A court of equity will treat a deed,
absolute in form, as a mortgage, when it is executed as a security for a
loan of money. That court looks beyond the terms of the instrument to
the real transaction; and when that is shown to be one of security, and
not of sale, it will give effect to the parties' actual contract.
Case: Bouffard v. Befese, LLC, NY Slip Op 07925 (2d Dept. 2013).
Here is the decision.
Monday's issue: Deposition testimony, hearsay, and summary judgment.
