Magnetic measurements and 57Fe Mossbauer spectroscopy studies were performed on oxygen- deficient high temperature superconductor SmFeAsO0.85 with TC=52.4 K. The upper-critical behavior (HC2) values were extracted from the real part of ac measurements. The field dependence of HC2 is consistent with a two band model. M{o}ssbauer spectra below and above TC consist of a singlet and a doublet, which are attributed to Fe ions which have two or one oxygen ions in their close vicinity, respectively. No change is observed in the major (~75%) singlet related to Fe ions surrounded by two oxygen ions. On the other hand, the doublet which senses oxygen vacancies shows a well defined magnetic sextet below TC. This indicates coexistence on a microscopic level of the two mutually exclusive states namely: superconductivity which is confined to the Fe-As layers and magnetism, in the same layers. Alternatively, the hyperfine parameters of the doublet are similar to the reported values of FeAs which orders magnetically at 77 K. Thus the magnetic features observed below TC, may be related to FeAs as an extra phase.
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