Case ID: cal_40/html/0117-01.html
Source: Caselaw Access Project
Author: {"author": "Rhodes, C. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

No. 2,233.
    LAWRENCE HUGHES, Appellant, v. GILMAN DAVIS, Respondent.
    Deed as a Mobtgage. — Legad Title. — An absolute cleed, although shown, by parol evidence to have been intended as a mortgage, conveys the legal title.
    Idem. — Equitable Deeence.-Oepee to BEDEEM.-'Where a defendant in ejectment, who is the plaintiff’s grantor, sets np as a defence that the deed was intended as a mortgage, he must show an offer to redeem before he can be entitled to r'elief in equity, or deprive the plaintiff of his right of possession under the deed.
    Agkeement to Extend Time op Pavment. — Considebation.—An agreement without consideration, to extend the time of payment of money due on a contract, cannot be enforced.
    Appeal from tbe District Court of tbe Ninth District, Shasta County.
    The plaintiff appealed.
    Tbe other facts are stated in tbe opinion.
    
      Beatty & Demon, for Appellant.
    
      First — When there is no fraud or oppression on tbe part of tbe creditor, and no debt (using tbe word “ debt” in its broadest and least technical sense), there can be no mortgage. (Hiclcox v. Loioe, 10 Cal. 206-7; Bobinson v. Gopsey, 2 Edwards, 143.)
    
      Second — Tbe papers on their face show a sale and contract of re-purchase at tbe option of tbe original vendor. That such a contract is not a mortgage; we refer to tbe following authorities: 19 "Wend. 518; 2 Edw. 138; 8 Paige, 543; Robinsons. Gopsey, (6Paige,480); Grimstonev. Carter, (3 Id. 421); Quirh v. Rodman, (5 Duer, 285.)
    
      lhird — If one, who is apparently an ordinary vendor, wishes to be allowed to prove in a Court of equity that tbe deed be made was by parol understanding or agreement to be considered and treated as a mortgage, be must offer to redeem;' in other words, be must place himself wholly within tbe jurisdiction of tbe Court to settle tbe whole controversy. Tbe Court will not try tbe case by piecemeal. It will not interpose by injunction to arrest tbe action of ejectment by tbe vendee unless tbe vendor will either tender tbe money in redemption or admit tbe validity of tbe debt, and submit to an order of tbe Court for a sale of tbe premises to pay tbe debt. How inequitable would be any other course! If tbe defendant was allowed to set up only so much of bis defence as would defeat or arrest tbe judgment in tbe ejectment suit, be might then, when a bill was filed to foreclose tbe mortgage, set up tbe Statute of Limitations or other defence, to defeat that proceeding. But if be is compelled to submit tbe whole case at once, tbe Court of equity, before giving him relief, will compel him to tender tbe money be owes, or at least to consent to a sale of tbe premises for tbe payment of tbe debt.
    In this case nothing of tbe kind was done, as tbe Statute of Limitations will have run long before this case can be decided; for this Court to bold that tbe defendant can defeat this action without submitting himself to tbe equity jurisdiction of tbe Court, will simply amount to a confiscation of plaintiff’s debt.
    
      J. Ghadbourne, for Respondent.
    In order to determine tbe true character of this transaction, tbe deed, lease, and parol evidence showing tbe intention of tbe parties, must be taken and read together, because they are parts and parcels of tbe same. (Pierce v. Robinson, 3 Cal. 116; Johnson v. Sherman, 15 Id. 291; Cunningham v. Hatoldns, 27 Id. 603; Hopper v. Jones, 29 Id. 19; Grayv. Hamilton, 33 Id. 686; Sears v. Dixon, Id. 326; Lodges, lurman, 24 Id. 385; Jaclcsonv. Lodge, 36 Id. 28.)
    These authorities clearly establish tbe right of tbe parties to make such an arrangement, and authorize tbe introduction of parol evidence to explain tbe real character of tbe transaction and tbe intention of tbe parties; and when this form or mode is adopted, it is in legal effect a mortgage and tbe parties are as completely bound, to all intents and for all purposes, as they would have been by any other form of mortgage.
    
      It seems to be too clear to require any argument that the transaction in this ease was a mortgage; that there was a debt, and that the deed, and lease and parol agreement were made to secure its payment. This being the case, the plaintiff is expressly prohibited by the statute from maintaining this action to recover the possession of the real property described in the complaint.
   Rhodes, C. J.,

delivered the opinion of the Court, Temple, J., Crockett, J., and Wallace, J., concurring:

The defendant being indebted to the plaintiff and other persons in the sum of $2,100, applied to the plaintiff for the loan of that sum, and offered as security, a mortgage of the premises in controversy. The plaintiff refused to take a mortgage, because of the expenses attending a foreclosure, and the transaction was consummated in this manner: The plaintiff advanced to the defendant $1,500, which, with the debt due from the defendant to the plaintiff, amounted to $2,100. The defendant and wife executed to the plaintiff a deed of the premises, and the plaintiff and defendant executed a lease, by which the plaintiff demised the premises to the defendant, for the term of five years, at the annual rent of $378. The lease contained the usual convenant for the payment of the rent, and for the surrender of the possession of the premises at the expiration of the term; and it was further covenanted that if the lessee should, during or at the expiration of the term, pay to the lessor the sum of $2,100, and perform the covenants on his part mentioned in the lease, then the lessor would execute and deliver to the lessee a good and sufficient deed of the premises. The note of the defendant which the plaintiff then held, was at a subsequent time surrendered. No note or contract in writing was made by the defendant for the payment of the $2,100.

The annual rent was paid by the defendant during the term. Two days after the expiration of the term, the sum of $2,100 not having been paid by the defendant, the plaintiff gave the defendant notice to quit, and subsequently brought this action to recover tbe possession of tbe premises. Tbe court found that tbe plaintiff loaned to tbe defendant tbe sum of 2,100 for tbe period of five years, to bear interest at tbe rate of one and a balf per cent, per month; that tbe deed and lease were executed to secure tbe payment of that sum and tbe interest thereon; andbeld tbattbe transaction constituted a mortgage, and that therefore tbe plaintiff was not entitled to recover tbe possession of tbe premises.

I shall assume that these facts were correctly found, and shall onlynotice one of tbe conclusions of law — that tbe plaintiff is not entitled to recover tbe possession of tbe premises.

In Jackson v. Lodge (36 Cal.. 28), tbe question whether an absolute deed, which is shown by parol evidence to have been intended as a mortgage, conveys the legal title to tbe premises, was discussed at great length, and a majority of tbe Court answered tbe question in tbe negative. I came to tbe opposite conclusion, and my views met tbe full concurrence of Mr. Justice Crockett. I do not propose, at this time, to enter again upon tbe discussion of that question, though the argument might be materially strengthened. Since tbe decision of that case I have seen nothing which tended to shake my confidence in tbe conclusion which I then expressed; and I again announce that, in my opinion, an absolute deed does convey tbe legal title.

Accepting as true tbe proposition that the deed of tbe defendant and wife conveyed to tbe plaintiff tbe legal title, it necessarily follows, that, upon tbe expiration of tbe term of tbe lease, tbe plaintiff was entitled to tbe possession of tbe lands conveyed, unless tbe defendant has made out a good equitable defence.

Tbe answer sets up facts, showing that tbe transaction was a loan and mortgage to secure tbe payment of tbe money and interest. Tbe principal sum bad become due and remained unpaid. An agreement to extend tbe time of payment is alleged, but for tbe want of consideration, it could not be enforced, if it bad been proven. Tbe money ' having become due, it was incumbent on tbe defendant, if be desired to have tbe Court declare that in equity tbe transaction constituted a mortgage, to offer to redeem. He cannot demand equitable relief, in respect to tbe contract, while failing to perform Ms part of it. He should do equity, by offering to redeem, when seeMng equity by having the deed declared a mortgage. There is no shadow of doubt in my mind, that equity requires the defendant to pay or tender the money loaned, before he deprives the plaintiff of the right of possession, which flows from the deed and lease and the expiration of the term.

Judgment reversed and cause remanded, with directions to render judgment for the plaintiff, for the possession of the premises sued for.

Mr. Justice Spbague, being disqualified, did not sit in this case.