The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1896-07-16
OPINION OF THE COURT, By
JUDD, G.. J.


1893, the complainant, P. II. Kahau,
wishing to borrow some monev, applied
to an attorney, J. K. Kaulia, and offer
ed to give a mortgage on his wife's
premises on Queen Street, Honolulu,
worth from $500 to $1,000, to secure a
loan of one hundred dollars. The at
torney agreed to lend the money of his
client Malie Kahai, now deceased,
whose devisee and legatee the defend
ant Mrs. Booth now is. The attorney
advised complainant to give his client
an absolute deed for the premises as
being less expensive than a mortgage
and promised that his client would give
him paper back stating that if the
complainants paid the money back in
one year, she would convey the land to
them. After considerable demurring
on the part of both Kahau and his wife
and, on being assured by the attorney,
Malie Kahai being present and agree
ing thereto, that the two papers would
be in fact mortgage, an absolute deed
was made by the compliments to Male
Kahai on the goth September, 1893. The
consideration expressed was $125, the
$25, being interest on 500 for one year
at the rate of 21a per cent. per month,
being retained in advance and made a
part of the consideration. At the same
time Malie Kahai executed and deliver
ed to compliments a paper translated
as follows:
To Kahau and Kapela Kahau,
Aloha to you two.
1 hereby declare to you two, in ac-
cordance with your request to me that
If you two shall repay to me one hun
dred and twenty-five dollars on the goth
September, A. d. 1894, or before such
date, | agree to resell my land situated
on Queen street Honolulu, Oahu, whose
size is 47-7x48-3 feet, which you sold to
me by the deed made on this Goth Sep
TENDER, 1898. And the expenses of such
sale shall be borne by you.
Respectfully,
(Sig.) Male Kahai
In presence of
(Sig) ]. K. Kaulia
Honolulu, Sept. 20, 1898.
None of these facts are questioned
The defendant Booth, trustee, after the
death of Male Kahai CHS wife sue
ceeding to her INTEREST," took the ground
that an absolute title had passed and
brought proceedings in ejectment
against compliments, whereupon a bill
was filed to declare the deed a mort
gage and to redeem the same The
Circuit Judge after hearing decreed
that the transaction was a mortgage !
and that compliments were entitled
to redeem.
We hold that the instrument made
by Malie Kahai was a defeasance.
By all the authorities a defeasance
is an essential requisite of mortgage,
and it may be % in the conveyance
itself, or CD in separate writing, or
(3) 1t may exist in parole merely. The
second method was adopted by the par
ties and the transaction was fully I'M
derstood and accepted by the complain
ants, the mortgage Malie Kahai and
her attorney.
In law the absolute deed and the
separate defeasance or agreement to re-
convey executed at the same time
amount to mortgage.
pennsylvania courts hold that where
the conveyance and the agreement to
reconvey on payment of the purchase
money are on their face of even date
(Which is this case) the transaction is
necessarily mortgage and that parole
evidence of a different understanding
by the parties will not be received to
convert it into conditional sale" Kerr
V. Gilmore, 6 Watts (Pa.) 4O5. Brown
V. Nickle, 6 Pa. ST. 800 But while it is
as this, it seems to us that it was p,.inG
Jdeie mortgage and it was hardly
necessary for the compliments to show
by parole that they were persuaded by
the mortgage to take the defeasance
Dy separate instrument on her as
Sufance that she considered it a mort
gage. But proofs were adduced before
the Circuit Judge and they showed that
the grantors continued in possession. |
that the consideration was Inadequate.
the land being worth many times more
than the amount of money paid, that |
interest was charged and that the full |
understanding of both parties was that |
the transaction was intended to be a |
mortgage and not a conditional sale. |
These facts would be sufficient to es-
tabi1sh defeasance by parole if the |
defeaSance was not in writing Camp |
bell V. Dearborn, 109 Mass. $50. IT
made no differnce that the time of
repayment had been allowed to pass.
Once mortgage always a mortgage.
and the mortgagor is allowed to re-
deem. Bayley V. Bayley, Admr. 5
Gray, 512. We remark that courts
look with disfaYor upon the method
OF making the defeasance by a separate
instrument. 1t is liable to be used
to the prejudice of the mortgagor Gas
in this case). Lord Chancellor Tai
bot said they always appear with a
face OF fraud" COtterell V. Purchase
Gus. Temp. Talbot, 81, cited in 1 Jones.
Mortgages, Sec. 243, and also Baker V.
Wind. Yes. Sr. 100 We should dis
courage the practice.
Cases on this subject may be found
cited in Jones, Mortgages, Secs. 241 to
DIX