Case Name: JOHN GARWOOD, Respondent, v. W. GEORGE WHEATON et al., Appellants
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1900-04-27
Citations: 128 Cal. 399
Docket Number: Sac. No. 476
Parties: JOHN GARWOOD, Respondent, v. W. GEORGE WHEATON et al., Appellants.
Judges: 
Reporter: California Reports
Volume: 128
Pages: 399–407

Head Matter:
[Sac. No. 476.
In Bank.
April 27, 1900.]
JOHN GARWOOD, Respondent, v. W. GEORGE WHEATON et al., Appellants.
Conveyance in Satisfaction of Mortgage—Deed not a Mortgage— Limited Option to Grantee of Mortgagor to Repurchase—Independent Transaction.—Where a mortgagor transferred the mortgaged premises to his daughter as a gift, and subsequently, in consideration of the surrender, extinguishment, and satisfaction of the note and mortgage, the father and daughter made a deed absolute to the former mortgagee, without any agreement that it was to secure any debt, such absolute deed is not a mortgage; and an option given to the daughter to repurchase the granted premises within a limited period, upon payment of a sum equal to the principal and interest of the original mortgage debt, with the taxes for the year, and the expenses of deed, abstract, and record, the option to cease if not exercised within the time limited, is a new and independent trans action as to her, who was never indebted to the grantee of the deed absolute. [Temple, J., dissenting.]
Id.—Quieting Title—Evidence — Written Memorandum'of Items — Parol Proof.—In an action to quiet the title of the grantee of the deed absolute against the father and daughter, where the defendants offered in evidence a written memorandum showing the different items which made up the amount of the price to be paid by the daughter, including taxes for the year, under the option to repurchase, a question asking for parol proof as to who was to pay the taxes for the year was properly disallowed.
Id.—Inadmissible Question Begging Point in Issue—Willingness of Grantor to Convey Absolutely.—A question asked of the daughter whether she was willing, and considered that she was deeding the property absolutely to the grantee named therein, is inadmissible, as begging the point in issue to be determined by the court from the evidence of the witnesses who had testified as to all that occurred prior to and at the time of the conveyance, and the reasons for executing the same.
Id.—Market 'Value—Improper Questions.—Questions as to the market value of the property not addressed to its value at the time of the conveyance, hut as of the date of the trial, asked of a witness who testified that he did not know the market value of land in the vicinity of the land in question, are properly disallowed as not proper evidence.
APPEAL from a judgment of the Superior Court of Sau Joaquin County and from an order denying a new trial. Edward I. Jones, Judge.
The facts are stated in the opinion of the count.
McClure & Honk, and Carpenter & Flack, for Appellants.
It is admissible to show that the intent of a grantor was not to make an absolute deed of the property. (Montgomery v. Spect, 55 Cal. 353; Booth v. Hoskins, 75 Cal. 275; Farmer v. Grose, 42 Cal. 173; Davis v. Brewster, 59 Tex. 93; 1 Jones on Mortgages, sec. 324.) Inequality between the value of the property and the price paid is material evidence. (Montgomery v. Sayre, 100 Cal. 182; 38 Am. St. Rep,. 270; Husheon v. Husheon, 71 Cal. 407; 1 Jones on Mortgages, sec. 329.) The agreement to reconvey on payment of the debt and interest indicates a mortgage. (Lee v. Evans, 8 Cal. 424; Hickox v. Lowe, 10 Cal. 197; Lodge v. Turman, 24 Cal. 385.) The burden of proof was ' on the plaintiff to show that the mortgagor’s right was given up deliberately and for an adequate consideration. (Bradbury v. Davenport, 114 Cal. 594; 55 Am. St. Rep. 92.) When it is doubtful whether the transaction is a mortgage or a conditional sale, it will be treated as a mortgage. (1 Jones on Mortgages, sec. 279, and cases cited; Hickox v. Lowe, supra.)
Nieol & Orr, for Respondent.
The findings are sustained by the evidence; and the facts proved show that there was a fair and complete extinguishment of the mortgage debt in consideration of the deed. (Page v. Vilhac, 42 Cal. 83; Farmer v. Grose, 42 Cal. 169; Watson v. Edwards, 105 Cal. 75.) There is no error in the record.

Opinion:
VAN DYKE, J.
Action to quiet title, and complaint in the usual form. Defendant Wv George Wheaton, answering, denies plaintiff's title, and alleges that the deed on which the plaintiff relics, made by himself and daughter, defendant Ada Julia Wheaton, although absolute in form, was executed to the plaintiff by way of mortgage to secure an indebtedness; and, further, said defendant alleges that at the time of making said deed to the plaintiff he had mo interest or estate whatever in the premises, as he had prior to that date, to wit, on June 29, 1896, transferred by grant 'absolute said property to his said daughter. Defendant Ada Julia Wheaton, in her answer, also denies title in the plaintiff, and sets up title in herself to said premises acquired by said conveyance from her father. She also alleges that the deed made by herself and father to the plaintiff was executed by way of mortgage to secure an indebtedness due from her father to the plaintiff.
The court finds on the issues presented by the pleadings that on the nineteenth day of August, 1893, the defendant W. George Wheaton, to secure the indebtedness of four thousand dollars, evidenced by promissory note of that date, and payable one year from date, executed and delivered a mortgage on the premises in question; that thereafter, on the twenty-ninth day of June, 1896, defendant W. George Wheaton, by a grant absolute, conveyed all of said premises to his daughter, Ada Julia Wheaton; that said Ada Julia Wheaton paid no consideration for said conveyance, and the same was made to her as a gift by her father; that on the tenth day of August, 1896, in consideration of the satisfaction of said indebtedness and the satisfaction of said mortgage, defendants W. George Wheaton and Ada Julia Wheaton agreed to, and they did make, execute, and deliver to plaintiff a deed absolute of grant, bargain, and sale of all of said described premises; that on the execution and delivery of said deed plaintiff surrendered to defendants Wheaton said note, and on the same day duly satisfied of record said mortgage; that on the said tenth day of August, 1896, at the time of the execution and delivery to him of said deed, plaintiff made and delivered to defendant Ada Julia Wheaton a written offer to sell said premises for the sum of four thousand eight hundred and fifty-three dollars, payable on acceptance of the offer, and if she desired to purchase said property upon said conditions he would keep the offer open until February 5, 1897, but no longer, and if not before said time, or then, accepted, the offer to be considered as withdrawn, and as never having been made; that the said sum of four thousand eight hundred and fifty-three dollars mentioned in the foregoing offer was the sum of principal and interest of the note and mortgage in question, with the taxes for 1896, and expenses of deed, abstract of title, and recording. The court further finds that said deed made and delivered to plaintiff by defendants Wheaton was not made or delivered to plaintiff, nor received by plaintiff, as or for a mortgage, or as security for any indebtedness whatever.
One Edward Gooch, a tenant of defendants Whe'aton at the time of bringing the action, was made a defendant, but he neither moved for a new trial nor has he taken an appeal.
The other defendants appeal from the judgment in favor of plaintiff, and from an order denying their motion for a new trial.
In addition to the contention of said appellants that the findings are not supported by the evidence, they claim the court erred in its rulings upon certain objections made during the trial. The first is a ruling sustaining plaintiff's objection to the question asked defendant Wheaton: "I will ask you who was to pay the taxes on these premises for the year 1896." The defendants themselves offered in evidence, without objection, a written memorandum showing the different items, in- eluding the taxes for the then current year, making up the sum for which the agreement or option was given. The objection to the question to show by parol what their written memorandum •contained was properly sustained.
It is further complained that the court erred in sustaining the objection to the following question asked defendant Ada Julia Wheaton: "Now, were you willing, and did you consider you were deeding this property absolutely to Mr. Garwood?" This question begs the very point in issue. The witnesses had testified fully as to all that occurred prior to and at the time o£ the transaction and the reasons for executing the deed in question. From this evidence the court was to determine the «fleet of the conveyance, whether the witness had, in her own mind, been willing or unwilling to execute a conveyance. It is also claimed the court erred in sustaining plaintiff's objection to the question: "Do you know the market value of property in that vicinity?" and "I will ask you what you received for that land, and what would be a reasonable and fair market price for the land in controversy." The questions were not directed to the ascertainment of the market value of the property at the time of the conveyance, and, if the value of the land had been an element of consideration to be inquired into, it must have been at the time of the transaction, and not at a time long subsequent thereto. Besides, the witness 'to whom the question was addressed testified that he did not know the market value of land in the vicinity of the land in question.
Without reviewing the testimony in detail, it is sufficient to-say that the findings are fully supported by the evidence. There is nothing in the record at all showing any understanding or agreement of the parties that the deed should be given or accepted as a mortgage. There is no element of fraud or oppression in the whole transaction between the parties. The case is a much stronger one than Farmer v. Grose, 42 Cal. 169, where it was held that the conveyance was absolute. In the opinion the court laid down this rule: "In eases of this class the well-established test by which to determine whether the transaction is a mortgage or a defeasible sale is the fact whether or not, notwithstanding the conveyance, there is a subsisting, con- tinning -debt from the grantor to the grantee." Page v. Vilhac 42 Cal. 75, follows Farmer v. Grose, supra, and holds' that a conveyance in that case was absolute and not a mortgage. There Vilhac gave Page a contract agreeing to sell back the whole or any part of the property upon payment of a specified sum, or proportional part thereof on or before November 1, 1865, at. which time the agreement was to "cease to be in force and become entirely null and void." In Watson v. Edwards, 105 Cal. 70, it was contended that to make such a conveyance from the mortgagor to the- mortgagee absolute, the yielding up of the' note and the discharge of the debt, without a new consideration from the mortgagee to the mortgagor, was insufficient; to which this court says: "This contention cannot, in our opinion, be successfully maintained. A mortgagor may sell and convey all his right and interest in the mortgaged premises to the mortgagee where the transaction is fair, honest, and without fraud, and where no unconscionable advantage has been taken of his position by the mortgagee. It would be surprising if two men in their senses and with their eyes open could not make such a contract. The doctrine 'once a mortgage always a mortgage'' does not refer to future contracts."
Here, as found, and as the testimony abundantly shows, the-note was surrendered, the mortgage canceled, and the debt extinguished. The owner of the fee, Ada Julia Wheaton, never was indebted to the plaintiff, and the plaintiff had no recourse whatever as against either of the appellants upon the former indebtedness. As to her to vdiom the agreement to reconvey was made, it was a now and independent transaction entirely.
The judgment and order denying a new trial are affirmed.
Garoutte, J., McFarland, J., Harrison, J., and Henshaw, J.,. concurred.