Opinion ID: 1230615
Heading Depth: 1
Heading Rank: 2

Heading: equitable-mortgage theory

Text: In order to establish a prima facie case on their equitable-mortgage theory, the buyers were required to show that the parties intended the transaction to be a mortgage, rather than an installment land contract, as construed from their written agreement and the surrounding circumstances. Baldwin v. McDonald, 24 Wyo. 108, 156 P. 27; and 59 C.J.S. Mortgages § 10a. There must have been an intent to create a security or, in other words, there must be proof that the maker intended the property to be held, given or transferred as security. 1 Jones on Mortgages, § 225, at 262-263. It has been observed that there is little possibility that a court will construe an installment land contract as a mortgage, assuming that it does not depart too far from the usual contract terms and provisions. Rudolph, The Wyoming Law of Real Mortgages, at 147. Appellants contend that they made the requisite showing by virtue of the contract provisions, which grant them a right of redemption for a period of six months after default, and the seller's conduct allegedly waiving its right to forfeiture. While it may be conceded, arguendo, that a seller may waive his right to declare an automatic forfeiture through conduct which has been characterized as acquiescence, it cannot be said that such acquiescence discloses an intention to treat the transaction as creating a mortgage. The primary effect of such conduct, as pointed out by appellants in their waiver argument, is to preclude the vendor from exercising its right to forfeiture until the vendee is put on notice that future defaults will not be countenanced and strict compliance will be required. Baker v. Jones, 69 Wyo. 314, 240 P.2d 1165, 1171. Furthermore, we fail to see how the language of this contract converts it into an equitable mortgage. See, Bishop v. Beecher, 67 N.M. 339, 355 P.2d 277. The presence of the right-of-redemption provision, without further evidence of the parties' intention and without any further indications arising from the contract itself, is not sufficient  as a matter of law  to convert this installment land contract into an equitable mortgage. At most, this provision was a contingency placed in the contract for the buyers' benefit, aimed at lessening the harshness of a forfeiture. To provide for such a revivor possibility does not mean that the buyers are entitled to the same or all of the protections afforded by a mortgage. We hold the buyers failed to establish a prima facie case with respect to their equitable-mortgage theory. This does not mean that, in appropriate cases, buyers will not be entitled to equitable remedies, such as restitution. Cf., Quinlan v. St. John, 28 Wyo. 91, 201 P. 149, reh. den. 28 Wyo. 91, 203 P. 1088; and Lawrence v. Demos, 70 Wyo. 56, 244 P.2d 793. [5]