Court Opinion

ID: 6517866
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:28:20.927848+00
Date Added: 2024-06-11T15:55:04.389322
License: Public Domain

SHARPE, J.
Deeds of trust have grown, into common use along with mortgages as a form of security for debt, and it is probably because of that fact that the terms mortgage and deed of . trust are sometimes used interchangeably. At least one decision as to their identity appears in Wolfe v. Dewees, 13 S. & M. 103, where a statute relating to the satisfaction of mortgages upon the record, but without a penalty, was under com sideration, and it was held by the court that “a deed of trust is but a species of mortgage, and is included by the statute.” This was inaccurately said, however, for the two terms are not synonymous even when used in reference to security for debt; and that a substantial difference exists as between the two classes of instruments has been pointed out in numerous adjudications. The distinction was well drawn in an opinion by Chief Justice Field, of California, in the case of Koch v. Briggs, 14 Cal. 257, (71 Am. Dec. 651), where a conveyance similar to the one described in this complaint- was under consideration, and the question was presented whether it was a mortgage within the meaning of a statute providing that “a mortgage of real property shall not be deemed a conveyance whatever its terms, so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure and sale.” It was there said of the instrument: “It has no feature in common with a mortgage except that it was executed to secure an indebtedness. This *622will be evident from a consideration of the rights of parties to a mortgage with reference to the mortgaged property. Where there is a mortgage there is a right after condition broken to a foreclosure on the part of the mortgagee and a right of redemption on the part of the mortgagor. * * * These two rights are reciprocal. When the one cannot be enforced the existence of the other .is denied, and when either is wanting, the instrument, whatever its resemblance in other respects, is not a mortgage.” It was further shown in the'opinion that under such a conveyance equity could not decree a strict foreclosure or a foreclosure by sale in the proper sense of the term, and that its interposition to effectuate the sale of the property could only be by way of enforcing or aiding the performance of the trust. That case was followed in Grant v. Burr, 54 Cal. 298, and quoted with approval in Moore v. Calkins, 95 Cal. 435 (29 Am. St. Rep. 128), and in Merritt v. Hurley, (So. Dak.), 55 Am. St. Rep. 859.
In More v. Calkins, supra, it was said in effect, that the test in determining whether a conveyance securing a debt is to be treated as a mortgage is not whether the grantee is the creditor or a third person, since it may be to the creditor but with such trusts declared as to prevent its operation as a mortgage. And in Merritt v. Hurley, supra, it was held that the conveyance may be to a third person and yet a mortgage by appropriate provisions leaving no trust to be executed by the third person. It would be impracticable to lay down a test which would in all cases serve to distinguish between such instruments in construing statutes relating to, since a statute which is purely remedial admits of a more extended application of its terms than does a statute which is penal. This statute here in question is highly penal, and must be strictly construed.—Grooms v. Hannon, 59 Ala. 510; Jarratt v. McCabe, 75 Ala. 325; Scott v. Field, 75 Ala. 419. It may be stated generally, as applicable to this statute, that if the conveyance be to a third person upon a declared trust to sell and convey the property in default of and for the payment of the debt secured, it is a trust deed .and not a mortgage. Koch v. Briggs, supra; Grant v. Burr, supra; Gillespie v. *623Smith, 29 Ill. 473; Reese v. Allen, 5 Gellman (Ill.) 236.
This conveyance is from appellee to a trustee upon a declared trust to sell the property for the payment of appellant’s debt if not paid according to the contract, and to apply the proceeds thereto and to convey the title to the purchaser. It is not a mortgage within the terms or meaning of the statute, and it follo'ws that the demurrer to the second count of the complaint should have been sustained, and that the deed of trust should have been excluded from the evidence. As this view of the case is conclusive against the plaintiff’s right to recover, the assignments of error, need not be further noticed.
The judgment of the city court must be reversed, and a judgment here rendered that the defendant, the appellant in this court, go hence without day, and that it recover of the appellee its costs in this behalf expended.