Whatever may be the law elsewhere, it is a general rule in equity, established by the decisions of the courts of this state, that a deed absolute in form will be treated as a mortgage when executed as security for a loan or a debt. (Despard v.Walbridge, 15 N.Y. 374; Horn v. Keteltas, 46 N.Y. 605;Fullerton v. McCurdy, 55 N.Y. 637; Ensign v. Ensign,120 N.Y. 655, 656.) But it is equally well settled that the burden of establishing an oral defeasance to such a deed rests upon the one who alleges it and its precise terms must be established by clear and conclusive evidence to overcome the presumption that the deed expresses the entire contract between the parties. There is a diversity of opinion as to the principle upon which this doctrino is founded. In this state, however, it seems to have been based upon the *Page 114 intention of the parties and upon the doctrine that courts of equity will always look through the form of a transaction and give effect to it so as to carry out the substantial intent of the parties. The law presumes that a deed is an absolute conveyance, and the party who claims it to be a mortgage must sustain his claim by proof sufficient to overcome this presumption of law, and it was held by this court in Ensign v.Ensign (120 N.Y. 655) that an oral defeasance must be established beyond a reasonable doubt. A conditional sale is not opposed to public policy nor in any sense illegal, and the courts of this state will give it effect as such when that is the real intention of the parties. (Randall v. Sanders, 87 N.Y. 578.) It seems perfectly obvious from the evidence in this case that the conveyance by the plaintiff to Mrs. La Bau was not intended as a mortgage or in the first instance for the purpose of securing the money advanced to her by the defendants' testatrix. The plaintiff sought to make a loan of the defendant's testatrix and to secure its payment by a mortgage on the premises subsequently conveyed. That, the defendants' testatrix refused to do, but insisted upon the plaintiff's fixing a price which she would accept in full payment for the premises, and that a full covenant deed should be given which was to continue as such and remain absolute, unless Mrs. La Bau should, within a year, elect to hold the deed as a mere security for the money advanced. That she did not do, but on the contrary gave notice that she would retain title to the property so conveyed and pay the plaintiff the balance of the consideration. Thus it becomes manifest that the defendant's testatrix not only declined to exercise her option by transforming the deed into a mortgage, but she actually elected to confirm the deed as an absolute conveyance and thereby the option was spent and afterwards was of no force or effect. From this brief history of the transaction, it seems certain that the deed was never at any time intended to be or regarded by the parties as a mortgage, but was always a deed absolute. That under these circumstances the defendants' testatrix obtained an absolute title to the premises, which, after the expiration of the year *Page 115 and in view of the election of the testatrix, was free from any condition or possibility by which it could be regarded or treated as a mortgage, there can be no doubt.
In its origin the instrument under consideration was a full covenant deed, and such has been its character from the day it was given until the present time, notwithstanding the fact that during the period of one year there was a possibility that by the action of the defendants' testatrix it might have been changed into an instrument in the nature of a mortgage and held as such for the security of the money advanced by her as a part of the purchase price, if she so elected during that time. Moreover, she agreed to pay the remainder of the purchase price at a time named, as was agreed by the parties. It is also to be observed that the plaintiff had no option in the matter. So far as she was concerned the instrument under consideration was a deed, and nothing she could do would interfere with its validity as such, or with the testatrix's title, or in any way change the character of this instrument. That there was never a time, not even for a moment, when the parties intended that the deed in question should be regarded as a mortgage is perfectly obvious, and, consequently, the principle that once a mortgage always a mortgage, upon which the learned Appellate Division relied, was utterly inapplicable under the facts in this case. Although the order of the Appellate Division asserts that the judgment of the Trial Term was reversed upon the "law and facts," still it is difficult to discover any facts necessary to sustain the judgment of the trial court as to which there was any conflict in the evidence that justified the Appellate Division in reversing the judgment upon that ground.
Hence, I favor the reversal of the judgment appealed from and the affirmance of the judgment entered by the trial court.
CULLEN, Ch. J., GRAY, and BARTLETT, JJ., concur with HAIGHT, J.; O'BRIEN and VANN, JJ., concur with MARTIN, J.
Appeal dismissed. *Page 116