I dissent. The evidence, in my opinion, shows conclusively that the deed under which plaintiff claims is a mortgage given to secure payment of a debt.
The plaintiff testified that Wheaton had failed to pay interest due, and that he then told him that a foreclosure would be necessary; that Wheaton objected that a foreclosure would entail expense, and he was sure he could get the money. He *Page 405 wanted time, and asked him if he, Wheaton, would deed the property to plaintiff he could have the privilege of buying it back in six months, and the witness proceeded: "Subsequently, I told him, if he wished to save the expense of foreclosure, the only way in which it could be done was to deed the property to me absolutely, and for me to cancel the mortgage, and then I will give you an option to buy it back again within any time you want. He replied that he could not do anything else."
Thereupon defendants made the deed to plaintiff and received a written option, as it is called, to purchase at any time within seven months for four thousand eight hundred and fifty-three dollars, which sum includes the principal sum due, with interest computed for the seven months during which the option was to extend. The plaintiff further testified: "The consideration for the deed and collateral agreement was the concellation of the mortgage, and the debt thereby secured, and that agreement affording them an opportunity of purchasing the property within seven months."
"All I wanted back at the time was the money that was due me. I was not willing that the matter should remain as it was any longer. He said if I would give him the privilege of buying the land, or would agree to sell it to him within a certain time, he would pay the debt by giving me a deed; it was his own proposition. The price of the land was the amount of the debt."
The defendants testified very positively, in effect, that the deed was given in consideration of further time in which to pay the debt. Garwood was willing, according to their evidence, to give further time if he could be saved the necessity of foreclosing a mortgage. That all the parties then understood that there would be no necessity of foreclosing, and that Garwood's title would become absolute at the end of the seven months, I concede. Mr. Wheaton testified: "The deed was given on the consideration that Mr. Garwood would give me further time. The deed was given to satisfy Garwood, to avoid foreclosure proceedings. I had no other alternative. I had either to assign this property to him or let him begin foreclosure proceedings. He said; "I shall begin foreclosure proceedings, but I will give you an agreement for further time of seven months to redeem in at the said rate of interest as before." *Page 406
He had conveyed the land to his daughter, and testified that after the deed was made he always considered that his daughter owned the land. They continued to collect the rents and to occupy the house as before. The testimony of the daughter is in effect the same.
I think, upon the crucial point, whether the deed was given to secure further time within which defendants could pay their debt, there is no substantial variance between the testimony of plaintiffs and defendants. They agree that such was the purpose. Such being the case, it is immaterial that both thought that the title passed by the deed and was absolute on the expiration of the seven months without foreclosure. The statement made by Garwood that the conveyance paid the debt is but a legal conclusion. Even had both parties used that expression, it would mean but little in view of the fact that as part of the consideration for the deed the option to repurchase for the precise amount of the debt was given.
Personal liability is not essential to a mortgage, and the well-established rule is that every contract which can well be construed to be a mortgage rather than an absolute conveyance of title is a mortgage. This policy is clearly recognized in sections 2888 and 2889 of the Civil Code. A conveyance of the fee by a mortgagor to the mortgagee is always regarded with extreme jealousy, and will be deemed merely as a renewal of the mortgage, if possible. (Bradbury v. Davenport, 114 Cal. 593; 55 Am. St. Rep. 92; Hickox v. Lowe, 10 Cal. 197.)
In the last case Judge Field quotes with approbation the following from Kerr v. Gilmore, 6 Watts, 405: "The cases, however, seem to admit the possibility of a deed absolute on its face and a defeasance agreeing to reconvey if the money be paid on a certain time, and the latter may be unavailing unless the money be paid at the time specified. This can, I apprehend, only occur where the contract and conveyance were clearly for an absolute sale, and the agreement to reconvey a subsequent and distinct matter not in contemplation of the parties when the sale was made and the deed delivered. . . . When they are of the same date and excuted at the same meeting of the parties, before the same witnesses, they must be a mortgage, and only a mortgage, or there will be no more mortgages." A great many cases are cited, and *Page 407 the learned justice concludes that "slight circumstances will determine the transaction to be one of mortgage, when that can be done without violence to the understanding of the parties."
The transaction is in the precise form of a mortgage at common law, and under the holding here it has all the consequences which attach to such a mortgage at law. Courts of equity allowed the mortgagor to redeem, but the effect of this decision is that nonpayment works a forfeiture and allows no redemption. It is a curious result if, notwithstanding the numerous provisions of our code prohibiting such mortgages, and providing that no such result shall follow, whatever the parties intend and agree to, the common-law mortgage can now be used, and the property subject to the lien forfeited without the right to redeem. The decision conflicts with sections 2888 and 2889 of the Civil Code.
That the parties did not agree or understand that the transaction was a mortgage is not to the point. They did understand that plaintiff was willing to give further time if he could avoid the expense and delay of a foreclosure. And he did give them further time upon their executing a deed which he thought would become absolute if not redeemed by paying the principal and interest of the debt within seven months. This by all the decisions was a mortgage, and, as I have said, was exactly and in all respects itself a common-law mortgage. It contracted for a forfeiture and denied the right of redemption.