Hughes v. Davis

Rhodes, C. J., delivered the opinion of the Court, Temple, J., Crockett, J., and Wallace, J., concurring: The defendant being indebted to the plaintiff and other persons in the sum of $2,100, applied to the plaintiff for the loan of that sum, and offered as security, a mortgage of the premises in controversy. The plaintiff refused to take a mortgage, because of the expenses attending a foreclosure, and the transaction was consummated in this manner: The plaintiff advanced to the defendant $1,500, which, with the debt due from the defendant to the plaintiff, amounted to $2,100. The defendant and wife executed to the plaintiff a deed of the premises, and the plaintiff and defendant executed a lease, by which the plaintiff demised the premises to the defendant, for the term of five years, at the annual rent of $378. The lease contained the usual convenant for the payment of the rent, and for the surrender of the possession of the premises at the expiration of the term; and it was further covenanted that if the lessee should, during or at the expiration of the term, pay to the lessor the sum of $2,100, and perform the covenants on his part mentioned in the lease, then the lessor would execute and deliver to the lessee a good and sufficient deed of the premises. The note of the defendant which the plaintiff then held, was at a subsequent time surrendered. No note or contract in writing was made by the defendant for the payment of the $2,100. The annual rent was paid by the defendant during the term. Two days after the expiration of the term, the sum of $2,100 not having been paid by the defendant, the plaintiff gave the defendant notice to quit, and subsequently — 120 — brought this action to recover tbe possession of tbe premises. Tbe court found that tbe plaintiff loaned to tbe defendant tbe sum of 2,100 for tbe period of five years, to bear interest at tbe rate of one and a balf per cent, per month; that tbe deed and lease were executed to secure tbe payment of that sum and tbe interest thereon; andbeld tbattbe transaction constituted a mortgage, and that therefore tbe plaintiff was not entitled to recover tbe possession of tbe premises. I shall assume that these facts were correctly found, and shall onlynotice one of tbe conclusions of law — that tbe plaintiff is not entitled to recover tbe possession of tbe premises. In Jackson v. Lodge (36 Cal.. 28), tbe question whether an absolute deed, which is shown by parol evidence to have been intended as a mortgage, conveys the legal title to tbe premises, was discussed at great length, and a majority of tbe Court answered tbe question in tbe negative. I came to tbe opposite conclusion, and my views met tbe full concurrence of Mr. Justice Crockett. I do not propose, at this time, to enter again upon tbe discussion of that question, though the argument might be materially strengthened. Since tbe decision of that case I have seen nothing which tended to shake my confidence in tbe conclusion which I then expressed; and I again announce that, in my opinion, an absolute deed does convey tbe legal title. Accepting as true tbe proposition that the deed of tbe defendant and wife conveyed to tbe plaintiff tbe legal title, it necessarily follows, that, upon tbe expiration of tbe term of tbe lease, tbe plaintiff was entitled to tbe possession of tbe lands conveyed, unless tbe defendant has made out a good equitable defence. Tbe answer sets up facts, showing that tbe transaction was a loan and mortgage to secure tbe payment of tbe money and interest. Tbe principal sum bad become due and remained unpaid. An agreement to extend tbe time of payment is alleged, but for tbe want of consideration, it could not be enforced, if it bad been proven. Tbe money ' having become due, it was incumbent on tbe defendant, if be desired to have tbe Court declare that in equity tbe — 121 — transaction constituted a mortgage, to offer to redeem. He cannot demand equitable relief, in respect to tbe contract, while failing to perform Ms part of it. He should do equity, by offering to redeem, when seeMng equity by having the deed declared a mortgage. There is no shadow of doubt in my mind, that equity requires the defendant to pay or tender the money loaned, before he deprives the plaintiff of the right of possession, which flows from the deed and lease and the expiration of the term. Judgment reversed and cause remanded, with directions to render judgment for the plaintiff, for the possession of the premises sued for. Mr. Justice Spbague, being disqualified, did not sit in this case.