*1 No. Apr. 5386. In Bank. [Sac. 1944.] BEELER, C. W. Respondent, v. AMERICAN TRUST (a
COMPANY Corporation), Appellant.
(11 *3 Phleger Brobeelc, Harrison, Kennedy & M. & Carr and B. Plant for Appellant.
Morrison, Hohfeld, Foerster, Shuman & and Clark Landels & Weigel, Curiae, Appellant. as Amici on behalf of
Carter, Carlton, & Barrett Carlton, Daniel S. Oliver J. Carter, McGregor Major & McGregor, McGregor Dudley and McGregor G. Respondent. for
CURTIS, J. A rehearing granted was permit herein to additional study of points The further con- involved. sideration consequently given this case has served to confirm the reached, conclusions accordingly, heretofore and following opinion expresses our sustained views. defendant,
The Company, American Trust an appeals from judgment adverse holding that a deed absolute in form was in fact equitable mortgage. principal The pre- contention sented the defendant bank aas basis for a reversal of the judgment is the that the is insufficient familiar claim justify the the trial related con- to conclusion of As a court. sideration, urged particularly it is that a affidavit verified grantor declaring contemporaneously of the executed deed not in- conveyance to be an absolute and property, as a of the under- mortgage, expression tended is a conclusive standing admissibility parties precludes between parol contrary. evidence to the surrounding
The facts and the transaction circumstances substantially this controversy appear out which arose to be July 28, Henry as follows: Prior Weiss owned 1937, large County subject tract of in Tehama land the Ameri- 21, 1933, running trust dated in favor of March promissory *4 did figure not of the debt on the at property the discounted materialize, 1, 1937, part and September no $55,000 Accordingly, had been the last-mentioned paid. second upon date the bank both Beeler and Weiss served scale had original notice indebtedness its default. The $81,000. aggregate then sum increased to the 1937, September 22, Subsequent said and on notice negotiating with purpose Beeler visited the bank for the might refinancing plan whereby he continue officers some the ranch and have extension time for to retain an of- payment of as theretofore The bank’s the debt reduced. longer carry any transaction property refused to this ficers security arrangement, they therefore on the records as a and Beeler would proposed following procedure: course of to the in return the bank would property deed bank and period of premises to Beeler a lease of the for the execute year annum, all $3,000 per pay one at a rental Beeler to taxes and ranch and to have expense maintenance on the during term option purchase any the land time this $60,000. accepted Beeler lease the sum of proposition by September dated and absolute deed conveyed As an accom- the bank. panying instrument, to the Beeler executed and delivered affidavit, his verified in which he stated that said deed conveyance “is intended to be and is an absolute of the title premises grantee to said not therein, named and and is conveyance a mortgage, now intended as trust any kind; that it was the intention of affiant as grantor in convey, said and said deed affiant did convey grantee right, therein all in- title and terest absolutely in premises; possession and to said premises said has grantee; been surrendered to the the execution delivery and affiant of said deed was not act- ing under misapprehension thereof, the effect and freely acted and voluntarily acting was not under coer- cion or duress; that the consideration for said deed was is the full obligations, cancellation debts, of all costs and charges secured that certain deed of trust heretofore existing on property, said reconveyance . . . and the of said property under trust; said deed of . . . This affidavit is made protection grantee deed, benefit of the in said its successors assigns, . . . and particularly for the bene- Guaranty fit of Title which Company, Insurance is about to insure the title to said reliance thereon, affidavit, ...” Pursuant to the terms of this bank executed a reconveyance reciting under its trust deed the indebtedness thereby secured had been fully paid. *5 5, 1937,
On November the deed from Beeler and the both reconveyance duly were recorded. 16, the 1937-1938 May 1938,
As of neither installment of fully on men- paid, taxes on the ranch had been and said day to upon pay tioned the bank served Beeler a notice the quit taxes to with the premises comply or the for failure parties terms of were unable settle their the lease. to brought July, 1938, and in bank differences on this score seeking suit in from the unlawful detainer Beeler’s eviction property. ensuing successfully trial Beeler main- ground tained his defense that the notice of breach given judgment him accord- defective, and was rendered ingly in his favor. against
On this action October Beeler commenced conveyance the American Trust have his deed Company to to ante- mortgage the defendant declared a secure the bank to alleged cedent complaint plaintiff debt. In his that the bank agreed outstanding against to reduce the indebtedness property $60,000 together sum inter- paid, to the to be annum, est per per period at the rate of 5 within the cent lease, year and that provided one as the terms of the mortgage accepted conveyance the bank to the deed of as complaint secure that debt.' To this bank filed defendant denying material aver- cross-complaint, answer and asserting plaintiff’s pleading par- ments of the that the ties transfer title to intended the deed to be absolute be, mort- property purported as it in form and not a gage arrangement. principal With security other trial, defined, controversial issue proceeded thus the action findings adopted and at fa- the conclusion thereof the court accordingly plaintiff. Judgment vorable to the was rendered against determining plaintiff, W. bank, defendant C. Beeler, question in sub- be owner fee of the ject mortgage payment lien to- following (1) $60,000, sums: indebtedness gether annum, per cent per with interest at the rate of 5 agree- according option expressed the terms the lease taxes, ment; (2) first installment of 1937-1938 $477.88, entry of the decree with interest from the date of the these sums receipt herein. It further ordered court, within the defen- specified by the time limitation dant reconvey should
'7 satisfaction of the and deliver to him a release and execute judgment defendant, adjudicated. Prom this lien thus prosecutes Company, appeal. Trust American law, repeatedly It declared is without doubt the required decisions, convincing our that clear justify finding purports a court that a deed which absolutely simple convey land fee was intended *6 mortgage. convey purporting “That deed on its face absolutely may by parol title be shown something mortgage—is striking exception else—namely, a rule, universally general held that has been changed except character of the instrument cannot be thus Jensen, upon convincing (Woods clear and evidence.” v. 200, Bostwick, 130 473]; see, also, Mahoney Cal. 203 P. v. [62 96 53 1020, Am.St.Rep. 175]; Cal. P. 31 Sul Sheehan v. [30 livan, 126 379 543]; Emery Lowe, 189 140 Cal. P. v. Cal. [58 981]; Wadleigh Phelps, 93]; P. 149 627 P. v. Cal. [73 [87 Todd, Winston, 357]; Couts v. 153 686 Todd Cal. P. v. [96 164 413]; Cal. 255 Kahn Parent, P. v. 174 570 Cal. [128 [163 P. 1008]; Lockhart McDougall Co., v. J. H. 190 308 Cal. 1]; Robinson, 426].) P. Carlson 235 v. 7 P.2d [212 Cal.2d [60 But change whether or not the os the evidence offered to tensible convincing character of the instrument is clear and a question is (Mahoney for the trial court to decide. v. Bost wick, supra; Todd, supra; Todd v. Lockhart v. J. H. Mc Dougall Co., supra; 59.) case, 17 In such Cal.Jur. § in others, the determination of that court favor of either party upon conflicting contradictory open evidence is not appeal. (Sherman Sandell, review on v. 106 373 Cal. [39 797]; P. Moulton, 87]; Locke v. 132 145 P. Beckman Cal. [64 Waters, v. 60.) 922]; Cal.Jur. § As was regard Wadleigh said Phelps, supra, this page 637, appellate finding “the court. . . will disturb of the trial court mortgage, is a effect the deed where warranting there substantial evidence a clear and satisfactory pre conviction to All questions that effect. ponderance and conflict of trial evidence are court..”
A review of light the record in the rules of these does not declaring finding ques establish that the the deed tion be mortgage evidentiary support. without sufficient
In construing disputed arrangement financial conced- edly made as understanding the result of be- reached of the defendant and certain officers
tween the September 22, 1937, re- at the conference aforementioned ne- gard parties’ at the outset for the course of must be had meeting gotiations appropriate relative to some dis- at that position here of the indebtedness secured outstanding of trust. involved under the con- trial, fol- length nection the at the as the plaintiff testified at lowing pertinent excerpts from the record will show:
Direct Examination Q. [plaintiff’s : attorney] Beeler, give “Mr. Carter yourself place us the conversation that took between representative Company September the American Trust 22, 1937. room,
“A. We all into the little the small board went meeting room, said, directors’ I ‘I and sat down. am here arrangement arrange- to make present some other than 55,000 ment of paying the indebtedness off dollars cash. I I find at can’t man I principal this time do it. The get had has financed been in an and had to accident have amputated just his arm and has hospital been in the and he said, couldn’t do anything me at that time.’ I ‘I want I ranch. want to continue with the ranch. don’t want you says, to foreclose on it like this letter but is there some *7 way other can do something we it Is there some about ? arrangement other carry we can make to this loan?’ The conversation practically altogether Kennedy between myself. and said, any way I say. He ‘There is not can You got have to pay money. That agreement was the and that got just what we ‘Well, to I I said, pay have have.’ can’t ’ ‘ it but way. said, there must somé He other That is same story old just grief with this ranch. We have and trouble with get through it. We a way half deal and some- thing goes blows up wrong. and can’t un- anything We do get less money.’ said, you pay we some He ‘Can’t us some money? pay you Can’t us dollars on We five thousand it. want money said, money some on the I ‘I thing.’ need what I have to carry along my again me and so business on.’ .1 insisted, thing ‘Isn’t way there some can this we handle you without foreclosing on keep I ranch.’ it? want Finally said, after Kennedy some words back and forth Mr. ‘The only way I you can see for do it is to deed us property and let us take we property the title to the so that on it.’ money and this discount amount can write off this 55,000 dol- get it I still said, you I do that will ‘If said, I 60,000 dollars.’ said, ‘No, should have lars?’ He we the interest that, you ought to reduce you if do ‘Well, ’ along it I understood all per cent. As per six cent to five Kennedy agreeable to Mr. per had been cent. That was six I it be done. and back forth how could we discussed and said, ‘That is way, didn’t it that but he want to see the bank way grief It has and trouble and we can do been it. a loan got off say get examiners it the books “You have one hand something or it.” On the foreclose on it or do about you give you back give property we can’t and title to a take mortgage going on it are and write off the loss we right on it got put there. We have it into the real estate department. way That it. Then got is the we have do we get can department off the in the estate write loss real get new deal refinancing later this with and we over will your have a to look property chance in Paradise.’ get conversation I property tried to him to take in Para- dise which He we have to reduce the indebtedness down. said, ‘I can’t I do that. don’t know what the it is.’ value of He asked questions said, ‘Well, me a lot of if about He it. you want to do it way now, property and deed us the you take lease option and an on it for year, back we will have time to send somebody up back and look at the get appraisal maybe on it and can take it in that we way. If we way, maybe can’t take it in that we can take in as additional security.’ said, I ‘I don’t want to trade in as additional security. big enough One ranch is look after. That is one of the reasons I want to trade it. want ” get rid of worry property.’ trouble Q. Just . . . give the substance of what was
“Mr. Carter: said.
“A. Mr. Kennedy said, finally ‘We will do that. We will take the deed to the property give you a lease and an option back on it and that give will us time to inspect Paradise carry and we can way deal *8 until get we can things done, these get the property inspected and see if we can said, take it in.’ I ‘If that falls down is ’ ‘ there some way other that we can do it I said, ? I you know generally sell properties for a small payment down and if just ranch, you like get money said
you could some that If falls we do about ? this down ago, a what could while grief nothing ‘We had but said, can’t do it.’ He have .we get off of want to it our thing with that and we and trouble go I things through, pay can said, these don’t books.’ I ‘If thousand dollars at the end of the you payment five a during carry the the' loan the time and balance of time ’ it and said, ‘We want settle my payment make ? He you if can it in kind of a deal at all and we will settle along, give you both all us some that is what we asked money Kennedy money.’ The discussion went on. for some you you What can said, ‘We know so well. don’t they give so we know are us for this interest and taxes will getting promises on this being paid? All we have been grain said, making I ‘I a lease on the place years.’ am forty-five with Her- bottom for hundred land on the dollars ’ gone. far had time. That is as schell Giles that you pay glad assign that the interest ‘I am got assign said, yet. You ‘You can’t taxes.’ He haven’t got.’ and forth about something you haven’t We talked back that said, equipment and so on ‘What that. He about mortgage a on that to you give Will chattel you us own? get interest taxes until do you payment secure ’’ ’ ‘ ’ I said, way. I It left that the Giles lease ? Sure will. negotiations or said, possible I that these “A. ‘Is prospective mortgage with the Para- deal to reduce the down I bank, if can property, acceptable isn’t dise arrangement arrangement now make some new or some continue payment and then with make on the indebtedness ’ mortgage. said, ‘Yes, all do is to new And he we want to get had All ever money property. some out of that we have ’ pin Kennedy to if he promises. tried to Mr. down And way would five dollars and an off-hand thousand take make some of deal. said, ‘Yes, way. some We want to kind of it. want to know get money We want to some out We fi- is the We That nally paid that it will he don’t want it. off. good country. no have It is only piece we it.’ That just a lot with us there. We have had of trouble conversation, gist difficulty had was the regard financing. been had conversation “Q. you given Have us substance day took place ? *9 why, said, “A. After the last of I conversation, end ‘Well, now, papers get how will handle these we this done?’ Kennedy said, Mr. ‘I np And can’t them- in five draw here It busy. you bring minutes. time. We If takes are will us in the list of property up there, per- the chattels sonal property, mortgage, so that we can make out chattel I will papers thpm draw or them have and send drawn you.’ up they We I both then. asked them what were and it sale, was to be a deed bill and a or a chattel of mortgage rather, option.” the lease
Cross Examination attorney]: Q. Plant you Now when “Mr. [defendant’s had that September conversation down there at the you they just didn’t ask Kennedy if couldn’t stay let the in abeyance you give matter them a new mortgage ? I carry
“A. Yes. him asked if he could on a mortgage new fifty-five and reduce the amount down thou- sand.
“Q. say, And didn’t he ‘We can’t can’t do that. We do just that because we can’t write off fourteen thousand some dollars, odd hundred mortgage write off one and take a new one like that’? They “A. Yes. couldn’t that on do account bank ex- of or ruling
aminers some the bank principle some of they bank that didn’t want to do it. “Q. you He told couldn’t off fourteen write some thousand dollars mortgage and take a new ? No, mortgage 55,000.
“A. couldn’t take a new “Q. I didn’t you ask Kennedy say that. Didn’t Mr. they couldn’t write off fourteen thousand and some odd hun- dred dollars, mortgage write off one then take another mortgage ? Well,
“A. may those words, yes, have been the Ias remem- ber. That was the substance conversation.
“Q. Yes. portion
“A. it, One it, but that isn’t all course. “Q. Didn’t Mr. Kennedy you they at that time had advise had too much trouble already that ranch with fore- closures and so forth?
“A. Yes. a deed and have do is take
“Q. And what he would thing up whole clear the ? the course a lot conver- Well, told after me,
“A. he only way that was the would sation, he said refinance me, was to take deed. ‘‘ do, take Q. thing That he would was to is the thing up and clear the whole ? my yes. Well, you reading deposition, “A. I see are probably the intent words and that was probably said those give thing up and conversation, to clear the *10 lien on life. new option you lease ? “Q. And back a they give would final Yes, “A. that was the conversation.
“Q. That he said, was it not? what “A. Yes.
“Q. Now that there discussion as at time was indebtedness, 74,000 that whether not the Weiss indebtedness, or cancelled ? dollar would be satisfied Well, might but “A. have been some little discussion there very all I can remember. impress it didn’t me much at might There have been some. this,
“Q. that substance of that discussion Wasn’t they gave would you when them the deed is, wipe that that Mr. Weiss cancel, out, the indebtedness them? owed my be, naturally. That It would impression.
“A. was in wipe order they it, they have to that out When took would said, yes. give mortgage. That was probably me new that indebtedness “Q. you So that understood that was be cancelled? Oh, nothing I me to promised that
“A. didn’t——- was all I can recall. effect ‘‘Q. But the discussion ? that was the substance dis- suppose “A. I some of the substance was cussion. portions plaintiff’s deposition [Reading from Plant
“Mr. testimony disposition of the Weiss indebted- relative to the : ness] “ I in the [by Well, ‘A. before was Mr. Beeler] We I what time it were time, there at one don’t recall was. land discussing acres the bottom fifty-three about I their folder there. saw they pulled out which was clear right there Kennedy or was Jerry It either them. was ready all they had they where me him and showed fifty-three acres and to sign for to the ranch Mr. Weiss or was free and clear to be free supposed besides, which I clear, far so as was concerned. “ deed was tell what that ‘Q. [by you Did he Mr. Plant] going for? to be “ Weiss Henry going take it from They ‘A. were deal with I made a That was before lieu of his indebtedness. Henry Weiss. “ ‘Q. ? That satisfaction of his indebtedness “ going to do.’ Henry ‘A. That’s Weiss was what is that correct ?
“Now statement understanding, Plant, them tak- my “A. for That was Mr. they anything were ing said that the deed. There wasn’t go that at all they cancel didn’t into the indebtedness Henry just prepared they said, but ‘We deeds have ’ here, Weiss me deeds. sign they did show “Q. just you correct? I have read Was statement they Yes, “A. and that would that I there saw deeds Henry take Weiss. the deeds for the “Q. in- They going lieu of the were to take that deed debtedness. Plant, that I assumed voluntarily,
“A. said that why doing that is is what and I assume were still *11 they didn’t tell me that what They would take the deed. they do would it for.
“Q. taking you would You that deed from knew their a effect, have the same is that correct ? for a Why pay should I five thousand dollars
“A. No. away it couple just give deed then of months before and $5,000 given promissory nothing ? had Weiss [Beeler obligation note in return for the and assumed Weiss’ deed from Weiss.]
“Q. they Isn’t it that knew took deed you a fact when they ? you going your cancel indebtedness were to I “A. No. didn’t know that.
“Q. Well, your your deposi- I again attention to will call you you questions tion I if asked ... will ask these were given? these answers “ to be ‘Q. disposition Now, anything said about during made that Mr. Weiss’ notes conversation? of “ ‘A. it I Well, gave was to be that when them the why, the property, cancel-well, would then that was automatically wiped out, that Weiss the indebtedness Mr. That all owed them. was about the discussion there was about that.’ your
“Was your testimony taking deposition? that at of Yes, my testimony, assuming “A. that was because the indebtedness foregoing testimony, summarization may
fairly be said that that shows incident to purchase 28, July 1937, assumption of the ranch on his grantor’s obligation of his existing to discharge the debt thereon, he been attempting had months to some work out plan some feasible with bank for a reduction of the loan; backing on the financial which relied to meet he $55,000 proposition terms of the bank’s cash discount June, 1937, scheduled; did not materialize within the time response notice of and election bank’s default trust, sell upon Septem- under its deed served him on 1, ber September 22, he visited the on arrangement arrange- “make some other than the present ment paying off in 55,000 cash”; indebtedness dollars problem carrying his loan discussed and con- tinuing ranch, bank, with the with several officers of but principally Kennedy, vice-president with the real department, estate loan who offered as the alternative refinancing whereby immediate foreclosure a scheme bank “could write taking off the loan the books” a deed giving plaintiff one-year with lease option during at purchase the ranch time period; that plaintiff did not want the transaction handled way, but the bank’s insisted on pro- officers this form of cedure as plaintiff’s only recourse; that the indebtedness was thereupon $60,000 previous fixed instead of the discount figure $55,000 time because extension commensurate option provision, rental and the was set at amount equivalent per per cent interest annum aforesaid $60,000, or $3,000, payable semi-annually; that as for payment prop- said interest and taxes on the erty give ensuing year, plaintiff agreed for the the bank *12 mortgage chattel equipment ranch, on certain on the with understanding mortgage returned such would be he was which bank lease assigning to the upon, his to him prop- ranch of the portion to a negotiating respect with then Paradise, Califor- land in plaintiff had a tract erty; that for a a basis to consider as he the bank nia, which wanted Kennedy Mr. question; of the indebtedness reduction made property an the Paradise appraisal to have according to the year during the course of some time in” either established, “take valuation the hank would so security.” “to the debt” “as additional reduce or nego- parties’ recital of the plaintiff’s Corroborative new of some tiations concerned the effectuation as with suc- arrangement handle plaintiff could which banker, Brown, Mr. cessfully testimony of a September present most the conference on during who witness, give This his recollection 22, 1937. when asked “Well, meeting, occurred at testified follows: what it appeared acquired that Mr. piece Beeler had of trust. Company which the American a deed Trust held The American Trust filed notice of breach Company had to re- endeavoring Beeler purpose Mr. was there for it, get something sort, and all finance an extension or of that trust.” the time was there around it centered this days A meeting parties, few this following between of con- plaintiff forwarded for his execution a deed veyance, a bill of on the personal property sale of certain mortgage specified, ranch in lieu of the chattel theretofore and a option agreement—all lease and which the documents parties previous negotiations, had discussed in their and which plaintiff However, admittedly signed question. without sig- papers with these sent hank also pro- certifying, according nature an affidavit pertinent quoted, visions thereof the transaction above the nature of complete conveyance absolute of title existing satisfaction and of an indebtedness cancellation any Nothing of the previously thereon. said had been for, bank officials indicating that the bank would ask require would such affidavit. testified signing before telephoned to the hank and affidavit discussed the McIntyre, document vice- assistant president, who had prepared necessary for the papers closing transaction, him as follows: “I asked what meaning was, affidavit nothing there was said *13 said, up to
about it before. ‘We have to have that clear He title, right put the it is it the real so all and we can estate I think department. always takes those.’ didn’t The bank said, it, anything you I ‘If have have that is about it. to sign upon I I At O.K. it.’ So did.” the trial both will respect matter, this Mr. direct and cross-examination to with at the McIntyre plaintiff admitted that he told the time question satisfy require- needed to the affidavit was ment company policy of the title it issue title before would the property exceptions free of and that bank was upon, the On face acting only intermediary “an the matter.” its part purpose, as to the affidavit this statement sustains ‘‘ expressly provides: particu- for it is made . . . This affidavit Guaranty larly of the for the benefit Title and Insurance property to to said Company, which is about insure title in reliance thereon.” bearing following testimony matter is the
Also
this
MeGlynn,
had
to a conversation he
with
company,
an
of the
the transaction was
officer
title
before
rather,
discussed, I
him
this
finally closed:
told
“We
all
on,
deeding
I
it
to
land was clear and so
that was
loan,
way they
to do it.
bank to
wanted
refinance
out,
you
takes
said,
given
He
affidavit. That
‘You have
I
said, ‘Why, no,
option
I have a lease and
doesn’t it?’
refinancing.’
asked, ‘What about this
and it is a form
He
you
giving
stamp
deed,
are
them
revenue
where
’
‘
I
reve-
There is no need
said,
?
all,
just
to refinance
given
nue
on it
it is
stamp
because
stamp
thing.’
said,
put
He
‘You
the revenue
refuse
said,
I
take
said, ‘Certainly
I
‘I will have to
on?’
do.’ He
your
‘You
up
said,
He
have
lease
bank.’
said,‘Why?’
said,
I
see
I
He
option.
don’t
them.’
want
you
if
aren’t
policy
‘We
write
of title insurance
can’t
turning that
moving
place
giving possession
off the
said,
selling
I
place
them,
you
it to them.’
over
if
aren’t
I
said,
‘I
will have
selling
am not
them.’ He
‘Then
it to
Francisco
advise them
attorneys
write to our
San
‘Well,
said,
I
exception
property.’
make
‘Are
moving
said,
He
property.’
I am
off
story.
not
‘Absolutely
I
paying you any money
said,
for it?’
just doing
it to
am
They
a cent.
don’t have
because
”
conversation
tenor of this
refinance.’
with the
Consistent
ex-,
expressly
policy
issued its
thereafter
company
the title
is in
Beeler,
possession”—
rights of W.
who
cepting “any
C.
prop-
occupancy of
reference to his
significantly without
in this
policy
accepted erty as a lessee—and the bank
the title
form,
indicated wanted
although
previously
had
exception.
such
certificate free of
considering the status
relevancy in
of some
Other matters
consummation
parties
as the
of their
result
record:
from the
appear
presently disputed transaction
to the value of
testimony
While the
relative
his wit
conflict,
in direct
the estimate
finding that the ranch
supports
nesses
trial court’s
*14
evi
$135,000.”
“in
This accredited
worth
excess of
the
inequality between
indicating
dence
of the
extent
the
in the
stated
the
consideration
property
worth of
and the
by
wit,
the bank
conveyance,
$60,000,
the amount claimed
“strong
figure,
appraisal
to accord with its
circumstance”
tending
operate
to show that the deed
intended
was
;
(Husheon
407
P.
mortgage.
Husheon, 71
v.
Cal.
[12
410]
H.
Emery
Lowe,
981]; Lockhart v. J.
v.
140
379
P.
Cal.
[73
Hook,
McDougall Co.,
Reynolds v.
1];
cured
by
aforementioned
made
plain-
trust deed
grantor
tiff’s
expressly
plaintiff
assumed
in the
purchase
terms of his
property.
appears
While
following said recordation the bank made certain entries and
designed
transfers on its records
full payment
indicate
debt,
endorsed on
$60,000
the back of the
note “We have
acquired
title
deed. Note cancelled” and “wrote off” the
$14,400
as a loss,
note
such bookkeeping procedure
itself
nois
effectual to
discharge
more
establish the
of the
than
debt
would be the
payee
act
writing
“Paid”
the word
across
face
note,
relinquishment
thereof
without
to the maker.
being
There
delivery
no
of the notes either
Weiss,
to Mr.
the plaintiff’s
him-
grantor,
or
self, the mentioned
regard
notations of the bank in this
have
no force or effect
(Wittman
Pickens,
here.
v.
As to parties’ finan subsequent conduct cial arrangement per in question, following tinent : December, 1937, great flood occurred River, Sacramento permanent many as the result which improvements damaged here involved were destroyed. communicated testified he magnitude of his bank, loss to certain officers de asked them for a loan—not money a contribution—of fray expense repair reconstruction, de *15 and give clined to requested, him the financial assistance making expended $3,000 that he in approximately of the sum necessary replacements While the structural ranch. on the required plaintiff during the terms the the of lease term the ordinary repairs property, thereof make on the under by taking improvements program of on the scale intimated substantiating expense outlay the of is a factor mentioned occupancy of owner. property his claim of continued the as of his plaintiff The further testified in the course of one that the relative to with the officers of the bank conversations contemplated some damage, selling he mentioned that he flood growing ranch; they with trees on the walnut prop improve removal of trees would him that the such the sale; proceeds erty keep he should from such and that $1,800, which sale for the sum of he consummated the objection This the bank. retained without amount he contradicted arrangement plaintiff as detailed exercise of bank, it, too, plaintiff’s reflects the Also property. ranch in relation to the rights of an owner after few months fact that some to be noted here resulting September 22, 1937, parties negotiations on controversy, made plaintiff in plan in now the financial — for portions one leases two of different accordance $4,500—the in latter, $2,750 and the other being mentioned, understanding parties’ the date on with afore- payment of his bank in assigned by second install- charge $3,000, yearly rental said dis- ranch. The 1937-1938 taxes ment with the officers of propositions of these lease cussed both ultimately meeting September bank at the leases, sub-leases, concluded, they executed as not as both were property. possession tenant of a testimony point noted is the Also to be at this representative had to a conversation relative January, 1938, appraisal of his Para- regarding property. dise Examination
Direct Q. what the conversation State “Mr. Carter: [with Kennedy]. Mr. Elberg him,
“A. I asked ‘What did bank’s [the appraiser] report property, on the valuation would money still amount of take to reduce the I owed ’ ‘ said, only way them. He we take it in can is as additional said, give you ‘I security.’ I additional don’t want security. get place pay rid of I want you.’ I He do property, said, the loan owe ‘We can’t security,’ that but it in which we will take as additional refused do.
“Q. As the- additional Sixty “A. thousand dollars.
“Q. subsequent September, 27th day Was 1937? January Yes,
“A. it was 1938.” Cross-Examination Q. you went and talked “Mr. Plant: Now when down you Kennedy, you to Mr. say, about this Paradise *16 20 referred to ‘the loan I you which my owe and indebted- ’ you,
ness to you did ? “A. Again, Plant, Mr. say exact won’t those the were words but in substance that is about it. “Q. As a matter fact, neither the word ‘loan’ or the word ‘indebtedness’ were used, they? ever were
“A. Yes, Plant, they were used'and have been from the beginning, they until away decided get wanted to it from me.”
While much of
foregoing
the
upon
recital is based
introduced on
important
behalf of the
some
respects
flatly
is
by
contradicted
witnesses for
defendant
the
bank—particularly
regard
purpose
financial
arrangement
Sep
made
parties
conference
22, 1937,
tember
existing
as a cancellation
indebted
ness on the ranch rather than another
transaction—it
loan
must be remembered
questions
preponderance
that all
had
conflict
evidence are for
trial
court. That court
right
accept
version
controversial
of this
true,
apparently
matter as
accepted,
did
it
so. Thus
plainly
ques
justify
finding
sufficient to
that the deed
mortgage
tion
a
was intended as
antecedent
to secure the
refinancing
formulating
as discounted
the bank in
debt
plan
plaintiff.
with the
view this accredited evidence
lan
continuing, subsisting loan,
a
following
relative to
Cal.App.
guage
Chapman
from the case of
Hicks,
v.
mortgage
162-163
P.
pertinent:
‘‘The test of a
[182
336]
so
is whether the relation of debtor and creditor continues
subsisting
conveyance [citing
that there is a
debt after the
given to
deed,
face,
a
cases];
where
absolute
though
mortgage
debt,
even
secure
will be held
conveyance.
parties stipulate
shall be an absolute
431]....)
Hodgkins
([Citing]
Wright,
The defendant bank’s citation of the case support (1861), ex rel. Ford v. Irwin 18 Cal. jurisdiction may not argument parol that in evidence instru- vary dispute received the terms of written concerning executing deed, no purpose ment con- absolute and avail here. That case involved a deed plaintiff, Ford, reconvey. One Arnold owed the tract conveyed ques- $8,600. the real sum of Arnold Ford, who, by grant, bargain and sale deed to tion same time delivered to Arnold a written agreement recon- ‘‘ vey the property, in which stipulated: it was This shall he treated as a contract convey, and not as an acknowl- edgment conveyance that said from Arnold my- wife self was mortgage.” intended as a opinion does not refer any ruling upon the admission or exclusion parol evi- dence, but discusses problem as one of con- proper struction of the instruments in the light of the evidence which had been Thus, received. it was held that the actual consideration for the in- pre-existing deed was a equal debtedness in amount required paid to the sum to be upon a reconveyance of impress was sufficient to upon the deed the character mortgage of a “unless controlled by the clause referred to (that the contract” is, stipu- *18 lation quoted); above object that of the clause was “repel” any presumptions and all which the oth- law would indulged erwise have in relation deed, there that was “no doubt parties could, that the by provision a for that purpose, exclude all affecting extraneous circumstances” character of the transaction; contract that such clause in the did away not take respect interfere in effi- with the cacy of contract, simply but repelled “any presumption from facts, giving outside to it from operation different that intended parties.”
To the extent that the discussion in the Ford case would limit the court only the consideration of the deed and the accompanying instrument, regard written without other evidence in case, in determining the of the real nature disputed transaction, of import it is inconsistent with the subsequently adopted provision subject code on the approved. cannot be Section 2924 of the Civil Code original the date its enactment in 1872 provided has every trust, transfer of property, an interest in other than only security act, made as a performance of another is to be deemed mortgage. a implication accord with the statutory of this pronouncement, recognized properly it was in Vance supra, v. Anderson (1896), that a collateral written agreement declaring deed a contemporaneously executed a should be treated as conveyance, an absolute not as mortgage, conclusive but one of the facts circumstances worthy transaction of consideration determining the real intention parties. sep If a writing parties arate expressly agree, same time at the
23 purports executed, deed it is what absolute than be, is, no sale, an absolute would be more says. Therefore, avoid itself if could thus what tran- mortgage, as a true nature of such real effect a never shown, policy never and the law saction could be contemporaneous by any converted permit a to be (Civ. constantly agreement a be evaded. into sale could 116; 13 Wehle Code, 2924, 2925; Robinson, v. Pierce Cal. §§ 7 Robinson, ; 202 Price, v. 394 P. v. Cal. Carlson 878] [260 mortgagee be- 426].) right 235 P.2d a Cal.2d [60 unquestioned, purchaser equity but come be parties are that the relations such transaction will de- carefully prevent the effectuation of some scrutinized cir- whereby the debtor under force necessitous vice (Civ. right redemption. deprived of his cumstances is (U.S.) 12 §2889; Southard, How. 139 Code, Russell v. [13 ; Peugh Davis, 96 L.Ed. 927]; L.Ed. v. U.S. 775] [24 1062, 55 Bradbury Davenport, 114 Am.St. v. [46 Mortgages, §§251, 1045.) Rep. 92]; Jones The rule pre- substantially such case is said to the same as that vailing beneficiary ques- when the trustee is deed of (Villa (U.S.) 323 L.Ed. Rodriguez, tioned. v. 12 Wall. [20 406]; supra.) Bradbury Davenport, n A presenting strikingly akin situation considerations recently here court appellate those involved was before Cal.App.2d Stewart, the second decision Davis v. adjudicated P.2d in accordance 1014] There, here, expressed. hereinabove a deed absolute views only mortgage. a part its face was claimed to be As *19 given, grantor the in the transaction which deed was the grantee which agreement, an elaborate written entered into things among provided: other “It is understood and delivery upon party become, shall execution and that first property, together of of the absolute owner said said deed does transaction improvements all thereon and that this with mortgage, subject only said not constitute a however period.’’ (See in option five-year recital Davis v. for said objec 734].) 31 576 P.2d Over Stewart, Cal.App.2d [88 testimony oral effect trial court tion, the admitted contemporaneous notwithstanding the the declarations of security as the writing, fact intended deed was the findings in accord- were made payment a debt. Thereafter 24
anee evidence, establishing with the judgment oral and the the deed as a mortgage was affirmed. The defendant argues that the distinguishable situation Davis case is agreement pro- because written expressly there not did vide, as does here, the affidavit the deed “was not is not security now intended of any as kind ... ...” writing properly hence evidence extrinsic to received uncertainty to remove the as disputed to whether or not given instrument indebt- satisfaction the antecedent That edness. is but a tenuous distinction bear will scrutiny. close import In both cases contempora- neous writing arrange- negation is the same—the of a ment incident to the subsistence of the debt—and whether writing by amplifies one recitals pur- purported detailed pose parties of the to execute an absolute transfer of title involved is immaterial Cer- an consideration. language tainly, accompany- in neither instance ing require instrument so obscure as to extrinsic evidence understanding. And, explanation its in one case in the as writing other, the declaration would con- not be held appear complete it trolling upon unless should harmony it was in with “all the facts and circumstances Anderson, (Vance supra.) transaction.” v. In concluding phase present the discussion of this appeal, it is sufficient to state circumstances of the case, by as whole reflected the evidence accredited court, entirely trial with are consistent view bank, agreeing fact on a defendant while loan be se- desirous, cured by mortgage, was for reasons of inter- certain departmental requirements with connected routine book- keeping procedure, giving ap- the transaction a different pearance by recording as an transfer title. absolute Such cases Henley Hotaling, cited the defendant bank 41 as v. 22; Grose, 169; Jensen, Cal. Farmer 42 v. Cal. Woods v. Cal. 200 P. ; Price, Wehle v. [62 473] 878]; Goodfellow, P.2d Cal. 548 [27 Goodfellow 898], an wherein absolute deed such in was sustained as face of the claim that parties was intended as a mortgage, upon merely trial rest affirmance of the court’s judgment upon based substantial evidence and thus do not conflict premise opinion the fundamental appellate reviewing court’s function in record to de- challenged termine findings whether lack evidentiary support. *20 of the defen the contention here to force There is no agreement for the no consideration that there was dant bank plain as claimed of the indebtedness for the reduction con at the basic parties made been between tiff have first 22, 1937, as aforesaid. September ference of on sub trial court found that the discloses place, the record meeting parties concluded that at said stantial evidence contemplated financial phases of respect to various with agreements, of which reciprocal arrangement a number discount of the understanding to the one concerned negotia integrated of these existing debt; that as the result parties and the have executed question was tions the deed dispute purpose the real thereunder, though acted observation, regardless of this conveyance. But that this matter of lack of considera further shows the record court, that the in the trial cause pleaded tion point did not entirely and as if such tried on other issues objection may not case; consequently, such enter into the (2 properly appeal. for the first time on Cal.Jur. raised Bank, 180 234-235, Some Sav. 67; Angeles Los Inv. v.Co. § 293, 1193].) A.L.R. re presented by the questions Two record additional quire pay some discussion. The first of these relates to stated, ment of taxes on the involved. As above agreement obligation upon the expressly placed the lease plaintiff during specified—Octo one-year period therein 1, first 1937, September 30, regard ber 1938. With taxes, discloses that installment of the 1937-1938 the record plaintiff 30, 1937, from the on November received covering enclosing prop a letter taxes bill for the the real erty stating covering separate that the bill assessment respect had personal property to certain the ranch plaintiff’s grantor, Weiss, been who was forwarded responsible therefor; plaintiff that on December gave the tax of the real collector his cheek for the amount property taxes; tax subsequently collector notified check, receipt the bank as to the but stated segregable such the entire tax bill could not amount of be accepted payment personal property until assess made; suggested ment was that the bank letter pay that he of the tax bill and deduct that the balance amount from a then to Mr. Weiss certain sum he owed purchase ranch; connection with the that the *21 nothing April 25, did further in the matter and 1938, on his real property check for the taxes was returned to him the tax collector; May 16, 1938, bank on the on served the plaintiff a notice to quit premises lease, the for of his breach subsequently proceedings. commenced unlawful detainer plaintiff June, 1938, The in testified he called at the defendant bank and pay delinquent taxes, offered to the in- cluding those on personal property question, the in if the prosecute bank would not the eviction that he proceedings; money then had sufficient in his bank account to substantiate his offer of payment; and that of the officers the defendant bank accept previously, noted, refused to proposition. his As the judgment unlawful detainer action in resulted a favor plaintiff of the herein defect in because of the the notice of breach respect liability. with tax amount to of the of view this properly evidence the trial court concluded the defendant bank of should be to the extent its reimbursed payment taxes, of the first of installment the real $477.88, but that the running of interest such sum was stopped by virtue of payment the offer of made good faith ability (Civ. 1485.) and with perform. Code, to § taxes,
As the to second installment 1937-1938 of the there question plaintiff’s assign arises the of the of effect the of ment discharge certain to this lease the bank of obli gation. plaintiff testified that at confer the aforesaid of September ence assign the he pay “to the interest the a lease he was taxes” [rent] negotiating then respect ranch; portion assignment such pay was accordingly up made “to all of the three thousand taxes in dollars and the second half of the full”; assignment that following acceptance bank’s given for “receipt payments, all the interest payments” that for he owed it. While certain witnesses defendant assignment bank stated the trial that the charge taken the amount of rental specified pur and the tax installment, the instrument itself ports to be court so apparently absolute on face and construed it plaintiff’s positive in accordance with the testi mony in finding the matter. Accordingly, the trial court’s was, to assignment payment effect that the full taxes, for the aforesaid second installment of as well as agree- charge $3,000 under the terms the lease rental bank’s ment, binding appeal, defendant on this and the the amount claim that indebted to it tax said installment cannot sustained.
However, establishes, further the record defen concedes, action the pending so the trial of this taxes paid of the 1938-1939 dant bank the first installment Appa amounting $430 the real here involved. find rently inadvertently trial court failed make ing question to this is no as to matter. Since there expen validity claim for bank’s reimbursement diture, are authorized under section 956a Code we finding. therefore, missing We, supply Procedure Civil ‘ defendant, paid Company, That American Trust find property, installment 1938-1939 real first taxes on said amounting $430, pursuant the sum of and that *22 agreement of to parties, duty plaintiff the was the pay installment, first said reim and said defendant be should payment its thereof; bursed for is that there due now owing plaintiff from the defendant, Trust American Company, $430, the of sum but interest be without thereon payment cause of said defendant’s offer refusal of the of findings be hereinafter these (Finding referred to.” to Villa.) XX numbered defendant, having paid
The account $430 the sum of on year 1938-1939, of taxes due for the the well sum as the is previous year, $477.88 of on account of the taxes for the entitled to in the aggregate $907.88. reimbursed amount findings is purpose making harmonize, For the the striking necessary modify Finding further to XXXIV by fol- inserting place out subdivision thereof and in its : lowing on $907.88, being The sum of of taxes “2. the amount (cid:127) property years 1938-1939
said real for the 1937-1938 and to- defendant, Company, American paid by the said Trust gether legal date upon amount with interest from the said entry in this decree action.” these
The conclusions of are also modified so as meet law to findings changes in the of fact. for determination point final presented
The second and allowance interest to be proper relates to made adjudicated mortgage bank reference to the defendant with plaintiff and $60,000. by It indebtedness of is claimed found trial court that tender of this amount made to the defendant bank some months due few before agreement under parties’ tender and that because of such thereof, and refusal the bank not entitled to interest (Civ. date. Code, §1504.) that bank con- The defendant stop tender, tends that the if in made, fact was insufficient the running of interest. finding upon trial court matter substantially
tender is as follows: That at 20, 1938, on June the defendant plaintiff bank the to pay offered indebted his good faith, ness ready, willing and was so; and able to do prior that plaintiff arrange to that date had entered into an ment whereby with one MacArthur the latter had plaintiff pay advance to money the amount of necessary indebtedness; financially that said MacArthur was able requisite advancement, make the and was and will ready ing so; to do Kennedy, offer was made to Mr. vice- president bank; Kennedy offer that said refused specifying any objection form, without to its and refused plaintiff deal with the any way, the matter but de thirty manded within vacate days; said virtue actions the defen officer’s objection dant waived the mode of offer offer; waived tender or other of performance such offer suspended running upon of interest the indebtedness. finding
This accord evi- strict subject. regard dence to his interview with Kennedy day fol- mentioned, testified “Well, : lows I went into the bank. He sit- [Kennedy] was ting .. He apparently—well, desk. . he was because sore I came in. He told me before he deal with didn’t want said, I *23 me. ‘I by will come in. have of a man name the give enough Roderick MacArthur money that will me liquidate you I can this to indebtedness and want to talk it get up.’ about and see what we can to He do closed said, you. ‘I get don’t want to talk bank. to out this You nothing have these you We had but trouble all with and everything leases and and I don’t talk you want to all. to you get off We want to that ranch if off you are not thirty put days you in will off.’ I we to tried talk further. say something, I tried to he ‘I don’t said, walked off and ’ ” get to talk You you. want to MacArthur out of here. Mr. their plaintiff’s corroborated the respect statement with money, and necessary advance of arrangement for the prior indebted- discharge the able to financially he added While plaintiff. assist the ness at the time so different entirely gave Kennedy on behalf of the day the plaintiff on the of the conversation had with account findings denied expressly the trial court in its question, in afore- testimony. Since, as substance of his credence the within wholly a matter stated, credibility witnesses is exer- as here court, trial its discretion province appeal. be disturbed on cised will not supports by the trial court The evidence accredited but payment, offer of finding as the fact of the only its running interest sufficiency prevent also Kennedy obligation. Thus, that Mr. plaintiff’s appears absolutely bank declined defendant representative mak and, in matter without negotiate plaintiff with questioning objection form the tender any as to the ing refused simply offer, he ability perform his right to had proposition that the to consider this basis Upon involved. in the protect his interest further concluding court was warranted trial met with respect would have action once having bank, offer and that a valid like rebuff in refused, to bear the indebtedness ceased been made and 1501, 1504; (Civ. Code, Lock that date. terest as of §§ 1].) Co., McDougall hart H. v. J. judg- expressed, above In accordance with the views $477.88, figures by striking therefrom ment is modified so inserting figures $907.88, place in their judgment party to recover modified, is affirmed. Neither appeal. costs on pro J., Shenk, J., Sehauer, J., Spence, J.
Gibson, C. tern., concurred. J., Dissenting. this case is
TRAYNOR, The evidence find- my uphold the trial court’s insufficient, opinion, to defendant, of trust on real ing $81,232.90, securing an indebtedness of $135,000 worth over agreement the indebtedness entered into an to reduce place $60,000 mortgage inarticulated accept and to its deed of trust.
30 proved it obligation cannot mortgage secures be
Since mortgage if there is no is intended conveyance that conveyance liability and contract of “independent of grantee against enforce conveyance, can which Equity Jurisprudence, [Symons’ grantor.” (4 Pomeroy, Warren, 145 ed., 579; Holmes v. 1195, p. fifth § 1941] Cal.App. Hicks, 41 954]; Chapman P. [78 only in the 783.) The debt 336]; see Cal.Jur. present promissory Weiss’s represented by case was that notes, and no relation between these notes was established deed, payable by lease. amount option, and The plaintiff from the amount option to exercise the was different notes, payable due and the until the rent exercise option prescribed was different from the interest disputed notes. regarding notes plain transaction they shows that were to cancelled when be tiff executed officers his deed defendant. Both defendant’s deposi testified to that effect. When trial, asked, tion was “Now, taken before was anything disposition was said about of Mr. be made Weiss’s during notes answered, that conversation?” “Well, gave was I to be that when them the deed property, then why, cancel—well, they that would was auto matically wiped out, the indebtedness that Mr. Weiss owed them.” testified, notes, Plaintiff also I “As far as the know they when took a reconveyed deed these mortgage *25 Plant, voluntarily, answered, “I that said ness?” and I still they it for and doing I were that that is what assumed Yet, when why take the deed.” they assume that is would you they took the asked, a fact that when “Isn’t knew your going to cancel indebtedness?” you deed from were I plaintiff replied, “No, that.” didn’t know Plaintiff, were to be taking position that notes not, to have appears that the debt was cancelled but somehow obligation by against been that some influenced belief him from notes. When confronted with apart existed said, testimony, repudiate earlier he did not it but “Yes that assuming my .testimony, was because was indebtedness.” suggests assumption agreement Plaintiff’s brief that the independent obligation Weiss “an contract that was created continue,” and that “the was to be Weiss indebtedness satisfied and his own continued.” only liability however, plaintiff assume, was represented by promissory indebtedness notes Weiss’s by
and secured the deed of There but one indebt- trust. was edness, and primarily while became liable therefor secondarily assumption agree- and Weiss liable under the ment, necessarily its satisfaction would end both liabilities. testimony suggest Plaintiff’s cannot be construed that this Weiss, indebtedness to be as to was satisfied but continued plaintiff, brought for in his answer to a suit Weiss he carry declared that “he did fulfil and out the terms of his agreement regarding payment obligation said against said procure did the same to released found, satisfied full.” moreover, What the trial court not that the deed security independent was taken as for some obligation arising assumption agreement that but it was pursuant agreement executed to an “trust deed indebtedness i.e., indebtedness, and interest” the Weiss should be security reduced and the deed taken as for the re- duced indebtedness. The contention that the Weiss indebted- ness was to be satisfied and the deed taken does not support finding impeaches but it. The can- finding not be sustained unless it can be concluded that
and defendant’s officers understood that the Weiss notes were continue effect.
The evidence establishes without contradiction it was intended that these notes be cancelled. Pursuant understanding plaintiff executed the deed to De defendant. fendant marked large note cancelled and wrote off the smaller at a loss, upon note insisted receiving affi davit was executed full satisfaction indebtedness, reconveyance reciting recorded full satisfaction steps indebtedness. Once were taken these the bank powerless payment enforce of the notes. The opinion the majority holding reason the debt operation survived this
Beam, 23 Cal.App.
624];
Negotiable
164
P.
see Brannan’s
[137
Law,
Instrument’s
(4),
sixth
119
ed.,
pp.
[Beutel’s
§
1938]
963, 964.) It has always
obligation
a
been clear that the
note
delivery.
(See
can
be
thus
terminated without
cases
Brannan,
964,
cited in
pp. 962,
supra.)
obligation
Plaintiff’s
was terminated when
in
accepted
defendant
the deed
satis
faction
(Wittman
33
Pickens,
the notes. The Colorado
v.
484
(Hanna McCrory,
Colo.
P. 299]), the New
v.
Mexico
[81
19
(First
996]),
N.M. 183
P.
and the Montana
State
[141
Hilger
Bank
Lang,
597,
v.
respect Appeals, may- New York Court of declared: “Juries presumption apply preliminary difficult find merged if they per written contract are are treaties such treaties as evidence of mistake. mitted to consider dangers, like there of re Against these and are two methods suggested by provision is One statute lief. may discretion one or more issues court its order ‘the The found in strict en separately be . .’ tried. other reformation must refused un forcement the rule that be ‘of and most support less the the clearest case ’ satisfactory Judgments . for reformation have character. . . it.” obey in this been even court failure to reversed 239 Co.,& N.Y. (Susquehanna A. O. Andersen S.S. Co. v. 381].) 296 285, N.E. [146 erroneously danger that deeds be grave is the will
So
mortgages
apply
that some
have refused
to be
states
found
mortgage
ex
may
doctrine that a
shown
be
be
Max
(see
Jackson v.
upon proof
fraud or mistake
cept
116]),
A.
others have held
well,
366,
113 Me.
368
while
[94
grantor’s
applied
unless the
the doctrine will not
testimony.
(Stitt
independent
testimony
is corroborated
27,
561].)
32
Portage
Co., 96 Minn.
N.W.
v. Rat
Lumber
[104
clear and
adopted
requiring
this state of
solution
appellate
requires
simply
convincing evidence
that,
rule,
go through
recognizing
form of
but
courts
states, they accept
many
other
appellate
courts
like
(Susquehanna S.S. Co. v.
responsibility for
enforcement.
its
Co.,
381];
296
285,
239 N.Y.
N.E.
Andersen &
A. O.
[146
956];
Allison,
21,
144
N.E.
v.
33
Allison Bros.
N.Y.
Co.
[38
48
680;
Baird,
Colo.
Dunlap,
676,
33
Baird v.
v.
N.Y.
Nevius
Rasch,
271
261,
v.
278 Ill.
506,
79];
517
Rasch
[115
[111
116];
Maxwell,
366,
A.
113
368
871];
N.E.
Jackson v.
Me.
[94
867];
569, 573
N.W.
Aikman, 194 Mich.
Frohlich v.
[161
Mc
529]; Nicolls v.
Ward,
One convincing searches the record in vain clear and the deed in case was intended to be mortgage. majority opinion relies largely testimony. testimony That impeached, however, because of the interest of plaintiff, it was because inconsistent sworn story was, moreover, affidavit. The told one; incredible that purely for bookkeeping purposes the bank entered agreement into accept an inarticulated
mortgage $60,000 in lieu of a trust the sum of securing $135,000 an indebted- real worth over $81,232.90. ness of upon inferences that seeks
Plaintiff’s contention rests *29 from under to elicit evidence relative to the circumstances subsequent conduct which the deed was delivered to plaintiff’s This does not warrant parties. opinion as “en- majority It is in the inferences. described tirely bank, while consistent with the view that defendant mortgage, was de- agreeing in fact loan secured sirous, interdepartmental requirements for reasons of certain giving procedure, of bookkeeping connected with its routine recording it an as appearance transaction a different ’ enough transfer of title.' for the evidence absolute It is not merely contention, however, to be consistent in agreement wholly for it is set forth consistent with it writings. prove to was plaintiff burden was on highly purported it probable that the deed was not what by evidence that be. He did not sustain this best burden something else, being simply is consistent deed’s with the it just being pur- is what but which as consistent with ports (Goodfellow supra; Wehle v. Goodfellow, be. Price, supra; Jensen, supra.) Woods v. speci- $3,000
Plaintiff infers from the fact that rental option in equivalent per fied to 5 cent of the lease interest, actually price $60,000, that the rental rental is option Such a price actually an indebtedness. price apt is percentage option bound to be a returns invest- range fall within of interest the normal arbitrary, price. would be as equivalent ments It charge be- however, to a rental an interest transmute into transmute a dividend as to produced cause it the same return in nothing There stock into interest from a bond. figures gives mathematical relation the two between of the relation- they clue to represent; what the substance a trans- It terms of ship not in is to the found the sums. involved, since look, the sums action that must not to one may nature, may however alike widely transactions differ be the sums involve. Kennedy, repre- the bank’s
Plaintiff contends that Mr. tract of sentative, made of a appraisal have guide California, Paradise, plaintiff land that owned or “as the debt” taking it either “to reduce security was “ad- security,” that if the and infers additional mortgage. By plaintiff’s question was a ditional” the deed regarding the however, testimony, the conversations own of de- possibility concerned with the Paradise were property option negoti- taking part price. it fendant’s as take asked if would September ations 22nd he defendant Kennedy indebtedness. property the Paradise to reduce the so, plaintiff but that replied that the bank could do if gave took option, the bank the deed and back lease and latter would examine the determine whether acceptable option price or part payment would be suggestion This part additional for a thereof. obviously contemplated parties might possibility arrangement enabling later enter to exercise into option by paying price in cash. Follow- part ing Elberg’s Kennedy visit told the outright, might the bank could not take it take but security. reasonably as additional It cannot be inferred even *30 plaintiff’s testimony regarded own that defendant the indebtedness as subsisting contemplated and the Paradise property as security additional for that rather indebtedness option than for price.
Plaintiff upon relies of testimony banker, Brown, support for for merely his contention. Brown testi- fied, however, that present during he was part the first September 22nd, conversation of left but before con- clusion; respondent that time; asked for another extension that Kennedy replied that back-interest would have to be paid up any “before sort”; discussion of that that there was some discussion as to whether the deed trust all covered of the property to which title, “just and had that left had sent for the certificate or for the deed trust.” is nothing testimony suggest There in this that defendant to reduce the accept indebtedness and security deed as for the lower amount.
The exception in policy “any rights title of W.C. Beeler possession” who is in uphold invoked the con- tention that the deed simply mortgage. It was was de- fendant’s lease option, however, and that this necessitated exception. Before the closed, transaction was was defendant advised Mr. McGlyn, County officer of Tehama put an to his Company, plaintiff’s Title affidavit end interest, property. replied in the Plaintiff that he had an McGlyn the Title Insurance and Guar- option. later advised had a Company telephone that defendant lease antee property, option possession would remain in defendant’s confirmation company thereupon obtained exception the title of these facts and its consent policy. contention can be support
No found stamp. sixty-dollar internal regarding discussion revenue company already on the deed the title stamp there is instructed defendant for its cost so had been to bill why McGlyn plaintiff whether no reason should have asked In put stamp he on. event whatever views refused McGlyn expressed to about the deed’s plaintiff may have refinancing, being merely a means there is no claim (See Brant v. his views defendant. Cali- communicated Dairies, 13].) Inc., 4 P.2d Cal.2d [48 fornia heavily finding of the trial court upon Plaintiff relies executed, question that when the $135,000, a rental value market value of than had a more figures substantially exceeded $7,500, of more than fixed in Such an excess option price and the rental the lease. conjunction is often indicative other circumstances in re transaction, greater for the the valuation unlikely more the owner is indebtedness, lation to the case, sell cancel the indebtedness. are alone however, parties themselves, whose valuations Epstein, 66 pertinent (Tetenman Cal.App. [226 v. property. Even 966]), high so a value to did not attach volun they had, if it is inconceivable would secured, and amply so tarily have indebtedness reduced disadvantage, trust relinquished, a deed of to its own Cal.App.2d Barnard, 5 (See mortgage. such Robinson 711].) P.2d *31 subsequent conduct nothing is in the evidence of There taken as was to to the deed the transaction establish indebtedness, or of the rather than satisfaction option. more than a lease and plaintiff anything had the walnut removal of Plaintiff’s the fences and repair in 1937 do River following of the Sacramento trees the flood him owner signify regarded not as the
39
repair
to
of his lease
by the terms
He was bound
property.
ob-
after
trees
removed the walnut
fences,
and he
improvements were
if the
taining defendant’s consent. Even
signify
not
required they do
than the lease
more extensive
advantage of the
they
ownership,
would redound
for
the leases
option. The evidence
plaintiff if he exercised the
the owner
him as
fails to establish
plaintiff
likewise
him
permitted
the bank
property,
lease from
subleases,
of indifference
to make
and it was a matter
and
plaintiff
bank whether the instruments executed
rather than subleases.
his lessees took the form of leases
existed,
deed
that the
assuming
Even
that a debt still
is
that the debt
it,
was intended
secure
there
no evidence
$60,000
when the
$81,232.90,
the amount due
was
agreed that
deed was executed. It is contended that
it was
the conference between
the debt should thus be reduced at
Plaintiff, however,
plaintiff and the
testified
bank officials.
*32
deficiency.
(Cal.
ment for a
Code,
2924%;
Civ.
Cal. Code
§
Proc.,
580(a).)
Regarded
Civ.
security,
the deed was
§
advantageous
less
defendant,
plain-
less burdensome to
tiff. It
power
conferred no
of sale and would have to
fore-
closed
proceedings,
thereby leaving plaintiff
court
awith
right
to redeem.
It
no provisions
contained
for defendant’s
protection
subject
and was
to the 1933
As se-
amendments.
curity,
therefore,
deed,
being
far
advantage
defendant,
advantage
was of
to plaintiff. Since the al-
leged agreement
oral,
appeared upon
and it
the face of
complaint
consideration,
no
special plea
there was
unnecessary.
defendant
lack
consideration was
(Acheson
Co.,
v.
;
Western Union
[Sac. (a STANDARD OIL OF CALIFORNIA COMPANY Cor- poration), Respondent, JOHNSON, G. CHARLES Appellant. as Treasurer, etc., Trust two notes Company can to secure aggregate $74,400 bearing sum of interest at rate make per per cent annum. Weiss was unable 5% stipulated payments 1936, he served and on October announcing with a notice of election to default the bank’s request proceed with the At the property. sale of this ranch give delayed to him proceedings of Weiss the foreclosure were June, opportunity try purchaser. find a the bank Weiss introduced W. C. Beeler the officers matter, parties thereupon interested discussed propositions looking various debt toward discount satisfactory figure to Beeler’s and its reduction incident to a Finally, Hammond, an assis- purchase of the property. $55,000 in vice-president bank, agreed accept tant if paid cash that sum the next few weeks. On were within Beeler, July 28, 1937, conveyed the ranch to Weiss expressly provided terms the transfer in the secured pay Beeler assumed and indebtedness the deed of At same time Weiss executed trust. personal delivered to Beeler a bill of sale certain on the ranch. as the arrangement contemplated by financial Beeler early discharge negotiations basis the bank for the
Notes
notes if wiped out, would be deed was standing in the bank’s name.” Plaintiff testified unequivocally on that occasion notes were to His testimony later incon- cancelled. was At clearly sistent. what, anything, times he did not recall if said was about the notes. When asked whether there was a discussion as to the satisfaction or notes, cancellation' of the replied, “Well, he might there have been some little discus- sion but it impress very didn’t me at all much can remember. might There been have some.” At times ad- hered testimony to his earlier that the notes can- were to be celled or asked, satisfied. He was “Wasn’t substance this, gave discussion you that when them the deed property they cancel, out, would that is, wipe the indebted- ness that Mr. Weiss owed them?” He “That replied, was my impression. be, It would naturally. it, When took they give a new in order to me wipe that out have would ’’ asked, also yes. He probably said, That mortgage. in lieu of the indebted- “They going to take were
is that notes could be can- celled delivery without plaintiff. settled, to Weiss or to It is however, parties obliga that the extinguish note can tion accepting thereof something perform other than the promised. (Civ. ance Code, §§ 1521, 1522; v. Gross Silvers man, 183 534]; Engineering B. & W. Co. v.
notes essential a proposes is if the creditor as to free the debtor. Thus, only if ordinary even this were an civil case where a preponderance required, is in- is the evidence evidence support finding sufficient to that the trust deed indebted- ness, i.e., indebtedness, reduced the Weiss should be indebtedness, deed taken and is for the reduced that Beeler’s support likewise insufficient the contention agreement created inde- to assume the Weiss indebtedness notes re- pendent obligation contract the cancelled however, case, ordinary in mained effect. This is not civil for, upon majority concedes, it incumbent opinion as the evidence, by “clear, satis- support contention 33 factory convincing; explicit, unequivocal indisput Price, (Wehle 878]; v. 202 able.” 397 P. Cal. [260 Goodfellow, 898].) v. 219 548, 554 P.2d Cal. [27 Goodfellow primarily While it with trial rests court determine convincing, finding whether the is clear is its conclusive, governed not in necessarily cases the rule requiring sufficiency such evidence “the the evidence finding support appellate should be considered light (Sheehan Sullivan, court that rule.” 126 v. Wright, 543]; see, Cal. 193 P. Moultrie 154 also v. [58 257].) duty of the ap such cases it is the [98 pellate in reviewing court determine, the evidence reasonably whether the it trier of facts could conclude that is probable more than that proved the fact to be exists not, does ordinary pre civil where case ponderance of required, the evidence is the trier but whether reasonably of facts highly probable could conclude that the fact exists. When it holds the trial court’s find ing governed by must be test relation same to sub cases, stantial applies evidence as in other ordinarily civil convincing rule that the evidence must be clear and be meaningless. destroy comes There is a contradiction thus ing If, the vitality of rule affirming while its soundness. as my opinion, sound, rule this court has erred pronouncements (see 248; 921) Cal.Jur. Cal.Jur. declining accept (See responsibility for its enforcement. my opinion dissenting Averill, in Stromerson Cal.2d 808, 817 732].) P.2d The doctrine that deed may mortgage shown be a originally an equitable It is one. also be recalled in equity appellate cases the court would review facts Although de novo. question whether the evidence estab- lishes that a mortgage deed was is now decided intended as
without contradiction that it then notes Following conference, deed, lease cancelled. containing option, and the were executed as affidavit agreement parol formal While memorials of then made. mortgage, admissible that a is a to show is not admissible to contract so vary the terms of a written as to transform complete partial it from cancellation. (Cal. Proc., 1856; Code 10 924.) Civ. see Cal.Jur. § majority opinion discharged, the notes were not holds because were not Yet plaintiff. delivered Weiss larger was cancelled, note the smaller one was written loss, off as a pursuant satisfaction of both was recorded to the understanding Despite and defendant. any note, these facts it is delivery held that without debt $60,000, larger is reduced to It amount note. pertinent inquire discharged note is then how smaller delivery. without Moreover, agreement the supposed to release liability $21,000 clearly over consideration without and is (Scheeline Moshier, unenforceable. ; 179.) given see If the Cal.Jur. deed was 222] merely as security already than represented less defendant had. The deed of power trust contained the usual of sale provisions other protection was not sub- defendant’s ject restricting right judg- amendments