Thе mortgagor (borrower) gave a deed to minerals underlying a portion of mortgaged premises to mortgagee (lender) as additional consideration for lender’s agreement to extend payment on an existing mortgage indebtedness and to accept a renewal note secured by a new mortgage. The question to be decided here is whether this deed was subject to cancellation, on redemption of the land from the lien of the new mortgage, because the mineral сonveyance fell within the prohibition of 42 O.S.1961, §§ 10 and 11.
Borrowers, the Fairchilds, are owners of 718 acres of land which were encumbered by two mortgages prior to the execution of the original Coursey mortgage. The junior mortgagee procured a foreclosure judgment. The day the land was to be sold (at a foreclosure sale) subject to the lien of the senior mortgage, borrowers succeeded in obtaining a loan from J. C. Coursey, called here lender. They gave the lender a onе-year note secured by a junior mortgage. With the proceeds of the new loan borrowers redeemed their property from the lien of the foreclosed second mortgage. As a part consideration for the loan borrowers let the lender use the mortgaged land for one year.
Borrowers failed to pay the one-year note when it came due and lender instituted foreclosure proceedings. Before the litigation was concluded the parties entered into a settlement. By its terms the time for payment of the one-year note was extended for a period of two years by a renewal note; the lender was granted a lease on the mortgaged premises at an agreed rental; the first year’s rental was to be applied on the arrears then due on the senior mortgage and on the taxes upon the property, the balance, if any, was to be credited on the note'; the second year’s rental was to be used for current pаyments on the senior mortgage indebtedness and taxes, the remainder, if any, to be credited on the note.
Shortly before maturity date of the two-year note, the parties entered into another agreement. The evidence concerning the negotiations culminating in this agreement is in conflict but there is no dispute that the agreement was entered into for the purpose of extending the mortgage debt. By the terms of the agreement, borrowers executed a renewal note (bearing 6% intеrest) due five years from its date and secured by a new second mortgage; the lender was given a lease on the mortgaged tract (less-a *38 few acres of pasture land) for a period coextensive with the note at an agreed rental which was to he applied on current payments due under the senior mortgage and on taxes, with balance to be credited on the junior mortgage note. By an instrument dated some eleven days after the date the note and mortgage werе signed, borrowers executed a mineral deed conveying to lender for a term of 25 years from date “an undivided 55 acre interest in and to all of the oil, gas and other minerals” underlying a part of the mortgaged tract. It is agreed that these instruments formed a part of a single transaction.
Eleven and a half months following the execution of their five-year note borrowers redeemed the land from the lien of lender’s second mortgage by payment in full of the principal indebtedness together with аll interest due. The day of the redemption lender executed a proper release of his second mortgage which was filed of record. Lender continued, however, to occupy that portion of the mortgaged premises he held under the terms of the lease agreement executed contemporaneously with the five-year note and mortgage, and declined to reconvey to the borrowers the mineral interest in the 55 acres. His refusal to vacate the land and to reconvey the mineral interest occasioned this litigation.
The trial court’s judgment canceled the lease and the mineral deed. At the hearing on motion for new trial lender tendered to borrowers “full possession of all of the surface” of the premises formerly encumbered by his second mortgage. At issue in this appeal is solely the validity of the mineral deed which, according to lender’s contention, was erroneously canceled.
At common law the title and possession of mortgagеd premises passed to the mortgagee. Under our statutes a mortgage does not operate as a conveyance vesting in the mortgagee any estate in the land. It creates a mere lien securing the payment of a debt. Pagе v. Turk,
The pоwer of redemption which ,our statute confers upon mortgagor is regarded as a substantive property right. Worley v. Carter, supra [p. 672,
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Mortgages, § 184, p. 785. As the earlier cases state, the mortgagor cannot effectively “clog [impair] his еquity”. A clog or restraint on the equity of redemption denotes “any provision inserted to prevent a redemption on payment or performance of the debt or obligation for which the security was given.” Wyman, The Clog on the Equity of Redemption, 21 Hаrvard L.R. 459, 472. This means that a mortgagor may not by agreement effectually burden his land beyond the point of redemption and by so doing preclude himself from being revested, on discharge of the debt, with the same interest in the land which he would have held if the mortgagе lien had not attached. The mortgagor may not disannex a portion of the mortgaged property, either by an express agreement or deed, and waive his equitable right of redemption. Worley v. Carter, supra, p. 672,
According to Pomeroy (4 Equity Jurisprudence, § 1193, p. 570), “[t]his doctrinе is based upon the relative situation of the debtor and the creditor; it recognizes the fact that the creditor necessarily has a power over his debtor which may be exercised inequitably; that the debtor is liable to yield to the exertion of such power; and it protects the debtor absolutely from the consequences of his inferiority, and of his own acts done through infirmity of will. The doctrine is universal in its application, and underlies many special rules of equity.” See also 36 Am.Jur., Mortgages, § 184, p. 785.
The rule against restricting the right of redemption stands preserved in Oklahoma by the express provisions of 42 O.S.1961, § 11. It applies with equal force and effect to agreements entered into as an inducement to the making of a renewal loan. The cirсumstances surrounding the transaction control the application of the rule rather than the form resulting from the transaction. Coussens v. Gilmore, Okl.,
The transaction from which the challenged mineral deed emerged cannot be treated as a separate, distinct and subsequent sale, as distinguished from a contract which is merely collateral to the making of a renewal loan. The record does not show any independent consideration moving to the borrowers other than one dollar, the adequacy of which to support the sale of 55 acres of minerals for a 25 year term we deem unnecessary to discuss, other than to note that this nominal consideration does not withdraw the transaction from the protection afforded by 42 O.S.1961, § 11. The subsequent release of the debt and mortgage obligation four years before maturity, even though the lender was under no such obligation according to the terms of the contract, Henderson v. Guest,
The contention is made by borrower that the mineral deed was additional seсurity for the loan and therefore a mortgage. The mineral deed given to Coursey by the Fair-childs described property included in the mortgage held by Coursey. As we noted in Moore v. Beverlin, supra [99 P.2d p. 890], it would be highly improbable that one already having a mortgage would taken another in the form of a deed on the same property to secure the same debt, which would not constitute as good security as the mortgage already had. While the deed cannot be considered additional seсurity, it must, under these circumstances, nevertheless be viewed as an impairment restraining the right of Fairchilds to redeem the mineral interest from the mortgage lien.
The intentions of the parties to the agreement, and the fact that the Fair-childs profited by being permitted to speculate in mineral values by the extention of the debt, cannot be considered in this action to cancel the mineral deed. “Where a statute expressly declares that certain kinds of contracts shall be void, therе is then no doubt of the legislative intention, and an agreement of the kind voided by statute is unlawful.” Burke v. Tarrant Investment Co.,
Affirmed.