Cunningham v. Hawkins

By the Court, Sawyer, J. Plaintiff introduced in evidence an instrument in writing executed by James H. Bartlett, dated May 13, 1856, purporting to transfer to George Raskt & Co. “all my (his) right, title and interest in the claims” in dispute, “in consideration of [606]the sum of two hundred and two dollars and sixty-five cents, with interest from date till paid by me.” Also, a note given by said Bartlett to said Raskt & Co., bearing the same date, for the sum of two hundred and two dollars and sixty-five cents, payable on demand with interest until paid, at three per cent per month. He then offered-to prove by Bartlett, that, the said instrument transferring said claims was intended by the parties to be a mortgage to secure the payment of said note. Upon objection of defendant the testimony was excluded by the Court, and exception taken to the ruling by plaintiff. The ground of the objection, is, that the evidence is irrelevant, and that it is inadmissible to show by parol that the instrument was intended as a mortgage. The testimony is relevant; and it is now settled in this State that parol evidence is admissible to show that a deed absolute on its face was intended to be a mortgage. {Pierce v. Robinson, 13 Cal. 116 ; Johnson v. Sherman, 15 Cal. 291.) Nor can the rule be confined to cases that formerly were cognizable in equity alone. There is but one form of action in this State, and the same rules of evidence must be applied alike to all cases. It may be that formerly the rule prevailed only in cases in equity. But, however that may be, there is no distinction in this State.

Section two hundred and sixty of the Practice Act provides, that, “a mortgage of real property shall not be deemed a conveyance, whatever its terms, so as to enable the owner of the mortgage to recover possession of the real property without foreclosure and sale.” If the rule contended for by the respondent prevailed, this provision of the statute would be nugatory, for the reason that when the mortgage is in its terms an absolute conveyance, the mortgagor would be prohibited from showing the real character of the transaction. The position contended for by the respondent would resolve the question into one of pleading, rather than a question as to the competency of evidence. But there is no equitable title to be set up. The plaintiff, if he has any title at all, has a legal title. A mortgage under our system, as between the parties, does not pass the legal title to the grantee. The title [607]