Raynor v. Drew

Hayne, C. — On May 14, 1875, the plaintiff gave to the defendant an instrument in writing, which in form was an absolute deed. It is admitted by the pleading that this instrument was to secure the payment of a promissory note; and therefore it was a mortgage, and under the present doctrine, did not convey the title (Taylor v. McLain, 64 Cal. 514; Healy v. O’Brien, 66 Cal. 519), and did not give a right of possession. (Civ. Code, sec. 2927.) But at the time the plaintiff gave to the defendant a verbal lease of the premises for one year. The lease is alleged in the complaint to have been “ until such time as the plaintiff should pay him said sum.” This was neither “an agreement that by its terms is not to be performed within a year from the making thereof ” (Dougherty v. Rosenberg, 62 Cal. 32), nor was it “ an agreement for the leasing for a longer period than one year.” (Browne on Statute of Frauds, sec. 32.) Such a lease, therefore, would not be void. The defendant testifies that he “ leased the premises for a year, during which the note was to run,” and the court found that it was for a year. There was probably a variance, but under the cir7 cumstances we do not think it misled the defendant to his prejudice, and therefore it was not material.

As part of the agreement of lease, it was stipulated that the rent was to offset the interest on the note. The defendant objected to oral evidence of this, as contradictory of the provision of the note that if the interest was not paid when due it was to be compounded. But the lease, although made at the time, was a separate and supplementary matter, and provided what was to be taken as payment of the interest, and hence was not in contradiction of the note.

There is a dispute about the amount of the rent. The plaintiff swears that it was to offset the interest, which would make it thirty-three dollars per month. The defendant swears in his answer that it was fifteen dollars per month, and in his evidence that it was twenty dol[310]lars a month. The only other evidence was the testimony of experts that thirty-three dollars was too high a rent. The finding was in accordance with plaintiff’s evidence, and under the well-settled rule as to conflict, it must be assumed here that such was the agreement.

The defendant entered and remained in possession up to the commencement of the action, which was on December 18, 1884. He paid the taxes and insurance, and made a good many repairs and improvements, but took no steps to get the title, either by foreclosure or otherwise.