Beeler

A rehearing was granted herein to permit additional study of the points involved. The further consideration consequently given this case has only served to confirm the conclusions heretofore reached, and accordingly, the following opinion expresses our sustained views.

The defendant, American Trust Company, appeals from an adverse judgment holding that a deed absolute in form was in fact an equitable mortgage. The principal contention presented by the defendant bank as a basis for a reversal of the *4 judgment is the familiar claim that the evidence is insufficient to justify the conclusion of the trial court. As a related consideration, it is particularly urged that a verified affidavit of the grantor declaring the contemporaneously executed deed to be an absolute conveyance of the property, and not intended as a mortgage, is a conclusive expression of the understanding between the parties and precludes the admissibility of parol evidence to the contrary.

The facts and circumstances surrounding the transaction out of which this controversy arose appear to be substantially as follows: Prior to July 28, 1937, Henry Weiss owned a large tract of land in Tehama County subject to a…

Dissenting. The evidence in this case is insufficient, in my opinion, to uphold the trial court’s finding that defendant, with a deed of trust on real property worth over $135,000 securing an indebtedness of $81,232.90, entered into an agreement to reduce the indebtedness to $60,000 and to accept an inarticulated mortgage in place of its deed of trust.

*30 Since a mortgage secures an obligation it cannot be proved that a conveyance is intended as a mortgage if there is no liability “independent of the conveyance and contract of conveyance, which the grantee can enforce against the grantor.” (4 Pomeroy, Equity Jurisprudence, [Symons’ fifth ed., 1941] § 1195, p. 579; Holmes v. Warren, 145 Cal. 457 [ 78 P. 954 ]; Chapman v. Hicks, 41 Cal.App. 158 [ 182 P. 336 ]; see 17 Cal.Jur. 783.) The only debt in the present case was that represented by Weiss’s promissory notes, and no relation was established between these notes and the deed, option, and lease. The amount payable by plaintiff to exercise the option was different from the amount due on the notes, and the rent payable until the exercise of the option was different from the interest prescribed by the notes. The only evidence…

A rehearing was granted herein to permit additional study of the points involved. The further consideration consequently given this case has only served to confirm the conclusions heretofore reached, and accordingly, the following opinion expresses our sustained views.

The defendant, American Trust Company, appeals from an adverse judgment holding that a deed absolute in form was in fact an equitable mortgage. The principal contention presented by the defendant bank as a basis for a reversal of the judgment is the familiar claim that the evidence is insufficient to justify the conclusion of the trial court. As a related consideration, it is particularly urged that a verified affidavit of the grantor declaring the contemporaneously executed deed to be an absolute conveyance of the property, and not intended as a mortgage, is a conclusive expression of the understanding between the parties and precludes the admissibility of parol evidence to the contrary.

The facts and circumstances surrounding the transaction out of which this controversy arose appear to be substantially as follows: Prior to July 28, 1937, Henry Weiss owned a large tract of land in Tehama County…