Koch v. Briggs

Citations

• 14 Cal. 256

Syllabus

<p>A deed of trust, the Trustee not being the creditor, but a third party, given to secure a note, and authorizing the Trustee to sell the land at public auction, and execute to the purchaser a good and sufficient deed of the same, upon default in paying the note, or interest, as it falls due, and out of the proceeds to satisfy the trust generally, and to render the surplus to the grantor, etc., is not a mortgage, requiring judicial foreclosure and sale.</p> <p>In mortgages there exist the right to foreclose, after condition broken, and the right of redemption from forfeiture. These two rights are mutual and reciprocal. When one cannot be enforced, the existence of the other is denied; and when either is wanting, the instrument, whatever its resemblance in other respects, is not a mortgage.</p> <p>In a deed of trust, as here, there can be no forfeiture of the estate, and hence no equity, as against such forfeiture, to foreclose, as in England. Nor would a suit for decree and sale, as under our system, lie, because such suit could be based only on the contract of the parties, and the contract is, that the Trustee shall sell, upon the happening of a certain event.</p> <p>Relief in equity would be limited to the contract, and a sale could only he made hy enforcing the trust.</p> <p>From sales under such trusts, there is no equity of redemption, for there is no forfeiture. Performance of the trust carries out the contract of the parties.</p> <p>In mortgages, the form of the contract is one of conveyance; while, in truth, the contract is only one of security, and equity gives effect to the intention of the parties.</p>