And the said Middle Yuba Canal and Water Company covenant, promise and agree, to and with the party of the second part, to pay to him the said principal sum and interest, as above specified, at the time, place, and in the manner above mentioned.

And the undersigned firms and individuals covenant, promise and agree, to and with the party of the second part, to pay to him the said principal sum and interest as above specified, at the time, place, and in the manner above mentioned.

In witness whereof, &c.

For mode of executing this instrument, see statutory provisions and forms under the title CHATTEL MORTGAGE.

CHAPTER XXX.

MORTGAGE.

No particular form of words is necessary to constitute a mortgage; and where two instruments taken together, described the property, and the amount of indebtedness, and conveyed the premises as security for the indebtedness, they were held to constitute a sufficient mortgage.'

It is not necessary, to constitute a mortgage, that it should appear upon the face of the papers, that there was any personal obligation on the part of the mortgagor to pay the amount of the principal and interest. Such obligation would only enable the mortgagee to look to the mortgagor for any deficiency remaining after the application of the proceeds of sale of the premises to the payment of the sum secured.*

A claim against the estate of a deceased person, although secured by mortgage, must be presented to the executor or administrator, with the necessary affidavit, or suit cannot be maintained for its recovery.

See title EXECUTORS AND ADMINISTRATORS.*

A mortgage given upon a homestead, will not avail as a lien, to the extent of the homestead exemption-five thousand dollars -unless the wife join in the execution of the instrument.*

See titles HOMESTEAD and ACKNOWLEDGMENTS. She should also join with her husband in a mortgage of her separate estate-see title HUSBAND AND WIFE.

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 a foreclosure and sale'.

The court may, by injunction, on good cause shown, restrain

11 Cal. 308.

2 10 id. 197.

6 id. 386; 9 id. 128.

45 id. 504; 8 id. 66; 10 id. 296.

Wood's Dig. art. 994, 995.

the party in possession from doing any act to the injury of real property during the foreclosure of a mortgage thereon; or after a sale on execution, before a conveyance.'

In an action for the foreclosure or satisfaction of a mortgage of real property, or the satisfaction of a lien or incumbrance upon property, real or personal, the court shall have power by its judgment to direct a sale of the property, or any part of it, the application of the proceeds to the payment of the amount due on the mortgage, lien or incumbrance, with costs, and execution for the balance."

If there be surplus money remaining after the payment of the amount due on the mortgage, lien or incumbrance, with costs, the court may cause the same to be paid to the person entitled to it, and in the mean time may direct it to be deposited in court."

If the debt for which the mortgage, lien or incumbrance is held be not all due, so soon as sufficient of the property has been sold to pay the amount due, with costs, the sale shall cease: and afterward, as often as more becomes due, for principal or interest, the court may, on motion, order more to be sold. But if the property cannot be sold in portions without injury to the parties, the whole may be ordered to be sold in the first instance, and the entire debt and costs paid, there being a rebate of interest where such rebate is proper."

A mortgage is a mere incident to the debt which it secures, and follows the transfer of the note, or other evidence of debt, with the full effect of a regular assignment. And if the mortgage be given to secure two notes, the endorsement and delivery of one of the notes carries with it a pro rata portion of the security.'

A conveyance and an attendant agreement for a reconveyance upon the payment of the amount of the consideration and interest, do not of themselves in the absence of other circumstances, create a mortgage, but only a defeasible purchase, which should be narrowly watched lest it may be made the means of converting what was in fact intended as a security, into an absolute purchase. Slight circumstances will determine the transac

15 Wood's Dig. art. 994, 995.

id 98-982.

6 Cal. 478; 9 id. 865, 426.

tion to be one of mortgage, when that can be done without violence to the understanding of the parties.'

It has been held by the Supreme Court of California, that a deed absolute on its face cannot be shown by parol testimony to be intended as a mortgage, except in cases of fraud, accident or mistake in the creation of the instrument itself. This doctrine

has been recently overruled and the old doctrine restored, in the case of Pierce vs. Robinson, administrator, in which case Judge Field decides as follows:

"I consider parol evidence admissible in equity, to show that a deed absolute upon its face was intended as a mortgage, and that the restriction of the evidence to cases of fraud, accident or mistake, in the creation of the instrument, is unsound in principle, and unsupported by authority.

"The entire doctrine of equity, in respect to mortgages, has its origin in considerations independent of the terms in which the instruments are drawn. In form, a mortgage in fee is a conveyance of a conditional estate, which, by the strict rules of the common law, became absolute upon breach of its conditions. But, from an early period in the history of English jurisprudence, courts of equity interposed to prevent a forfeiture of the estate, and gave to the mortgagor a right to redeem, upon payment within a reasonable time, of the principal sum secured, interest and cost. As the right to thus recover the estate forfeited arose, not from the terms of the instrument, but from a consideration of the real character of the transaction, as one of security and not of purchase, it could be enforced only in equity, and was hence termed an equity of redemption. And when the right to redeem had been once established, to prevent its evasion the rule was laid down, and has ever since been inflexibly adhered to, that the right is inseparably connected with the mortgage, and cannot be abandoned or waived by any stipulations entered into between the parties at the time, whether inserted in the instrument or not."

The original character of mortgages has undergone a change. They have ceased to be conveyances except in form. They are no longer understood as contracts of purchase and sale between

10 Cal. 684.

the parties, but as transactions by which a loan is made on the one side, and security for its repayment furnished on the other. They pass no estate in the lands, but are mere securities; and default in the payment of the money secured does not change their character.'

Proceedings for the foreclosure of mortgages, in the sense in which the terms are used in England and in several of the states, by which the mortgagor, after default, is called upon to repay the loan by a specified day, or be forever barred of his equity of redemption, are unknown to our law. The owner of the mortgage in this state can in no case become the owner of the mortgaged premises, except by purchase upon sale under judicial decree, consummated by conveyance.'

A foreclosure suit, by our law, results only in a legal ascertainment of the amount due, and a decree directing the sale of the premises for its satisfaction, the surplus, if any, going to subsequent incumbrancers, or the owner of the premises, and execution following for any deficiency.'

The statutory right of redemption is equally applicable to sales under decrees in mortgage cases as to sales under ordinary judgments at law.'

The estate of a mortgagor and of a judgment debtor after sale, stand upon the same footing, and the insertion in the decree of a clause foreclosing the equity of redemption, is a useless formula, which cannot enlarge the effect of the decree, or any rights of the mortgagee under it.'

The decisions as to the estate of the judgment debtor after sale, become, therefore, authorities for determining the estate of the mortgagor after sale under the decree; and from them it will be found that the estate must remain in the mortgagor until a consummation of the sale by conveyance, as it does in the judgment debtor, and that the conveyance when executed will take effect, in the one case, from the date of the mortgage, as it does in the other, from the time the lien of the judgment attached.'

It follows that a creditor of the mortgagor obtaining a judgment after sale under the decree of foreclosure, but before the

1 McMillan v. Richards, 9 Cal. 365.