M.'s indebtedness, and the surplus, if any, paid to M., his heirs and assigns. Held, that such deed was not a mortgage, but a deed of trust, which transferred the legal title of the premises to the trustees, and entitled M. to a reconveyance upon repayment of the sums loaned by plaintiff, and to a sale as provided in case of default. 2. Where a note was secured by a trust deed, evidence that the debtor and another gave the creditor a second promissory note for a less amount will not, in the absence of an express mutual agreement to that effect, extinguish the debt evidenced by the earlier note, the presumption of payment arising from the delivery and cancellation of the former note being overcome by direct evidence that such was not the understanding of the parties. 3. Where there is no direct evidence of the intention of the parties, the fact that a note is unsecured raises a strong presumption against a claim that it was given in full satisfaction of a secured indebtedness. 4. A mortgage lien, or one created by a trust deed, cannot be enforced against subsequent incumbrances, of which the mortgagee has actual notice, for advances or indorsements made or given after such notice. 5. A sale made under power in a mortgage or trust deed is valid, though for an amount greater than the secured debt, if there is no proof of fraud, or that the rights of the mortgagor were injuriously affected, or that bidders were deterred from attending the sale. 6. Sums expended by a trustee under a trust deed, in payment of taxes and other paramount liens, are valid charges on the property, though the instrument contains no express authority for such payments. 7. An allegation of ownership may be either a statement of fact or a conclusion of law, and where the court has found, as a conclusion "of law, that plaintiff was not the owner" of property, such conclusion will not be treated as a finding of fact unless it clearly appears to have been such. In bank. Appeal from superior court, city and county of San Francisco; John F. Finn, Judge. Action by the Savings & Loan Society against John M. Burnett and another to quiet title. From a judgment for defendants, and an order denying new trial, plaintiff appeals. Reversed. A. N. Drown and E. W. McKinstry, for appellant. Robert Y. Hayne and Jarboe & Countryman, for respondents. HENSHAW, J. Action to quiet title. The appeal is from the judgment, and from the order denying a new trial. On the 22d day of May, 1868, Denis Mahoney, the then owner of the lands in controversy, was indebted to the Savings & Loan Society in the sum of $20,000, gold coin of the United States, for moneys borrowed. Upon that date he executed, as party of the first part, a deed of trust to Burr and Dean, as parties of the second part. The Savings & Loan Society, as party of the third part, was the beneficiary of the trust, which was for the following declared purposes: "To secure the payment to the party of the third part of said indebtedness, and all further indebtedness of the party of the first part to the party of the third part that may be contracted during the continuance of this trust, not exceeding $35,000 at any one time, whether evidenced by promissory note or otherwise, whether for interest, insurance, or for moneys expended in and about said premises for repairs, taxes, liens, or incumbrances." The parties of the second part and the party of the third part, their successors and assigns, are expressly authorized to pay all taxes, assessments, and liens then subsisting, or which might afterwards be imposed, upon the premises; to keep the buildings on said premises insured against loss by fire; and to make such repairs and improvements on said buildings as to them may seem best. "These trusts shall continue," declares the instrument, "as security to the party of the third part and its assigns for the repayment in gold coin of the United States of the moneys so borrowed and received by the party of the first part, and the interest and premiums thereon, and of all amounts so paid out as aforesaid, and for the repayment in like gold coin of all moneys that may be hereafter loaned and advanced, and all sums of money, with interest thereon, due or to become due from the said party of the first part to said Savings & Loan Society or their assigns, or to said trustees, whether the same be evidenced by promissory notes or otherwise, and all accruing accounts and balances, together with the reasonable expenses of this trust, and $2,000 in gold coin of the United States, as counsel fees, which shall become due and payable by the party of the first part to the parties of the second part immediately upon any default made or suffered by the party of the first part in any of the payments aforesaid." The instrument next provides for a reconveyance to Mahoney, his heirs and assigns, upon payment at maturity, and, upon demand, of all moneys advanced, laid out, and expended under and in pursuance of the trust, with interest. It is then provided that in case of default, upon demand of the party of the third part, it shall be lawful for the parties of the second part "to sell the above-granted premises, or such part thereof as, in their discretion, they shall find it necessary to sell in order to accomplish the objects of these trusts, in the manner following, namely." It is further provided that after publication, and on the day of sale so advertised by publication, or upon the day to which the sale may be postponed, "they may sell the property so advertised, or any portion thereof, at public auction, to the highest cash bidder." The Savings & Loan Society was authorized to bid and purchase at the sale, and the parties of the second part were to execute to the purchaser or purchasers a deed of conveyance of grant, bargain, and sale of the afore-granted premises. Out of the proceeds of the sale, the party of the third part was to be reimbursed costs and expenses of the sale, and counsel fees were to be retained, and the balance or surplus, if any, paid over to Denis Mahoney, his heirs and assigns. The instrument finally declares that the recitals given in such deed to the purchaser shall be conclusive proof of the default and due publication of notice, and the deed, with, such recitals, shall be effectual and conclusive against the party of the first part, his heirs and assigns, and all other persons. On the 6th day of March, 1869, Denis Mahoney executed to John M. Burnett a deed of trust, whereby and wherein he "granted, bargained, sold, aliened, released, and conveyed" the land in controversy to Burnett," upon trust to receive the issues, rents, and profits of said premises, and apply the same, or such portion thereof as shall be necessary, for the support, maintenance, and education of the nine children of said Denis Mahoney, and to convey to the survivors of them, upon the youngest attaining his majority, equal, undivided portions thereof." This instrument further provides: "And in case it should become advisable, in the judgment of the said Denis Mahoney and Burnett, to make improvements upon said property, the said trustee is hereby authorized to raise money by mortgage or otherwise on said property, or such part thereof as may be necessary for that purpose, and to pay the same, and all charges and interest thereon, out of the rents and profits of the whole of said property, after the application of so much thereof as may be necessary for the support, maintenance, and education of said children." This instrument was duly recorded upon the 8th day of March, 1869, and, "from and after the recording thereof, plaintiff and Burr and Dean had full knowledge of said deed and its contents." Sundry sums of money were expended by the Savings & Loan Society to release the property from liens of taxes and street assessments; other sums for insurance; still others for the improvement of the property. All of these sums were moneys which it was authorized to expend, and no expenditure was made upon the property not contemplated by, and included within the terms of, the trust deed. Default having been made by Burnett in his payments, the Savings & Loan Society made application to Burr and Dean to sell the property, or such part thereof as, in their discretion, they should find necessary to sell in order to accomplish the objects of the trust. Publication was then made in the manner prescribed by the trust. conditions of the sale were set forth in the notice, as required. Burr and Dean "found it necessary to sell all of said property," and "did sell the property at public auction to the highest cash bidder therefor, and for gold coin of the United States, and at such sale said Savings & Loan Society became the purchaser of the land and premises so sold, at and for the sum of $17,250 cash, gold coin of the United States; said Savings & Loan Society being the highest and best bidder therefor, and said sum being the highest amount The bid therefor at such sale." Thereafter, Burr and Dean executed and delivered to plaintiff their deed, as contemplated by the trust, and containing the recitals therein provided for. Said deed was duly acknowledged and recorded on the 9th day of February, 1882. "On the 12th day of October, 1878, in consideration of the indebtedness then due and owing upon said last-mentioned promissory note, and under the provisions of said lastmentioned deed of trust to the plaintiff herein, and in consideration of further indulgence granted thereon by plaintiff, the said Denis Mahoney and said John M. Burnett, as trustee as aforesaid, executed their certain indenture," renewing and continuing their liability and obligation to the Savings & Loan Society upon that certain promissory note for $4,565, dated November 13, 1873, and upon the guaranty thereafter executed by said John M. Burnett, and "each undertook and promised to pay to the Savings & Loan Society the note and all sums of money remaining unpaid or hereafter to become due thereon, and jointly and severally confirmed and continued until full payment of all indebtedness now owing, or hereafter to become due, the trusts created and the grants made by that certain deed of trust executed by said Denis Mahoney to E. W. Burr and Benjamin Dean, bearing date May 22, 1868." "On the 25th day of May, 1871, money was required for the purposes of said property, and for making repairs and additions to the buildings and improvements thereon, and on the 5th day of March, 1872, additional money was required for the purpose of protecting said land and improvements, and paying certain street assessments theretofore imposed and levied, and which were then a charge and lien thereon; and plaintiff loaned and advanced said further sums of money to be used, and which were used, for the purposes aforesaid, to wit, on said 25th day of May, 1871, the sum of $500, and on said 5th day of March, 1872, the sum of $650." On these dates, Denis Mahoney and John M. Burnett, "claiming to act as trustee," executed and delivered to plaintiff their promissory notes for these amounts. Burnett signed as trustee of the Mahoney estate. Each of these notes was declared by the makers to be se cured by the deed of trust executed by Mahoney to Burr and Dean. On November 13, 1873, there had been paid, of the original note of $20,000, all but $2,000. There were likewise due and owing to the bank the two promissory notes above mentioned, and certain sums paid for taxes upon the property. More money was required on the 13th day of November, 1873, by Mahoney and Burnett, "for the purpose of protecting said property. and paying certain street assessments which had been imposed upon it, and which were then a charge and a lien upon it." Mahoney and Burnett, as trustee, were without funds to pay such assessment; and on said 13th day of November, 1873, the plaintiff, at the instance and request of said Mahoney, with the knowledge and concurrence and at the request of Burnett, claiming to act as trustee, loaned and advanced the full sum of $249, in gold coin, "with which to pay, and which was used to pay, such street assessments, and to discharge the lien thereof upon said real property." The sums above mentioned, with interest, including the $249 last referred to, aggregated the sum of $4,565; and, on this day, Mahoney and Burnett executed and delivered to plaintiff their promissory note for that amount, in which it was declared that "this note is secured by deed of trust, duly stamped according to law, made by Denis Mahoney to E. W. Burr and B. D. Dean, dated the 22d day of May, 1865." The note was signed: "Denis Mahoney. John M. Burnett, Trustee of Mahoney Estate." (The quotations are from the findings.) 1. The deed from Mahoney to Burr and Dean is not a mortgage, but a deed of trust. The decisions of this court upon such instruments have never been in flux, but, to the contrary, have been set and consistent since first they came before it. Moreover, this precise form of deed has, upon more than one occasion, been construed and upheld. Koch v. Briggs, 14 Cal. 262; Thompson v. McKay, 41 Cal. 221; Fuquay v. Stickney, Id. 587; Whitmore v. Savings Union, 50 Cal. 149; Grant v. Burr, 54 Cal. 300; Bateman v. Burr, 57 Cal. 483; Durkin v. Burr, 60 Cal. 360; Society v. Deering, 66 Cal. 281, 5 Pac. 353; Partridge v. Shepard, 71 Cal. 477, 12 Pac. 480; More v. Calkins, 95 Cal. 435, 30 Pac. 583. It transferred the legal title to the trustees, while Mahoney retained the right to a reconveyance upon payment, and to a sale as provided in case of default. Nothing in Powell v. Patison, 100 Cal. 235, 34 Pac. 676, can be construed as militating against the interpretation which has thus invariably been given. Moreover, in that case the instrument under consideration was not brought up for review. 2. The trial court, regarding the transaction of November 13, 1873, found that the note for $4,565, made by Mahoney and Burnett, "was taken and received by the Savings & Loan Society in payment and satisfaction and extinguishment of all sums of money then due it by Mahoney or Burnett, and of all claims and demands which it then had against said Mahoney and Burnett, or either of them." So finding, it properly conIcluded that by this payment the trust was extinguished, except as to the duty of the trustees to reconvey, and that their deed after sale was in contravention of the trust, and void. As is said in the first brief filed by respondents' counsel: "Our whole argument in this case proceeds upon this proposition: That, the debt originally secured by the Burr and Dean deed having been paid by the $4,565 note and the novation of the original indebtedness, the deed by Burr and Dean to plaintiff, being in contravention of By the trust, was absolutely void, and conveyed no title whatever." Divers questions have been raised in later briefs filed by other counsel for respondents, but, as said, this finding, with its logical sequitur in the conclusions of law, was the determinative point in the trial court. The finding is attacked as wholly unsupported by the evidence. respondents it is contended that there is at least a conflict of evidence, and that, under. the rule, it will not be disturbed. The evidence said to raise a conflict is the presumption that an obligation delivered up to a debtor has been paid; that the ordinary course of business has been followed (Code Civ. Proc. § 1963, subds. 9, 20); and the circumstances of the cancellation and surrender of the $20,000 note, the satisfaction and cancellation of it upon the books of the bank, and the taking of the new note, to which Burnett affixed his signature as joint maker with Mahoney. Appellant claims that there is no evidence to support the finding that the note was entered as satisfied and canceled upon the books of the bank. There is no direct evidence to that effect. The books of the bank were not introduced, and that part of the finding, if it has support, must derive it from the inference drawn from the fact of delivery and its circumstances,-a deduction from this fact warranted by the course of business. Id. § 1960, subd. 2. But disputable inferences or presumptions, while evidence, are evidence the weakest and least satisfactory. They are allowed to stand, not against the facts they represent, but in lieu of proof of them. The fact being proven contrary to the presumption, no conflict arises. The presumption is simply overcome and dispelled. It is the general rule that one executory contract does not extinguish another. It is also the rule that there must be an express agreement or understanding to that effect before another note, bill, or check extinguishes and satisfies the indebtedness evidenced by an earlier one. Without multiplying authorities upon these propositions, it is sufficient to refer to Comptoir D'Escompte de Paris v. Dresbach, 78 Cal. 15, 20 Pac. 28, where the California cases are collated. passing, it may be said that it is a matter of grave doubt whether the finding under consideration fills the required measure as a finding. It is silent as to any agreement between the parties, and merely declares that the $4,565 note was received in payment. Comptoir D'Escompte de Paris v. Dresbach, supra. But conceding, though not deciding, that the finding is sufficient in this regard, it is without evidence to sustain it. The presumptions and inferences must give way to the facts, as testified to by witnesses who were parties to the transaction; and, as to the evidence of these witnesses, there is not only no conflict, but it is singularly har monious in showing that the note was neither given nor received in payment of the pre-existing indebtedness. Burnett testifies In that he and Mahoney went to the bank for more money; that Burr thought they should "clear up" the small notes, and give a new note for the balance, which was done; that he signed the note as trustee because Burr required it to be done. He (Burr) thought it should be done for the security of the bank. "Q. Now, when you and Mr. Mahoney went to the bank, and this note for $4,565 was exe.cuted, it was not for the purpose of paying | off the $20,000 note? A. No, sir; our purpose was, as Mr. Burr expressed it, to clean up these two notes and whatever balance was necessary,-to clean up whatever was outstanding there. Q. Well, what was the purpose of your going there? It was not to pay the $20,000 note? A. No, sir. Q. But to get more money wherewith to pay these charges on the property? A. Yes, sir. Q. The intent of this note was simply to aggregate the existing amounts in one sum, and to evidence the indebtedness by this note. That was the purpose of giving the one note, as you have related, was it not? A. That was the intention." Burr, the other party to the transaction, and president of the bank, testified: "It was at my suggestion that the consolidation was made into this one note. The cashier probably suggested it to me that we had better make it into one note. The consolidation was merely to facilitate the bookkeeping of the bank. Q. Under what circumstances was this note for $4,565 made and taken? A. At the exclusive discretion of the president. Not for the purpose of paying anything, but to consolidate the debt, in the discretion of the president, without reference to the board." Such is the unconflicting testimony. The circumstances of the transaction, it is true, may be used to determine the character of the exchange. But the circumstances, to prevail, must be such as to establish the mutual agreement of the parties. Hart v. Boller, 15 Serg. & R. 163; Brown v. Dunckel, 46 Mich. 32, 8 N. W. 537. 'Here the circumstances, so far from raising a conflict, are in perfect adjustment to the acts and declarations of the parties. Burnett's evidence shows that he believed that in signing as trustee he was binding the interests of his beneficiaries, as the money was all used for the purposes of the property. The $4,565 note itself declares in terms that it is secured by the bank's deed of trust. Burnett and Mahoney subsequently asked for postponement of the sale about to be made under the terms of the trust, and by writing again solemnly ratified and confirmed the instrument. Nor, if the rule of knowledge of the law invoked by respondents' counsel be applied in all rigidity, is the situation of the parties to this transaction altered in the slightest; for if, as counsel contend, the agreement was one of satisfaction and payment, and if the bank was chargeable with this knowledge, so also were Burnett and Mahoney. Then Burnett and Mahoney should have immediately demanded a reconveyance, but they never did. They should not have inserted the misleading clause in the $4,565 note, securing it by the extinguished trust deed, but they did. They should not have asked a postponement of the sale, and ratified in writing the trust deed, but should have enjoined the sale; and had a court of equity declare the trust satisfied and discharged. Each and every circumstance points irresistibly to the one conclusion that there was no agreement of payment between the parties, and that the $4,565 note was not accepted for such purpose. And this aside from the consideration-which, nevertheless, is important-that, if the bank had taken the $4,565 note in payment, it was taking an unsecured debt for one fully secured. This fact alone, it is uniformly held, raises a strong presumption against payment, whether the new paper be by the same maker, or, as here, bears an additional name. 2 Daniel, Neg. Inst. (4th Ed.) §§ 748, 1260, et seq.; 1 Jones, Mortg. (4th Ed.) § 924 et seq.; Pinney v. Kimpton, 46 Vt. 83; Dayton Nat. Bank v. Merchants' Nat. Bank, 37 Ohio St. 209; Moses v. Trice, 21 Grat. 567. Finally, it may be added that the facts bring the finding within the rule declared in Field v. Shorb, 99 Cal. 662, 34 Pac. 504. 3. It is next contended by respondents that the optional payments or advances made by appellant after it had actual knowledge of Mahoney's later deed to Burnett could not be covered by the trust deed; that the sale was for a sum much larger than the amount with which the property was therefore chargeable; that this sum was fixed by appellant in its demand upon the trustees to sell; that appellant was the purchaser, with notice of these facts; and that the sale is therefore void. The rule in this state as to optional advances made by a prior mortgagee, though opposed elsewhere by authority of great respectability (1 Jones, Mortg. [5th Ed.] § 373), may be taken as declared in Tapia v. Demartini, 77 Cal. 387, 19 Pac. 641: "But the lien of the mortgage cannot be enforced against subsequent incumbrancers, of which the mortgagee has actual notice, for advances or indorsements made or given after such notice. The notice must be actual. Constructive notice, by the recording of subsequent incumbrances, is not enough." And, notwithstanding the differences existing between a mortgage and an instrument like the one in question, the same rule may justly be made applicable to both. The court found that, from and after the recording of the deed from Mahoney to Burnett, "plaintiff and Burr and Dean had full knowledge of said deed and its contents." This language is neither apt nor satisfactory. It leaves in uncertainty whether the court meant actual knowledge, or the constructive knowledge which follows recordation. Under the latter interpretation, it is insufficient. Actual knowledge alone will bind the prior mortgagor. Under the former interpretation the evidence does not support it in all its scope. The deed to Burnett was recorded March 8, 1869. Upon May 25, 1871, Burnett signed the $500 note to appellant as "trustee of the Mahoney estate." Assuming that this signature was sufficient to give the bank actual notice upor that date, no intendment of law, to which our attention has been called, would operate to throw that notice back more than two years, to the date of the recordation of Burnett's deed; yet the record discloses no other prior actual notice. However, appelant had actual notice at least as early as May 25, 1871, and, as most of the payments or advances were made after that date, the effect of them upon the status of the parties is yet to be determined. The situation on May 25, 1871, taking that as the date of the actual notice, is said by respondents' counsel to be sufficiently advantageous to support his contention. Most of the moneys for which the property was sold were laid out after that date. Powers of sale under trust deeds or mortgages, it is true, will be strictly construed. Flower v. Elwood, 66 Ill. 449; Sears v. Livermore, 17 Iowa, 297. And the acts of the trustees in contravention of the trust are void. Civ. Code, § 870. But it does not follow that any sale made under such a power is void, or even voidable, because made for an amount greater than the secured debt. In Spencer v. Annan, 4 Minn. 542 (Gil. 426), relied on by respondents, the amount due was $964.62, and the notice of sale was for $1,606.60. The court said: "We do not hold that it is absolutely necessary to state with certainty the exact amount legally due, for a party, under a mistake of law or fact, may honestly claim more than by law he would be entitled to, and, if the other party is not shown to be prejudiced thereby, the sale should not be disturbed. The mortgagee may estimate the amount according to the strict terms of the contract, or may err simply in a computation of the interest, and if, under such circumstances, he claims more than he can legally recover, it does not necessarily vitiate the sale. Perhaps any amount within the terms of the contract may in good faith be claimed without affecting the legality of the notice. But we do hold that a party cannot arbitrarily or wantonly claim in his notice a sum which neither the terms of the contract, nor any legitimate calculation based thereon, will justify." It was found in that case that the sum claimed exceeded by more than one-half "the amount which any calculation based upon the note would produce," and therefore the sale was set aside, as irregular, under direct proceedings instituted for that purpose. In Ormsby v. Tarascon, 3 Litt. (Ky.) 404, also relied upon, the sale was not only for an amount much larger than was due, and for an installment not due, but the circumstances evidenced actual fraud and collusion between the parties to the sale; and "for this reason," says the court, "the sale ought not to be allowed to stand." In that case, Ormsby was seeking, under direct proceedings in equity, to redeem, and it is finally held that the title obtained by the sale was not, under these circumstances, freed from this equity. But, besides these cases cited by counsel, there are others elucidating the true principle. Thus in Ramsey v. Merriam, 6 Minn. 168 (Gil. 104), the case of Spencer V. Annan is discussed and distinguished. Any amount within the terms of the security, it is held, may be claimed in the notice; and, if the sale is for an actual excess, "there are other and more appropriate means of redress" than an action to set aside the sale, viz. an action to recover the surplus. So in Butterfield v. Farnham, 19 Minn. 85 (Gil. 58), the amount due was $26,916. The sale was for $34,251,-an excess of over $7,000. It was held that, in the absence of fraud or actual injury, the claiming of more than is legally due or stipulated for in the contract cannot affect the validity of the sale. That, while a claim which would necessarily have the effect to deter bidders would be held fraudulent in law, there is no rule of law by which the claim of such an excess must be held necessarily to have such an effect, and under existing circumstances it cannot be said that it would do so. The doctrine of Spencer v. Annan, supra, is subjected to the modification that, even if the excess be arbitrarily and wantonly claimed, it will not affect the sale, unless its amount was such as to deter bidders. "As to the mortgagor and those claiming under him, they knew what was due. No false claim could affect them, and for the excess for which the property was sold the mortgagor had his recovery." In Bowers v. Hechtman, 45 Minn. 238, 47 N. W. 792, it is said: "Perhaps there may be cases where the amount claimed to be due would be so excessive, and so wholly unwarranted by anything in the terms of the mortgage, as to furnish in itself intrinsic evidence of fraud on part of the mortgagee, and of consequent prejudice to the owner of the mortgaged premises. But the rule is that claiming in the notice more than is due on the mortgage will not affect the validity of the sale, unless it appeared that it was done with a fraudulent purpose, or that it has resulted in actual injury to the mortgagor." The rule may thus be stated: A sale under power for a larger sum than the amount due is valid in the absence of proof of fraud, or that the property or the rights of the mortgagor are injuriously affected, or that bidders were deterred from attending the sale. Jencks v. Alexander, 11 Paige, 619; Hamilton v. Lubukee, 51 Ill. 415; Fairman v. Peck, 87 Ill. 160. In this case the sums for which, in the aggregate, the property was sold were not only expressly contemplated by the deed of trust, but they were each and all paid out, within the terms of the trust, for the benefit of the property. If any one of them was a sum not properly chargeable in the notice of sale, it was not because it had |