273 P. 58 | Cal. Ct. App. | 1928
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *405 This is an action brought to foreclose a deed of trust. The trial court refused to permit plaintiff to introduce any evidence, upon the ground that the complaint did not state a cause of action. Plaintiff was given an opportunity to amend his complaint, but he did not do so, and judgment was entered for defendant. From this judgment the appeal is taken.
The complaint alleges the execution of a promissory note for $4,000, and a deed of trust for the payment of the same (a copy of each of said instruments is attached to the complaint); that plaintiffs had expended the sum of $27 for insurance upon the premises described in the trust deed, and that the trustees had refused to pay the same, as provided in said trust deed; that the trustors had failed to pay two installments of $38 each, due under the terms of the promissory note in connection with which the trust deed was executed; that that trust deed was intended, and agreed by the parties to be and operate simply as a first lien or a first mortgage upon said premises, and as security for the payment of the debt; that plaintiff had requested the trustee to foreclose said trust deed, in the nature of a first lien or a first mortgage, and to sell said real estate and apply the proceeds thereof in payment of the amount due plaintiffs, and said trustee refused to do so unless it was first paid the sum of $150 on account of its fees and disbursements; that plaintiffs elect that the balance of principal and interest be immediately due and payable. Judgment is prayed that said deed of trust be adjudged to operate simply as a first lien or mortgage and as security for the payment of the debt due plaintiffs; that a commissioner be appointed to sell the premises, and that defendants be foreclosed of all equity of redemption. *406
A number of points are urged by appellants, but the matter to be decided is whether or not the complaint stated a cause of action. The error must be predicated upon the ruling of the trial court that plaintiffs could not introduce any evidence in support and proof of the allegations of their complaint. This ruling was based upon the ground that the complaint did not state a cause of action.
It is not contended by appellant that the trust deed contains any unusual features or provisions, nor do we find that it does. We shall proceed upon the premise that said instrument is the usual form, to wit, a conveyance, absolute in form, to a trustee, for the purpose of securing a debt, with a power of sale upon default.
[1] There is no doubt that a deed of trust such as the one we have before us may be foreclosed where some special reason exists which will justify a court of equity in exercising its peculiar powers. Instances of this character are where there are accounts to be settled or where the trustee fails or refuses to act or repudiates his trust or is guilty of a breach of trust. (Curtin
v. Krohn,
[2] It is contended by appellant that the complaint does come within the foregoing rule, in that it is alleged that the trustee refused to sell the property upon his demand to do so. The parties stipulated at the trial that the said demand was oral. The trust deed provides that it shall be in writing. The answer, however, denies that there was any default under the deed of trust. Under such circumstances a demand to sell would have been unavailing, and a demand and refusal would not be a condition precedent to the right of plaintiff to commence the action. (Cox v. Delmas,
Section
[4] We have before us, then, the bare proposition: Can a beneficiary, under an ordinary deed of trust, upon default on the part of the trustor, proceed in equity to foreclose that instrument in the same manner as though it were a mortgage? The nature of a deed of trust, and the distinction between it and a mortgage, were pointed out in the early case of Koch v.Briggs,
The foregoing decision has never been questioned in this state. It has been cited numerous times with approval. In the case ofHerbert Kraft Co. v. Bryan,
We do not agree with appellant when he states that the case ofCormerais v. Genella,
It is earnestly contended by appellant that what was said by the court in the Koch case on the question of the foreclosure of a deed of trust was not necessary to the decision. That is a debatable question. Conceding that such matter was not authoritative, we believe we have shown that the doctrine laid down in said case has been engrafted into our system of jurisprudence so many times by judicial interpretation that it is now a firmly established rule of property. It is, as we believe, a natural outcome of, and corollary to the "title" theory as applied to deeds of trust in this state.
Appellant relies upon the case of Bell Silver Copper Min.Co. v. First Nat. Bank of Butte,
[6] Appellant urges that the allegation in the complaint that the deed of trust was intended as a mortgage would give the court jurisdiction to proceed and would come to his aid in stating a cause of action. He points out that a complaint setting up adeed with this allegation, states a cause of action, and that the same rule should apply to a deed of trust. No authorities are cited. We are unable to agree with this contention. [7] In an action to have a deed declared a mortgage, there is an absolute conveyance of title, with no mention made of any indebtedness or security, and consequently, no right reserved in the grantor to a defeasance. In law the grantee is the owner in fee. Equity is appealed to, so that the deed may be proved to be only part of the transaction, and evidence aliunde may be introduced to show an agreement that the deed was intended merely by way of security, and that there was a defeasance. Such suits have been brought in this state under the provisions of section 744 of the Code of Civil Procedure. It has been held that said section does not apply to deeds of trust. (Bateman v. Burr,
The judgment is affirmed.
Finch, P.J., and Hart, J., concurred.
A petition for a rehearing of this cause was denied by the district court of appeal on January 11, 1929, and a petition by appellant to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on February 7, 1929.
All the Justices concurred.