114 Cal. 593 | Cal. | 1896
This appeal is from a judgment rendered against the plaintiff upon demurrer to the complaint.
The complaint, after alleging the appointment of the plaintiff as administrator of Daniel Keniston, deceased, and describing the property involved in the controversy herein, alleged in substance as follows: That on January 1, 1891, Keniston executed a mortgage to the defendant Davenport upon certain of the real estate described in the complaint to secure the sum of four thousand dollars, with interest at ten and one-half per cent per annum,
The remainder of the complaint (except paragraph 4, which need not be noticed) is as follows: “That on or about said first day of March, 1895, the said Daniel Keniston, being then sick in body and embarrassed financially, and being persuaded thereto by the representations of said defendant Davenport, was induced to sign, and did sign, a certain agreement with said Davenport, and to execute a deed to lots 4 and 5 of the premises, above described, to said J. 1ST. Davenport, which he, the said. Keniston, handed, together with said agreement, to the defendant J. H. Anderson, cashier of the Bank of Escondido. That by the terms of said agreement, upon the payment to said cashier of a sum of money, not expressed in said agreement, before July 1, 1895, the said cashier was to discharge said mortgage •and return the note secured thereby to said Keniston, and that in case said Keniston should not pay said sum ■of three thousand nine hundred and thirty-three dollars and eighty-seven cents, and interest to July 1st, before ■said July 1, 1895, the said cashier should deliver said -deed to said Davenport and the note to said Keniston, and the delivery of said deed should be in full cancellation and satisfaction of said note.
“3. That the said Daniel Keniston from the time-of the execution of said agreement continued sick and unable properly to attend to his business, and from and after the twenty-ninth day of June until the ninth day of July, 1895, the said date of his death, was unconscious, and that subsequent to the death of said Daniel Keniston, and after plaintiff had applied for administration in behalf of himself and the heirs of said Keniston, he notified the defendant Anderson not to deliver said deed to said Daveuport, but that he, the said Ander
“ 5. That said deed constitutes a cloud upon the title of plaintiff, and his right to subject said property to administration. That the equity in said property is of great Value, namely: The sum of four thousand dollars, and that the estate of said Daniel Keniston is largely indebted, and that it is necessary to sell the interest of the estate in said premises in order to pay said indebtedness.”
The prayer of the complaint is that said deed from Daniel Keniston to the defendant Davenport be decreed to be void and of no effect, or that the same is a mortgage to secure any sum which may be found due from said intestate to said defendant Davenport, and that said property be further decreed to be assets of the estate and subject to administration.
The demurrer to the complaint is as follows: “ That said complaint does not state facts sufficient to constitute a cause of action in this, to wit: “ 1. That it shows on its face that this defendant is the owner of lots four (4) and five (5) in section four (4), township twelve (12) south, range two (2) west, San Bernardino meridian; 2. That the complaint contains no offer or tender, or any allegation of offer or tender, to pay the overdue mortgage indebtedness to this defendant therein alleged to be subsisting.”
This demurrer was sustained, and, the plaintiff declining to amend his complaint, judgment was rendered “that the complaint herein be, and the same is hereby, dismissed on the merits,” and for costs.
Appellant insists that said contract or agreement deposited with Anderson with the deed is void, because it
Aside from the provision of said section of the Civil Code, it is well settled that the mortgagor is not allowed to renounce beforehand his privilege of redemption; that while generally any one may renounce any privilege or surrender any right he had, that an exception is made in favor of debtors who have mortgaged their property, for the reason that their necessities often drive them to make ruinous concessions; that when one borrows money upon the security of his property, he is not allowed by any form of words to preclude himself from redeeming (Jones on Mortgages, secs. 251, 1045), though the doctrine “once a mortgage, always a mortgage” does not apply to subsequent contracts. (Watson v. Edwards, 105 Cal. 70, 75.)
In Peugh v. Davis, 96 U. S. 332, it was held that an equity of redemption is so inseparably connected with a mortgage that it cannot be waived or abandoned by any stipulation of the parties made at the time, even if embodied in the mortgage, though a subsequent release of the equity of redemption may undoubtedly be made to the mortgagee. As to such release, the court, by Field, Justice, said: “It must appear by a writing importing in terms a transfer of the mortgagor’s interest, or such facts must be shown as will operate to estop him from asserting any interest in the premises. The' release must also be for a consideration which would be deemed reasonable if the transaction were between other parties dealing in similar property in its vicinity. Any marked undervaluation of the property in the price paid will vitiate the proceeding.”
In relation to such subsequent agreement, Jones, in his
In support of this proposition the author cites, among many other cases, Villa v. Rodriguez, 12 Wall. 323, from which we quote the following passage: “The law upon the subject of the right to redeem where the mortgagor has conveyed to the mortgagee the equity of redemption is well settled. It is characterized by a jealous and salutary policy. Principles almost as stern are applied as those which govern where a sale by a cestui que trust to his trustee is drawn in question. To give validity to such a sale by a mortgagor it must be shown that the conduct of the mortgagee was, in all things, fair and frank, and that he paid for the property what it was worth. He must hold out no delusive hopes; he must exercise no undue influence; he must take no advantage of the fears and poverty of the other party. Any indirection or obliquity of conduct is fatal to his title. Every doubt will be resolved against him. Where confidential relations and the means of oppression exist, the scrutiny is severer than in cases of a different character. The form of the instrument employed is immaterial. That the mortgagor knowingly surrendered and never intended to redeem is of no consequence. If there is vice in the transaction, the law, while it will secure to the mortgagee his debt, with interest, will compel him to give back that which he has taken with unclean hands. Public policy, sound morals, and the protection due to those whose property is thus involved, require that such should be the law.”
Respondent contends, however, that this case is conclusively settled by this court in McDonald v. Huff, 77
Respondent also contends that the deed to him took effect when delivered, as of the date of the escrow, and that the agreement was, therefore, fully executed before this action was begun. But that does not conclude the plaintiff. In Russell v. Southard, 12 How. 139, it was held that, though a mortgagee in possession may take a release from the mortgagor, the transaction is to be carefully scrutinized, and if any unconscientious advantage was taken, the release wúll be set aside.
Conceding that the depositary may, upon the happening of the condition, deliver the deed held by him in escrow, notwithstanding the death of one of the parties to the escrow agreement, the transaction is not placed beyond the control of a court of equity if the circumstances of the case require its interposition.
It is said, however, by respondent, that the term “ equity,” when applied to mortgages in this state, describes nothing; and quotes Pomeroy’s Equity Jurisprudence, section 1188, to the effect that it is an entire misuse of language to apply the name “ equity of re
If the allegation contained in said fifth paragraph had been specially demurred to upon the ground of uncertainty or ambiguity, such demurrer should have been sustained; but we think, when tested by a general demurrer, that the allegation is a* sufficient statement that the interest of the estate in the property described in the deed is of the value of four thousand dollars over and above the indebtedness of the estate to the defendant. It is alleged that the said deed constitutes a cloud upon the title of plaintiff and his right to subject said property to administration. The “ equity,” therefore, must refer to the interest which the estate would have had in the land subject to the mortgage; and, as the demurrer concedes the truth of this allegation, a cause of action was stated entitling the plaintiff to relief upon that ground, if no other.
Respondent contends, however, that the complaint is fatally defective because it contains no offer or tender, or any allegation of offer or tender, to pay the overdue mortgage indebtedness. They treat this as an action to quiet title, or as an action to redeem. Strictly speaking, it is neither. It alleges that a mortgage was given, that at the date of the deed and agreement a subsisting debt secured by the mortgage was due, unpaid, and enforceable under the mortgage, which was then, and still would have been, a valid lien upon the premises, alleges
Plaintiff treats the lien as still subsisting. A bill in equity to redeem from a subsisting and enforceable mortgage lien would not lie, as the lien could be discharged by payment; but the defendant claims to have an absolute title to the land, and that the mortgage, which formerly subsisted, has been paid and discharged by the conveyance of March 1, 1895. If the decree prayed for in a given case would leave the defendant without remedy for the recovery of the money which would have been secured by the mortgage if a deed had not been subsequently given, it is clear that a court of equity would not grant it unless the plaintiff had tendered or offered to pay the money which he alleged the deed was given to secure, wdiether the debt was barred by the statute of limitations or not. But the decree here sought can have no such effect. The suit is brought, not to deprive the defendant of any of his just rights, but to determine the validity of the transaction by which the defendant claims what amounts to a forfeiture of the mortgaged property, and not to deprive him of a remedy whereby he may collect his debt. To impose upon the plaintiff the condition that he shall first tender payment, would give the defendant a benefit or advantage of great value from what is, upon the facts alleged, a transaction from which he should not be permitted to derive any benefit or advantage; that is, he could stand upon the apparent title conveyed by the deed without foreclosure, for all time, knowing that his debtor cannot quiet his title against him without payment of the debt and interest, though barred by the statute, with the power of alienation at any time to an innocent purchaser; advantages which he did not and could not have had under the mortgage.
Nor is it true that the'debtor who has given a deed absolute in form as security for the payment of his debt
Keniston died July 9th, plaintiff was appointed administrator July 23d, and this action was commenced July 30th, the deed to defendant Davenport having been delivered on the 24th.
It is alleged that the estate is largely indebted, and that a sale of the interest of the estate in the premises described in the deed is necessary in order to pay said indebtedness. Under such circumstances it would be inequitable to require a tender of tlie amount due as a condition upon the performance of which alone the action could be maintained, and a compliance with such condition would appear, from the facts stated, to be impossible. Certainly the money could not be raised upon the premises embraced in the deed, whatever its value, until it should be determined that the deed was itself only a mortgage.
We think the court erred in sustaining the demurrer, and that the judgment should be reversed, with leave to the plaintiff to amend his complaint if so advised.
Searls, O., and Bedgher, C., concurred.
For the reasons given in the foregoing opinion the judgment is reversed, with leave to the plaintiff to amend his complaint if so advised.
McFarland, J., Temple, J., Henshaw, J.