121 Cal. 515 | Cal. | 1898
Suit to foreclose a mortgage executed to Bernardo Fernandez, the plaintiff, by defendant Patrick Tormey, on August 23, 1893. At that time the Union Stock Yard Company of San Francisco, a corporation, was indebted to Fernandez, in the sum of $50,742.12, to fall due, with accruing interest, on August 28, 1893; which indebtedness was evidenced by the-promissory note of a certain third person, a mortgage of lands-securing the same, and a contract in writing whereby said corporation had assumed and agreed to pay the amount unpaid on said note to Fernandez, and he had released the original maker thereof from personal liability thereon.
Said Tormey, having occasion to raise a considerable sum of money, borrowed $45,135.60 from one John A. Stanly, and $16,-000 from the Commercial Bank of Vallejo. On said August 23, 1893, the following transactions occurred at the office of said Stanly: Tormey and Fernandez—the latter acting for the accommodation of the former-—executed two joint notes, for the-sum of $8,000 each, to the said Commercial Bank, payable with interest one year from date, and to secure one of them Fernandez made to the bank a mortgage of land owned by him; as security for the other Fernandez and Tormey made a mortgage to the bank of lands owned by them as tenants in common; Tormey executed his note to Stanly for said sum of $45,135.60; and Fernandez made to one Henry Rogers a formal written as
It is first stated in this mortgage that for the purpose of securing payment of a promissory note dated August 23, 1893, copied at length, by which in terms Tormey promised to pay Fernandez the sum of $62,742.12 on or before two years after date, with interest, etc., the mortgagor mortgages to the mortgagee certain described tracts of land. It is then provided that “This mortgage and the note secured hereby are given to secure the said Fernandez against any loss which he may ever sustain by reason of the. transfer and assignment by him to Henry Eogers of” the aforesaid obligations of the stock yard company, particularly described; also, “to indemnify and save the said Fernandez harmless from any loss or liability which he may ever sustain by or on account of the execution by him” of said notes and accompanying mortgages for $16,000 to the Commercial Bank. It was further stated in the mortgage that said assignment to Eogers was given as security for the payment of Tor-me/s note to Stanly, and that said notes to the Commercial Bank were given for money advanced by the bank to Tormey. The mortgage was read to Fernandez and he made no objection to any of its provisions.
On June 24, 1895, Eogers instituted an action in the proper •court to foreclose the said mortgage of the Union Stock Yard Company; Fernandez was joined with the company as a defendant, but no personal judgment was asked against him (Haber v. Brown, 101 Cal. 445); and no steps seem to have been taken in that action beyond filing a complaint. On June 27, 1895, said stock yard company, on its own petition in insolvency, was adjudged an insolvent debtor. On November 19, 1895, Fernandez paid to the Commercial Bank $12,400, satisfying the amount due on the mortgage he had made to the bank for Tenney's accommodation on land owned by himself in severalty, and paying also one-half the amount due on the mortgage which cov
November 20, 1895, Fernandez commenced this action. After trial the court found as facts, among other things, that by the assignment of August 23, 1893, the plaintiff conveyed and transferred to Rogers all his right and interest in and to said obligations of the stock yard company; and that in consequence thereof plaintiff has sustained a loss of $50,742.12, the value of those securities at the date of the assignment, together with interest from that date; that after the commencement of this action Tormey tendered to plaintiff repayment of the sums plaintiff had paid to the Commercial Bank, and interest thereon, together with the note duly canceled and certificate of satisfaction of the mortgage to said bank which plaintiff had discharged in part only, also a re-assignment by Rogers to plaintiff of the said obligations of the stock yard company, etc.; and offered to pay plaintiff's expenses of the action, including such reasonable counsel fee as the court might fix; which tender was followed by deposit in court of the money and instruments tendered. The court further found that the value of said stock yard company securities, after they were assigned to Rogers by plaintiff, depreciated from twenty to thirty-three per cent, and that said tender included nothing on that account. From these and other findings the court concluded that Tormey is indebted to plaintiff on the note and mortgage in suit to the full amount of the principal thereof—$62,742.12—and a further sum of $10,176.41 for interest thereon; and for these sums, with counsel fees, etc., a decree of foreclosure was rendered.
On appeal defendants raise no question as to the right of plaintiff to sue for the enforcement of the mortgage to the extent necessary to reimburse him for the money he paid to the Commercial Bank, with interest and expenses; nor does plaintiff dispute that Tommy's tender after suit brought covered all the detriment he sustained in that behalf. The principal contest in this court relates to the effect and consequences of plaintiff’s assignment to Rogers of the stock yard company’s paper. The express purpose of the mortgage in suit is security to plaintiff against “loss which he may ever sustain” on that account; hence, it was essential that he should have sustained actual loss,
The case, however, cannot be reconciled with that view. Nothing can be clearer on the evidence than that Rogers, on his part, took the obligations assigned to him by plaintiff to hold in pledge for the payment of Tenney’s note to Stanly. We may concede, as counsel insist, that the statement in the mortgagé to that effect does not estop plaintiff (Osborne v. Endicott, 6 Cal. 149; 65 Am. Dec. 498); but the statement harmonizes with all the parol evidence of the occurrences at the time of the assignment, and its correctness, as concerns Rogers and Stanly at least, must be said to have been established without conflict. It of course follows that plaintiff was not divested of his title in the assigned securities by force merely of the assignment. (Civ. Code, sees. 2888, 2986.) Now it may be admitted that there might have been such a contract between plaintiff and Tormey that, as to them, the assignment to Rogers would be held equivalent to an outright sale of the stock yard company securities) Tormey becoming responsible to plaintiff for the purchase price. But security for any such responsibility is not included within the terms of the mortgage interpreted in the light of attending circumstances; the provision that “this mortgage and the note secured hereby are given to secure the said Fernandez against any loss which he may ever sustain by reason of the transfer and
Regarding plaintiff’s further insistence that the action of Rogers in suing on the pledged securities was an application of the same on the debt of Tormey to Stanly, and, virtually, a conversion of the same, we observe that as pledgeholder it was Rogers' right to collect the money which became due on said securities, and his suit for that purpose was not a conversion of them. (Civ. Code, secs. 2996, 3006; McArthur v. Magee, 114 Cal. 126.)
Loss to plaintiff is also said to have accrued from the facts in evidence that subsequently to the assignment to Rogers the Stock Yard Company was adjudged insolvent, the land on which its debt to plaintiff was secured depreciated in market value, and the further fact assumed (whether with ox without proof we
Upon the record before us plaintiff was entitled to no recovery beyond the sums of money tendered to him by Tormey after suit brought, together with reasonable attorneys’ fees to the time of tender. The judgment and order denying a new trial should be reversed.
Belcher, C., and Chipman, C., concurred.
For the reasons given in the foregoing opinion the judgment and order denying a new trial are reversed.
Temple, J., Henshaw, J., McFarland, J.