Suit to remove a cloud and quiet title to real estate. Findings and judgment were for the defendants, and the plaintiff appeals from the judgment and from an order denying a new trial. Walter S. Maxwell, the husband of Amelia, their three children, all minors, and Charles A. Baskerville, as trustee, were the other defendants. The property involved was the separate property of Mrs. Maxwell.
The facts, briefly stated, are as follows: On and prior to August 23, 1893, Mr. and Mrs. Maxwell were indebted to the plaintiff in the sum of nine thousand three hundred dollars, and plaintiff had instructed its attorneys to commence proceedings by attachment against them to collect, said indebtedness, and to attach the property here in controversy. Before commencing suit plaintiff sent for Mr. and Mrs. Maxwell and informed them that an immediate settlement must be made, or proceedings would be taken for its collection; that said defendants requestеd delay, saying they had reasonable prospects of settling in a few days. Plaintiff then agreed, “on condition that Mrs. Maxwell would make no disposition of her property and make no change in the situation of it, that proceedings would be postponed until Saturday”; that Mrs. Maxwell then promised, “on her honor, using those words,” that she would make or suffer no change in the situation of her property; whereupon plaintiff instructed its attorneys to delay proceedings until the following Saturday;
This deed was recorded the same day, and on the next plaintiff was informed of it, and with knowledge that it had been executed and recorded the plaintiff took from the Maxwells their promissory note payable one year after date, with interest payable quarterly, and if not so paid the principal to become due and payable upon such default, and a mortgage upon the interest of Mrs. Maxwell in the Lanfranco block, in the city of Los Angeles, to secure said note. Default was made in the payment of the first quarter’s interest, and plaintiff thereupon foreclosed the mortgage, and, after exhausting the mortgaged property, on April 7, 1894, docketed a deficiency judgment for the sum of five thousand one hundred and sixty-seven dоllars and five cents.
At and prior to the execution of said trust deed one Etchepare held the promissory note of Mr. and Mrs. Maxwell, then past due, upon which he brought suit in December, 1893, and obtained judgment for seventeen hundred and twenty-three dollars and thirty cents and costs, and an execution issued thereon was levied upon the property described in said trust deed, and the interest of Mrs. Maxwell therein was sold to Etchepare on February 19, 1894.
Upon the plaintiff’s deficiency judgment being docketed (April 7, 1894) an execution was issued thereon, which was returned nulla bona, and thereafter the plaintiff performed all the acts necessary to redeem the said premises from Etchepare, and in due time the sheriff executed and delivered to the plaintiff, as such redemptioner, a deed for the said premises, and said deed was duly recorded prior to the commencement of this action.
Thе foregoing facts are shown by the evidence without conflict, and, excepting the directions of the plaintiff to its attor
The court, however, made some additional findings, which azoto the effect that prior to the execution of the mortgage to the-plaintiff upon the one-fourth interest in the Lanfranco block,, the French Bаnk had taken a mortgage upon all the interests therein for sixty thousand dollars upon which Mrs. Maxwell had paid twenty thousand dollars; that at the time of the execution-c.-f the mortgage to the plaintiff she owned other real estate bathe city of Los Angeles “aggregating several thousand dollars-over encumbrances, and was possessed of a large amount of personal property, unincumbered, aggregating in value between five- and six thousand dollars.”
The seventeenth finding is as follows: “The plaintiff knew of the execution of the said trust deed and the financial condition of the said defendants, Walter S. Maxwell and Amelia C. Maxwell, his wife, at the time of the execution, and delivery of the-said note and mortgage by them to the plaintiff on the twenty-fourth day of August, 1893.”
From these findings the court drew the following conclusions of law: “1. That plaintiff waived its right to attack said trust deed;: that no legal redemption in this сase was had, and that plaintiff" did not become substituted to the rights of the purchaser at the-sheriff’s sale on the Etchepare judgment, and is not the owner of the property and not entitled to have the same removed as a cloud thereon, or to quiet its title thereto”; and that defendants-are entitled to judgment.
The complaint alleged that said trust deed was made with the-intent to delay and defraud creditors, and especially the plaintiff, and that the defendants, Mr. and Mrs. Maxwell, were insolvent, and these allegations were denied.
After the findings were filed, but before judgment was entered' thereon, the plaintiff, upon due notice, moved the court to amend" and supplement its findings in several particulars, among them to find upon the question of fraudulent intent in making the-trust deed, and to find that the Etchepare note was made before-the deed of trust was executed. The motion was denied, and plаintiff excepted.
The other proposed amendments and additions to the findings will be noticed, so far as material, in another connection.
Two principal questions were presented to the trial court: 1. Was said trust deed made by Mrs. Maxwell with intent to delay or defraud her creditоrs? 2. If so, did the plaintiff waive its right to attack it and to have it declared void?
It is conceded that if the plaintiff is estopped from attacking said trust deed upon the ground that it was made with intent to delay or defraud creditors, it is immaterial to the plaintiff whether it was so made or not.
Appellant contends, however, that the conclusion of the court “that plaintiff waived its right to attack said trust deed,” if regarded as a conclusion of law, is not sustained by thе findings; and, if regarded as a finding of an ultimate fact, is not justified by the evidence; and this contention I think must be sustained.
This question of waiver cannot be discussed without assuming that the trust deed was made with the fraudulent intent charged, for unless there was first a fraud there could be no waiver; and the court, in finding that the plaintiff waived the fraud, impliedly found that the deed was fraudulent and would have been void as to the plaintiff but for the waiver.
The facts upon which counsel for respondent base their argument that plaintiff waived the fraud are stated in their brief to be: that the bank had full knowledge of the making of the trust deed by which the property was conveyed for the benefit of the children; that it was recorded; that it knew of the mortgage upon the homestead and of the general embarrassment of the defendants in meeting their obligations; that all the encumbrances on Mrs. Maxwell’s property were of record, and “after knоwing these facts he (the president of the bank) entered into an agreement whereby he accepted for the bank a mortgage to the bank”; and the principle which counsel say must control is “that a man who does not speak when he ought, shall not be heard when he desires to speak.”
If Mrs. Maxwell 'had informed the bank of her intention to place the property in question beyond the reach of her creditors,
It was said by Sir Edward Coke, referring to the statute of 13 Elizabeth, that if there is actual fraud at the outset of a transaction nothing afterward can “anyways salve or amend the matter.” It is conceded that this is not now the broad and unbending rule. The exceptions to it are stated in Bigelow on Fraud, volume 2, pages 407, 408, to be cases of present or subsequent consent or ratification by the creditor, and an undoing of the fraud, as by a reconveyance before proceedings are commenced. We do not think that the acts of the plaintiff, which dеfendants call “a waiver,” amount to a subsequent consent or ratification by the creditor. “To make out a case of abandon
“A waiver is the intentional relinquishment of a known right.” (28 Am. & Eng. Ency. of Law, 526.)
The conclusion of the court below that plaintiff waived the fraud of defеndants was based, as the evidence and the findings conclusively show, wholly upon the fact that it took the note and mortgage with knowledge of the financial embarrassment of Mr. and Mrs. Maxwell, and of the making and recording of the trust deed. Those facts do not justify the inference that the plaintiff intended to waive the fraud. Nothing was said upon that subject. No stipulation to that effect was inserted in the note or mortgage. The only inference to be drawn frоm the mortgage is that of a condition attached by the law to all mortgages, namely, that the mortgaged property shall be first exhausted, and if that proves insufficient a judgment for the deficiency shall be docketed which may be enforced against any other property liable to execution. It is not contended that this statutory right was waived as to any other property than that fraudulently conveyed, though I can see no logical or satisfactory reason why the supposed waiver would not equally apply to such other property. Any other interpretation of the law, or inference of fact, .would make fraud a virtue to be carefully protected and nurtured into full fruition. There was no dealing with the trustee in relation to the trust property. From the time the trust deed was delivered Mrs. Maxwell was a stranger to the title of the property thereby conveyed. She had no authоrity to act concerning it. She could neither exempt it from the payment of her debts nor apply it thereto. The giving of a mortgage as security for an antecedent debt requires no new consideration to support it, nor does it impose upon the mortgagee any condition not expressed upon its face other than those provided by law. The note and mortgage were in writing and expressed the whole agreement of the рarties. This transaction falls far short of “clear, unequivocal, and decisive” evidence of a purpose on the part of the plaintiff to waive a legal right given it by the solemn act of the mortgagors and in the absence of such evidence a court
Respondents cite several authorities, but none of them sustain their contention that the facts of this case show a waiver on the part of the plaintiff. Our attention is particularly called to the case of Pell v. Tredwell,
Wolf v. Van Metre,
In the case of Zuver v. Clark, 104 Pa. St. 222, the statement of facts shows that the creditor was present at the execution of the deeds alleged to be fraudulent, and was a subscribing witness to their execution, and that the exchange of properties was •made upon his recommendation.
Bobb v. Woodward,
■ It is further contended by respondents thаt plaintiff was not a judgment creditor having a lien upon the property in controversy, and was not, for that reason, entitled to redeem from the sheriff’s sale to Etehepare.
This contention is based upon two grounds: 1. That plaintiff waived the fraud, and thereby admitted the title of the trustee; and 2. That, admitting the trust deed was made to delay and defraud creditors as alleged, the judgment lien could not attach to the land because the conveyanсe was operative between the parties, and hence there was no title or interest in Mrs. Maxwell to which the lien could attach.
The second ground is wholly untenable. The code expressly declares that such transfer “is void against all creditors of the debtor.” “A void thing is as no thing.” So far as existing creditors are concerned, the title and ownership of the proрerty remains in the fraudulent grantor as fully as though no transfer had been attempted.
In 1 Freeman on Executions, section 136, it is said: “As against the fraudulent transferee the creditor may seize the property, whether real or personal, as that of the fraudulent vendor, and may proceed to sell it under execution. The title transferred by such sale (on execution) is not a mere equity—not the right to control the legal title and to have the fraudulent transfer vacated by some appropriate proceeding; it is the legal title itself, against which the fraudulent transfer is no transfer at all.”
This language was quoted and approved by this court in Judson v. Lyford,
The case of In re Estes,
If it be true, as the authorities clearly hold, that so far as it is necessary for the protection of creditors the title and ownership remаins in the fraudulent grantor, and that a sale under execution will pass the legal title to the purchaser, it must logically follow that a judgment duly docketed becomes a lien on the real estate so fraudulently conveyed. If there is nothing to which a judgment lien could attach, there can be nothing which would pass by a sale on execution.
I therefore conclude that the plaintiff had a judgment lien, and was entitled to redeem the property from the sale under execution issued upon the Etchepare judgment.
Another question should be briefly noticed. The answer alleges, and the court found, that aside from the property embraced in the trust deed Mrs. Maxwell owned real estate aggregating several thousand dollars over encumbrances, and was possessed of a large amount of personal property, unincumbered, aggregating in value between five and six thousand dollars.
There can be no question, upon the evidence appearing in the record, that there was on the part of the grantor such personal intent to defraud, and the facts stated in said finding do not overcome that evidence; and, besides, it is a finding of probative facts merely, and not of the fact of fraudulеnt intent or its opposite.
The evidence upon which that finding is based is also used, in argument, to show that there was personal property out of which plaintiff's deficiency judgment could have been satisfied. The return of the sheriff of no property found, and Mrs. Maxwell’s statement to the officer that she had no property, is conclusive upon that point, if it were material, a point we need not discuss. Besides, the finding relates to the date of thе trust deed, and not to the date of the execution.
The conclusion “that plaintiff waived its right to attack said trust deed,” not being justified by the findings or the evidence, a finding upon the issue of the fraudulent intent with which it was charged to have been made is essential.
I advise that the judgment and order appealed from be reversed and the cause remanded.
Searls, C., and Chipman, C., concurred.
For the reasons given in the foregoing opinion the judgment and order appealed from are reversed and the cause remanded.
Henshaw, J., Garoutte, J., Harrison, J., McFarland, J.
Temple, J.