25 P.2d 879 | Cal. Ct. App. | 1933
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *421
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *422 THE COURT.
An action by plaintiffs Olson and Caldwell to quiet their alleged title to an undivided interest in a parcel of land in Los Angeles County.
They are daughters of Charles Lyman Cornwell, who died intestate in said county on September 26, 1921. They claim that the land was the community property of decedent and defendant Ella H. Cornwell, their mother, who will be hereinafter *423 referred to as Mrs. Cornwell; also that defendant California Security Loan Corporation, hereinafter referred to as the loan company, acquired its interest therein with notice of their rights as heirs of decedent and under a certain contract of settlement made with their mother, by which the latter agreed that they should have an interest in the property. After said contract was recorded defendants Rhoades succeeded to the interest of the loan company therein.
The trial court found against plaintiffs' claims, and judgment having been entered accordingly, they have appealed therefrom.
Decedent and Mrs. Cornwell married on November 20, 1872, and came to California in 1882. There were four children of the marriage. The land was purchased on a contract in 1884, and was conveyed by the record owner to Mrs. Cornwell by grant deed dated July 12, 1886, and recorded July 27, 1886. According to the court's findings the conveyance to her was made at decedent's request. The spouses and their children resided thereon until the death of decedent.
Commencing in 1924 Mrs. Cornwell executed several encumbrances upon the property to secure sums borrowed. Among these were several deeds of trust to the Title Guaranty Trust Company to secure loans made by the loan company. The last was dated August 29, 1927, when Mrs. Cornwell, with her son, Ralph, executed a deed to the title company as trustee to secure a loan of $24,500 from the loan company. Defaults occurred under this deed, and on April 19, 1930, the land was sold by the title company as trustee and purchased by the loan company. In 1930 the loan company's interest therein was acquired by defendants Rhoades.
When the title to the land was secured by Mrs. Cornwell the statute provided that all property of the wife owned by her before marriage, and that acquired afterwards by gift, bequest, devise or descent, with the rents, issues and profits thereof, should be her separate property (Civ. Code, sec. 162). The same rule applied to property owned or in like manner acquired by the husband (Civ. Code, sec. 163). Section 164 of the same code provided that "all other *424 property acquired after marriage by either husband or wife is community property".
[1] In support of their contention that the land was the community property of their parents plaintiffs rely in part upon the disputable presumption that it was of that character (Alverson v. Jones,
It is also contended that the loan company had notice of plaintiffs' claims both as heirs of their father and under their contract with Mrs. Cornwell. This is based upon the facts that alis pendens was filed in Mrs. Cornwell's suit to quiet title and that the loan company had actual notice of the suit.
[5] The suit mentioned was commenced by Mrs. Cornwell against her children on March 2, 1926, and a lis pendens was filed on March 4, 1926. The complaint alleged title in her, and that the defendants (including the plaintiffs in the present action) claimed some estate or interest in the property. On June 14, 1926, defendants last mentioned answered, denying Mrs. Cornwell's alleged title and averring that the land was community property and that the interest they claimed therein was by right of inheritance as heirs of their father. They asked no affirmative relief nor did they file a lis pendens. However, that filed by Mrs. Cornwell was sufficient notice that they claimed an adverse interest (Welton v. Cook,
[8] No judgment except one of dismissal was entered in the quiet title action, and this was done pursuant to the contract between the parties settling their differences and by which plaintiffs acquired an interest in the land. The trial court in the present case has found that plaintiffs' asserted interest by succession from their father was without foundation, and it appears that their sole interest was that acquired from Mrs. Cornwell under the settlement contract mentioned, following the execution of which the suit was dismissed.
These facts bring the case within the rule above stated, and the rights of the loan corporation were unaffected by the lispendens filed.
However, it is clear from the evidence that both the loan and title companies had actual notice of the pendency of the suit as early as February, 1927; but, according to correspondence between them, the loan company was satisfied to accept a policy of insurance from the title company insuring the loan against any loss growing out of the litigation. The settlement contract was executed on August 8, 1927, but was not recorded until June 29, 1928. The last deed of trust was executed on August 29, 1927, and recorded September 6, 1927. [9] The contract recited that a settlement of all disputes between the parties had been made, and contained the provision that plaintiffs "shall have and from now on are entitled to one-sixth (1/6) part and interest each" in the property. It seems clear from the language of the parties that it was the intention to make a present transfer to plaintiffs of an undivided interest in the property; and where the intent is expressed it is sufficient, whatever may be the inaccuracy of expression or the inaptness of *428
the words used, and the courts will give the instrument that effect (8 R.C.L., Deeds, sec. 64, p. 937; Meyers v.Farquharson,
[10] It has been held that actual notice of the pendency of an action is in many respects more extensive than the doctrine oflis pendens (38 Cor. Jur., Lis Pendens, sec. 7, p. 10); and it is the general rule that whatever is sufficient to direct the attention of a purchaser or encumbrancer to the prior rights or equities of third persons, and to enable him to ascertain their nature by inquiry, will operate as a notice of the facts (Lawton v. Gordon,
[13] The court also found that plaintiffs' action was barred by the provisions of section 164 of the Civil Code. This could only be true if the land was community property, or if the plaintiffs succeeded to an interest therein, and could have no application to the enforcement of their rights under the settlement contract.
[14] The same may be said of the contention that the acts of the decedent were such as to estop those claiming under him from asserting an interest in the property.
[15] Mrs. Cornwell executed three deeds of trust upon the property to secure the repayment of money borrowed from the loan company, the dates and amounts of these encumbrances being as follows: September 12, 1925, $12,500; January 4, 1927, $21,000, and August 29, 1927, $24,500. The proceeds of the second and third loans were used to pay off the one which immediately preceded them, respectively. As found by the court, plaintiffs had acquired no interest in the land before the first and second loans were made; and should it be finally determined that the loan company had constructive notice of the contract before its third loan was made it will then be a question for the trial court as to whether under the circumstances the prior encumbrances should in the interest of justice be kept alive. That this may be done in a proper case appears to be well settled. (18 Cal. Jur., Mortgages, sec. 490, p. 197.)
The finding and conclusion of the trial court that the land was separate property is sustained by the evidence, and it will be unnecessary to litigate this issue further. However, there remain to be determined the questions whether the *431 loan company had constructive notice of plaintiffs' rights when the last deed of trust was executed and the loan secured thereby was made; and if it had, whether that portion of its loan which was used to pay off the loan or loans which preceded it should in equity be chargeable against the interest which plaintiffs acquired under the settlement contract.
The judgment is accordingly reversed and the cause remanded for a determination of these questions.
A petition for a rehearing of this cause was denied by the District Court of Appeal on October 28, 1933.