284 P. 729 | Cal. Ct. App. | 1930
This is an appeal from a decree of foreclosure. *342
The defendants were the owners of 200 acres of farm land in San Joaquin County. April 24, 1925, they executed and delivered to the plaintiff, which was a fruit-marketing corporation, their promissory note for $15,000, payable in installments of $5,000 on September 15th of 1925, 1926 and 1927, secured pursuant to section
". . . We and each of us promise to pay to Pacific Fruit Exchange, a corporation, or order, the sum of Fifteen Thousand and no/100 Dollars, . . . with interest thereon from date until paid, at the rate of eight per cent per annum in like gold coin, payable annually, and if not so paid the interest may be added to the principal and bear like interest, and the whole note may, at the option of the holder, without notice to the maker thereof, be treated as due and payable. . . ."
For default in the payments of both principal and interest for the years 1925 and 1926 the plaintiff declared the entire amount represented by the note to be due. In January, 1927, this suit for foreclosure was brought. The instrument was treated as an agreement for a crop lien and also as a real estate mortgage to secure the payment of the note. The facts were stipulated at the trial. By agreement, two questions only are raised to be determined on this appeal.
The appellants contend that (1) the instrument in question is not a real estate mortgage; but, on the contrary, that it creates only a crop lien; (2) the foreclosure action was prematurely commenced, since the time for deferred *343 payments was specifically extended to December 1, 1929, by the following terms of the mortgage:
"It is further agreed by the parties of the first part that if the whole of said indebtedness, and all other indebtedness due, owing or existing from first parties or either of them during said year, to second party, is not paid out of the proceeds of said crops of 1925-26-27-28-29, the parties of the first partmay pay such balance in United States Gold Coin on or before thefirst day of December, 1929, but should the whole of said indebtedness not be paid on or before the first day of December, 1929 (time being of the essence of this contract), then this agreement is hereby continued through the season of 1930 and thereafter so long as any indebtedness remains unpaid from the parties of the first part to the party of the second part, in all respects as herein agreed upon for the seasons of 1925-26-27-28-29."
[1] We are of the opinion that the instrument in question constitutes a valid real estate mortgage which the plaintiff was authorized to foreclose for any default in the terms thereof or for deferred payments on the note for the security of which the mortgage was given. The appellants assert that the provision of the instrument that "the real estate herein described is also hereby mortgaged to secure the indebtedness herein mentioned" is defective as a real estate mortgage for the reason that it contains no language of grant or conveyance of the real property previously described. [2] Words of grant or conveyance of the property are not required to constitute a valid mortgage. A mortgage is merely a written contract hypothecating specific property and creating a lien for the security of a debt. (Section 2920, Civ. Code; 17 Cal. Jur. 696, sec. 5.) A mortgage is not necessarily a grant of real property. (Adler v. Sargent,
[4] The foreclosure proceeding was not commenced prematurely. The defendants were in default of payments of both principal and interest for the years of 1925 and 1926. The specific terms of the note authorized the holder thereof to declare the entire amount due for default at any time without notice to the makers thereof. The plaintiff elected to do so. The commencement of the action was sufficient notice of this election. It is true that the provision of the *345 contract heretofore quoted purports to allow the defendants to pay the deficiency in any annual installments which were due, "on or before the first day of December, 1929." The language of the note and this provision of the contract are utterly and irreconcilably inconsistent. [5] Where a conflict respecting the maturity of a debt exists between the conditions which appear in a mortgage and in the note secured thereby, the provisions of the note will control. (1 Jones on Mortgages, 7th ed., 82, sec. 71; 19 R.C.L. 493, sec. 287; 46 L.R.A. (N.S.) 477, note.) [6] A clause in a note authorizing the acceleration of the date of maturity for default in the payment of principal or interest will control a statement in the mortgage which is conflicting therewith unless the provisions of the two instruments may be reasonably reconciled. (19 R.C.L. 494, sec. 290.) [7] It is true that when the note is silent regarding an option on the part of the holder thereof to declare the entire debt due for default in the payment of an installment of interest and the mortgage contains such an acceleration clause, the latter will control. (41 C.J. 453, sec. 340.) This is because the provisions of the two instruments are not repugnant and may be reconciled by adding to the note the further remedy for default which is provided by the mortgage. In the present case, however, the provisions respecting the maturity of the note and mortgage are irreconcilable and the default clause of the note must, therefore, prevail.
The judgment is affirmed.
Plummer, J., and Finch, P.J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on February 20, 1930, and a petition by appellants to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on March 20, 1930.
All the Justices concurred. *346