Shaffer v. McCloskey
Shaffer v. McCloskey
Opinion of the Court
Plaintiff brought this action for a decree reviving a certain mortgage, and subrogating him to the rights of the assignee of said mortgage. Judgment went for plaintiff, and defendants appeal from the judgment upon the judgment-roll, which includes findings, their general contention being that upon the findings the judgment should have been for defendants.
The facts are, briefly, these: The plaintiff, Shaffer, and the defendant, McOloskey, were, on February 11, 1888, the owners, as tenants in common, by purchase from one Fahey, of certain land described in the complaint; and on that day, as the main part of the purchase money, they made to Fahey their promissory notes for certain sums of money to be due at different times, and also executed to him a mortgage upon the said land to secure said notes. Fahey assigned the
It turned out, however, that without plaintiff’s knowledge, McOloskey, after the execution of said mortgage, and before its satisfaction as aforesaid, had executed a deed of trust of all his interest in the land to one John Buddie for the benefit of the Merced bank, a corporation made a defendant,in the action, to secure a certain sum of money; and that said deed of trust had been recorded in the county recorder's office on November 10, 1888. (Certain proceedings were had under said deed of trust by which McCloskey’s interest was, after this action was commenced, sold to the defendant Howell; but they do not affect the questions here involved.) Appellants contend that under these facts all rights of respondent under the mortgage were merged in the deed from McOloskey, and that he was bound by
Counsel for both sides have exercised great industry in presenting this case to the court, and they have argued it in their briefs with great learning and ability. If we do not notice in detail the many views which they have taken, and the numerous authorities which they have cited, it is not because we do not appreciate their efforts to aid the court, but because such a course would carry an opinion beyond reasonable length.
In our opinion the judgment should be affirmed. It will be noticed that the judgment in this case does not weaken any position which appellants were induced to take by any conduct of the respondent. It does not take away from them any money which they were induced to invest by any act or laches of respondent; nor does it lessen the value of any security which he in any way induced them to take. They did not acquire any lien after the mortgage had been marked satisfied, and were not led by a clear record to invest money in the land. They took the deed of trust while the mortgage was in full legal existence, recorded and unsatisfied, and with perfect understanding that it was a valid prior lien, and they are merely seeking to take an advantage offered by an inadvertence or mistake of respondent. This is what equity will not allow.
As to the question of merger, it must be remembered that, with respect to that subject, equity is not controlled by the rules of law. The case of Rumpp v. Gerkens, 59 Cal. 496, is very similar on this point to the case at bar. In that case Rumpp brought suit to foreclose a mortgage executed to him by Gerkens, and Leonis was made a defendant as claiming some interest in the land mortgaged. Leonis had a prior mortgage executed by Gerkens upon the same land, but he had taken a deed of the land from Gerkens upon his promise to discharge and cancel the mortgage. This was done, however, without any actual knowledge of the second mortgage to Rumpp. The court below decreed that the amount
We are satisfied that the rule of equitable subrogation was properly applied by the court below in this case. Without referring to foreign authorities, the case at bar is fully within the principle declared in Matzen v. Shaeffer, 65 Cal. 81; Rumpp v. Gerkens, 59 Cal. 496; Swift v. Kreamer, 13 Cal. 526; 74 Am. Dec. 603; Carpentier v. Brenham, 40 Cal. 221; Carr v. Caldwell, 10 Cal. 380; 70 Am. Dec. 740; and Tolman v. Smith, 85 Cal. 280.) In. many of the cases cited by appellants the party seeking subrogation was a mere volunteer, or intermeddler; but in the case at bar respondent was an original party to the transaction, and forced to the course taken by him in order to protect his own interests. The fact that the deed of trust was recorded is of no value. In many of the cases cited by respondent, and particularly in Rumpp v. Gerkens, 59 Cal. 496, and Brooks v. Rice, 56 Cal. 428, the junior mortgage had been recorded. Despondent clearly intended that his payment of the mortgage
It is contended that respondent should have offered to reconvey one-half of the land to McCloskey. This appeal is evidently prosecuted in the interests of appellants other than McCloskey; but the whole decree is based upon the theory that the mortgage is revived, and the half interest in the land considered as belonging to McCloskey; and his undivided half is decreed to be sold to satisfy one-half of the mortgage debt. This protects the rights of every party, and remits each to his original status.
The judgment is affirmed.
De Haven, J., and Fitzgerald, J., concurred.
Reference
- Full Case Name
- R. SHAFFER v. H. H. McCLOSKEY
- Cited By
- 33 cases
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- Published
- Syllabus
- Mortgage—Satisfaction by Cotenant—Deed of Trust—Subrogation.— Where two tenants in common have executed a mortgage to secure the purchase money of the land owned by them as cotenants, and one of them, being unable to pay his share of the mortgage, has conveyed his interest in the land to his cotenant, in consideration that the latter shall pay the full amount remaining due on the mortgage, and the mortgage is afterwards satisfied of record upon such payment, without knowledge on the part of the person making the payment that his grantor had previously made a deed of trust of his half of the land, the person paying the mortgage may maintain an action to revive it, and to be subrogated to the rights of the assignee of the mortgage as against the holder of the deed of trust. Id.—Rights of Subsequent Lien-holder.—A subsequent lien-holder who has not acquired his lien after a prior mortgage has been marked satisfied, and has not been led by a clear record to invest money on the land, but who took the encumbrance while the mortgage was in full legal existence, recorded and unsatisfied, and with perfect understanding that it was a valid lien, will not be permitted in equity to take advantage of an inadvertence or mistake in the satisfaction of the mortgage. Id.—Merger.—In respect to the merger of a lesser estate in a greater, equity is not controlled by the rules of law; but is governed by the actual or presumed intention of the person in whom the interests are united. Id.—Equitable Subrogation.—One who is forced to pay the debt of another in order to protect his own interest, and who is not a mere volunteer or intermeddler, is entitled in equity to be subrogated to the debt. Id.—Record of Subsequent Lien—Right of Subrogation Unaffected.— The fact that a subsequent lien or deed of trust was recorded is immaterial to the right of a payer to revive a prior satisfied lien, and to be subrogated to such prior lien. Id.—Change of Legal Rights by Mistake—Equity—Restoration of Former Conditions.—When the legal rights of parties have been changed by mistake, equity restores them to their former condition when it can be done without interfering with any new rights acquired on the faith and strength of the altei ed condition of the legal rights, and without doing injustice to other persons. Id.—Reconveyance of Land.—It is not necessary that the one-half of the land be reconveyed to the cotenant who granted it where the decree for equitable relief is based upon the theory that the mortgage is revived, and the one-half interest in the land considered as belonging to the co-tenant by whom it has been conveyed to the plaintiff, and his undivided half decreed to be sold to satisfy one-half of the mortgage debt.