Opinion
[Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] Rehearing Granted 62 Cal. 623 at 640.
Appeal from a judgment for the plaintiff in the Twenty-third District Court in and for the City and County of San Francisco. Thornton, J.
COUNSEL
The Court erred in overruling the demurrer.
At the time the note and mortgage for thirty-six thousand dollars were made and delivered, June 1, 1874, the defendant, Maria Baker Batchelder, was and still is a married woman, and could make no contract for the direct payment of money. ( C. C., § 167, before repeal.) Neither could she dispose of the community property, for the law placed the control and disposition of it during life and coverture in the husband. Therefore, she could, at the time this note and mortgage were made, make a contract of such character only in reference to her separate estate; and in order for the complaint to state a cause of action against her, it should contain an allegation that the contract was made in reference to her separate estate or property, and the condition of the property should also be stated. There being no allegation of this kind, the complaint is fatally defective. (Coats v. McKee , 26 Ind. 223; Robson & Allen v. Shelton & Husband, 14 La. An. 712; Sexton v. Fleet, 6 Abb. Pr. (N. Y.), 8-10; Murray et al. v. Keyes et al. , 35 Pa. St. 384; Wallace v. Rippon, 2 Bay (S. C.), 112; Trimble v. Miller, 24 Tex. 214; Covingtons v. Burleson , 28 id. 368.)
The defendant, Maria Baker Batchelder, being unable to make a contract for the direct payment of money on June 1, 1874, simply joining in the note with her husband, made it the obligation of the husband alone. (Shartzer v. Love , 40 Cal. 93; Brown v. Orr et al. , 29 id. 120; Althof v. Conheim , 38 id. 233.)
The Court erred in overruling the demurrer, for the further reason that at the time of the commencement of this action nothing was due on the thirty-six-thousand-dollar note of June 1, 1874, and therefore the suit to foreclose the mortgage was premature. (Bank of San Luis Obispo v. Johnson , 53 Cal. 99; Williams v. Townsend , 31 N.Y. 411; Jones on Mortgages, 1175.)
The note and mortgage of June 1, 1874, upon a legitimate construction, do not authorize a foreclosure upon the breach of any condition beforethe first day of June, 1879. But if there should be any doubt in this, then the clause above quoted in the third mortgage must of a certainty set it at rest. A new contract is made, increasing the rate of interest, and expressly provides what shall be done, not only with the interest in default, but for the interest that shall accrue, viz., all interest in default, whether past or future, shall bear interest at the rate of one per cent., and be added to the principal. (Haggerty v. The Allaire Works. 5 Sandf. 230-237.)
Again, to give the construction asked for by counsel for respondent to this mortgage is to declare in favor of a penalty, and, in effect, it would work a forfeiture of the contract. Now, it is a universal rule of courts of equity never to enforce either a penalty or a forfeiture. (Story's Eq. Jur., vol. 2, sec. 1319.)
" Contracts under which a forfeiture is claimed to have accrued should be construed strictly, and the facts urged in support of the forfeiture ought to be clear and explicit, and not be left to inference or argument." (Von Schmidt v. Huntington , 1 Cal. 56; Colman v. Clements , 23 id. 248; Wiseman v. McNulty , 25 id. 237; Waring v. Crow , 11 id. 367.)
By increasing the rate from ten to twelve per cent. upon the interest in arrears, and all interest to accrue and be in arrears on the mortgage of June 1, 1874, the mortgagee was increasing and adding to his debt the sum of eight hundred and seventy-five dollars. This is the consideration by which the clause in the mortgage of February 20, 1877, is governed.
Parties can make a certain agreement between themselves for a consideration referable to this agreement alone, and at the same time bind themselves in the contract to carry out or extend the terms of a foreign contract, based upon an entirely different and separate consideration. (Parsons on Contracts, 5th edition, vol. 2, page 217.)
The Court erred in giving judgment against the defendant, Maria Baker Batchelder, for deficiency after sale. (Butler v. Baber , 54 Cal. 178.)
The mortgage gives the mortgagee no right to consider the whole principal sum and interest due, with the right to foreclose upon default in the payment of taxes by the mortgagors. (Jones on Mortgages, vol. 2, sec. 1175; Williams v. Townsend , 31 N.Y. 411, 412.)
Sol. Hydenfeldt, Jr., S. Hydenfeldt, and Hydenfeldt & Jefferson, for Appellant.
E. J. and J. H. Moore, for Respondent.
Defendants' demurrers were all properly overruled.
If default is alleged, in that interest was not paid, or that taxes were neglected to be paid by defendants and were paid by plaintiff, and not repaid to him, does it not plainly follow that the right to foreclose and sell at once arose upon such default?
Defendants' neglect to pay the taxes, and their payment by plaintiff to prevent the sale of the mortgaged premises for such taxes, gave plaintiff the complete right of action to foreclose at once, and collect the whole debt. How otherwise can plaintiff be " empowered to sell the premises above described in the manner prescribed by law, and out of the proceeds of such sale retain the above amount of $ 36,000, with interest," etc.?
The decisions applicable to this branch of the case are: Whitcher v. Webb , 44 Cal. 127; Bank of San Luis Obispo v. Johnson , 53 id. 499; McKissick v. Cannon , 4 P. C. L. J. 285.
The mortgage is exactly in accordance with the approved forms in like cases. (See Spaulding's Law Encyclopedia and Forms, ed. 1877, p. 345.)
The general principles applicable to this case, in this regard, are also laid down in 1 Jones on Mortgages, §§ 71-77; Chick v. Willetts, 2 Kan. 384, 385; id. 54; Rubens v. Prindle, 44 Barb. 336; Broderick v. Smith , 26 id. 539; 37 id. 60; 15 How. Pr. 434; 24 id. 400.
Judgment was properly entered on the complaint, and answers upon the ground stated, because the answers failed to deny the facts alleged. They do not deny the genuineness and due execution of the notes and mortgages. " In such cases there can be no issue of fact upon the tenor or effect of the instrument." (Burnett v. Stearns , 33 Cal. 473, 474; Sacramento Co. v. Bird , 31 id. 67-73; Corcoran v. Doll , 32 id. 83-88.
Every denial is of some conclusion of law, made to negative, not some fact stated by the complainant, but some legal conclusion only. Such denials are mere evasions. (Lightner v. Menzel , 35 Cal. 460; Burke v. Table Mountain W. Co. , 12 id. 403, 407; Piercy v. Sabin , 10 id. 22, 27; Nelson v. Murray , 23 id. 338; Lightner v. Menzel , 35 id. 452; Castro v. Wetmore , 16 id. 379; Christy v. Dana , 42 id. 174; Kinney v. Osborne , 14 id. 113; Towdy v. Ellis , 22id. 659; Higgins v. Wortell , 18 id. 330, 333.)
The notes and mortgages now before this Court, having, as they do, the signatures of both husband and wife, properly acknowledged and certified, are valid and binding on both parties and on the property for all purposes, and would have so been at any time for more than twenty-five years past. It matters not whether the property in question belonged to the husband or to the wife, or was that of the community. (Marlow v. Barlew , 53 Cal. 456; Parry v. Kelley , 52 id. 334.)
As part consideration for the increase of two per cent. per year on the arrearages of interest, the mortgagee was lending $ 2,000 additional. Will it reasonably be inferred that he lent this further sum and waived his right to foreclose and get his principal of $ 36,000 on default of payment of interest, taxes, etc., for so paltry an advantage, and yet carefully guard that right on all the inferior sums in all subsequent mortgages, and notably in the very mortgage containing the supposed waiver? Should not the waiver be explicit, and not left to inference or argument? (Racouillat v. Sansevain , 32 Cal. 376; McNeil v. Shirley , 33 id. 202; Saunders v. Clark , 29 id. 299; Civil Code, §§ 1697, 1698.)
JUDGES: Thornton, J. Morrison, C. J., and Myrick and Sharpstein, JJ., concurred. McKinstry, McKee, and Ross, JJ., dissented.
OPINION
THORNTON, Judge
After the foregoing decision was rendered, a rehearing was had in Bank, upon which the following decision was rendered:
The Court:
This case was heard before Department One of this Court, and its opinion filed June 24, 1881. (7 P. C.L. J.733.) Subsequently, a hearing before the Court in Bank was granted. Such hearing having been had, an opinion by the Court in Bank was filed May 30, 1882. (9 id. 515.) Thereafter a rehearing in Bank was granted. Such rehearing has been had. We are satisfied with the views expressed in the opinion of the Court in Bank; and for the reasons therein given, the Court now makes the same order, and gives the same judgment as therein contained.