Summary
In Brooks v. Rice, 56 Cal. 428, the mortgagee under the first mortgage was ignorant of the existence of a second mortgage and it was held that a conveyance to him by the mortgagor of the premises to satisfy the mortgage would not operate as a merger but the lien would be considered as still existing for the protection of the claim of the first mortgagee.
Summary of this case from Ferry v. FiskOpinion
Department Two
Appeal by the plaintiff from a judgment for the plaintiff, in the First District Court, County of Ventura. Fawcett, J.
Action to foreclose a mortgage executed by defendant Rice. The Court below found, that, prior to the execution of the mortgage sued upon, the defendant Rice executed two mortgages upon part of the land to the defendant Beckwith; and that after the execution and recording of the mortgage sued upon, Rice, being unable to pay the interest on the sums due to Beckwith, as it accrued, agreed with Beckwith to convey to him the mortgaged premises in satisfaction of said mortgages, and said Beckwith agreed to surrender up the notes and mortgages in consideration of said conveyance; that, accordingly, the conveyance was made, and the notes surrendered; that when Beckwith took the conveyance he was ignorant of the existence of the intervening mortgage.
COUNSEL:
Blackstock & Shepherd, for Appellant, cited Jones on Mortgages, §§ 736, 740.
Bledso & Pettinos, for Respondent, cited Jones on Mortgages, §§ 848, 856, 857, 870-873; Millspaugh v. McBride, 7 Paige, 509; Skeel v. Spraker , 8 id. 182.
OPINION
THE COURT
The Court is of opinion that the judgment in this cause should be so modified as to direct the foreclosure of the mortgage held by plaintiff as to all the property mentioned in it; that the property embraced in the mortgage of plaintiff, and not embraced in the mortgage to Beckwith, set on foot by the judgment, should be first sold, and the proceeds paid over to the plaintiff, to the extent of his debt and costs, and any surplus remaining, to the defendants, purchasers from the mortgagor. If the proceeds of such sale should be insufficient to pay off plaintiff's mortgage, that then the remaining property embraced in his mortgage should be directed to be sold, and the proceeds of the sale applied to the payment of the mortgage to Beckwith, and if any surplus remains, to the payment of the mortgage of the plaintiff. If anything remains after such payment last mentioned, it should be paid over to the purchasers from the mortgagor.
The cause is remanded, that the modifications above pointed out may be made by the Superior Court of the county of Ventura. The appellant to recover the costs of this appeal.