Dyer Law & Collection Co. v. Abbott

SHAW, J.

Defendant appeals from a judgment rendered in favor of plaintiff in an action brought to recover upon a promissory note.

As a special defense, the defendant by answer alleged that with the execution and delivery of the note and as security

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for the payment thereof, he and plaintiff’s assignor executed an agreement, copy of which is set out in the answer, which agreement “is in truth and in fact a mortgage on real estate and was given as security for the obligation sued upon in this action.” The agreement contained a clause as follows: “The payment of the said promissory note and moneys is hereby secured upon the interest of the party of the first part [defendant herein], in what is known as the Dreamland Pier Company at Ocean Park, and the property owned by him jointly with C. A. de Lisle-Holland and W. H. Labb, and also secured on all devices erected on or so to be, the said pier and property.”

The sole contention of appellant is that, in the absence of an affidavit filed by the plaintiff denying the execution of the instrument, its genuineness, as provided by section 448 of the Code of Civil Procedure, is deemed to be admitted, and since the instrument constituted a mortgage given to secure the payment of the obligation, no action could be instituted for recovery upon the note other than as provided in section 726 of the Code of Civil Procedure, namely, to foreclose the mortgage, and if the proceeds of a sale of the property were insufficient to pay the amount found due, take judgment for the deliciencv.

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New matter in an answer is deemed to be controverted without any special replication, and hence, while under section 448,

supra,

the plaintiff herein by his failure to file the affidavit therein prescribed must be deemed to have admitted the due execution and genuineness of the instrument set out in the answer, he was nevertheless entitled to offer any competent evidence in avoidance of the efféet or operation of such instrument.

(In re Garcelon,

104 Cal. 570, [43 Am. St. Rep. 134, 32 L. R. A. 595, 38 Pac. 414].) It appears that immediately prior to the time when the note would have been barred by the statute of limitations, to wit, on March 28, 1919, defendant by a written instrument renewed his promise to pay the same. The court, upon ample evidence, including that of the defendant himself, found that neither at said time nor at any time thereafter did defendant have any interest whatsoever in the property described in the purported mortgage; that the property therein described and upon which the