Beyerle v. California Surety Co.

NOURSE, P. J.

Plaintiff sued to cancel and to restrain the foreclosure of a deed of trust upon certain real property. The defendants had judgment and the plaintiff appeals upon typewritten transcripts.

On July 2, 1926, plaintiff, as sole owner of the property, conveyed by deed of grant to the California Surety Company in consideration for her subscription to stock in that corporation. This deed was duly recorded. In the same month the Surety Company handed plaintiff a deed conveying the same property back to her, which deed was not acknowledged and was not recorded. While the title was in this condition, and on October 13, 1926, the California Surety Company executed and delivered a deed of trust upon the property naming Torrance Finance Company as trustee and Metropolitan Trust Company of California as beneficiary. On November 17, 1927, the plaintiff secured from the California Surety Company a valid deed to said property which was duly recorded and since that time plaintiff has been the owner of the property.

The trial court found that plaintiff’s deed to the Surety Company was for a valuable consideration and without fraud or misrepresentation on the part of that company; that plaintiff caused said deed to be executed and recorded for the purpose of enabling said corporation to represent to the commissioner of corporations of the state of California and' to the public generally that the Surety Com

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pany was the real owner of said property and for the purpose of enabling said company to obtain from the commissioner of corporations a permit to sell its capital stock, and also to enable said company to mortgage or otherwise borrow money encumbering said property; that the Surety Company did so represent to the public and to the commissioner of corporations that it owned said property, and that said commissioner on the 15th of September, 1926, granted to said Surety Company a permit to sell its capital stock upon the representation of the plaintiff and said company that the latter was the owner of said property; that immediately following the recordation of plaintiff’s deed the Surety Company made a deed back to said plaintiff of said property-which said deed was not acknowledged so as to entitle it to be recorded and it was not recorded, and that said deed was placed in the possession of plaintiff “on the specific agreement and understanding that the possession by plaintiff of said deed from defendant California Surety Company to plaintiff should not constitute a legal or other delivery of said deed, that such manual tradition of said deed did not constitute a delivery thereof”. The trial court also found that the plaintiff was estopped to claim any right, title or interest in the property either by reason of said deed from the California Surety Company or by reason of possession of plaintiff of the real property at the time of the execution of the trust deed, or otherwise. Upon these findings of fact the trial court drew the conclusion of law that the trust deed was a valid and subsisting deed of trust; that the plaintiff held title to the property subject to all the conditions and provisions thereof, and that she was not entitled to any restraining order preventing the foreclosure thereof.