Johnston v. Murphy

BEASLY, J.,

pro

tem.

This is an action begun December 31," 1914, on a promissory note given by defendant to plaintiff. The principal defense is that the note was secured by a mortgage and that the action should have been one of foreclosure.

The note was dated January 23, 1909. The alleged mortgage consists of a letter from the defendant to plaintiff, the body of which reads as follows: “I hereby certify that there is due to you the sum of four thousand dollars. Said sum is secured by a lien upon that certain land comprising 937 acres in the rancho Los Positos, being the same land conveyed to me by Louis Aurreeoechea. The indebtedness is a prior claim to any lien I may have. ’ ’ The letter was not acknowledged nor recorded.

The transactions between the parties of which this letter formed an incident may be stated more at large as follows: The defendant Murphy during or perhaps before the year 1902, acting for one Aurreeoechea, borrowed four thousand dollars from plaintiff, and Aurreeoechea executed a mortgage on a ranch belonging to him to secure payment of the loan. In 1904 Murphy purchased the ranch from Aurreeoechea, and on July 19, 1906, he conveyed it to his wife. This deed was not recorded until June 30, 1908. Some time in the early summer of 1906—so Johnston testified—-Murphy induced him to sign what he, Johnston, supposed was a release of a part of the ranch from the lien of the Aurreeoechea mortgage, but what turned out to be a deed of the entire ranch to Murphy. This deed was not recorded until November, 1906. Johnston did not learn until January 23, 1909—the date of the note in suit—of the true character of the paper he had signed in 1906, namely, of the deed to Murphy of the whole ranch, nor that this deed released the ranch from the lien of the mort

[471]

gage; nor was anything said by Murphy even at that time about the deed to Mrs. Murphy, and it appears from Johnston’s evidence that although the letter which defendant now seeks to have construed to be a mortgage is dated November 1, 1906, it was actually received by Johnston through the mail and after the execution of the note in suit. It also appears that Johnston kept this letter but made no reply to it; that is to say, it does not appear that he accepted it or treated it as a mortgage.