San Francisco Lumber Co. v. Yates

WASTE, P. J.

The plaintiff brought this action to foreclose two mechanics’ liens. The court awarded a personal

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judgment against the contractor and decreed a lien on the building and land, subject only to a mortgage executed by defendants W. F. and Jeannette Yates, held by the German Savings & Loan Society, concerning which there is no dispute. It ordered a sale of the premises to satisfy the claims. Certain of the defendants appeal, claiming that their interests under ■ a prior recorded deed of trust are superior to the rights of the lienholders, and that the court erred in its findings of fact and conclusions to the contrary.

The defendant Jeannette Yates was the owner of the lot in question. She made a contract with the defendants Berry, by the terms of which it was agreed that Mrs. Yates should erect a building upon the lot, the Berrys to buy the premises from her for an agreed price of $2,150 and interest, payable in monthly installments after completion of the building. Pursuant to this agreement Mrs. Yates and her husband executed and delivered a deed conveying the land to the Berrys, which deed was duly recorded. As part of the transaction, Amelia Frances Berry and Curtis Berry, her husband, then executed and delivered to Mrs. Yates their promissory note for the sum of $2,150, and interest, payable in installments as agreed. In order to secure the payment of the note, Mr. and Mrs. Berry executed a deed of trust of the lot to defendants Henry S. Bridge and Harry B. Allen, as trustees, which was properly recorded. Coincident with the execution of the note and deed of trust, Mrs. Yates sold and indorsed the note to the defendant Carrie E. Bridge, and she and her husband transferred and conveyed to Mrs. Bridge all of their right, title, and interest in and to the deed of trust, and Mrs. Bridge has ever since been the owner and holder of the note and said interests. Neither the assignment of the note nor the transfer of the interests under the deed of trust has ever been recorded.

After all the foregoing transactions had been completed, Mrs. Yates entered into an agreement with W. F. Yates, her husband, who was her agent and builder, to construct a dwelling on the lot. The court found, and it appears to be a fact, that the purpose of the execution of the note and deed of trust by the Berrys to Mrs. Yates, and by her transferred to Mrs. Bridge, was to- obtain money to be