Wood v. Willey

California Court of Appeal Jan 9, 1934 No. Docket No. 8938.Published

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Holding. The court held that a property owner's agreement to extend a mortgage debt, made before the statute of limitations expired, effectively extends the mortgage lien against subsequent purchasers, even if those purchasers were unaware of the extension.

Issues

Whether a written agreement to extend a mortgage debt, made by the property owner before the statute of limitations expired, binds subsequent purchasers.
Whether a purchaser of property with a recorded mortgage has a duty to inquire about potential extensions of the debt even if the record suggests the statute of limitations has passed.

Disposition. Affirmed in part and reversed in part.

Quotations verified verbatim against the opinion

“Although Morgan did not assume the debt at the time the property was conveyed to him the effect of his promise was to extend both the debt and the lien of the mortgage”

“It is also the rule that if a mortgagor while still the owner of the mortgaged property procures an extension of the time of payment a purchaser of the property from him takes the same subject to the lien of the mortgage”

THE COURT.

The above action was brought to quiet plaintiff’s title to a parcel of land in Los Angeles County. Plaintiffs acquired title from the estate of J. J. Morgan, deceased, by deed dated September 20, 1929, and recorded on September 27, 1929. Morgan acquired the property from P. N. & J. Willey on November 8, 1902, by a deed which recited that the conveyance was made subject to “the mortgage on this and other property for the amount of $14,000”. The mortgage referred to was executed by W. E. Ploel and others to the Willeys, and it was recorded on March -10, 1920. The same was assigned to appellant E. H. Willey on June 6, 1922, and the assignment was duly recorded. The mortgage secured a note payable on or before three years after March 1, 1920. So far as appears by the public records the note and mortgage were barred by the statute of

[199]

limitations at the time of the plaintiffs’ purchase. On February 2, 1925, Morgan executed an agreement in writing to pay appellant Willey on March 2, 1926, the balance which remained unpaid on the note, namely, $500 with interest, and said appellant therein agreed to extend the time for payment accordingly. This agreement was not acknowledged nor recorded, and no part of the said amount or the interest thereon has been paid. Willey alleged that plaintiffs had notice at the time of their purchase of all of the above facts, and acquired title subject to the lien of the mortgage. The court, however, found against these allegations, and entered judgment quieting plaintiffs’ title as against Bank of America of California, a corporation, and Mary L. Willey, who were joined as defendants, and said E'. H. Willey. The latter, who has appealed, contends that these findings are unsupported, and that the lien of the mortgage continued by virtue of said agreement.

As urged by plaintiffs, one not personally liable for the debt secured, who acquires mortgaged land for a consideration after the lapse of time within which an action to foreclose the mortgage could be brought and at a time when the records show the lien to be extinguished may quiet his title as against the mortgagee without paying the debt

(Faxon

All Persons,

Wood v. Willey

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THE COURT.

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