Jensen v. Burton

California Court of Appeal Sep 24, 1931 No. Docket No. 6840.Published

Before: Archbald

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Holding. The court held that the trial court's judgment in favor of the defendants was supported by evidence that the plaintiff's acquisition of the property fee title resulted in a merger of the mortgage and the fee, thereby extinguishing the underlying debt.

Issues

Whether the defendants, as original mortgagors, had standing to assert the defense of merger and satisfaction of the note.
Whether the evidence supported a finding that the plaintiff's acquisition of the property resulted in a merger that extinguished the debt.

Disposition. affirmed

Quotations verified verbatim against the opinion

“In law a merger always takes place when a greater estate and a less coincide and meet in the same person in one and the same right, without any intermediate estate.”

“The question is one of intention, actual or presumed, of the person in whom the interests are united.”

“It would seem to be clear that there is evidence from which the court could have found that a merger was intended and that, the value of the land was such that not only the mortgage but the debt was extinguished.”

ARCHBALD, J.,

pro

tem.

From a judgment in favor of defendants on a complaint filed on a promissory note plaintiff has appealed.

In 1917 plaintiff, then and now a resident of Iowa, sold a farm belonging to him to defendants, who were also residents of that state at the time. The latter gave plaintiff the promissory note sued on, in the sum of $12,000, secured by a mortgage on the farm, which was made subject to a first mortgage of $18,000, placed thereon by defendants to raise a part of the purchase price of said farm. During the same year defendants made an agreement with one Holmes whereby the latter agreed to purchase the farm subject to the two mortgages above mentioned, which he assumed, giving in addition his unsecured note for $6,500 without interest until March 1, 1919, at "which time he was to pay $4,000, the balance to be carried at six per cent interest until paid. Holmes paid the interest on the mortgages until March 1, 1925. The bank in which he was accumulating his interest money failed before the date for payment came, viz., March 1, 1925, and fearing that the holder of the first mortgage, the interest on which was also in default, would foreclose and put a receiver in possession of the farm and harvest whatever crops he might plant for that year, Holmes entered into an agreement with plaintiff whereby he quit-claimed to the latter, on March 16th of that year, all of his interest in the premises, and plaintiff immediately leased the farm to a brother of Holmes, who, in conjunction with the latter, farmed the property for two seasons and until the holder of the first mortgage took possession under a sheriff’s deed. Suit to foreclose the first mortgage was filed November 25, 192'5, judgment of foreclosure entered December 11th and the farm sold thereunder on January 13, 1926, to the plaintiff in the foreclosure action for the sum

[68]

of $21,014.75, being the amount due on the first mortgage together with attorney’s fees and costs of foreclosure and sale. No redemption thereof having been made, the sheriff issued his deed to the holder of the first mortgage on January 15, 1927. Defendants having been residents of Los Angeles County for a number of years and plaintiff’s security having been taken by said foreclosure suit, the latter brought action on the note in the county named," with the .result mentioned.

Jensen v. Burton

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ARCHBALD, J.,

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