Thompson v. Thomas

KERRIGAN, J.

This is an appeal from a judgment in an action to foreclose a mortgage. The facts are as follows:

On August 13, 1913, a note, secured by the mortgage in question, was executed by the defendant Thomas to the plaintiff in consideration of a loan of four thousand dollars, the mortgage covering a number of lots of land situate in San Bernardino County. On March 7,

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1914, Thomas executed and delivered to Harold P. Collins a grant deed covering a portion of the mortgaged property. This deed was taken subject to the mortgage, and also contained a provision that the grantee agreed to pay the same. On September 12, 1914, Thomas conveyed the remaining lots except three thereof to defendant Callie L. McDowell, the deed reciting that the lots were subject to the mortgage. On September 23, 1914, Harold P. Collins by deed conveyed the property acquired by him above mentioned to R P. Howard, this deed also being made subject to the mortgage. On July 7, 1915, the mortgagee, with actual notice of the aforesaid conveyances and of their terms, in consideration of the sum of $350, released the lots conveyed to Collins and by him subsequently transferred to Howard. In its findings the court places a valué of two thousand dollars upon these lots. The various instruments referred to were all duly recorded.

The mortgage contained the following provision: “The mortgagor agrees that the mortgagee may at any time without notice release portions of said mortgaged premises from the lien of this mortgage without affecting the personal liability of any person for the payment of said indebtedness, or the lien of this mortgage upon the remainder of the mortgaged premises, for the full amount of said indebtedness then remaining unpaid.”

The court in its decree decided that this provision of the mortgage was invalid, and in ordering judgment for the plaintiff directed that she credit upon the amount claimed the sum of two thousand dollars, which the court found to be the value of that part of the mortgaged premises released by her to Howard.

The plaintiff appeals from the judgment.

As we view the record there is only one important point in the ease. The appellant contends that under the provision of the mortgage quoted she had a right to grant the partial release of the mortgaged premises to Howard for less than the market value of the property so released and to hold the remainder for the balance.