Henshaw v. Homeland Co.

VICTOR E. SHAW, J.,

pro tem.

The mortgage for the foreclosure of which this action was brought was given to plaintiff by defendant Homeland Company to secure the payment of a note for eleven thousand dollars upon which said defendant paid the interest to February 13, 1912, together with $4,392.07 of. the principal. Judgment went for plaintiff from which, upon a bill of exceptions, the Homeland Company appeals.

In its answer defendant alleged certain facts as a defense, which facts are also contained in a cross-complaint upon which it sought to recover from plaintiff the amount of principal and interest paid by it upon the note. These facts are as follows: On July 3,1891, James P. McCarthy and William M. Fitzhugh, as the owners in common of a tract of land, executed a mortgage thereon to plaintiff to secure their joint and several notes to him of even date in the sum of twenty-four thousand dollars payable on or before July 15, 1893. About February 5, 1892, McCarthy and Fitzhugh executed a deed of trust to the California Title Insurance and Trust Company, as trustee, transferring certain lands (other than those so mortgaged to secure the Henshaw notes of twenty-four thousand dollars), together with notes and securities in' trust, with power to dispose of the same, and apply the proceeds in payment of certain obligations, among which was the indebtedness evidenced by said notes of twenty-four thousand dollars to Henshaw, and providing that after the full execution of said trust the balance of said proceeds of sale and collections should be paid, fifty per cent to McCarthy, thirty per cent to Fitzhugh, and twenty per cent to other parties named. In April, 1892, Fitzhugh paid Henshaw $8,450 on account of the twenty-four thousand dollar notes so given by bi-m and McCarthy. In December, 1907, Henshaw executed an instrument whereby he transferred and assigned to the Homeland Company all the “right, title, interest and estate

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of any kind and nature, and all right or property of every kind and description belonging to or in anywise owned or claimed by the party of the first part under the aforesaid deed and assignment of trust, and of, in and to the indebtedness and obligation referred to therein, and which is designed to be, and is, in anywise secured by said deed and assignment of trust.” The document contained further provisions as follows: “It is also further understood that the party of the first part (Henshaw) has heretofore released William M. Fitzhugh from all personal liability upon the obligation secured by the said assignment of trust, but it is expressly understood that there has been no release, in anywise, of any property covered by said deed or assignment of trust, whether owned by said William M. Fitzhugh or any other person, excepting only that the party of the second part (Homeland Company) shall not have the right to proceed against William M. Fitzhugh, personally, and above and beyond the value of any interest which the said William M. Fitzhugh may have in the property involved in said trust.