Blech v. Jeal

[531]

LENNON, J.

This is an appeal from a judgment upon the judgment-roll alone. The question presented for our determination is whether or not the findings support the conclusion of law that respondent Blech is entitled to have a mortgage held by him in trust for respondent Rutledge satisfied out of the lands of appellants.

Prom the findings it appears that appellants, defendants and cross-complainants below, executed a note wherein they promised to pay to one E'arle L. Roberts the sum of nine thousand five hundred dollars. At the same time, appellants executed a mortgage on various parcels of land owned by them to secure this note. By assignment, respondent Blech became the owner "of the note and mortgage which he holds in trust for respondent Rutledge. Three thousand dollars of the principal sum remains due, owing, and unpaid. A portion of the land covered by the mortgage was conveyed by appellants to respondent Rutledge prior to the time at which she acquired the equitable title to the note and mortgage. Mrs. Rutledge assumed no personal obligation to pay the mortgage indebtedness which had at the time of the conveyance been reduced to eight thousand five hundred dollars. Respondent Blech, subsequent to his acquisition of the note and mortgage as trustee for Mrs. Rutledge, without consideration, released from the mortgage the land conveyed to her by appellants.

Appellants contend that the above-mentioned release was in effect a fraud upon them. In this behalf it is argued that when Mrs. Rutledge accepted the conveyance of the land subject to the mortgage, she undertook, as between herself and appellants, to pay part of the mortgage indebtedness. The existence of this obligation, which appellants assert should be implied from the facts surrounding the conveyance, is further supported by the argument that the debt for which the land was liable must presumably have been considered in determining the price which Mrs. Rutledge was required to pay appellants for the land.

Assuming, although by no means admitting, that such would be the interpretation to be placed upon the transaction in the absence of an express agreement to the contrary, respondents rely upon two agreements executed by appellants and Mrs. Rutledge at the time of the conveyance. Respondents allege that by these agreements Mrs.