Seidell v. Tuxedo Land Co.

CURTIS, J.

Plaintiffs, who are husband and wife, are the owners of certain real property situated in the county of Glenn. They acquired the property by deed dated January 23, 1930, and executed by J. R. and Prances R. Covington, which deed contained a recital in the following words: “Subject to a deed of trust dated August 25, 1925, and recorded August 25, 192'6, in Book 97 of Trust Deeds at page 313.” The consideration paid by them for said real property was their own unsecured note for $500. Plaintiffs instituted this action for the purpose of enjoining the sale of said real 'property under proceedings brought to foreclose said deed of trust. The regularity of said proceedings

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is not questioned. No claim is made that the promissory note, mentioned in said deed of trust, or any part thereof, has been paid, nor that it was not long past due at the time of the institution of said foreclosure proceeding. Plaintiffs admit that at the time they" acquired said real property they had actual as well as constructive notice of said deed of trust, and of the indebtedness which it was given to secure. The principal ground upon which the plaintiffs relied for relief before the trial court against the defendants was that while J. E. and Frances R Covington executed and delivered said trust deed, they did not execute the promissory note described and mentioned therein. Upon this issue the trial court found that said deed of trust was given to secure a promissory note for the sum of $9,400 and interest, no part of the principal of which had been paid except the sum of $700, and that said note was the property of the defendant, the Tuxedo Land Company. The plaintiffs have appealed and they now make the same point here that they made before the trial court.

The evidence shows that the land described in the deed of trust was formerly owned by Lulu L. Spencer, who conveyed it to J. R Covington and Frances E. Covington by deed dated August 25, 1925. The deed of trust involved herein bears the same date. The note for $9,400 was also dated August 25, 1925. The deed of trust was not acknowledged until March 18, 1926. It was recorded August 25, 1926. The evidence further shows that a brother of J. E. Covington, named E. P. Covington, and his wife, Nora Covington, had in the early summer of 192'5, a lease and option to purchase said land, and that the two Covington brothers and their wives undertook to buy the land in August of the same year. Whether any deed to the land was made to them at this time does not clearly appear, but it was shown that the two Covingtons and their wives executed a deed of trust covering said land to secure a promissory note for $9,400, which represented either the whole, or practically the whole, of the purchase price that was to be paid for said land. While this deed of trust was executed and acknowledged it never became effective, was never recorded, and there appears to be some uncertainty as to what finally became of it. After this transaction the Covington brothers remained on the land under a joint claim until some time