California Bank v. Brooks (1899) · DecisionDepot

California Bank v. Brooks

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Sep 23, 1899 No. L.A. No. 569.Published

Before: Temple

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Holding. The court held that a first mortgagee cannot extend the statute of limitations on their debt to the prejudice of a second mortgagee by renewing the original note. Consequently, the plaintiffs were entitled to priority over the first mortgagee's claim that had become time-barred.

Issues

Whether a first mortgagee can extend the statute of limitations on a debt to the detriment of a second mortgagee by accepting new notes.
Whether the plaintiffs are entitled to priority in the distribution of proceeds from the sale of security.

Disposition. remanded

Quotations verified verbatim against the opinion

“The first mortgagee could not renew the note and thereby extend the statute of limitations so as to affect the second mortgagee.”

“All the rights of William Collins & Sons, as against plaintiffs, depend upon their right to maintain an action on the original note.”

“But the right to maintain an action upon that note became barred December 18, 1894, which was before the commencement of this action.”

Synopsis

APPEAL from a judgment of the Superior Court of Ventura County. B. T. Williams, Judge.

The facts are stated in the opinion of the conrt.

TEMPLE, J.

—The complaint avers that on the twelfth day of March, 1891, J. Marion Brooks made a promissory note to one Weldon, for the California Bank, in the sum of fourteen hundred and fifty-seven dollars; that prior to that time Brooks, 'owed William Collins & Sons about four thousand five hundred! dollars, evidenced by a promissory note for three thousand dollars, dated December 18, 1889, and due one year after date, and by a note for three hundred and fifty dollars, dated February 7,1891, payable sixty days after date. Also, that on the twelfth day of March, 1891, the indebtedness of Brooks to William Collins & Sons was secured by conveyance of certain real property by Brooks to said William Collins & Sons. On the same day Brooks executed to Weldon an instrument in writing, by

[199]

which it was, in substance, agreed that said property should be held by Collins to secure the debt due to the bank as well, and that Weldon might at any time pay the debt due to Collins, and then should be entitled to a transfer of the security to himself. To this agreement Collins assented in writing, accepting the obligations thereby imposed.

On the thirtieth day of March, 1891, it is averred, Brooks-executed to Weldon a mortgage on certain property, subject to the claim of William Collins & Sons. The mortgage is set out at large in the complaint.

Assignments from Weldon to plaintiff Witmer are alleged, and also that Witmer holds the note and mortgage for the plaintiff bank.

It is then charged that on the 13th of February, 1894, William Collins & Sons surrendered to the said J. Marion Brooks the promissory note for three thousand dollars, and took in satisfaction and discharge thereof two other promissory notes, one dated February 3, 1894, and the other February 13, 1894, each bearing interest at the rate of ten per cent per annum and payable one year after date.

It is then alleged that “by reason of the transactions aforesaid the plaintiffs have a prior lien upon the remainder of the property in the hands of said J. S. Collins, as trustee, and conveyed to him by the said J. Marion Brooks, as aforesaid, for the payment of their said debt, and are entitled to payment in preference to the said William Collins

California Bank v. Brooks

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Synopsis

TEMPLE, J.

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