Ekmann v. Plumas County Bank

SEAWELL, J.

The question presented by this appeal is whether a mortgagor, by waiving or extending the bar of the statute of limitations, can affect the rights of a junior holder of a trust deed, which has no knowledge of and does not consent to the agreement of waiver entered into between the senior mortgagee and mortgagor.

[672]

On October 6, 1921, George W. McMillan and Mary E. McMillan, Ms wife, being the owners of the real property in suit, acknowledged two deeds wherein said McMillan and wife were grantors and J. C. Boyle was grantee. Said deeds were not delivered or recorded until October 23, 1925, and appellant did not have actual notice of their existence until after she commenced her action to foreclose her first mortgage lien. On July 17, 1923, McMillan and wife executed a promissory note in the principal sum of $2,500, payable one year from date, to Isabella Ekmann. On the same day the McMillans executed a mortgage to secure the payment of said note, which was recorded on September 29, 1923.

On January 4, 1928, said J. C. Boyle and Rae E. Boyle, his wife, being indebted to respondent Plumas County Bank in -the sum of $2,750, as evidenced by a promissory note dated October 5, 1927, and due December 4, 1927, executed a deed of trust in favor of said bank on the property described in the Ekmann mortgage. This trust deed was made to cover said antecedent indebtedness, and was recorded on February 15, 1928.

On July 16, 1928, said McMillan and wife, at the request of J. C. Boyle, who had been importuning appellant, Mrs. Ekmann, first mortgagee, not to commence a foreclosure proceeding, entered into an agreement in writing by the terms of which, in consideration of Mrs. Ekmann forbearing to file a foreclosure action within the period of the statute of limitations, they agreed to waive the right to plead the statute in defense of any action filed within six months from the seventeenth day of July, 1928, the date of the expiration of the period of limitations. It is admitted that the Plumas County Bank did not consent to said waiver, and did not know of its existence until after July 17, 1928.

Appellant, Mrs. Ekmann, on December 22, 1928', within the period covered by said waiver of the statute of limitations, but beyond the statutory period provided in the note and mortgage, commenced an action of foreclosure of said mortgage. Six days thereafter, to wit, December 28, 1928, the trustee under said deed of trust sold the real property in suit to the Plumas County Bank. Said bank pleaded the statute of limitations as a bar to the McMillan mortgage.