Smith v. White

PRESTON, J.

The relief granted by the court below in this canse appears to be somewhat broader than the pleadings, when properly interpreted, warrant. The case as made therein and as shown by the evidence is an action in equity to enjoin an execution sale upon the ground that the judgment underlying it was procured by fraudulent conduct on the part of the judgment creditor and as a result of such fraud, pecuniary damage has resulted to plaintiffs in excess of the said judgment. The complaint also tenders the issue that the levy, if otherwise legal, is ineffective because the property affected thereby was theretofore and then impressed with a valid homestead and for that reason exempt. This latter issue, however, need not be discussed in view of our views upon the former.

The facts necessary to this discussion are: That plaintiffs were the owners and mortgagors of a lease and furnishings of a hotel in Sacramento, the defendant Kindblom being the mortgagee. The mortgage amounted to approximately the sum of $4,124.50. A foreclosure in the Superior Court of Sacramento was had. A sale was ordered and was being conducted when this occurred: The mortgagors were present and prepared on behalf of themselves or some other person or persons to bid the amount of the mortgage for the property, there being apparently other reasons why they did not redeem same prior to sale. Said defendant was also present and had with him a prospective purchaser of the property, should he, the judgment creditor, be the successful bidder. This prospective purchaser was pledged to give a greater amount for said property than the mortgage debt. The defendant, so the court found, for selfish reasons, conspired with the owner of the hotel and caused him, through his son, to proclaim during the bidding that he would not accept plaintiffs as tenants of the building, if they became the purchasers, and so “chilled” the sale as to allow defendant to secure the property for $2,500, plaintiffs having stopped bidding at the figure of $2,300. Accordingly, a deficiency judgment in the sum of $2,124.50 was entered in favor of said defendant and against plaintiffs. Upon this deficiency judgment so secured in Sacramento County, execution issued and was levied upon real property of the plaintiffs situated

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in Merced County, whereupon plaintiffs brought this action in said county seeking, first, to enjoin the sale on the ground that the real property constituted a valid homestead and, secondly, a count therein was based upon the claim of fraud growing out of said foreclosure sale as above mentioned. As a prayer the said complaint demanded not only the granting of said injunction but damages in the amount of $11,000. Plaintiffs had judgment on both counts, first, for the injunction as prayed and, second, for damages in the sum of $2,300, the second count having been heard by the court sitting with a jury. The court also entered separate judgments under each count. Defendants have appealed.