City of San Francisco v. Lawton

Field, C. J. delivered the opinion of the Court Cope, J. concurring.

The object of the suit to foreclose a mortgage, under our law, is to obtain the sale of the estate which the mortgagor held at the time he executed the mortgage, and the application of the proceeds of the sale to the payment of the demand, for the security of which the mortgage was given. All persons who are beneficially interested, either in the estate mortgaged or the demand secured, are proper parties to the suit. This rule, as a general thing, will only embrace the mortgagor and mortgagee, and those who have acquired rights or interests under them. Where prior incumbrancers are made parties, it is only for the purpose of liquidating the amount of their demands, and paying them out of the proceeds of the sale. Adverse titles to the premises held by parties claiming by conveyance from the mortgagor prior to the mortgage, or from third parties prior or subsequent to the mortgage, are not the [474]proper subjects of determination in the suit. Such titles must be settled in a different action, giving rise, as they generally do, to questions of purely legal cognizance. (Eagle Fire Co. v. Lent, 6 Paige, 637; Corning v. Smith, 2 Seld. 82; Holcomb v. Holcomb, 2 Barb. 23.) The foreclosure operates, except in a single instance, only upon the estate or interest which the mortgagor possessed at the time, and the sale under the decree passes, with the like exception, only such estate or interest. The exceptional instance, to which we refer, arises where the mortgagor has, subsequent to the execution of the mortgage, acquired a title which enures, by way of estoppel, to the benefit of the mortgagee. In such case, the foreclosure operates upon the subsequently acquired title to the same extent as if originally held by the mortgagor, and the sale under the decree passes it. In all other cases, the estate mortgaged is the only estate brought under the consideration of the Court, and the only estate affected by its decree. (Clark v. Baker, 14 Cal. 612.)

In the present case, the defendants, Howard, Perley, Gould and Smith, who alone appeal from the decree, set up in their answer title to a portion of the mortgaged premises, under a grant from the former Mexican Government, bearing date in May, 1839, and a patent of the United States, issued upon its confirmation, in March, 1858, and also under a deed executed by the Tax Collector of the city and county of San Francisco, upon a sale for unpaid taxes for State and county purposes, for the fiscal year ending in June, 1856. On the trial, they produced the patent, and traced title thereunder to the defendants Howard and Perley. They also produced the tax deed, .and traced title thereunder to Perley. The record does not disclose any evidence of title in either Gould or Smith under the patent or the tax deed. Of the value of the titles conferred by those instruments, it is unnecessary to express any opinion. Their validity is not the proper subject of determination in the present suit. It is only necessary to look into them so far as to see that they are asserted in good faith, and are not mere pretenses for delay; and this being seen, the rights of the defendants Howard and Perley should have been reserved in the decree. If there were no other reasons than the assertion of these adverse