Bateman v. Burr

Morrison, C. J. : On the 25th day of August, 1875, the plaintiff Bateman borrowed of the “ Savings and Loan Society ” the sum of seven thousand dollars, and thereupon made and delivered to said society his promissory note for that amount, payable one year after date, with interest thereon at the rate of five-sixths of one per cent, per month. On the same day, a certain deed of trust was executed between Bateman, party of the first part, E. W. Burr and J. M. Shotwell, parties of the second part, and the Savings and Loan Society, party of the third part, whereby Bateman granted, bargained, sold, and conveyed to the parties, of the second part certain lots of land in the city of San Francisco. The deed recites that the conveyance is made to secure the payment of the money evidenced by the promissory note referred to above, and contains the provision that “ if default shall be made in the payment of said sums of principal or interest when due in the manner stipulated in said promissory note, * * * then it shall be lawful for the said parties of the second part, or the survivors of them, their successors or assigns, on application of the party of the third part, or their assigns, to sell the above-granted premises, or such part thereof as in their discretion they shall find it necessary to sell in order to accomplish the objects of these trusts.” The deed proceeds to set forth the notice which shall be given, how the proceeds of the sale shall be distributed, etc.

This suit wa.s brought for the purpose of enjoining a sale, under the power claimed, by virtue of the provisions of the foregoing deed of trust. The allegations in the complaint are, that the parties named in the instrument as the parties of the second part were about to sell the property described in the deed, without a decree of foreclosure; that the instrument was in the nature of a mortgage, and that the amount due “ has not been ascertained, determined, or adjudged by any Court or tribunal, and is, therefore, unknown to plaintiffs, and to each of them.” The answer sets forth, specifically, the payments made on the [482]note, and the amount due may he ascertained therefrom by a simply mathematical calculation. All the equities set forth in the complaint are denied by the answer, and we are simply called upon to determine the question, whether, under the terms of the deed, the parties of the second part (the trustees) can sell without a decree of foreclosure. The question is not affected by the fact that the other plaintiff in the case is a subsequent mortgagee. She has no rights under the mortgage that are not subordinate to the rights created by the deed of trust.