California Supreme Court Jan 29, 1884 No. No. 8,915Published
Before: Thornton
Synopsis
Implied Promise—Equitable Liability—Valuable Consideration.— On the foreclosure of a mortgage, the court, with the consent of the plaintiff, allowed a credit to the mortgagor for a sum which he was bound to pay to a third party, but for which the mortgagee was not liable. The mortgagor executed a second mortgage for the amount of the reduction. Subsequently the judgment of foreclosure of the first mortgage was satisfied by a judicial sale. Held, (1) that having received the full benefit of the credit there was an implied promise by the mortgagor to repay the amount, and that this was a sufficient consideration for the second mortgage. (2) That the cause of action upon the second mortgage accrued at the date of the rendition of the judgment upon which the credit was given.
Practice—Misjoinder of Parties. —On an appeal from a judgment of foreclosure, if it appears that unnecessary or improper parties were united with the proper plaintiffs, the court may order a judgment in favor of the proper plaintiffs, and direct that the complaint he amended by striking out the names of those improperly joined.
Findings—Inferences of Fact.—The appellate court may draw inferences of law from the facts found by the trial court, hut cannot infer from the findings a fact not found.
Thornton, J. In the view we take of this case, we lay out of it the stipulations of March 14, 1876, and of June, 1876, [7]except so far as is hereinafter pointed out. They were disregarded by the District Court in pronouncing the judgment of July, 1877, which judgment was modified by this court so far as to allow the credit on the note and mortgage for $37,500, of the $5,255.30, being the amount of costs and interest thereon, in the partition case of the San Fernando Farm Some-stead Association v. De Celis et al. This allowance was for the benefit of Porter and Maclay, and was in effect an advance by the De Celis plaintiffs to Porter and Maclay. It was not intended as a gift by the De Celis plaintiffs to Porter and Maclay. They had not previous to this action paid any part of the sum" allowed to the De Celises. The judgment, as entered by the District Court, under the order of the Supreme Court made on the 7th day of June, 1879, allowing the sum of $5,255.30, was not set aside, or this credit stricken out. Admitting that Porter and Maclay did not consent to it they did not move to set aside. This judgment was executed, their indebtedness in the foreclosure suit was paid, and they got the full benefit of this credit. Under all these circumstances, it is clear that they received so much money which ex cequo et bono, they were bound to refund to the De Celis plaintiffs, and that the law would imply a promise to pay this sum. It makes no difference that they did not consent to the judgment as entered in the Supreme Court, and by its direction in theDistrict Court. They got the benefit of the money.
The amount was credited on the note and mortgage, the judgment of foreclosure was so entered, and as thus entered was executed. It is equivalent to receiving so much money which they used for their own purposes. Det it be conceded that they objected to receiving the money on the credit allowed (a most unusual objection), still they availed themselves of it, and cannot now be heard to object to paying it back. If A objects to receiving the money of B, still if he receives it, and more especially if he uses it for his own purposes, his objection to receiving it would count as nothing in defense to B’s action to recover it. By using the money he gives all the consent' required. By such conduct his objection is waived and displaced, and consent and approval take its place. It is equivalent to consenting originally when the judgment was entered by the Supreme Court.
Although it does not clearly appear by the judgment finally entered by this court why the credit was allowed, still it is found that in this court a form of decree was prepared by order of the court (called in the findings the Bishop judgment), in which blanks were left for the amounts to be inserted. After the preparation of the form of decree by Mr. Bishop, Porter, and George H. Smith, Esq., attorney for the plaintiffs (the De Celises), met to determine the amounts, and the result of their conference was that Porter agreed orally that if the judgment for costs in the partition case was allowed as a credit in the Bishop judgment, that he would carry out the contract made June 14,1876, and thereupon Smith agreed to allow this credit, and it was accordingly allowed and inserted in the judgment. This revived the stipulation of June 14, 1876, and the contract made then, including the mortgage sued on in this action, as far as regards Porter, and he became bound by all the obligations of such contract which he had by it assumed. In fact the main object of such stipulation and contract as between Porter and the other contracting party, to whose rights the De Celis plaintiffs have succeeded, was to secure the credit of the partition costs in the mortgage then in suit, and to obtain security for the •repayment of those costs, and anything allowed beyond the : amount of costs. Afterwards, Maclay objected (on what ground does not appear) to the Bishop judgment, and the same was modified, but still allowed the credit above mentioned, though Porter objected to it, for what reason we are not informed, still as he received the consideration of the agreement made between him and the plaintiffs at the conference in regard to the Bishop judgment, we do not think that we should be justified in holding that he was thereby let out .of his agreement reviving the contract made between him and Smith, representing the De Celis plaintiffs. As far as we can get any light from the findingsas to the objections of Porter and Maclay to the judgments above mentioned, they seem to have had relation to the state of the accounts between themselves, in which the De Celis plaintiffs had no interest. As said above, it appears from the findings that the judgment as finally entered by the order of this court was fully executed, and Porter and Maclay received all the benefit of the credit.
[9]It appears from the above that the mortgage sued on was sustained by a sufficient consideration in its inception, was also sustained by the agreement made at the conference on the Bishop judgment, that such consideration has never failed, but that the full benefit of this agreement has been received by Porter, the mortgagor, by the credit in the decree and the sale under it, by which the indebtedness secured was paid off in full.
The court held that Maclay’s indebtedness,'which was secured by Porter’s mortgage, was barred by the Statute of Limitations as it arose from a parol promise. We do not think that it is barred. The action to recover it did pot accrue earlier than the 7th day of June, 1879, when the final judgment was entered in the Supreme Court, and this action was commenced on the 14th. day of July, 1880, on which day the complaint was filed.
It is contended that the mortgage sued on was extinguished by the foreclosure of the mortgage for §37,500. We cannot perceive how this can be. The mortgage in this action originated from a credit on the foreclosed mortgage. How it can then be extinguished or merged does not appear. The ground of the existence of the mortgage herein is the credit allowed on the one foreclosed. The existence of one is consistent with the payment and satisfaction of the other. How, then, can there be extinguishment or merger of any kind?
With regard to the question of parties arising on the demurrer to the complaint, we think it only necessary to say that, in our view, the De Celis plaintiffs are the proper plaintiffs in this action, by reason of the assignment of Eulogio to them of the indebtedness herein, which carried the mortgage and the distribution of the indebtedness to those plaintiffs by the Probate Court. On the return of this cause to the court below, the complaint may be amended by striking out all the parties plaintiff except the De Celis plaintiffs, and the court will then proceed to enter judgment for the De Celis plaintiffs, foreclosing the mortgage sued on herein, and, if on the sale of the property mortgaged -any deficiency arises, directing that such deficiency be docketed, three fourths of it against Porter and the remaining one fourth against Maclay,
[10]The amount of the indebtedness for which the mortgage herein is security is $5,255.30, with legal interest from the 7th day of June, 1879.
The judgment is reversed, as well as the order denying the motion for a new trial, and the cause remanded, with direction to the court below to enter judgment in favor of the De Celis plaintiffs against Porter and Maclay as above indicated, the elements of which judgment distinctly appear in the findings.
If it becomes necessary to protect the interest of the other persons improperly joined as plaintiffs herein, the court can on their motion require the money to be paid into court, and make such order distributing it as shall appear to be proper in vigw .of the rights of all the parties.
Ordered as above.
Sharpstein, J., and Myrick, J., concurred.
After petition for hearing in Bank, the court, on the 28th of February, 1884, modified the judgment and rendered the following opinion:--
The Court The petition for a modification of the judgment .calls attention to the fact that the interest should be charged on the credit allowed on the mortgage, $5,255.30, with interest from 14th of June, 1876, instead of from the 7th day of June, 1879. If it had been found as a fact by the court below that the credit on the mortgage was allowed as of the 14th of June, 1876, we should unhesitatingly order the modification. But it is not so found. Of what date such credit was allowed is a fact which this court cannot find, but which should have been found by the court below. It may be that the credit was allowed as of the 14th of June, 1876, but this can only be arrived at in this court by an inference of one fact from others found, which we cannot make. The only inferences which we can draw from the findings are inferences of law. We are not allowed to draw inferences of fact from the facts found. If this court were to infer a fact from other facts, it would be usurping the province of the trial court, which alone can find the facts in issue. This is the rule with regard to special verdicts, and we are of opinion that the same rule applies to findings of fact. There is no find[11]ing that the credit referred to was allowed of an earlier date than that mentioned in the opinion in the cause, and in directing a judgment on the findings we must adhere to the facts as found.
But the contract of 14th of June, 1876, of which the mortgage sued on forms a part, which it is held was revived by the promise of Porter at the conference in relation to the judgment which was entered in this court in 1879, does bind Porter to pay interest on three fourths of this credit at the rate of ten per cent per annum, and the judgment should be modified so as to allow interest at the rate last named as against Porter from tho 7th day of Juñe, 1879. But Maclay has made no promise to pay interest at that rate. Maclay is only bound to pay the legal rate. And if Maclay should be called on to pay anything on the deficiency judgment, the interest as against him should be computed only at the rate of seven per cent. This applies not only to the computation to determine the amount of the deficiency as against Maclay, but interest on the deficiency so determined, as against him, should be computed at the same rate.
The judgment is modified in this regard, and the court below in entering judgment will regard these directions in addition to those given in the opinion filed on the 29th day of January, 1884.
AI Brief
AI-generated · verify before citing
Holding. The court held that the defendants were liable to repay the plaintiffs for a credit received in a prior foreclosure judgment, as they accepted the benefit of the credit and thereby implied a promise to pay. The court further held that the mortgage securing this debt was valid, not barred by the statute of limitations, and not extinguished by the prior foreclosure.
Issues
Whether the defendants are liable to repay a credit received in a prior judgment which they accepted and utilized.
Whether the mortgage securing the repayment of the credit is valid and enforceable.
Whether the action to recover the debt is barred by the statute of limitations.
Whether the mortgage was extinguished by the prior foreclosure of a separate mortgage.
Disposition. reversed and remanded
Quotations verified verbatim against the opinion
“Under all these circumstances, it is clear that they received so much money which ex cequo et bono, they were bound to refund to the De Celis plaintiffs, and that the law would imply a promise to pay this sum.”
“The mortgage sued on was sustained by a sufficient consideration in its inception, was also sustained by the agreement made at the conference on the Bishop judgment, that such consideration has never failed”