Storch v. McCain

Sharpstein, J. Action to foreclose a mortgage given to secure the payment of a promissory note of eight thousand dollars. The central question in the case is, whether the note had been paid and the mortgage discharged before the commencement of this action. The court so found, and that finding is attacked by appellant, on the ground of the insufficiency of- the evidence to justify it.

The evidence shows that one John Belz had possession of the note and mortgage by authority of plaintiff, who testifies as follows: “ Shortly before maturity I sent the note to the First National Bank of Los Angeles, California, for collection. I stated to them if it was not paid promptly, to turn it over to-John Belz, who would see to. the collection of it.” The note was indorsed by plaintiff generally or in blank, and was turned over by the bank to Belz. On December 22, 1889, Belz and defendant McCain negotiated for the exchange of said note and mortgage for an absolute conveyance to plaintiff by defendant McCain of an undivided one-fourth part of the mortgaged premises and a note for $1,485.35, secured by a mortgage on another fourth of said premises. Belz, in consideration of said absolute conveyance and last-mentioned note and mortgage, delivered to defend[306]ant McCain said note of eight thousand dollars, canceled and executed the following indorsement on the record of the mortgage given to secure the payment of said note: —

“ Received full and entire satisfaction on the within mortgage this twenty-second day of December, 1887.

“ George Storch.

“ By John Belz, his attorney in fact.-”

If John Belz had authority to bind the plaintiff, there can be no doubt of the satisfaction of the mortgage which this action is brought to foreclose. It is not shown that Belz was authorized by any formal power of attorney to execute a release of said mortgage. He held plaintiff's power of attorney at the time, but it did not authorize him to enter the satisfaction of said mortgage, and the court finds that Belz had authority from plaintiff, other than that contained in said power of attorney, for executing the satisfaction of the mortgage which plaintiff is seeking to foreclose in this action. The defendant McCain testified that plaintiff told him, at the time the loan was made for which said note of eight thousand dollars and mortgage were executed, that the money loaned belonged to Belz, and that plaintiff wrote him, defendant McCain, that he, plaintiff, had sent the note to the First National Bank for collection; that Belz was there, and anything that defendant McCain did with Belz, he, plaintiff, stood by it; he stood by anything that Mr. Belz did for him. That testimony, and the turning over to Belz of the note indorsed by plaintiff, together with the mortgage, constitute the evidence of the authority of Belz to receive anything other than money in satisfaction of the note and mortgage. And we think that is sufficient to justify the finding that Belz had such authority. The indorsement and delivery of the note by plaintiff to Belz was strong evidence of it. A note indorsed in blank is payable to bearer, and may be negotiated by delivery alone. (Curtis v. Sprague, 51 Cal. 239; Peacock v. Rhodes,