Chapman v. Bank of California

Paterson, J. The findings of the court below disclose the nature of the action and relief sought. They are, in substance, as follows: In October, 1875, the plaintiff executed and delivered to McKinley, Glenny, and Latham conveyances of certain real estate, comprising 20,041 acres, undivided, in a larger tract of 86,000 acres, situated in the counties of Kern and Tulare, and at the same time conveyed certain other lands belonging to him, comprising 38,134 acres, situated in the counties of Fresno, Merced, Stanislaus, and Mariposa. About the same time he conveyed to McKinley and Glenny about 26,330 acres, situated in the counties of Alameda, San Mateo, Santa Cruz, Solano, Napa, Merced, Fresno, San Luis Obispo, and San Francisco. These conveyances, though absolute in form, were intended and accepted merely as security for the payment of certain indebtedness due from the plaintiff to the Bank of British North America. Thereafter, said indebtedness, so secured, was assigned to the defendant, and on August 28, 1876, McKinley, Glenny, and Latham conveyed to the defendant all the lands transferred to them as aforesaid. In September, 1876, the plaintiff was indebted to the defendant in the sum of $214,523.97, and Isaac Friedlander was indebted to the defendant in the sum of $500,358.46. The plaintiff executed six promissory notes in divers sums, aggregating his indebtedness to the defendant, which were made payable to Friedlander, and by the latter indorsed and delivered to the defendant. At the same time Fried-lander executed six promissory notes, aggregating the amount of his indebtedness to the defendant, which were made payable to the plaintiff, and by him indorsed and delivered to the defendant. On November 25,1876, the defendant executed and delivered to the plaintiff and Friedlander an instrument designated as a “declaration of trust,” in which it declared that it held all of the lands conveyed by McKinley, Glenny, and Latham as security for the payment of said twelve promissory notes. In August, 1879, “ the plaintiff, overwhelmed with debt, and unable to meet his liabilities to the Bank of Cali[157]forma and to others, proposed to and urged the Bank of California to make a settlement with him, and to take all the said lands then held in security in fee-simple absolute in discharge and full satisfaction of" said indebtedness.” The bank agreed to this settlement, and accepted the plaintiff’s proposition. On September 6, 1879, in pursuance of the agreement, and to -carry out the settlement, the plaintiff delivered to the bank ten deeds (including the conveyance for the 29,041 acres of land which had been set off to the plaintiff out of the 86,000-acre tract), absolute in form, conveying to the defendant all of said lands, and the bank thereupon canceled and discharged all of said indebtedness, and surrendered the twelve promissory notes to the plaintiff, who has ever since held the same. Said ten conveyances were not executed to secure, and were not intended to secure, said indebtedness, or any part thereof, but were executed by plaintiff to the bank in full satisfaction and payment of all his indebtedness. No part of the lands was ever sold by the bank until after the delivery of said ten deeds. There was no fraud, oppression, or unfairness on the part of the bank. The settlement was fair, and for a full consideration. At the time of said settlement the plaintiff made and delivered to the bank a promissory note for twenty thousand dollars, payable two years after date. This note was never secured by any of the deeds, nor in any manner. Plaintiff never paid the note, but after its maturity — in 1881 ■—- the bank surrendered the note to the plaintiff. Plaintiff never complained of the transaction, and never informed the defendant in anyway that he was not satisfied with the settlement until April, 1887, when he demanded an accounting. The court further found that the allegations of the answer relating to the intention of the parties and the nature of the transaction between them were true. It was found that the plaintiff’s cause of action was barred by his laches, and by the provisions of sections 318 and 343 of the Code of Civil Procedure. Judgment was entered in favor of the defendant, and plaintiff moved for anew trial; the