Wenzel v. Schultz
Before: Searls
Synopsis
Mortgage by Deed Absolute—Power op Sale—Title Not Conveyed.— A deed, absolute on its face, made to a creditor o£ the grantor, as security for the sum of money due from the grantor to the grantee, in pursuance of an understanding that the grantee would sell the land, pay off a mortgage held by a third party, retain the sum of money due himself, and pay the residue to the grantor, is a mortgage, and conveys no title to the creditor, though sufficient to pass title as between the grantor and a purchaser from the grantee in good faith, and for a valuable consideration without notice.
Id.—Reconveyance to Grantor—Agreement to Pay Indebtedness— Vendor’s Lien—Estoppell.—Upon a reconveyance by the creditor to the grantor, under an. agreement that the latter would make the sale which the former had failed to make, and would pay the creditor from the proceeds the amount of the indebtedness which had been secured by the deed, neither the debtor nor his subsequent grantee is estopped to deny that the creditor ever had title to the land, as against his claim to foreclose a vendor’s lien for the amount of the debt.
Id.—Disputing Title of U-rantor.—The grantee in fee who owes no duty to his grantor is not estopped from disputing the title of such grantor.
Id.—Issue as to Title.—In an action to foreclose the vendor’s lien the answer of a defendant, who is the grantee of the defendant to whom the land was reconveyed, denying that the plaintiff ever owned the land, entitles such grantee to show that the deed to the plaintiff was a mortgage, and did not convey the title.
Id.—Purchase of Land Subject to Mortgage.—Where the land was purchased subject to an outstanding mortgage, and there is nothing to show that the purchaser became obligated to pay the mortgage note, the land alone is liable for its payment, and the purchaser cannot be required to redeem the mortgage before it is due.
The deed being a mortgage, plaintiff was not the owner of the land. (Civ. Code, secs. 24, 29; Smith v. Smith, 80 Cal. 325.) There was no sale to Schultz by plaintiff, and he could not have a vendor’s lien. (Civ. Code, sec. 3044.) A grantee is not estopped to deny the title of his grantor. (San Francisco v. Lawton, 18 Cal. 476; 79 Am. Dec. 187; Osterhout v. Shoemaker, 3 Hill, 518; Sparrow v. Kingman, 1 N. Y. 253; Blight v. Rochester, 7 Wheat. 548; Propagation Society v. Pawlet, 4 Pet. 506; Watkins v. Holman, 16 Pet. 54; Barker v. Salmon, 2 Met. 32; Averill v. Wilson, 4 Barb. 180.) That the deed was a mortgage could be shown under the issue as to the ultimate fact of the ownership of the land. (Grewell v. Waldon, 23 Cal. 165; Smith v. Smith, 80 Cal. 323.)
Searls, C. Action to foreclose a vendor’s lien, and to have a mortgage executed by the plaintiff upon the [252]land claimed to be subject to such vendor’s lien foreclosed.
According to the averments of the amended and supplementary complaint plaintiff was, on the eighth day of December, 1888, the owner of and in the possession of certain land described therein. That plaintiff sold and conveyed the land to Charles F. Schultz. The consideration of the sale was $5,000, as follows: Schultz agreed to pay off a debt of plaintiff to Hattie Stoerling, amounting to $1,500, evidenced by a promissory note bearing interest at ten and a half per cent per annum, and secured by a mortgage on the land conveyed. The residue of the purchase money, amounting to $3,500,, was to be paid in gold coin. Ho part of the purchase price was paid. On the 1st of May, 1889, on an accounting between plaintiff and Schultz, there was found to be due to plaintiff on account of the $3,500, part of the purchase price of the land, the sum of $2,700, for which sum Charles F. Schultz and Lavantia Schultz, his wife, made to plaintiff their promissory note, payable one day after date, with interest at nine per cent per annum. On the twenty-eighth day of May, 1889, Charles F. Schultz, being at the point of death, and desirous of avoiding the necessity of administration on his estate, conveyed said land to Lavantia Schultz, his wife, subject to the vendor’s lien of plaintiff, and subject to the payment to plaintiff of the purchase money, as aforesaid, of all of which she had notice, and then and there agreed to pay said purchase money to plaintiff.
Lavantia Schultz is insolvent.
The interest of the defendant, Elizabeth A. Davis, in said land is vested under a deed from the defendant, Lavantia Schultz, dated February 6, 1891, and as a part of the consideration thereof the former assumed and agreed to pay the debt of the plaintiff to Hattie Stoerling, secured by said mortgage, and the deed to her recites that the conveyance is subject to the mortgage which is described therein. Charles F. Schultz died
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