Alvord v. Spring Valley Gold Co.

California Supreme Court Mar 21, 1895 No. No. 18305Published

Before: Fleet

AI Brief

AI-generated · verify before citing

Holding. A grantee who accepts a deed containing an express recital of a mortgage and a promise to pay the underlying debt is estopped from challenging the validity of that mortgage, regardless of whether the original mortgagor complied with statutory ratification requirements.

Issues

Whether a grantee is estopped from challenging the validity of a mortgage when the deed contains an express recital of the mortgage and an agreement to pay the debt.
Whether a general covenant to perform 'lawful obligations' limits a specific covenant to pay a defined bonded indebtedness.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“The effect of such a recital is to charge the land with the lien as effectually as if the purchaser had himself executed a mortgage of that purport.”

“The deed itself was put in evidence, and was competent, and, as we have seen, conclusive evidence as against the grantees and those claiming under them of the due execution and validity of the mortgage.”

Synopsis

Corporations—Conveyance from Foreign to Domestic Corporation— Assumption of Mortgage—Estoppel to Deny Validity.—Where a mortgage was made by a foreign corporation on mining property situated in California, and the property was subsequently conveyed to a California corporation which expressly assumed, undertook, and bound itself to pay the mortgage indebtedness, the domestic corporation is thereby estopped to deny the validity of the mortgage, and the effect of the recital is to charge the land with the lien as effectually as if the purchaser had executed a mortgage of the same purport.

Id.—Construction of Deed — Specific Covenants not Controlled by General Language.—Where the deed recites the existence of a specific bonded indebtedness, and that it is subject to a specific mortgage given to secure that indebtedness, and contains an express covenant to pay all of the present indebtedness “above specified,” the specific language cannot be controlled by general language following by which the grantee undertakes to perform all the “ lawful obligations” of the grantor, and the effect of the specific covenants is not limited to lawful obligations.

Secondary Evidence—Preliminary Proof.—Secondary evidence of the contents of a missing document not in possession of the adverse party, cannot be given when the proof shows that there is a person who might probably have it, of whom no inquiry has been made, but the preliminary proof should show that inquiry had been made, without result, of every person who, according to the evidence, would be likely to have the document, or to know of its whereabouts.

Van Fleet, J. This was an action to foreclose a mortgage alleged to have been given by the Spring Val[551]ley Hydraulic Gold Company, a New York corporation, on its mining property in California, to secure payment of certain bonds of that corporation. The court below held the mortgage invalid for want of a compliance with the act of April 23, 1880 (Stats. 1880, p. 131), which requires the ratification of the holders of at least twothiras of the capital stock. Many interesting questions have been argued by counsel, but only one of them need be considered.

The complaint contained, among other things, the following allegations: “That on or about the 23d day of July, 1886, the said Spring Valley Hydraulic Gold Company duly granted and conveyed unto the defendant, the Spring Valley Gold Company, all of the property described in said indenture of mortgage, together with other property, in consideration of which grant and conveyance the Spring Valley Gold Company assumed, undertook, and bound itself to pay, and agreed to pay, all of the indebtedness then existing of the Spring Valley Hydraulic Gold Company, and particularly the indebtedness represented by the aforesaid bonds, and secured as aforesaid by the said indenture of mortgage; and undertook and agreed to assume toward all the creditors and obligees of said Spring Valley Hydraulic Gold Company the position of debtor and obligor, and to be substituted in the place and stead of said Spring Valley Hydraulic Gold Company as such debtor and obligor.”

This allegation was not denied by the answer, but the execution of the mortgage therein referred to was put in issue.

The evidence showed that in July, 1886, a deed was executed from the Spring Valley Hydraulic Gold Company to the defendant, the Spring Valley Gold Company (which is a California corporation), for the property in question, which deed was executed by both of the parties thereto, and contained the following clause: “ Subject, nevertheless, to a certain mortgage or deed of trust on said premises, bearing date May 14, 1881, made by [552]the said Spring Valley Hydraulic Gold Company to William Alvord, F. F. Low, and Henry B. Laidlaw, trustees, to secure the payment of $200,000, and interest thereon, and recorded in the office of the recorder of Butte county, California, June 3,1881, in Book M of Mortgages, pages 773 to 782, and subject also to an indebtedness of the said the Spring Valley Hydraulic Gold Company of about $165,000, in addition to the above-mentioned indebtedness of $200,000, secured by said mortgage, or deed of trust, as aforesaid.

Alvord v. Spring Valley Gold Co.

AI Brief

Synopsis

More from California Supreme Court

Related research

AI Brief