Savings & Loan Society v. McKoon
Before: Belcher
Synopsis
Statutory Construction—Penalties not Favoreb.—Penalties are never favored by courts of law or equity; and statutes imposing penalties or creating forfeitures must be strictly construed, and every intendment and presumption is against the person seeking to enforce a pen-ally or forfeiture provided for by such statute.
In.—Construction of Code—Failure of Corporation to File Copy of Articles—Action to Foreclose Mortgage—Mortgagee Property not “Helb” by Mortgagee.—Section 299 of the Civil Code, which provides that any corporation failing to comply with that section by filing a certified copy of the copy of its articles of incorporation filed in the office of the secretary of state in any county “in which it holds any property,” except where the original articles are filed, shall not maintain or defend any action in relation to such property, “its rents, issues or profits,” until that section is complied with, does not apply to an action by a corporation to foreclose a mortgage in another county, which is simply and only an action for the collection of a debt, and to enforce a lien for its payment. The corporation does not “hold” the mortgaged property, within the meaning of that section.
In.—Nature of Mortgage—Lien Incident of Secured Debt.—A mortgage, though a conveyance in form, and treated as a conveyance for certain purposes, passes no estate in the land, but only creates a lien upon it, which is an incident of the secured debt, and passes by a simple assignment of the debt.
BELCHER, C. The plaintiff is a corporation duly organized under the laws of this state for the purpose of transacting the business of a savings bank, and having its principal place of business in the city and county of San Francisco. It brought this action in the superior court of San Diego county to foreclose a mortgage upon lands in that county, given by defendant’s testator to secure payment of his promissory note. Both the note and mortgage were executed in San Francisco, and the note was made payable at the office of plaintiff. The complaint follows the usual form in such cases and states all the facts necessary to constitute a cause of action. Among other things, it states that prior to the commencement of the action, and within the time and in the manner provided by law, plaintiff presented to defendant, as executrix, for allowance, its claim for said mortgage indebtedness, and the same was allowed by her as presented, and was approved by the judge of said superior court, and then duly filed in court and thereafter ranked among the acknowledged debts of the estate.
The only defense relied upon here is that the action should have been dismissed, because, as alleged in the answer, “the plaintiff has never filed a certified copy of the copy of its articles of incorporation, filed in the office of the secretary of state, in the office of the county clerk of the county of San Diego, state of California, in .which county is situated the property set forth in plaintiff’s complaint herein: and no such certified copy was on file in the office of said county clerk at the time of the commencement of this suit; nor is any such certified copy on file in said office at this time.”
The cause was tried by the court and judgment rendered in favor of the plaintiff, from which the defendant has appealed on the judgment roll.
Only two questions are presented by the record: 1. Does section 299 of the Civil Code apply to an action for the foreclosure of a mortgage? 2. If it does, has it been substantially complied with by the respondent in this action ?
[1791]. Section .299 of the Civil Code provides that every corporation must file in the office of the county clerk of every county in this state in which it holds any property, except the county where the original articles of incorporation are filed, “a copy of the copy of its articles of incorporation, filed in the office of the secretary of state, duly certified by such secretary of state,” and as a penalty for not doing so it declares that “any corporation failing to comply with the provisions of this section shall not maintain or defend any action or proceeding in relation to such property, its rents, issues, or profits, until such articles of incorporation, and such certified copy of the copy of its articles of incorporation, shall be filed at the places directed by the general law and this section.”
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