Newhall v. Sherman, Clay & Co.

GRAY, C. The appellant brought suit against A. T. Hatch and others on the third day of February, 1897, to foreclose a deed intended as a mortgage, and joined the respondent as a defendant, because, as stated in the complaint, “The said Sherman, Clay & Co. claim some interest or lien upon the lands and premises hereinbefore described; but that said claim is subsequent to and subordinate to the mortgage aforesaid.” Respondent demurred on the grounds, among others, that the complaint failed to state a cause of action, and that the cause of action therein stated was barred by the provisions of section 337 of the Code of Civil Procedure. This demurrer was sustained, plaintiff declined to amend and appealed from the judgment against him. The defeasance which was executed with the deed is set out in the complaint, and after reciting the deed and the property conveyed thereby, said defeasance reads as follows:

“And, whereas, said deed is absolute in form, yet in fact is intended as security for the payment of the sum of four thousand dollars loaned by said Newhall to said A. T. Hatch.

“Now, this defeasance witnesseth, that the said George A. Newhall, for himself and for his heirs, executors, administrators and assigns, hereby binds himself and agrees to reconvey the hereinabove mentioned and described property unto the said A. T. Hatch, his heirs, executors, administrators or assigns, at

[511]any time, upon the payment to him of said sum of four thousand dollars and his demand for a deed to said property.

“In witness whereof, the said George A. Newhall has hereunto set his hand and seal, this fourth day of November, A. D. 1892. (Signed) GEO. A. NEWHALL.”

The complaint shows that the suit was begun more than four years after the execution of the deed and defeasance upon which the suit is based. There appears to be no promise in writing subscribed by the defendant as to the payment of the amount loaned, and, though his obligation to pay may be founded in parol, yet the suit for foreclosure is deemed to be founded upon the written instruments consisting of the deed and defeasance whieh constitute the mortgage, and the statute of limitations will not bar such suit until four j-ears after the execution of these instruments. And for the purposes of the foreclosure suit the debt itself not barred until the end of four years, because its payment is secured by the same written instruments. (Wood v. Goodfellow, 43 Cal. 185; Union W. Co. v. Murphy's etc. Co., 22 Cal. 621.) Respondent therefore relies upon the proper statute of limitations when he pleads section 337 of the Code of Civil Procedure, in his demurrer.