Carpentier v. Brenham

CROCKETT, J. — On the former appeal in this ease (Carpentier v. Brenham, 40 Cal. 221) it was decided that notwithstanding the foreclosure of the mortgage to Moss and the sale under it, a court of equity will deem it to be still subsisting and unsatisfied, so far as may be necessary for the protection of the purchasers at the foreclosure sale, as against the junior mortgage to Catherine Hays; and that the only remedy of the junior mortgagee is a bill to redeem from the prior mortgage. This ruling has become the law of the case, and its correctness or incorrectness is not open to review on this appeal. Correctly assuming these propositions to have been settled, the defendants contend that the complaint has none of the characteristics of a bill to redeem, and was, therefore, properly dismissed. But we do not regard it in so narrow a light. Whilst not strictly and in a technical sense a bill to redeem, it is nevertheless capable of the necessary amendment, without materially changing the nature and scope of the action, and the plaintiff would be permitted to amend, if the ends of justice require it. We shall, therefore, for the purposes of this ap[814]peal, treat the complaint as sufficient to authorize a decree for redemption, if the facts will justify it.

On the former appeal the questions arising on the statute of limitations were not before us, but as the facts are now presented, the plaintiff contends that the mortgage to Moss and the rights which the defendants claim under it are barred by the statute, and consequently that he is under no obligation to redeem from a defunct mortgage. On the other hand, the defendants insist that when the debt to Moss became due, the statute commenced to run against the right of Iiays to redeem, and had fully run before the commencement of the action.

All that the junior mortgagee acquired by her mortgage was a lien on the land, subject to the lien of the prior mortgage, which had then become due. The statute had already commenced to run against the right of the mortgagor to redeem from the prior mortgage, or, to use a more accurate phrase, against his right to pay off the mortgage debt and demand a release of the mortgage. When Moss obtained the sheriff’s deed under his foreclosure sale he acquired the legal title as fully for all purposes as though it had been conveyed to him directly by Brenham, the mortgagor, after the execution of the junior mortgage. He took it, however, subject to the then existing lien of the junior mortgage. But, as we decided on the former appeal, he will be treated in a court of equity, and as against the junior mortgagee, as sustaining a twofold relation toward the property; first, as the holder of the legal title, good as against all the world, except the junior mortgagee; and, second, as the holder of the prior mortgage, which, as against the junior mortgage, a court of equity will keep alive and deem to be unsatisfied, notwithstanding the foreclosure and sale under it. The rule is founded on the plainest principles of justice and equity, and is abundantly supported by the authorities. If it were otherwise, the holder of the prior mortgage, by the mere act of taking from the mortgagor a conveyance of the legal title, would extinguish his mortgage and give priority to the junior mortgage. To avoid this injustice, courts of equity have established the rule that, when the junior mortgagee, under such circumstances, seeks to enforce his lien, the prior mortgage will be kept alive, and will be deemed to be still in force, with