Montgomery v. Sayre

THORNTON, J. This action was on a promissory note executed by defendant’s testator to the plaintiff. It was given to secure the payment of the note of the Pioneer Gold Mining Company to the plaintiff for $110,000. This last note was indorsed by William S. Chapman. It was further secured by the pledge of all the shares of the capital stock of the Pioneer Gold Mining Company, except thirty shares thereof, and also by a mortgage on the Pioneer mine, then owned by the company above named, executed by said company. The above facts appear and are not disputed. It further appears that there was a prior mortgage executed by the company on the Pioneer mine, on which a suit for foreclosure was brought, and in this suit the plaintiff, who was one of the defendants therein, filed a cross-complaint, asking that his mortgage be foreclosed. This was done, and an order of sale issued directing the proceeds of the sale of the mine under the decree to be applied first to the payment of the prior mortgage, and the remainder upon the plaintiff’s mortgage. At the sale under this decree, the plaintiff became the purchaser of the mortgaged premises for $50,000, of which $10,415 was paid to the owners of the prior mortgage, and the remainder, less costs of sale, was applied on the second debt of plaintiff, adjudged then to amount to $69,426.60. The sheriff’s return of sale showed a deficiency due on the second debt to plaintiff, amounting to $61,534.13. The complaint shows payments on the mortgage debt to plaintiff, including the payment made of a portion of the funds of the sale above mentioned, amounting to $98,380.82. Judgment for this deficiency was docketed against the mortgagor company and W. S. Chapman. On this judgment payments were made before the commencement of this action, leaving still due, as averred in this complaint, the sum of $34,551.20. Plaintiff asks judgment on the note sued for, principal and interest thereon, amounting to $17,120.80. The claim of plaintiff on [367]the note sued on was regularly presented to the defendant’s executor, who rejected it. This action was brought on the note to recover the amount above mentioned, to be paid by defendant in due course of administration. It is set up in the answer that the $110,000 note had been fully paid, and denies that any sum remains due and unpaid on it. Other allegations of the complaint were denied. These need not be fully stated. As an affirmative defense, the defendant set up by his answer the following: “That a transcript of the docket of the deficiency judgment docketed against the Pioneer Mining Company and W. S. Chapman (the maker and indorser of the mortgage note) was filed with the recorder of Fresno county in November, 1887, and thus the judgment became a lien upon all the real property of said W. S. Chapman in said Fresno county; (2) that at and before the filing of said transcript, Chapman owned certain real property described, situated in said county, which was held in the name of W. F. Goad, trustee for plaintiff, Montgomery, for further security for debts due Montgomery from Chapman; (3) that the said lien of said judgment was never enforced against said property of said Chapman, but that said Montgomery, Chapman & Goad, after the death of said A. L. Sayre, sold and conveyed by deed to Thomas E. Hughes all said' real property for $35,000, paid by Hughes to Montgomery, which was received by Montgomery as payment in full of every debt and obligation due from Chapman to him, except the judgment aforesaid, which then amounted to less than $36,000, and that Montgomery thereupon released said land from the lien of said judgment; (4) that said real estate was then worth $140,000, and if sold at its real value would have realized enough to pay all debts due Montgomery from Chapman, including said deficiency judgment; (5) that said Montgomery released said land from the lien of said judgment, and released said Chapman from the obligation of said judgment without the consent of defendant. ’ ’ The case was tried by a jury on the 28th of April, 1889, who rendered the following verdict: