Newhall v. Hatch

HAYNES, C. The facts can best be stated historically, with such reference to the pleadings as may be necessary. On November 3, 1892, defendant Hatch and wife mortgaged to the plaintiff certain real estate situated in Alameda county. The instruments constituting the mortgage consisted of a deed in form absolute, executed by Hatch and wife, and a defeasance executed by Newhall, the body of which, after reciting the deed, was as follows: “And whereas, said deed is absolute in form, yet in fact is intended as security for the payment of the sum of $4,000 loaned by said Newhall to said A. T. Hatch: Now this defeasance witnesseth that the said George A. Newhall, for himself, 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 any time upon the payment to him of said sum of $4,000.00 and his demand for a deed to said property.” On April 21, 1896, Sherman, Clay & Co., the appellant herein, obtained a judgment against said A. T. Hatch in the superior court of Alameda county for the sum of $47,792.25, which was then docketed, and became a lien on said mortgaged premises. On February 3, 1897, Newhall commenced an action to foreclose his said mortgage lien, and made Hatch and wife, Dalton, the assignee of Hatch in insolvency, and Sherman, Clay & Co. defendants, alleging as to the latter that it had, or claimed to have, some lien thereon, but which was subsequent and subject to said lien of the plaintiff. In said first action the complaint set out the defeasance hereinbefore quoted, and alleged: “That no part of said sum of $4,000 has been paid, nor has any interest thereon been paid, but the whole thereof, with interest from Novem[655]ber 3, 1892, is now due and owing by said Hatch to the plaintiff herein.” Sherman, Clay & Co. demurred to said complaint, and, among other grounds, specified that the cause of action was barred by the provisions of section 337 of the Code of Civil Procedure. Said demurrer was sustained, and, the plaintiff declining to amend, judgment that his action be dismissed as to Sherman, Clay & Co. was entered on April 27, 1897, and from that judgment Newhall appealed, and this court affirmed the judgment: Newhall v. Sherman, 124 Cal. 509, 57 Pac. 387. After said judgment was entered against Newhall in the superior court, Sherman, Clay & Co. took out execution upon its judgment against Hatch, and on July 22, 1897, the sheriff sold said premises to said Sherman, Clay & Co., and, no redemption having been made, it received the deed of the sheriff therefor on July 28, 1898, and recorded it August 5, 1898. Thereafter, on June 27, 1899, said New-hall commenced the present action to foreclose his said mortgage upon the same premises, and again made the corporation known as Sherman, Clay & Co. a party defendant. The making of the deed and defeasance was alleged as before, but it was also alleged as follows: “That thereafter, on September 20, 1895, and long prior to the accruing of the claim of Sherman, Clay & Co., hereinafter mentioned, the said defendant A. T. Hatch made and subscribed in writing a new promise to pay the indebtedness secured by said mortgage, which new promise is in the words and figures following, to wit: