Summary
In Higgins v. Manson, 126 Cal. 467, 58 P. 907, 908, 77 Am. St. Rep. 192, it is stated: "The form of the writing is not important, provided it sufficiently appears that it was thereby intended to create a security. If that intention appears, it will create a mortgage in equity, or a specific lien on the property so intended to be mortgaged."
Summary of this case from Flyge v. FlynnOpinion
S.F. No. 1738.
October 27, 1899.
APPEAL from a judgment of the Superior Court of Humboldt County. E.W. Wilson, Judge.
The facts are stated in the opinion.
George D. Collins, for Appellant.
J.N. Gillett, for Respondent.
Foreclosure. Defendant had judgment on a general demurrer to the complaint, from which plaintiff appeals.
The action is brought against defendant as administratrix of her deceased husband's estate. The complaint alleges that Homer Manson in his lifetime executed and delivered to plaintiff his certain written instrument, of which the following is a copy:
"$100.00. San Francisco, Cal., Sept. 2d 1896.
"One day after date (without grace), I promise to pay to the order of Charles H. Higgins the sum of one hundred and no/100 dollars for value received, with interest at the rate of one per cent per month until paid, both principal and interest payable only in United States gold coin.
"(Signed) H. MANSON."
"San Francisco, Cal., Sept. 2, 1896.
"In consideration of the sum of one hundred no 100 dollars, loaned me by Chas. H. Higgins, I this day deposit with him as security my government patent to 160 acres of timber land in Humboldt county — certificate No. 7072 — dated at Washington, D.C., the 18th day of October, 1889; said certificate to be returned to me if the sum of one hundred dollars, and interest at the rate of one per cent per Mo., is paid in one year from date.
"I further agree to transfer and assign over to Chas. H. Higgins all my right and title to said 160 acres of land — certificate No. 7072 — should I fail to pay my obligation of one hundred dollars and interest on September 2, 1897.
"(Signed) HOMER MANSON."
"Witness:
"(Signed) Geo. E. Dodge."
The complaint alleges that the patent referred to in the intrument was issued to Manson on October 18, 1889, by the United States, whereby title was transferred to Manson to the land sought to be sold, describing it; alleges nonpayment and waives recourse against the property of the estate other than the above-described property, and prays judgment "for the foreclosure of said lien and for the sale of said real property in satisfaction of said lien," and for general relief.
Appellant concedes that a lien cannot be created by the mere deposit of a title deed; but he contends that a lien in the nature of a mortgage may be imposed upon land without compliance with section 2922 of the Civil Code. (Citing Dingley v. Bank of Ventura, 57 Cal. 471; Hill v. Eldred, 49 Cal. 398; Kreling v. Kreling, 118 Cal. 419, and some other causes; also Civ. Code, secs. 1636, 1647, 1656, 2872, 2881.) As to when a written memorandum makes the deposit of a title deed a mortgage he cites 1 Jones on Mortgages, sec. 187; 2 Pomeroy's Equity Jurisprudence, secs. 1235, 1237, 1266; 1 Beach's Modern Equity Jurisprudence, sec. 291. To the point that the contract does not set forth a description of the mortgaged premises, it is claimed that reference is made to the patent and by the latter the description is furnished; that the maxim, Id certum est quod certum reddi potest, applies. (Citing Preble v. Abrahams, 88 Cal. 251; 22 Am. St. Rep. 301; Towle v. Carmelo etc. Co., 99 Cal. 398.)
Respondent concedes that the law of this state recognizes an equitable mortgage, and also concedes that an instrument may be drawn contemporaneous with the deposit of the title deeds which a court of equity will enforce as an equitable mortgage; but it is contended that it must be such an agreement as meets the requirements of our code, and must leave no doubt; and, further, that the instrument should "expressly state that the debt was `secured by, or be a charge on, the land described in the deed.'" (Citing 3 Pomeroy's Equity Jurisprudence, sec. 1266; and relying especially upon Gardner v. McClure, 6 Minn. 250.) The parties, by their mutual concessions, have reduced the inquiry to the single question as to the true purport and meaning of the written instrument pleaded. The true rule, as we think, was correctly stated in Howard v. Iron etc. Co., 62 Minn. 298. "Every express agreement in writing, whereby the party clearly indicates an intention to make some particular property therein described a security for a debt, creates an equitable lien upon the property, which is enforceable. The form of the writing is not important, provided it sufficiently appears that it was thereby intended to create a security. If that intention appears, it will create a mortgage in equity, or a specific lien on the property so intended to be mortgaged." (Citing, in support thereof, 2 Pomeroy's Equity Jurisprudence, secs. 1235, 1236; Payne v. Wilson, 74 N.Y. 348; Daggett v. Rankin, 31 Cal. 321; White Water etc. Co. v. Vallette, 21 How. 414.) We are not concerned, at this time, as to the rights of third persons or creditors of the estate. If the complaint is good as between the parties to the action, it is not demurrable. (Howard v. Iron, etc. Co., supra.) Gardner v. McClure, supra, is a very well-considered and instructive case. The agreement there, however, clearly showed an intention to fix the lien upon the deed and not upon the land described therein, and the opinion in the case is mainly a learned review of the doctrine from its inception in England as applicable to the mere deposit of the deed unaccompanied by any clear intention to place a lien upon the land itself. There was in that case no such clause in the contract as the concluding paragraph of the instrument here. In this paragraph there is, we think, a clear intention to make a transfer of the land itself by Manson, should he fail to pay as agreed. Reading the entire instrument, it seems to us the intention is made manifest that the land should stand as security for the debt, and the land is sufficiently described to indicate what was intended to be mortgaged. It is no answer that this part of the agreement was executory, for equity regards as done that which ought to be done. (2 Pomeroy's Equity Jurisprudence, sec. 1237.) In Daggett v. Rankin, supra, Mr. Justice Currey gives what Mr. Pomeroy calls "an admirable statement of this truth," namely: "The doctrine seems to be well established that an agreement in writing to give a mortgage, or a mortgage defectively executed, or an imperfect attempt to create a mortgage, or to appropriate specific property to the discharge of a particular debt, will create a mortgage in equity, or a specific (equitable) lien on the property intended to be mortgaged."
I advise that the judgment be reversed.
Gray, C., and Haynes, C., concurred.
For the reasons given in the foregoing opinion the order is reversed. Temple, J., McFarland, J., Henshaw, J.