Carstenbrook v. Wedderien

The action was brought to set aside the release and satisfaction of a certain chattel mortgage and to have said mortgage, given by said defendants to one Wallace Dinsmore, determined and declared to be in full force and effect and to have plaintiffs adjudged to be the owners and holders of said mortgage and the note secured thereby and entitled to the full payment of all the sums so secured, and also to have said mortgage foreclosed.

The relief sought by the complaint, involving as it does “equitable subrogation” and foreclosure, is a matter peculiarly of equitable cognizance and the appeal should not have been taken to this court.

The cause is transferred to the supreme court.

Hart, J., and Chipman, P. J., concurred.

On the sixth day of January, 1908, the cause was retransferred by the supreme court to this court for determination,, and on the 23d of January, 1908, the following opinion was rendered:

On the eighth day of August, 1904, plaintiffs brought suit against defendants for the sum of $591 and interest. Thereupon a writ of attachment was issued and placed in the hands of the sheriff of the county of Yuba for service. He was directed to attach certain personal property belonging to defendants upon which there was a chattel mortgage in favor of one Wallace Dinsmore to secure the payment of a promissory note for $1,500. The sheriff, acting in view of section 2969 of the Civil Code, declined to levy the writ of attachment on said property unless the plaintiffs should pay or tender to the said mortgagee or deposit with the county clerk or treasurer of said county payable to the order of said mortgagee the amount due on said mortgage. The plaintiffs thereupon deposited with the said county clerk, in accordance with said demand, the sum of $1,509.35. Thereafter, on August 11, 1904, the clerk paid said sum to the said mortgagee, who entered upon the record in the county recorder’s office the usual acknowledgment of satisfaction and discharge of said mortgage. Upon the payment of said money by the plaintiffs to .the clerk the sheriff levied the said writ of attachment upon said property. The action was afterward tried and judgment rendered in favor of plaintiffs

Prom this judgment and order denying their motion for a new trial defendants have appealed.

• Appellants admit that plaintiffs are entitled to be reimbursed for the amount paid on account of said mortgage, but they contend that the only recourse is through the attachment suit. It is declared in their brief: “They have obtained their judgment in that action and should proceed to have execution issued out, levied upon the property in question and then have it sold in accordance with section 2970 of the Civil Code, and the proceeds applied to the payment of said mortgage debt with interest and the balance upon their judgment. These sections of the Civil Code deal with the subject exclusively and under well-established rules of interpretation should be held to lay down the rule that must be followed.”

We think appellants are clearly right in their contention. The subject is a matter of statutory regulation, and we must look to the provisions of the statute for the course to be pursued. “Equitable subrogation” implies that there is no adequate remedy at law, but here the remedy is not only adequate, but it is plain, simple and speedy. Indeed, it is difficult to understand why plaintiffs should have resorted to the foreclosure suit, unless the purpose was to secure an attorney’s fee and to make conditions as burdensome as possible for defendants. The statute, certainly, does not contemplate that in such a case the property shall be sold twice, once under foreclosure of the mortgage and again under execution to satisfy the judgment in the other action. Section 2969 of the Civil Code provides upon what conditions personal prop

It is obvious that said section is intended to furnish the exclusive method for the reimbursement of said creditor as the preceding section prescribes the condition by compliance with which he may, under process, take possession of the property.

The procedure taken in the case at bar imposes an unjust burden upon the defendants, and we are satisfied that it is not contemplated by the said act of the legislature.

..It is no answer to say that the defendants are not prejudiced for the reason that they would have to bear the. expense of foreclosure in case the mortgagee had brought suit on his mortgage.

This view ignores the obvious intent of the legislature to avoid this expense in the event of attachment. Besides, it is manifest that the probable result of a sale would be quite different in the case of foreclosure where the property is free from any other lien from that presented here where the property is in the possession of the sheriff under other process and subject to execution to satisfy another judgment.

The authorities cited by respondents to justify the course pursued in the court below simply illustrate the application of the well-known principle of equitable subrogation, but they

In Shaffer v. McCloskey, 101 Cal. 576 , [ 36 Pac. 196 ], two tenants in common had executed a mortgage to secure the purchase price of the land, and one of them, being unable to pay his share of the mortgage, had conveyed his interest in the land to his cotenant, in consideration that the latter would pay the full amount due, and the mortgage was afterward satisfied of record upon such payment, without knowledge of the grantee that his grantor had previously made a deed of trust of his half of the land. It was justly held that the person paying the mortgage could maintain an action to revive it to protect his interest against the deed of trust.

The supreme court, through Mr. Justice McFarland, properly said: “Respondent clearly intended that his payment of the mortgage should inure to his own benefit, and not to the benefit of appellants; and there is no equitable ground upon which appellants can object to it so inuring. They were not led astray by the payment of the prior mortgage, and are left in the exact position which they expected to occupy when the .trust deed was taken.”

Randall v. Duff, 107 Cal. 33 , [ 40 Pac. 20 ], is a clear case of equitable subrogation where the purchaser under an ineffectual foreclosure of mortgages, having paid off the mortgages, is held entitled to the rights and remedies of the mortgagees. The court, speaking through Mr. Justice Temple, said: “Subrogation is allowed by courts of equity to secure justice. Ordinarily it takes place when one has paid a debt which some one else ought to pay. In such cases, sometimes the person so paying succeeds to the securities which the original creditor held for his debt. This is allowed when justice requires it, and the securities which a person so obtains are held by him merely to insure reimbursement.. He will

In Brown v. Rouse, 125 Cal. 645 , [ 58 Pac. 267 ], the doetrine of equitable subrogation is again discussed by the court through Commissioner Chipman, and the conclusion reached that it was not a proper case for its application because the one claiming the benefit of it was a volunteer, and furthermore it is said: “There was no mistake of fact, for he had knowledge of the authority under which Rouse was acting; his mistake was one of law. No question of fraud, accident or mistake of fact arises. ”

The other authorities cited by respondents are in line with the foregoing, and we see no necessity for reviewing them in detail.

Of course, if it appeared that the proceedings in the attachment suit were invalid or so defective that the property could not be legally sold under an execution upon the judgment, a different case would be presented and it would probably be brought within the principle of Randall v. Duff, 107 Cal. 33 , [ 40 Pac. 20 ]. But, as already seen, the judgment in said cause has been affirmed; we must assume that the proceedings were all regular and that the property is of sufficient value to satisfy plaintiffs’ claim if they pursue the remedy pointed out by the statute. But at any rate they had knowledge of the requirements of the statute; they proceeded to attach according to its conditions, and they must abide by the consequences.

The judgment and order are reversed.

Hart, J., and Chipman, P. J., concurred.

A petition for a rehearing of this cause was denied by the j district court of appeal, on February 22, 1908, and the fol- I lowing opinion was then rendered: j

Respondents in their petition for rehear- | ing state that they “assign as their grounds for a rehearing j herein certain matters which existed with relation to said | cause at the time of the hearing, and which were not plainly set forth in the record.” As a matter of fact they were not set forth in the record at all, and, of course, cannot be - considered by us. i

These additional matters of equitable cognizance stated and implied in the said petition are of persuasive force, but they are outside of the record and would not justify us in granting a rehearing; but as the cause was ordered back for a new trial we can see no reason why plaintiffs should not be permitted to amend their complaint,-setting up the additional facts which in their opinion render the remedy provided by the statute inadequate or inoperative. In ease this is done and the judgment should be for respondents, we invite the consideration of the learned trial judge to the question whether the amount recovered should not be limited to the amount actually paid out by plaintiifs, with the legal rate of interest.

The rehearing is denied.

Chipman, P. J., and Hart, J., concurred.