Sanford v. Bergin ( 1909 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] This is an action for the partition of a tract of land containing 13,316 acres, known as the Rancho los Megaños in Contra Costa County. An interlocutory order declaring the interests of the several parties and directing partition accordingly was made by the court below. The plaintiff, Charles E. Sanford, and the defendant, M.R. Jones, as administrator with the will annexed, of the estate of Harriet Sanford, deceased, moved the court for a new trial, which was denied. They appeal from the order for the partition and from the order denying a new trial.

1. The plaintiff was adjudged to be the owner of an undivided five and five-sixteenths hundredths of the land. In his complaint plaintiff alleged title to an undivided one half thereof. This claim was based upon an alleged resulting trust in the land whereby it was claimed that James T. Sanford, uncle of the plaintiff, in 1871 acquired the title to the land in trust for his mother, brother, and sisters, the plaintiff being the sole and only heir of the brother, the trust arising from the alleged fact that the purchase money belonged to the beneficiaries above mentioned. The court found that the allegations of fact upon which it is claimed that the trust arose were untrue. It is conceded that this finding is supported by sufficient evidence. The claim to an interest in the land by virtue of such resulting trust is now abandoned.

2. The claim of Jones as administrator of the estate of Harriet Sanford, deceased, is that Harriet Sanford held a mortgage upon the land to secure a debt amounting to at least three hundred thousand dollars, and he asks that said mortgage be declared a lien thereon and that its payment be provided for in the partition proceedings. He asserts that on December 11, 1875, James T. Sanford was the owner of the land, that on that day he executed to Harriet Sanford, who was his mother, a deed purporting to convey the land to her in fee simple for an expressed consideration of $172,500, but that, in fact, said deed was intended as a mortgage to secure a debt then due from James T. Sanford to Harriet Sanford and "the family," that is, his brother, Charles B. Sanford, and his sisters, Harriet A., and Josephine L. Sanford. It was alleged that this debt aggregated more than three hundred thousand dollars, but the mortgage lien asserted in this partition proceeding consists only of the amount thereof alleged to be due to Harriet Sanford. The court found that the deed to Harriet Sanford was absolute and that no debt or mortgage from James T. to Harriet Sanford was proven, but that, if any such debt and mortgage did, at any time, exist, they were barred and extinguished by the statute of limitations and by laches, long before the commencement of the action. The action was begun on April 30, 1898. The answer of Jones, in which, for the first time, the mortgage claim was asserted, was filed on April 20, 1903. The filing of this answer must be deemed to be equivalent to an action of foreclosure, and the question of the bar of the statute of limitations or of laches must be decided upon the theory that the action was begun upon the date last mentioned.

The debt, if any, which was secured by the alleged mortgage, was not evidenced by any bond or note, nor, as far as appears, by any instrument in writing whatever. The evidence shows that if such debt ever existed it arose in the state of New York while the parties resided in that state, and that if any writing was given in evidence thereof such writing was executed in that state. The deed of December 11, 1875, claimed to constitute a mortgage, and which is the foundation of the asserted right of Jones as administrator of Harriet Sanford's estate, was executed in New York. "An action upon a contract, obligation, or liability, not founded upon an instrument of writing, or founded upon an instrument of writing executed out of the state," is barred unless such action is begun within two years after the cause of action shall have accrued. (Code Civ. Proc., secs. 312, 339.) There is an exception in the case of a defendant who is out of the state, in which case the time of his absence is not a part of the time limited for the beginning of the action. But here the alleged debtor and mortgagor came to this state early in 1876 and remained here until his death on May 2, 1885. It is alleged in the answer that the debt which the deed of December 11, 1875, was intended to secure, was due at the time of the execution of that deed. Hence it follows that, unless something occurred to prevent the operation of the statute, or to revive or renew the debt or mortgage, any action thereon was barred on December 11, 1877, twenty-five years before the filing of the answer which we hold to be the beginning of such action. (San Jose etc. Bank v. Bank,144 Cal. 574, [78 P. 5].)

It is claimed that the following facts are proven by the evidence without conflict and that they show that the action is not barred:

On October 12, 1881, Harriet Sanford, at the request of James T. Sanford, executed a quitclaim deed purporting to convey the land to her daughter, Harriet A. Sanford. This deed was intended and accepted as an assignment of the mortgage interest and rights claimed to have been created by the deed of December 11, 1875, from James T. Sanford to his mother. Before the execution of this deed the Savings and Loan Society of San Francisco, a corporation, and other persons holding as trustees for said corporation, had received deeds and conveyances of the land in trust to secure a debt due said Society from James T. Sanford, but the Society wrongfully claimed absolute title thereunder in trust for its benefit and that James T. Sanford had no right or interest in the land. The Society was in possession. On May 1, 1882, James T. Sanford and Harriet A. Sanford began an action in the United States circuit court against said Society for an accounting and to redeem the said land. Harriet A. Sanford and James T. Sanford both signed the complaint in said action. Therein they averred that the indebtedness of James to his mother on December 11, 1875, was more than $172,500, that the deed of that date, executed to Harriet Sanford by James T. Sanford, was given as security for said indebtedness then due, that the quitclaim deed of October 12, 1881, by the mother to Harriet A. Sanford, assigned and transferred to Harriet A. Sanford all the rights and interests of the mother acquired by the deed aforesaid to her from James T. Sanford, and they prayed that the Savings and Loan Society, upon payment to it of the amount found due to it from James T. Sanford, be required to convey or cause to be conveyed the said rancho to Harriet A. Sanford. On April, 1884, James T. Sanford gave and signed his deposition as a witness in said action. Therein he testified that the said deed by his mother to his sister Harriet A. Sanford was made for the reason that his mother was too ill to commence or carry on the action against the Savings and Loan Society, which was then in contemplation, that the reason that the conveyance was not made to himself was that he did not wish to disturb the security that that deed carried with it and that the deed to his sister was made without any other consideration. It is claimed that the complaint and deposition in said action constitute written acknowledgments of the existence of the debt and mortgage to Harriet Sanford, taking the same out of the operation of the statute of limitations. Harriet Sanford died on October 11, 1883. Her will was probated in New York on December 26, 1886, and Harriet A. Sanford was appointed executrix thereof. James T. Sanford died on May 3, 1885. His will was probated in New York and Harriet A. Sanford was there appointed executrix thereof. By Harriet Sanford's will a legacy of one hundred and fifty thousand dollars was given to her daughter Josephine L. Sanford, some small legacies were bequeathed to others and the residue equally to the four children, Charles B. Sanford, Harriet A. Sanford, James T. Sanford, and Josephine L. Sanford. Charles B. Sanford died on January 29, 1896. The plaintiff is his son and only heir. Harriet A. Sanford died testate on January 12, 1888. Her will gave all her property to her sister Josephine L. Sanford. On February 13, 1888, said will was admitted to probate and said Josephine was appointed administratrix of her said estate, and on October 6, 1890, the said estate, including all the interest of Harriet A. in the lands in controversy here, was finally distributed to said Josephine. On May 21, 1887, Josephine was appointed administratrix of the estate of James T. Sanford. His will gave all his property to his said sisters Harriet and Josephine. On May 12, 1888, his estate was distributed to Josephine, one half in her own right and one half as successor to her sister Harriet A. Josephine then represented all the interests concerned in the prosecution of the action in the United States circuit court. In her dual capacity as the representative of the respective estates of her brother and sister as aforesaid, she obtained a revival of said action against the Savings and Loan Society and others and on December 31, 1889, was duly substituted as plaintiff therein. Thereafter until her death on September 12, 1897, the prosecution of said action was continued by her, individually, and as administratrix of the respective estates of James T. and Harriet A. Sanford. Final judgment in the action to redeem was rendered on February 27, 1897, and the action was appealed to the circuit court of appeals. On May 1, 1900, the administrators of the estate of Josephine were substituted in her stead as plaintiffs in said action and on the same day the appeal was determined in their favor and the judgment became final.

The first written acknowledgment of the debt and mortgage by James T. Sanford was the aforesaid complaint filed by him on May 1, 1882, more than six years after the mortgage was made. As the alleged mortgage secured a debt which said complaint declared was due at its date, it follows that the debt was barred three times over when the acknowledgment was made. At that time, therefore, the mortgage had already become extinguished by the lapse of time within which an action could be commenced upon the debt which it secured. (Civ. Code, sec. 2911; San Jose etc. Bank v. Bank,144 Cal. 574, [78 P. 5]; Wells v. Harter, 56 Cal. 343; Jeffers v.Cook, 58 Cal. 152; Henderson v. Grammar, 66 Cal. 336, [5 P. 488]; Ward v. Waterman, 85 Cal. 505, [24 P. 930]; Hughes v.Cannedy, 92 Cal. 387, [28 P. 573]; Newhall v. Sherman, 124 Cal. 512, [57 P. 387].) When a written acknowledgment of a debt is made after the statute of limitations has begun to run, but before the statutory period has expired, the effect is to keep the original obligation alive, and a suit may be maintained on the original contract, after the expiration of the original period and within the new period initiated by such acknowledgment. (Rogers v. Byers, 127 Cal. 528, [60 P. 42], and cases there cited.) But if the new promise or acknowledgment is not made until after the debt has become barred, the original contract is practically extinguished, and the suit can only be maintained upon the new express promise, or upon the new promise which the law implies from an acknowledgment in writing. (Rogers v. Byers,127 Cal. 528, [60 P. 42]; Concannon v. Smith, 134 Cal. 17, [66 P. 40]; Southern Pacific Co. v. Prosser, 122 Cal. 417, [52 P. 836, 55 P. 145].) The effect of the application of these rules to a debt secured by a mortgage is that where the acknowledgment is made before the action is barred, the original contract being thereby kept alive, the mortgage is not extinguished by the lapse of the period of limitation after the cause of action first accrued. The original contract not having been barred at the time of such acknowledgment, it is extended and the mortgage lien continues with it. (Daniels v. Johnson, 129 Cal. 417, [79 Am. St. Rep. 123, 61 P. 1107].) But when the new promise or acknowledgment occurs after the debt is barred and the mortgage lien extinguished, the new promise, express or implied, becomes the basis of the cause of action, and it does not revive or renew the mortgage lien. (Wells v. Harter, 56 Cal. 343; SouthernPacific Co. v. Prosser, 122 Cal. 417, [52 P. 836, 55 P. 145].) "A mortgage can be treated, renewed, or extended, only by writing, executed with the formalities required in the case of a grant of real property." (Civ. Code, sec. 2922) Neither the complaint nor the deposition can be construed to be a renewal or revival of the mortgage lien. Undoubtedly, if the case of the administrator of Harriet Sanford depended upon this question, the action would have long ago become barred.

In avoidance of this conclusion, the appellants contend that the complaint in the redemption suit was more than a mere acknowledgment. They say that it was an assertion by James T. Sanford that on May 1, 1882, when the complaint was filed, the said mortgage was then a subsisting, valid lien on the property to secure the existing debt, and that the debt was not then barred, nor the mortgage lien extinguished: that this assertion necessarily implies that there had been successive renewals or acknowledgments of the debt, from time to time within the period of limitation, whereby both the debt and the mortgage had been kept in existence as continuing obligations until that date, and that this averment in the complaint is the equivalent of proof of the renewals necessary to accomplish that end. It will here be observed that, even if this is taken as correct, and the giving of the deposition in 1884 be deemed a new acknowledgment of the debt within the new period of limitation beginning on May 1, 1882, in which event the debt and mortgage would be kept alive until April, 1886, there would still remain a period of seventeen years between April, 1886, and April, 1903, when the present proceeding is deemed to have been commenced, by which period the action would be barred. To surmount this obstacle, in part at least, the appellants advance another proposition, which we will now state.

It is said that the filing of that complaint to redeem from the prior mortgage, the mortgagor and second mortgagee joining therein, with a prayer that the second mortgage be protected by the decree, was a continuing declaration by the mortgagee and his successors in the suit, repeated in effect every day during the pendency of the action until the final judgment therein, that the second mortgage was a valid and subsisting lien to secure the payment of the debt for which it was given, and that this prevented the running of the statute of limitations during the pendency of that action. It is also claimed in the same connection, that so long as the mortgagor and his successors were engaged with the mortgagee and her successors in prosecuting the action to redeem the prior mortgage, for the purpose, among others, avowed in the complaint therein, of protecting and preserving the estate so that the lien of the said second mortgage might be effectual thereon, such mortgagor and his successors are estopped, so far as the beneficiaries under the second mortgage are concerned, to assert that the statute of limitations had been running in their favor or that by that means the mortgage lien had been extinguished.

It may be conceded that there is some force in these three propositions respecting the effect of the complaint and depositions and the joinder in the prosecution of such action. We are not disposed to enter upon a discussion of the questions presented thereby, but will, for the purposes of the case, concede all that the appellants claim in respect thereof. We are of the opinion, notwithstanding these propositions, that the action to foreclose the mortgage is barred.

Final judgment of the essential fact in dispute in the action to redeem, the right of the said plaintiffs to redeem at all, was given by the United States circuit court on November 16, 1893, after a trial upon the merits. This judgment declared that the Savings and Loan Society, through George Mearns, its trustee, held the land and the title thereto in trust, as security for the payment of a debt due to it from James T. Sanford, and that upon payment of such debt the complainants, "as the personal representatives and successors in interest of James T. Sanford," were entitled to have executed to them a conveyance of all the estate, right, title, and interest in the land had and held by the said Society and its trustees in the said land. An accounting was necessary and a referee was appointed to take the account. He made his report stating the account up to February 25, 1897, and on that date the court gave final judgment of redemption and for a conveyance to said complainants, upon payment of the debt. Josephine L. Sanford was the sole complainant at the time the aforesaid interlocutory and final judgments were rendered, she having been regularly substituted for James T. Sanford and Harriet A. Sanford, respectively, as administratrix of their respective estates. Redemption was to be made within six months, or, if an appeal was taken, within six months from the time the judgment should become final on such appeal. In default of any redemption, the complainants' bill was to thereupon stand dismissed. This judgment was affirmed on appeal. The executors of the estate of Josephine L. Sanford were substituted for her as complainants, and by stipulation of both parties to the suit, a supplemental decree was made therein on May 1, 1900, bringing the account down to that date, declaring that one hundred and ninety-five thousand dollars had been agreed to as the sum due to the Savings and Loan Society and that upon payment thereof within six months thereafter, the said Society should execute or cause to be executed to the "complainants, their successors, assigns, or appointees, the conveyance provided for in, and directed to be executed by, said final decree," referring to the decree of February 25, 1897. No redemption having been made within the six months allowed therefor, the complainants' bill, by the terms of the decree itself, stood dismissed on November 1, 1900. A formal order dismissing the bill was made on May 13, 1901. It further appears in the evidence that the plaintiff caused Jones to obtain letters of adminstration upon the estate of Harriet A. Sanford in Contra Costa County on April 6, 1903, nearly twenty years after her death, that the answer of Jones as administrator was filed and prosecuted at the instance of the plaintiff in this action, that as early as 1897, he had employed attorneys to prosecute such rights as he had under the asserted mortgage to Harriet Sanford, that he and his attorneys were at that time informed of all the facts tending to establish those rights, and that no disclosure of his claim to any such rights was made to the adverse parties prior to the filing of the answer of Jones on April 20, 1903.

The final decree of May 1, 1900, fully settled the rights of all the parties, and then, if not before, there was an end to those relations between them which, it is claimed, suspended the operation of the statute of limitations and estopped James T. Sanford and his successors from invoking it. Nothing then remained to be done, except to pay the debt declared to be due to the Savings and Loan Society. James T. Sanford and his successors had, by that decree, which was final, obtained all the relief that was possible in that action. Thenceforward his successors and representatives were not asking any relief on behalf of the successors of Harriet Sanford or Harriet A. Sanford, as mortgagees, nor were they constructively repeating any written declaration in the complaint that the deed of December 11, 1875, was in effect a mortgage. If the beneficiaries under that instrument had any rights thereunder at that time, such rights had then accrued and matured and were at once enforceable by foreclosure suit against the interests of the successors of James T. Sanford, and there was nothing in the relations between them which should have prevented such foreclosure, if it were necessary in order to keep the mortgage alive. Charles E. Sanford had then full knowledge of all the facts upon which the claim that such mortgage existed was based. He was at liberty to procure letters of administration upon his grandmother's estate and begin such action without delay. The want of an administration upon an estate does not suspend the statute of limitations upon a mortgage in favor of such estate. (Grattan v.Wiggins, 23 Cal. 28; Tynan v. Walker, 35 Cal. 634, [95 Am. Dec. 152]; Hibernia etc. Soc. v. Conlin, 67 Cal. 178, [7 P. 477].) Conceding, therefore, that the statute was suspended while the action was pending, it again began to run either on May 1, 1900, the date of said decree, or on November 1, 1900, the date when the period of redemption expired. In either case the present action to foreclose was barred.

Furthermore, the record shows that there was, prior to that decree, an abandonment and repudiation by Josephine L. Sanford of the original plan to have the Harriet Sanford mortgage of 1875 kept alive, and that this was known to Charles E. Sanford and his attorneys; so that it cannot be said that they were relying on the good faith of Josephine L. Sanford or her successors. The decree of 1893 in the redemption suit declared the right of redemption, which was the vital question, but it did not follow the prayer of the complaint by providing for a conveyance of the land to the successors of Harriet Sanford, the alleged mortgagee, or of Harriet A. Sanford, the alleged successor and trustee of Harriet Sanford. Josephine L. Sanford, then the sole complainant, was the administratrix of the respective estates of the two original complainants, and thus represented both interests. But instead of procuring a decree providing for a conveyance to her as representative of Harriet A. Sanford's interest, she obtained a decree declaring that upon redemption a conveyance should be made to her as the personal representative and successor in interest of James T. Sanford. Here was a distinct repudiation of the claim that the old mortgage of December 11, 1875, then remained a subsisting lien or right. Neither the final degree of 1897, nor that of 1900, specified or stated the capacity in which the complainant was to receive such conveyance. They merely followed the original decree of 1893 and did not purport to change or modify it in that particular. Josephine L. Sanford executed her last will on May 3, 1897, in which she disposed of the Rancho los Megaños in terms showing an intent to dispose of the entire estate in fee simple and inconsistent with any other intention. She was not on friendly terms with Charles E. Sanford, as he well knew. She did not mention nor dispose of any interest in the estate of her mother, but treated the entire estate as her own and as composed of said land and certain goods and chattels. This will was filed for probate on September 20, 1897. Charles E. Sanford filed a contest thereof, but it was admitted to probate on September 14, 1898. The inventory of her estate was filed by her executors on April 6, 1900. It stated that the estate consisted of the said rancho, subject to the Savings and Loan Society mortgage, and various articles of personal property, making no mention at all of any legacy due from her mother's estate, or any lien in the mother's favor on the rancho. It thus appears that from and after 1893 she was acting in open hostility to plaintiff's claims, whether under a resulting trust or as one of the residuary legatees under Harriet Sanford's will. This evidence of repudiation of the former relations which may have been supposed to have existed between Josephine L. Sanford and the plaintiff was sufficient to justify the court in concluding that the plaintiff had not been the victim of any misplaced confidence in his aunt. In addition, it is to be noticed that on May 1, 1900, the executors of Josephine were substituted as complainants in the redemption suit, and it was therein decreed that upon redemption the conveyance from the trustee of the Savings and Loan Society was to be made to said executors as complainants. Upon the death of Josephine the administration of the two estates of James T. Sanford and Harriet A. Sanford lapsed. No successor was appointed in either estate. The executors of Josephine L. Sanford did not succeed to her duties or powers as administratrix of the estates of her deceased brother and sister. If she were trustee of an express trust, they became trustees of a constructive trust. They did not represent those estates when they were substituted as complainants in the suit to redeem, but they then represented the interests of Josephine L. Sanford alone. (Norton v. Bassett, 154 Cal. 411, [97 P. 894].) A conveyance to them as such executors would be a conveyance, on its face enuring to the benefit of the estate of Josephine, and not for the benefit of the plaintiff. It would be antagonistic to him. In view of all these considerations it is very clear that the statute of limitations immediately began to run in favor of her estate against any claim of the plaintiff, or of the successors or representatives of Harriet Sanford, based upon any mortgage then claimed to exist upon the interest of James T. Sanford then vested in the successors of Josephine. The court below properly refused to give any relief to the administrator of the estate of Harriet Sanford.

The respondents earnestly contend that the parol express trust in favor of Harriet Sanford, upon which it is claimed Harriet A. Sanford and Josephine, as her successor, held the mortgage herein sought to be enforced, was not established by satisfactory or sufficient evidence, and that, consequently, the transfer thereof to Harriet A. Sanford was absolute, that the estate of the mother had no interest therein and that it vested wholly in Josephine, under her sister's will. They also contend that upon the failure to redeem on November 1, 1900, the title to the land became absolute in the Savings and Loan Society and its trustees, free from all claim on the part of the plaintiff or Jones as administrator, that the title of the respondents is derived by subsequent deeds from said trustees, and that by these transactions all right to or lien upon the land in favor of the plaintiff or Jones have been cut off. In view of the conclusions we have reached in regard to the statute of limitations, we find it unnecessary to consider these questions.

The judgment and order are affirmed.

Sloss, J., Henshaw, J., Angellotti, J., and Melvin, J., concurred.

Rehearing denied.