Bristol v. Hershey

Appeal by plaintiff from a judgment of the superior court of Los Angeles county in favor of defendant rendered upon a hearing sustaining the demurrer to the second amended complaint without leave to amend.

It appears from the second amended complaint that on August 1, 1902, defendant Hershey obtained a decree foreclosing a first mortgage executed by plaintiff on certain real estate, in which proceeding one Wills, the holder of a junior mortgage, was made a party, but to whom no affirmative relief was granted by the decree; that under this decree, on September 24, 1902, the premises were sold to Hershey for the full amount found due, together with accrued interest and costs; that the certificate of sale issued to Hershey was defective in that the premises sold were incorrectly described; that in such form the certificate was recorded in the recorder's office of Los Angeles county, but not indexed; that subsequently the certificate was corrected, but the record thereof was not altered; that afterward, in December, 1902, Wills, the holder of the junior mortgage, brought an independent action against plaintiff in foreclosure, and such proceedings were had that on February 12, 1903, the premises were sold under the Wills decree and a certificate in due form issued to her; that thereafter, on March 3, 1903, Wills redeemed the premises from the previous sale to Hershey by paying to the sheriff the full amount due Hershey; that in such redemption the said Wills presented with the other instruments required by law the certificate so issued to Hershey as altered and corrected; that a certificate of redemption in due form was issued by the sheriff to Wills, but not filed for record or recorded; that defendant Hershey, on August 24, 1903, acquired by purchase from Wills the certificate so issued to her; that thereafter, on September 20, 1903, four days before the time for redemption had expired under the sale to Hershey, plaintiff entered into an oral agreement with Hershey, whereby it was agreed that plaintiff was to pay to Hershey $50 per month, or a sum equal to interest upon all sums due Hershey under the sale, such payments to be made monthly, commencing January 1, 1904, in consideration of the prompt payment of which Hershey agreed that plaintiff might retain possession of the premises, and the right of redemption and the right to pay the full amount of the decree was to be extended two or three years; that if said monthly payments were promptly made plaintiff could pay to Hershey the full amount of all indebtedness, and that all liens, decrees and obligations in favor of Hershey and against said real estate would thereby be canceled and discharged; that plaintiff, relying upon said agreement, made no effort to redeem within such intervening four days; that afterward, in December, 1903, defendant Hershey notified plaintiff to vacate the premises, and on or about January 1, 1904, took possession of a part thereof, but plaintiff has retained possession of the remainder; that on December 30, 1903, Hershey took out a sheriff's deed; that on November 2, 1905, plaintiff offered to pay Hershey the full amount of all claims due her, which she refused to accept; but thereafter, in 1906, paid into a bank for plaintiff's use a thousand dollars, upon a written statement that she was willing that plaintiff should share in the advance in the value of the property.

There is nothing in the point that the record of the original defective certificate was not altered, or that a correct certificate was not recorded. The statute does not require that the certificate issued by the sheriff shall be recorded, but simply that it be filed. (Code Civ. Proc., sec. 700.) No reason is suggested why the clerical error of the sheriff in the issuance of the certificate might not be corrected and a correct certificate refiled. The complaint does not negative the refiling of a corrected certificate. Wills being a junior mortgagee, and having asked and received no affirmative relief in the original action, was at liberty before the time of redemption expired to institute her original action in foreclosure and obtain an appropriate decree and a sale thereunder. Having exercised this right and having received a certificate of sale regularly issued to her on account thereof, as the holder and owner of such certificate, she became a successor in interest of plaintiff and entitled to redeem. (Pollard v. Harlow, 138 Cal. 392, [71 P. 454].) When she, as such holder of the certificate, so exercised this right of redemption from the Hershey sale, she became subrogated to all of Hershey's rights to the same effect as though Hershey had assigned to her the certificate of sale. (White v. Costigan,134 Cal. 38, [66 P. 78].) When Hershey took an assignment of the Wills certificate she acquired all rights held by Wills thereunder, including the subrogated rights. Had a stranger purchased this certificate from Wills, no one would question the extent of the interest acquired by an assignment of the Wills certificate. No reason suggests itself why Hershey, by a purchase of such certificate, could not and did not acquire the same rights guaranteed to any other purchaser.

The contention that the redemption by Wills extinguished the sale theretofore made to Hershey cannot be maintained. The effect of a redemption by a successor in interest, holding the legal and equitable title, is a restoration to the original estate (Code Civ. Proc., sec. 703), but this does not apply to one holding but the equitable title under a certificate issued upon a second sale. In such cases the holder of the junior certificate redeems from the previous sale in his own interest and adverse to the debtor and holder of the legal title, and it is not a redemption in the interest of the judgment debtor or for the judgment debtor, and the effect of which is not to restore the estate to the judgment debtor, nor to extinguish the original sale from which the redemption is had. There being no extinguishment of the Hershey sale, it follows that at the expiration of twelve months from the date thereof, as against the judgment debtor, the complete legal and equitable title vested in Hershey as the owner and holder of the Wills certificate with its subrogated rights, unless her oral agreement was such as to estop her to claim the same. The oral contract to extend the time for redemption was valid, needed no consideration in its support, if the debtor was lulled into a false security and thereby permitted the time for redemption to expire. (Schroeder v. Young, 161 U.S. 342, [16 Sup. Ct. Rep. 512].) This oral agreement conferred the right and privilege of redemption beyond the statutory period upon a condition precedent, namely: that the judgment debtor should pay the interest on all sums due Hershey, in any event to the extent of $50 per month. Plaintiff does not claim to have paid or tendered payment thereof. The nearest approach to an allegation in reference thereto is a statement that on January 1, 1904, she was prepared to make the first payment. This fact does not seem to have been communicated to defendant, nor any tender or offer to pay made in connection therewith. During the ensuing twenty-two months intervening between January 1, 1904, and November 2, 1905, there was no offer or tender to pay any of these monthly payments, between which dates a great increase in the value of the property ensued. Nor is there any allegation in the complaint of any fact which would excuse performance upon plaintiff's part. The receipt of a sheriff's deed cannot be construed as a notification upon defendant's part that she would not carry out her agreement. There was nothing in the agreement which prohibited her from taking out the deed at any time after the time of redemption had expired. No new title was conveyed by the deed. It is evidentiary purely in its character, and whatever of title was acquired by Hershey was the result of failure to redeem within the statutory or agreed period, and not because of the issuance of the deed.

Construing the pleading most strongly against the pleader, as is our duty, she retained possession of all the premises until after January 1, 1904, after which date she was in default under her agreement in the payment of interest, and being thus in default the taking of possession by defendant of a portion thereof would not have the effect to excuse performance on plaintiff's part of her contract. While the tenor of all decisions, wherein has been involved the right of redemption after the statutory period based upon an agreement, has been extremely liberal in protecting the redemptioner's rights, yet in no case called to our attention has it been held that a redemptioner may violate the agreement under which he claims and still have a decree giving effect to the violated agreement. He who seeks to enforce a contract must show that he has complied with the agreements and conditions of the contract on his part to be performed. (Civ. Code, sec.1439; Cameron v. Burnham, 146 Cal. 584, [80 P. 929].) This proceeding being one in equity to enforce a right under an agreement violated by the plaintiff, we do not think that she is entitled to any relief under the allegations of the complaint.

We attach no importance to the fact that in July, 1906, long after the plaintiff's default, the defendant paid to plaintiff a thousand dollars, upon the statement that the property "was growing more valuable and in time I shall doubtless dispose of it, and I am willing that you should share in advance in what it may produce." The only proper construction to be given to such statement is to the effect that this thousand dollars represented the amount which the defendant was willing that the other party might share in the transaction, and its receipt and retention by the plaintiff, under the circumstances, would indicate plaintiff's acquiescence in the equitable character of defendant's offer. In no event, however, could it have any effect to change or alter the rights of the parties theretofore attaching.

Judgment affirmed.

Shaw, J., and Taggart, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on May 14, 1908.