Huene v. Cribb

Appeal by plaintiff from a judgment rendered upon an order sustaining a demurrer to a complaint.

It is alleged in the complaint that on September 7, 1904, defendants Cribb and Sinclair conveyed to one Holmes certain described premises, and received, as part of the consideration therefor, the note of Holmes for $1,100, secured by a written instrument on the premises sold, in form a trust deed, but in fact a mortgage, in which instrument said Holmes was party of the first part, the Title Guarantee and Trust Company the party of the second part, and Cribb and Sinclair parties of the third part. That on May 24, 1906, plaintiff acquired said premises subject to said written instrument; that afterward, on the 10th of July, 1906, when $889.98 of the indebtedness secured by said instrument was unpaid, the Title Guarantee and Trust Company and said Cribb and Sinclair agreed with plaintiff, in consideration of the full payment of the said note and interest due thereon, to extend the time of payment of said note until the Title Guarantee and Trust Company should prepare and deliver to plaintiff an abstract of title for said premises, and on the 18th of October, 1906, on the same consideration, renewed said agreement, but the Title Guarantee and Trust Company, although requested, failed and neglected to deliver to plaintiff such abstract of title and never prepared the same. That plaintiff, relying upon said promise and agreement, provided and had in her possession at all times the money with which to pay off the obligation so secured by said written instrument; that notwithstanding this agreement, Cribb and Sinclair, on the 17th of November, 1906, caused the Title Guarantee and Trust Company to sell, under notice, the said premises, and Cribb and Sinclair purchased the same for $1,275, claiming that sum to be the amount due under the said instrument; that plaintiff had no knowledge of such sale until the 26th of November, 1906; that on December 7th following she tendered to Cribb and Sinclair and to the trustee the full amount for which such property was sold, and all interest due thereon, and demanded a reconveyance of said premises; that the property so sold is of the value of $6,500. Plaintiff prays that the sale be set aside and declared void, that the property be reconveyed to plaintiff and her title thereto be quieted, and for other appropriate relief.

Defendants all joined in a demurrer to the complaint upon the grounds, first, that several causes of action were improperly joined and the causes of action were not separately stated; second, on account of a misjoinder of parties defendant; on account of uncertainties and ambiguities not necessary to notice, and finally, a general demurrer for insufficiency of the complaint to state a cause of action against the defendants or either of them. The court sustained this demurrer, and no amendment being had, judgment was entered accordingly.

It is insisted by appellant that the sale was void because it affirmatively appears by the complaint that no power of sale was given in the instrument executed to secure the note. The instrument is declared by the complaint to have been in form a trust deed, but in fact a mortgage. Trust deeds in this state ordinarily do, and mortgages may, confer a power of sale. The complaint must be construed most strongly against the pleader. "If a fact necessary to his cause of action is not alleged, it must be taken as having no existence." (Hildreth v. Montecito Creek W. Co., 139 Cal. 27, [72 P. 395].) If as a fact the usual and ordinary power of sale was not conferred by this deed of trust, it was incumbent upon plaintiff to allege that fact; otherwise it will be presumed that the usual and ordinary powers were therein contained. The complaint, however, stated facts which, if true, were sufficient to defeat the sale so made, under the circumstances. Plaintiff alleges that she purchased the property subject to the encumbrance, from which no personal liability would follow, but that after she acquired the title she entered into an agreement with Cribb and Sinclair by which she assumed the obligation, in consideration that the payment of the note be extended until the defendant corporation should prepare and deliver to plaintiff an abstract of title. This assumption of payment was a sufficient consideration for the extension of time, and until such abstract was furnished the note did not mature, and until its maturity and default in payment no authority reposed in the trustee to sell. This, of course, presupposes good faith upon the part of all concerned, and would not conclude Cribb and Sinclair to the extent of indefinitely postponing payment in the event the corporation should fail for an unreasonable period to provide such abstract; but an unreasonable delay upon the part of the abstract company, or its refusal to carry out its agreement, would be facts of which Cribb and Sinclair might avail themselves under a notice of rescission of the contract of extension, but having once agreed to extend payment until the abstract company furnished the abstract they could not, without notice to plaintiff, arbitrarily proceed to declare plaintiff's default. Cribb and Sinclair, having made the agreement through which the time was extended, are estopped now to claim any title acquired by sale made in violation thereof. In addition to this, were it even conceded that under the allegations of the complaint the sale so made was effective, nevertheless it affirmatively appears that a large excess above the amount due upon the note was realized from the sale, which, if not paid to the trustee, is now in the hands of the purchasers, Cribb and Sinclair. All of these parties are affected by the trust undertaken by the corporation, and if the fact be as alleged in the complaint, that the sale price was in excess of the amount required to satisfy the indebtedness, there is sufficient in the complaint for an accounting as against the trustee, to which proceeding Cribb and Sinclair are proper parties under the circumstances detailed in the complaint. There was no misjoinder of causes of action (Code Civ. Proc., subd. 4, sec. 427); and that they were not separately stated was a matter which could not be reached by a demurrer at the time these proceedings were had — the amendment to section 430, Code of Civil Procedure (Laws 1907, p. 706), not then being in force.

We think the court erred in sustaining the demurrer, and the judgment is reversed and cause remanded for further proceedings.

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