Benicia Agricultural Works v. Estes

Citations

• 3 Cal. Unrep. 855
• 32 P. 938
• 1893 Cal. LEXIS 1029

Syllabus

<p>Mortgage Foreclosure—Defense of Unlawful Consideration,— On a mortgage foreclosure the evidence showed that, at the time the note and mortgage were given, there was pending, in insolvency proceedings against defendants’ father, the latter’s petition for discharge and plaintiff’s opposition thereto; that the consideration of the note, though not expressed therein, was an assignment to defendants by plaintiff of his claim against the insolvent, which was of the same amount as the note, and that the estimated value of the claim was one-sixth of its face; that by agreement plaintiff’s claim against the insolvent assigned to defendant was to be held by plaintiff’s attorney, and, when paid, to be applied on the note; that, after the giving of the note and mortgage, plaintiff’s opposition to the discharge of the insolvent was withdrawn. Held, that the mortgage and note were void as against public policy.</p> <p>Mortgage Foreclosure—Evidence of Unlawful Consideration.— The fact that a mortgage was given as security for the performance of an unlawful contract may be shown by oral testimony in an action for foreclosure, though no infirmity appears on the face of the mortgage.1</p>