Fernandez v. Tormey

Citations

• 121 Cal. 515
• 53 P. 1119
• 1898 Cal. LEXIS 944

Syllabus

<p>Mortgage—Indemnity—Assignment of Securities.—A mortgagee, whose mortgage purported to indemnify him against any loss which he might sustain on account of an assignment of securities made by him to secure a debt of the mortgagor to a third party, must have sustained actual loss, as distinguished from liability therefor, resulting proximately from the assignment, in order to vest him with any right of action upon the mortgage on account of such assignment. .</p> <p>In.—Pledge—Title of Pledgor.—The securities having been assigned and held by way of pledge for the payment of the mortgagor’s note, the title of the mortgagee, as pledgor, was not divested merely by force of the assignment; and he cannot claim to have sustained loss, by reason of the assignment, to the extent of the face value of the securities.</p> <p>Id.—Liability of Mortgagor—Face Value of Securities.—The mortgagor cannot be held liable for the face value of the pledged securities, there having been no sale thereof, and no agreement that the mortgagor should become responsible for their face value to the mortgagee, security therefor not being within the terms of the indemnifying mortgage, interpreted in the light of the surrounding circumstances.</p> <p>Id.—Prospective Operation of Indemnity.—The natural import of a mortgage by way of indemnity is to indemnify against contingent loss not yet accrued; and agreements for indemnity are to be construed as having a prospective operation, when a different intent is not expressed.</p> <p>In.—Action upon Pledged Securities—Conversion.—The action of the pledgee in suing upon the assigned securities, for the purpose of collecting the money due thereon, is lawful, and cannot constitute a conversion thereof by him.</p> <p>Id.—Depreciation in Value of Securities.—The mere decline of the securities in market value, which is not attributable to the assignment thereof by way of pledge, and which so far as appears would have been the same had the assignment not been m