Wenzel v. Schultz

Citations

• 100 Cal. 250
• 34 P. 696
• 1893 Cal. LEXIS 779

Syllabus

<p>Mortgage by Deed Absolute—Power op Sale—Title Not Conveyed.— A deed, absolute on its face, made to a creditor o£ the grantor, as security for the sum of money due from the grantor to the grantee, in pursuance of an understanding that the grantee would sell the land, pay off a mortgage held by a third party, retain the sum of money due himself, and pay the residue to the grantor, is a mortgage, and conveys no title to the creditor, though sufficient to pass title as between the grantor and a purchaser from the grantee in good faith, and for a valuable consideration without notice.</p> <p>Id.—Reconveyance to Grantor—Agreement to Pay Indebtedness— Vendor’s Lien—Estoppell.—Upon a reconveyance by the creditor to the grantor, under an. agreement that the latter would make the sale which the former had failed to make, and would pay the creditor from the proceeds the amount of the indebtedness which had been secured by the deed, neither the debtor nor his subsequent grantee is estopped to deny that the creditor ever had title to the land, as against his claim to foreclose a vendor’s lien for the amount of the debt.</p> <p>Id.—Disputing Title of U-rantor.—The grantee in fee who owes no duty to his grantor is not estopped from disputing the title of such grantor.</p> <p>Id.—Issue as to Title.—In an action to foreclose the vendor’s lien the answer of a defendant, who is the grantee of the defendant to whom the land was reconveyed, denying that the plaintiff ever owned the land, entitles such grantee to show that the deed to the plaintiff was a mortgage, and did not convey the title.</p> <p>Id.—Purchase of Land Subject to Mortgage.—Where the land was purchased subject to an outstanding mortgage, and there is nothing to show that the purchaser became obligated to pay the mortgage note, the land alone is liable for its payment, and the purchaser cannot be required to redeem the mortgage before it is due.</p>