Frey v. Clifford

By the Court, Belcher, J.: This is an action to recover the possession of certain lots in the City of Sacramento. Both parties claim title under John A. Sutter, Senior, as the common source. The case was tried in the Court below without a jury. Upon the facts found by the Court judgment was rendered in favor of [340] the defendant. The appeal is upon the judgment roll, and it is claimed that the Court erred in its conclusions of law. The facts are substantially as follows: On the 15th of January, 1850, John A. Sutter, Senior, conveyed the lots in controversy to O. 0. Pratt by a bargain and sale deed with covenants of warranty. The deed expressed a consideration *of fifty thousand dollars,. but no money consideration was actually paid. The deed was given to enable Pratt to sell and convey the lands described in the deed, and he was to have" a certain percentage of the purchase money as his commissions. This deed was recorded on the 15th day of December, 1855. On the 11th of December, 1855, Pratt, by the direction and at the request of Sutter, Senior, conveyed the lots by deed of gift to Anna Sutter, wife of Sutter, Senior. This deed purported to be made in consideration of the “ esteem and respect ” which the grantor had for the grantee, and was recorded on the 15th of December, 1855. In February, 1868, Anna Sutter conveyed the' lots to the plaintiff. On the 7th of May, 1850, Sutter, Sr., conveyed to John A. Sutter, Jr., for the expressed consideration of one dollar, all his “ right, title, and interest in Sacramento City, Upper California, consisting of town lots and buildings standing thereupon.” Sutter, Jr., took this deed with actual notice of the deed to Pratt, and paid no consideration therefor. The deed was recorded on the 20th of May, 1850. The defendant deraigned title to the demanded premises from Sutter, Jr., through several conveyances, purporting to convey the title, the last of which was to Humphrey Griffith, and bore date July 13th, 1852. Griffith paid no valuable consideration for the premises, and all the intermediate grantees took their deeds with actual notice of the deed to Pratt. On the 17th of July, 1854, Griffith mortgaged the premises to Hodgdon to secure a preexisting debt owing from [341] the mortgagor to the mortgagee, and at the time of receiving the mortgage Hodgdon paid no new consideration. This mortgage was in the usual form, and was taken by Hodgdon without any notice of the deed from Sutter, Sr., to Pratt. It was duly recorded on the day of its date. Hodgdon foreclosed the mortgage, and on the 25th of October, 1855 (he still having no notice of the deed from Sutter, Sr., to Pratt), at the sale under the foreclosure decree purchased the premises for six hundred and sixty-six dollars, which was credited on the decree, and satisfied about two thirds of the amount due thereon. He received the Sheriff’s deed on the 2d of May, 1856. Hodgdon afterwards entered into the actual possession of the premises, and the defendant is his tenant. It is insisted on the part of the appellant that Hodgdon was not a purchaser for a valuable consideration within the meaning of the Eegistry Act, because his mortgage was made to secure a preexisting debt, with no new consideration paid, and his bid at the Sheriff’s sale was for an amount less than his judgment. The Act concerning conveyances declares that every conveyance of real estate which shall not have been recorded, as provided in said Act, shall be void as against any subsequent purchaser in good faith and for a valuable consideration of the same real estate when his own conveyance shall have been first duly recorded. What may constitute a valuable consideration is a question which has been much discussed, and upon which different Courts have decided differently. It is settled in this State that it must be money or the like, in contradistinction to a good consideration, though it may be greatly disproportionate to the value of the land. (Clark v. Troy, 20 Cal. 219.) It may be the surrender, suspension, or forbearance of a legal right to process for the enforcement of the collection [342] of the debt, as, for example, the right to the process of attachment. (Payne v. Bensley, 8 Cal. 260; Naglee v. Lyman, 14 id. 450.) The question whether a preexisting debt is a valuable consideration, has usually arisen when commercial paper has been transferred by a person having no title and no right to transfer it to another, who received it in good faith, and as a mere security or payment of a preexisting debt. There is great conflict in the decisions; the greater number of them, it would seem, holding that a preexisting debt is not a valuable consideration. After a careful examination of all the authorities, however, just the opposite doctrine has been announced in this State. (Payne v. Bensley, 8 Cal. 260; Robinson v. Smith, 14 id. 94; Naglee v. Lyman, id. 450.) Unquestionably what is a valuable consideration in the case supposed of commercial paper is a valuable consideration within the meaning of those words as used in the Eegistry Act. We hold, therefore, in accordance with the decisions cited, that a mortgagee, in a mortgage given for the security of a preexisting debt, is to be regarded in this State as a purchaser for a valuable consideration. , (See, also, Work v. Brayton, 5 Indiana, 396.) Judgment affirmed. Upon an application for a rehearing, the following opinion was rendered: By the Court: A rehearing is asked upon the ground that the demanded premises were not included in, and therefore did not pass by the deed of May 7th, 1850, from Sutter, Sr., to Sutter, Jr. If this be so, it is said that the point upon which the case was decided in our former opinion becomes immaterial. [343] The words used in the deed by way of description were: “ All my right, title, and interest in Sacramento City, Upper California, consisting of town lots and buildings thereupon.” It is not denied, and we think it could not be, that this description was sufficient to have conveyed the lots in controversy, if they had not been embraced in the previous unrecorded deed from Sutter, Sr., to Pratt, but it is insisted that, being a quitclaim, though it were taken in good faith, and for a valuable, consideration, and first recorded, it could not prevail to convey the title as against the previous deed. In our former opinion we held that Hodgdon was to be regarded as a purchaser in good faith, and for a valuable consideration, and we still adhere to that opinion. This being so, Hodgdon is in a position to claim these lots, if Sutter, Jr. could have done so, provided he had received his deed in good faith, and for a valuable consideration. In Graff v. Middleton, 43 Cal. 341, we held that our Registry Act had made no distinction in this respect, between quitclaim deeds and other deeds, and “that a quitclaim deed received in good faith, and for a valuable consideration, which is first recorded, will prevail over a deed of older execution, which is subsequently recorded.” Rehearing denied.