Burnett v. Lyford

Harrison, J. Action for the foreclosure of three mortgages executed to the Hibernia Savings and Loan Society by Thomas B. Deffebach and his wife, Inez Reed Deffebach. The property mortgaged was the separate estate of the wife, and the moneys obtained by the mortgages were advanced by her to discharge the personal obligations of her husband. Inez died intestate, September 15, 1883, and Thomas died intestate, June 21, 1884. The defendant Lyford is the administrator of the estate of each of the said decedents, and the defendant Judson is alleged to have some interest in the mortgaged property, subject to the lien of the mortgages. The rec — 116 — ord does not disclose the extent or character of this interest, but in their brief his counsel state that it is an undivided one third of the mortgaged lands, acquired by him through an execution sale upon a judgment against Thomas. (Judson v. Lyford, 84 Cal. 505.) This interest was derived by Thomas upon the death of his wife, as the heir to one third of her estate. After the death of the mortgagors, the Hibernia bank made due presentation and proof of its claims upon the mortgages against their respective estates, which were allowed and filed, and thereafter the same were assigned to the plaintiff herein. An answer was filed by the defendant Lyford, as administrator of Inez, setting up that the property mortgaged was her separate estate; that the debts secured by the mortgages were the separate obligations of Thomas; that, as between them, she was only a surety for Thomas; and that upon her death one third of her estate descended to Thomas, and the other two thirds to her children. No answer was filed by Lyford, as administrator of the estate of Thomas. Judson, in his answer, did not set forth the character of his interest in the lands or allege any affirmative matter, but merely denied the assignment to the plaintiff of the notes and mortgages sued on, and denied that they were unpaid. Judgment having been rendered in favor of the plaintiff, Judson moved for a new trial, which was denied. From this order he has appealed, but no appeal has been taken from the judgment itself. The plaintiff offered in evidence the several notes and mortgages sued on, upon each of which was the following indorsement: — “For value received, the Hibernia Savings and Loan Society hereby sells, assigns, transfers, and sets over to George G. Burnett, all its right, title, and interest in and to the within note. “Hibernia Savings and Loan Society. [seal] “ By Miles D. Sweeny, President.” And the said notes and mortgages, with the said indorsements, were admitted in evidence without objection. — 117 — These indorsements were sufficient to vest in the plaintiff the title to the notes, and to enable him to bring the action in his own name. The assignment of the notes carried with them the mortgages, even if there had been no assignment of the security. (Civ. Code, sec. 2936.) If the appellant had intended to question the sufficiency or genuineness of the indorsements, he should have done so at the time they were offered in evidence. (Poorman v. Mills, 35 Cal. 121; 95 Am. Dec. 90; Bullard v. Stone, 67 Cal. 482.) The signature attached thereto, in the absence of any objection, must be assumed to be genuine. The failure to make an objection to the signature when the indorsement was offered in evidence was an admission of its genuineness, and equivalent to proof thereof; and as the seal affixed thereto purported to be the corporate seal of the bank, it must also, in the absence of objection, be assumed to be genuine, as well as to have been affixed by proper authority. It was, therefore, evidence of the corporate act which it purported to authenticate. (Angell and Ames on Corporations, sec. 224; Indianapolis etc. R. R. Co. v. Morganstern, 103 Ill. 149; Trustees v. McKechnie, 90 N. Y. 629; Morris v. Keil, 20 Minn. 531; Hutchins v. Byrnes, 9 Gray, 367; McCracken v. San Francisco, 16 Cal. 639.) The burden of proving the contrary was upon the appellant, and it is not competent for him, after having allowed the evidence to be introduced without objection and without attempting to impeach its genuineness or sufficiency, to make upon appeal an objection which was not presented at the trial, and which might have been obviated if objection had then been made. (Chouquette v. Barada, 28 Mo. 497; Poorman v. Mills, 35 Cal. 121; 95 Am. Dec. 90; Bullard v. Stone, 67 Cal. 482.) The subsequent admission in evidence of wffiat purported to be a formal assignment to the plaintiff of the notes and mortgages, even if erroneous, was a harmless error, as the assignment had already been sufficiently shown. The motion for a nonsuit was properly denied. The admission of the notes with their indorsements was evidence before the court of the plaintiff’s title thereto — 118 — and right to maintain the action, and his production of the notes at the trial was evidence that they had not been paid. At the trial it was shown by the appellant that the assignment from the bank to the plaintiff was made at the instance of the defendant Lyford, and that he (Lyford) furnished the money which was paid therefor to the bank. Upon these facts, it is urged by the appellant that Lyford is the real party in interest, and that inasmuch as by section 1617 of the Code of Civil Procedure an administrator is forbidden to purchase a claim against the estate he represents, the legal effect of the transaction was to operate as a payment of the notes, and consequent release of the mortgage liens. Whether the plaintiff is the real party in interest, or whether the defendant Lyford is the beneficial owner of the notes and mortgages, is immaterial to the appellant, and is not available to him as a defense herein. No allegation in reference thereto was made by him, and if he has any defense against Lyford which he would not have against the plaintiff, or if the assignment to Lyford would have given to the appellant greater rights than did the assignment to the plaintiff, it was incumbent upon him to make such allegation in his answer. (Poorman v. Mills, 35 Cal. 121; 95 Am. Dec. 90.) The assignment of the notes to the plaintiff prima facie vested him with the title thereto, and the right to bring the action; and if the appellant would question this right, it constituted matter of defense which he should have alleged. We do not think that the provisions of section 1617 of the Code of Civil Procedure have any application to the facts of the present case, or can be invoked by the appellant to defeat the action for the foreclosure of the mortgages. If an administrator, with the desire of protecting the estate which he represents against a sacrifice of its property under the foreclosure of a mortgage, should, in case there were no funds of the estate in his hands, advance his own funds with which to relieve the property from — 119 — such sacrifice, and take a transfer of the debt to himself, a probate court would be justified in allowing him, upon the settlement of his accounts, the amount so paid for the benefit of the estate; and the transaction would not be vitiated if, at his request, the transfer should be made to another instead of to himself. It might for many reasons be for the benefit of the estate, either for the purpose of maintaining some claim in its behalf, arising out of such debt, or for preserving some right in reference to the property affected by the debt, that the debt should not be extinguished. Such transaction of the administrator could always be questioned by the heir, or others who might have an interest in the estate, but not by a stranger. In the present case, inasmuch as the integrity of Lyford in procuring the assignment to Burnett is not questioned by Judson, either by allegation or by evidence, and as the court below sustained the transaction, we must hold that if his acts could, under any state of facts, be sustained as valid, they must be referred to such facts, rather than be held invalid from the mere circumstance that he furnished the money with which the transfer was made to Burnett. His acts, in the absence of any evidence impeaching their character, must be held legal, rather than illegal. As the representative of the two estates, Lyford was justified in taking such steps for their protection from the enforcement of the mortgages against the property as would preserve the rights and obligations of the respective estates towards each other, and as would also compel Judson to discharge that portion of the encumbrance which in equity devolved upon him to discharge by virtue of his having succeeded to the interest of Thomas. The advancement by Lyford of the money, and the procuring of the assignment to be made to Burnett for the purpose of enabling him to effect this result, was within the line of his authority as administrator of the two estates, and must be construed as within the exercise of his duties as such administrator, rather than as a “purchase” of — 120 — the claim within the meaning of section 1617 of the Code of Civil Procedure. The case of Jones v. Hanna, 81 Cal. 507, invoked in support of the contention of appellant, is inapplicable. In that case the plaintiffs purchased the property of the estate of Hanna under an express agreement with the administratrix that the purchase should be for her individual benefit, and the transaction was held to be invalid, for the reason that it was indirectly a purchase by the administratrix of the property of the estate she represented, and therefore in violation of the express terms of section 1576 of the Code of Civil Procedure. The order is affirmed. Garoutte, J., and Paterson, J., concurred. Hearing in Bank denied.