Giselman v. Starr

Henshaw, J. The appeals are from the judgment and from an order denying a new trial. Action by plaintiffs as executors of the last will of S. C. Hastings, deceased, to reform, and as reformed to foreclose, a mortgage executed by defendant. Starr executed the note and mortgage in suit to William Giselman, trustee, in payment and cancellation of an existing note, also secured by mortgage, made by him to S. 0. Hastings. A few days thereafter Giselman indorsed the note, “ Pay to the order of S. C. Hastings, without recourse, William Giselman, trustee,” and delivered it to Hastings. At the same time he executed, as trustee, an assignment to Hastings of the mortgage. These papers, upon the death of Hastings, coming into the hands of the executors, of whom Giselman is one, this action was in due time commenced. The defendant meets it by answer and cross-complaint, whereby he claims that he executed the note and — 655 — mortgage to Giselman, as trustee, for the use and benefit of the daughters of said Hastings; that at the time of the assignment to Hastings he knew this fact, and, so. knowing, took the note and mortgage without consideration; that thereafter Ella Hastings, daughter of S. 0. Hastings, acquired by gift all of the interest of S. G. Hastiugs in the note and mortgage, and that the action is not prosecuted by the real parties in interest. The named beneficiaries of the trust and the widow of S. 0. Hastings are interpleaded as having or claiming some interest in the mortgage and note, and are brought in under averments that without a determination of their rights defendant cannot tell to whom to pay the amount found due, nor with safety redeem in the event of a sale. Plaintiff’s answer to the cross-complaint does not, in terms, deny that the note and mortgage were executed to Giselman as trustee for the use and benefit of the named children of S. 0. Hastings, but does deny that they are or ever have been the property of the children or any of them. Upon all other material averments of the cross-complaint it joins issue. The children and others interpleaded by defendant, one and all filed disclaimers, and in this state of the pleadings the trial was had. The death of Hastings and their appointment as executors admitted, plaintiffs introduced the note with its indorsement, the mortgage and the assignment of it, and rested upon this direct evidence and the presumptions arising from it. (Code Civ. Proc., sec. 1963, subds. 8,11, 21, 22; Civ. Code, secs. 1614, 3104, 3122-24.) 1. The first point presented by appellant is that the transfer by Giselman to Hastings is void, since the note and mortgage are the only instruments creating and containing the terms of the trust, and there is nothing in them to show that Giselman had the power to sell or assign. If the note and mortgage are the only instruments creating the trust, then is the trust radically defective in naming no beneficiaries. (Civ. Code, sec, — 656 — 2221.) But aside from this, and treating the instruments as defining the powers of the trustee, there is contained in them, by necessary implication, the power to the trustee to sell or assign. For the promissory note is made payable to Giselman, trustee, or order, and the mortgage was also to Giselman, trustee, Ms assigns and successors. No evidence having been offered to overcome the presumption that Hastings took the note and mortgage for value, the transfer to him was not in violation of the trust but was valid. 2. In support of the contention that the interest of S. C. Hastings in the note and mortgage passed by gift to his daughter Ella, it is shown that Ella was incompetent, and that the father applied for and obtained letters of general guardianship over her and her estate. In the inventory of her estate, which is duly verified by the guardian, the note and mortgage are entered as the property of the incompetent. The note was exhibited to the appraisers by or at the instance of Hastings, and by them appraised at a valuation suggested by him. The clerk of the court testified that at the time of the application for letters of guardianship the father expressed sympathy and anxiety for his afflicted child, and said he was making provision for her and desired to make such provision while he was living. “ He said he had not yet turned over any thing, but expressed his desire to do so.” This array of facts and circumstances makes a strong presentation of the intent of Hastings to give the note and mortgage to his daughter. It is established that upon one occasion, under oath, he declared them to be her property. But such a declaration, however binding in good morals, is not of itself sufficient to establish a gift. No legal duty was imposed upon Hastings to give this particular property to his daughter, and, if the intended donation lacked any thing of consummation, the promises or declarations were but nudum pactum and not enforceable. It is not here a question of acceptance of the gift by the incompetent which, the gift being — 657 — advantageous to her, the law would presume; but the question is whether the gift was so completely made as to enable the law to presume its acceptance. To every gift delivery is essential. Says Chancellor Kent, speaking of negotiable instruments: “ Delivery in this, as in every other case, must be according to the nature of the thing.....It must be the true and effectual way of obtaining the command and dominion of the subject. .... If the thing given be a chose in action the law requires an assignment, or some equivalent instrument, and the transfer must be actually executed.” The Civil Code declares that a verbal gift is not valid, unless the means of obtaining possession and control of the thing are given, nor, if it is capable of delivery, unless there is an actual or symbolical delivery of the thing to the donee.” (Civ. Code, sec. 1147.) Hastings’ attempted or intended gift fell short of these requirements. Lacking his indorsement of the note, his possession remained a possession in his personal and not in his representative character, and the gift failed of completion. What has been said renders unnecessary any consideration of the points presented by appellant, that Ella Hastings’ guardian was a volunteer who appeared without service of summons or cross-complaint upon either the ward or herself, and that she had no power to disclaim or to bind the ward by disclaimer. 3. The defendant has a statutory right to have a cause of action against him prosecuted by the real person in interest (Code Civ. Proc., sec. 307), and it was in the exercise of that right that he pleaded lack of title in plaintiffs and asked to have determined the conflicting claims of those whom he asserted to be the owners. But the purpose of the statute is readily discernible, and the right is limited to its purpose. It is to save a defendant, against whom a judgment may be obtained, from further harassment or vexation at the hands of other claimants to the same demand. It is to prevent a claimant from making a simulated transfer, and thus defeating any just counterclaim or setoff which defendant would — 658 — have to the demand if pressed by the real owner. But where the plaintiff shows such a title as that a judgment upon it satisfied by defendant will protect him from future annoyance or loss, and where, as against the party suing, defendant can urge any defenses he could make against the real owner, then there is an end of the defendant’s concern and with it of his right to object; for, so far as he is interested, the action is being prosecuted in the name of the real party in interest. The cases which seemingly lay down the broad rule that it is not a good plea to allege that the note sued upon is the property of another and not of plaintiff, without showing some substantial matter of defense against the one asserted to be the owner, are to be read in the light of their facts, and so read they will be found to be in strict accord with what is here said. These are cases where prima facie legal title is shown in plaintiff, such a title as would protect defendant if judgment were obtained upon it. If, under such circumstances, the defendant claims another to be the real owner, he must support his right to make that claim by showing that he has some equity or defense against the real owner which he cannot maintain against the prima facie legal owner. Such is the meaning of Price v. Dunlap, 5 Cal. 483; and Gushee v. Leavitt, 5 Cal. 160; 63 Am. Dec. 116. In the case under consideration the plaintiffs are prima facie legal owners, as executors, of the note and mortgage. Defendant is fully protected against those whom he names as owners and claimants by the judgment in favor of plaintiffs, and, in addition, he neither pleads nor shows any defense or setoff which he could make against the real owner, were Ella Hastings declared to be such. Therefore, by satisfying the present judgment, defendant is discharged from liability to all of the alleged conflicting claimants; and, since he does not dispute the debt nor its amount, this is all that in equity he can ask, or should desire. 4. The complaint sufficiently pleaded facts which, if proved, would entitle plaintiffs to a reformation of the — 659 — description, of the second tract of land mortgaged. In the mortgage the description began “ at meander post on line Between sections 2 and 25, in township 14 north, of range 10 west, Mount Diablo meridian,” etc. It was sought to change 2 to 24, making it read “ between sections 24 and 25.” This reformation the court ordered. The evidence, it is contended, does not support the finding. The evidence is in some respects confusing and unintelligible. The witness Starr speaks of the land by descriptions foreign to that of the mortgage and without the judicial knowledge of this court, though doubtless well understood by the trial judge and counsel. We cannot be expected to know, judicially, where the “mill property” is, or where “the fence stood about where the west line of Main street is now,” nor much about a description “ which goes about down to the China house and runs west along the section line about seven hundred feet.” But through the mists enough can be discerned to show that the finding is justified and supported. The mortgage declares that the tract described is the same heretofore conveyed by A. F. Tate to L. A. Young. Tate’s deed contains the description contended for by plaintiffs. Defendant is given the description claimed and asked if, assuming it correctly describes the property on which the flour-mill rests, he meant to mortgage it. He replies, yes, but says he “ understands it is not a proper description.” The Young deed would seem, to show that it is. He also says that the meander corner must be on the north line of section 25, “ the section line between 24 and 25.” Construing the description given in the mortgage, sections 2 and 25, of township 14, are not contiguous sections, while sections 24 and 25 are. Altogether there is sufficient evidence to support the finding of mistake and to justify the decree of correction. The averments in the cross-complaint, which it is complained were not found upon by the court, were — 660 — either admitted or sufficiently covered by the findings actually made. The judgment and order appealed from are affirmed. McFarland, J., and Temple, J., concurred.