Howe v. Tucker , 219 Cal. 193 ( 1933 )

I dissent. A reading of the complaint in this case discloses that the primary object of the action is to remove the lien created by the deed of trust upon the property and that the cancellation of the note is a mere incident to that relief. Without repeating in detail the allegations of fraud, it is well to note that the plaintiff alleges facts indicating the relation of special confidence between the parties prior to the execution of the note and deed of trust; that in order to assist the defendants, who were then in reduced financial circumstances, all of the parties conceived the plan of selling the property involved; that the plaintiff undertook, if the property were sold, to make a gift of $10,000 from the profits to the defendants; and, that at the earnest solicitation of the defendants and to evidence his desire, plaintiff executed the note and deed of trust upon the express declaration, promise and representation of the defendant May E. Tucker "that she would not record said papers in any public office without the written consent of the plaintiff so to do, except upon his death and for her protection in that event". Another paragraph of the complaint sets forth that, notwithstanding the declarations, promises and representations just mentioned, defendant May E. Tucker caused the trust deed to be recorded, and it concludes with a prayer for judgment in the following language: "that defendant Mrs. May E. Tucker and Dorothy Tucker be declared the constructive trustees of said trust deed and note for the use and benefit of plaintiff; that the proper reconveyance be decreed; that said trust deed be ordered cancelled and all rights thereunder annulled; that said defendants and all others claiming through or under them or either of them, be enjoined from further treating said deed of trust and note as effective obligations and from claiming any right, title, interest, lien or encumbrance thereby; and for such other relief as may be proper".

Section 392 of the Code of Civil Procedure reads in part as follows: "Actions for the following causes must be tried in the county in which the subject of the action, or some part thereof, is situated, subject to the power of the court to change the place of trial, as provided in this code: 1. For therecovery of real property, or of an estate or interest therein, or for the determination in any form, of such right or interest, and for injuries to real property." Considering the complaint in this case as I have outlined it above, together with the obvious fact that to determine that the note which is secured by the deed of trust was given as the result of fraud and lacks any consideration is to adjudicate that the defendants have no right or interest in or lien upon the real property, the ultimate object of the action is a decision that the defendants have no such lien and that the apparent lien ought to be canceled. This view of the case is strengthened by our ruling in Bank of Italy v. Bentley, 217 Cal. 644 [20 P.2d 940], wherein we determined that "the holder of a note secured by a deed of trust must first exhaust the security before resorting to the personal liability of the trustor". From this decision it is patent that the note and deed of trust are to be treated as one instrument and that they cannot be separated as is attempted by the majority opinion of this case.

The case of Jacobs v. C.H. Smith Lumber Co., 206 Cal. 128 [273 P. 571], relied upon in the majority opinion, is not controlling for two reasons: first, the object of the action there was to reform the note so as to purge it of its usurious contents and not to cancel the lien created by the deed of trust, and second, it was not established at the time of that decision that the note and deed of trust were in effect one instrument, and that foreclosure of the deed of trust must precede recovery on the note.

Shenk, J., concurred.