Lavenson v. Standard Soap Co.

22 P. 184, 80 Cal. 245, 1889 Cal. LEXIS 898
CourtCalifornia Supreme Court
DecidedAugust 31, 1889
DocketNo. 11609
StatusPublished
Cited by38 cases

This text of 22 P. 184 (Lavenson v. Standard Soap Co.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lavenson v. Standard Soap Co., 22 P. 184, 80 Cal. 245, 1889 Cal. LEXIS 898 (Cal. 1889).

Opinion

Gibson, C.

Action on the case for damages suffered by the impairment of a mortgage security. Judgment for plaintiff, from which, and an order denying a new trial, defendants appeal.

The complaint shows that the plaintiff had from the [246]*246Mege Pacific Commercial Company, one of the defendants, a properly executed and recorded mortgage upon the realty therein described; that the other defendant, knowing this fact, with the said mortgagor, dug up, detached, and remp.ved certain fixtures, permanently attached to ¡the realty, well -knowing that such severance and removal would impair and render insufficient -plaintiff’s security, and by such acts it was rendered insufficient; that said mprtgagor was at the time insolvent, and has since so remained; that thereafter plaintiff foreclosed his mortgage and failed to realize .sufficient to satisfy his claim; that a personal judgment for .the deficiency was entered and remains unsatisfied. These facts are amply .sufficient to constitute a cause of action, and the demurrers were properly overruled.

Section 2929 of the Civil Code provides that “no person whose interest is subject to the lien of a mortgage may do any act which will substantially impair .the mortgagee’s security.” The converse of this rule was declared in Hill v. Gwin, 51 Cal. 47,"in which it was held that a mortgagor was answerable in damages for the removal, prior to foreclosure, of fixtures attached to the mortgaged property.

“In New York, the mortgagee may have an action on the case against the mortgagor for injury to the mortgage security.” (2 Washburn on Real Property, 14, and the leading case of Van Pelt v. McGraw, 4 N. Y. 110, there cited.) That case was approved by this court in support of the same principle, in the case of Robinson v. Russell, 24 .Cal. 467.

The latter case was a suit by a mortgagee in possession for an injunction to restrain the defendants from removing from the premises mortgaged certain trees and vines, and a steam-engine and pump erected to irrigate the land, and to prevent one of the defendants from paying over to his co-defendants certain money in his hands representing fruit sold from the premises. It was found [247]*247by the trial court that the defendants had riot removed, and did not intend removing, from the premises anything beside the growing fruit, nursery trees and vines, which had -been attached by the sheriff at the suit of some of the defendants. Defendants had ¿judgment, which was affirmed, for the reason's that the injuries resulting from such acts were not irreparable, and it did not appear but what adequate damages for the trespass could be recovered against the defendants, as it was not shown that they were insolvent. The court said; “Thére can be no doubt but whát an action can be maintained by the mortgagee for injuries of the character set forth in the' complaint in this case, when it appears that by the acts complained of the mortgaged security is impaired. This is clearly shown in Yates v. Joyce, 11 Johns. 136, Lane v. Hitchcock, 14 Johns. 213, and Gardner v. Heartt, 3 Denio, 232, cited by appellants’ counsel, and more fully in Van Pelt v. McGraw, 4 N. Y. 110. But all those were actions on the cáse for the wrongful and fraudulent injury committed upon the premises, whereby the mortgagee’s security was impaired. There can be as little doubt that the „mortgagee may, by injunction, stay the commission of waste upon the mortgaged premises, when he makes a proper case in equity, and shows that the threatened acts will -materially impair the value of the property subject to the lien, so as to render it inadequate security "for the mortgage debt;”

Thus it appears that the mortgagee hás concurrent remedies by an action at law for damages, or by suit in equity for an injunction to prevent threatened damages. This seems reasonable under a system like ours, where nothing but a lien passes to the mortgagee, which would not enable him to maintain replevin for fixtures severed from the freehold, as could be done at common law, where the legal title passed to the mortgagee.

The removal of the fixtures complained of in this case deprived the mortgagee of his lien thereon (Buckout v. [248]*248Swift, 27 Cal. 433; 87 Am. Dec. 90), and before he could resort to other property of the mortgagor it was incumbent upon him to exhaust his mortgage security. (Code Civ. Proc., sec. 726; Ould v. Stoddard, 54 Cal. 613; Bartlett v. Cottle, 63 Cal. 366; Mascarel v. Raffour, 51 Cal. 242.) This he did do, and found it insufficient, by reason of the wrongful removal of some of the fixtures, and his personal judgment against the mortgagor of little worth, on account of its insolvency.

The findings substantially show that on and prior to the twentieth day of November, 1882, the plaintiff was the owner of certain real property in South San Francisco, with the building thereon and certain machinery and fixtures therein, viz.: One gun-metal digester, two soap-kettles, one high-pressure boiler, and thirteen candle-machines, each and all of which were permanently affixed to the realty, and formed a part thereof.

There were on that date certain other fixtures.in the building that had been detached and severed therefrom, and which were not included in or subject to the mortgage executed on the same date, and hereinafter mentioned. All of these appliances were adapted to the manufacture of soap and candles, and were by the plaintiff put in and together with the premises were used by him for such purpose. On the twenty-second day of August, 1882, he leased the premises to. one Easterbrook for ninety days from said date, with the knowledge that the lessee intended to manufacture oleomargarine and stearine on the premises, if the lessee should, determine that such business could be conducted at a profit, in which event he, the lessee, intended to form a corporation to carry on such business on the premises, and place thereon machinery suitable for the purpose. Thereafter, the defendant corporation, the Mege Pacific Commercial Company, was formed, and on the 20th of November, 1882, purchased the premises and fixtures of the plaintiff for the sum of twenty-five thousand dol[249]*249lars, of which sum it paid ten thousand dollars, and gave its promissory note for the remainder, and on the same date, to secure the payment of the note, executed and delivered to plaintiff a mortgage on the same premises. This mortgage was on the twenty-third day of the same month duly recorded. After the execution of the mortgage, Easterbrook and the mortgagor, at an expense of about $9,386.86, placed on the property certain machinery and appliances, only adapted for manufacturing oleomargarine and stearine, which on the suspension of the business became and remained useless, and did not add anything to the salable value of the mortgaged premises. None of these appliances so put in by the mortgagor were intended .to be or were received by the plaintiff as security for the promissory note in place of the fixtures which were covered by the mortgage.

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Bluebook (online)
22 P. 184, 80 Cal. 245, 1889 Cal. LEXIS 898, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lavenson-v-standard-soap-co-cal-1889.