Savings & Loan Soc. v. Davidson

• Decision Date: 02 October 1899
• Docket Number: 399.
• Citation: 97 F. 696
• Parties: SAVINGS & LOAN SOC. et al. v. DAVIDSON et al.
• Court: U.S. Court of Appeals — Ninth Circuit

97 F. 696

SAVINGS & LOAN SOC. et al. v. DAVIDSON et al.

No. 399.

United States Court of Appeals, Ninth Circuit.

October 2, 1899

John Garber and Robert Y. Hayne, for appellants.

Garret W. McEnerney and W. B. Treadwell, for appellees.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

HAWLEY District Judge.

This is a suit in equity to redeem about 13,000 acres of land situate in Contra Costa county, Cal., known as the 'Los Meganos Rancho' or 'Marsh Ranch.' It has been lingering in the courts for many years. The bill of complaint was filed May 1, 1882. The taking of testimony was continued from time to time, and innumerable delays, from various causes occurred before the case was finally brought to trial. The circuit court delivered an opinion therein on October 3 1893, in favor of complainants' right to redeem, and an accounting was then ordered. Thereafter, on February 23 1897, a final decree was rendered (Sanford v. Society (C.C.) 80 F. 54), from which the present appeal is taken. There are 69 formal assignments of error in the record, reduced to 11 in the brief of appellants, which really include every point embraced in the formal assignments.

The transactions out of which the litigation arises date back to 1871, and, in many respects, are complicated. The testimony upon several material points is decidedly conflicting. The record, as brought to this court, contains 2,689 printed pages, and the briefs of counsel cover, in addition thereto, 490 pages, and they cite nearly 400 authorities in support of their respective contentions. The record shows that the suit was originally brought by Harriet A. Sanford and James T. Sanford, as complainants, against the Savings & Loan Society, Albert N. Drown, E. W. Burr, and George Mearns, as defendants. The death of some of the parties accounts for the change that has been made in the parties to the suit.

The bill of complaint, among other things, alleges: That on November 1, 1871, Charles P. Marsh and Alice F. Camron conveyed ninety-one undivided hundredths of the ranch in question to James T. Sanford. That a mortgage was given upon said land to secure the payment of certain promissory notes, amounting to $259,332.23. That Sanford paid upon said notes and mortgages $92,539.44. That the mortgage was foreclosed, and property sold, under decree of foreclosure, January 26, 1875, to Marsh and Camron for $199,183.80. That prior to July 3, 1872, Sanford acquired the title to the nine undivided hundredths of the property, and on that date conveyed to the Brentwood Coal Company, a corporation, the entire land. That the said corporation, on May 10, 1873, executed and delivered to Sanford a mortgage of said land to secure the payment to him of the sum of $90,000. That on May 12, 1873, Sanford assigned this mortgage, and the debt thereby secured, to George S. Bowdoin, in trust to secure the payment of certain sums of money due to various creditors of Sanford. That on July 26, 1875, being the last day on which the premises sold under foreclosure could be redeemed, 'Sanford through and in the name of said George S. Bowdoin, and said George S. Bowdoin for the use and benefit of said James T. Sanford, did redeem said mortgaged lands and premises' from the foreclosure sale; 'said James T. Sanford furnishing $122,648.23 in gold coin of his own proper money, and $150,000 then and there by him borrowed of said defendant the Savings & Loan Society, for the purpose of making said redemption. ' That, in order to secure the repayment to the bank of the sum of $150,000 so borrowed, Sanford caused and procured said Bowdoin to assign the certificate of redemption to the defendant E. W. Burr. That on November 9, 1875, the sheriff, who made the foreclosure sale, conveyed to said Burr, as assignee of the certificate of redemption, the property so sold and redeemed, being 91/100 of said ranch. That on July 29, 1881, by the procurement of Sanford, and for the purpose of better securing said sum of $150,000, said Bowdoin executed and delivered to the defendant Albert N. Drown an assignment of said certificate of redemption, and all rights accruing to him thereunder, and assigned and transferred to the defendant George Mearns the mortgage of the Brentwood Coal Company which Sanford had theretofore assigned to said Bowdoin, in trust as above stated, and also conveyed to the defendant Drown the 9/100 part of said ranch, the title to which had theretofore vested in him through Sanford, and also quitclaimed to said Drown all his right, title, and interest of, in, and to the whole of said premises. That the defendant Burr was the president of the defendant Savings & Loan Society. That the defendant Albert N. Drown was the attorney for said society, and the defendant George Mearns its searcher of records. That neither of them had any real interest in any of the assignments or conveyances, or paid any part of the money therefor, but that the same were taken and held by them, respectively, solely as security to the bank for the money advanced by it. That at various times thereafter the bank, at the request of Sanford, and for his benefit, purchased several outstanding titles created by Sanford in the property, some of which conveyances were made to the bank, and others to the other defendants, but for the benefit of the bank. That all of said purchases were made by the bank for the purpose of clearing Sanford's title, and were held by it only as security for the payment of the money so advanced by it. That no written evidence of the said indebtedness to the bank was ever given, but the money was advanced upon the understanding that the same was to bear interest at the rate of 1 per cent. per month. That in the month of March, 1878, the bank agreed to reduce said rate of interest to 10 per cent. per annum. That on December 11, 1875, Sanford conveyed the property to one Harriet Sanford by a deed which, though absolute in form, was designed by the parties thereto as a mortgage, to secure certain indebtedness due to said Harriet Sanford. That on October 12, 1881, whatever title was acquired by Harriet Sanford was then conveyed by her to Harriet A. Sanford. That from the fall of 1876, up to November, 1878, Sanford was in the actual possession of the premises. That about the last-named date, at the request of the bank, he surrendered possession thereof to the bank, and it has ever since been, and still is, in possession of the same, and in receipt of the income arising therefrom. That up to September, 1881, the bank recognized the rights of the complainants, and admitted that it held possession of the lands, and of all title thereto held by it in its name, or in the name of any one else for its benefit, merely as security to secure repayment of the indebtedness of Sanford to it. That about September, 1881, the bank for the first time ignored the rights of complainants, and refused to render an account to Sanford, of his indebtedness, or of the rents, issues, and profits of the property, or of the disbursements attending the same, or of any matter pertaining thereto, and then, for the first time, claimed to be the absolute owner of said property. That the bank has from time to time, in divers ways and manners, made advances for the account of and to said Sanford, and made disbursements and assumed liabilities on his account, the amounts of which are unknown to complainants, and the bank has refused to render the same, or in any way to recognize his rights in the premises. The bill of complaint contains an offer to pay to the bank such sum as may, upon a just and proper accounting, be ascertained to be due it, and prays that an accounting be taken of the amount due from the complainants, or either of them, to the bank; that it be adjudged that the defendants hold the land merely as security for the amount so due; that, upon payment of such amount, the defendants be decreed to convey the premises to the complainant Harriet A. Sanford, and to account for all money realized from the rents, incomes, profits, or otherwise of the property; and for general relief.

The answer is quite lengthy. It admits the deraignment of title and of the making of most of the conveyances, but denies the character of some of them. It presents two material issues of fact: First, whether or not the redemption made in the name of Bowdoin was made by or for Sanford, and whether or not the $150,000 loaned by the bank was loaned to Bowdoin or Sanford; second, whether or not the subsequent purchases by the bank were made for the benefit of Sanford, or through his procurement, or were made in hostility to him. Upon the first of these issues the answer alleges that said redemption was made by said Bowdoin with the sum of $121,928.27 'furnished by himself,' and the further sum of $150,090.34 'then loaned and advanced to him by said Savings & Loan Society. ' The answer denies that Bowdoin made said redemption for the use or benefit of Sanford, and alleges that the defendants have no knowledge or belief as to whether Sanford furnished to said Bowdoin any money so used in said redemption, or whether he caused or procured Bowdoin to assign the certificate of redemption to Burr, and leaves complainants to make proof of those allegations. It admits that the assignment of the certificate of redemption to the defendant Burr was made 'to secure the repayment to said Savings & Loan Society of said sum of $150,090.34 so loaned and advanced by it to said George S. Bowdoin, and also to secure the payment by said Bowdoin to said Savings & Loan Society of interest on said last-named sum from said 26th day of July, 1875, until paid, at the rate of 1 per cent. per month'; and, with reference to the conveyance by the sheriff, the answer alleges 'that the...