Mercantile Trust Co. v. Sunset Road Oil Co.

This is an appeal from an order by the superior court of the county of Kern in the action of Mercantile Trust Co. of San Francisco v. Sunset Road Oil Co., vacating, annulling, and setting aside an execution sale of certain real property at which R. H. Cross, the appellant, was the purchaser; and permanently enjoining him from selling, mortgaging, pledging, hypothecating, or in any other way disposing of, or attempting to dispose of, the property, and from interfering or attempting to interfere with the possession of the receiver thereof. The proceeding which terminated in this order was a collateral proceeding in that action, and it is necessary to make a somewhat extended statement of the facts because of their complexity. On the eleventh day of March, 1911, the Mercantile Trust Company of San Francisco commenced an action in the superior court of the county of Kern against the Sunset Road Oil Company and others, for the purpose of foreclosing a mortgage given by the Sunset Road Oil Company to the Mercantile Trust Company of San Francisco as security for a bonded indebtedness of $2,000,000. In that action, John Daniel was, on the thirteenth day of March, 1911, appointed receiver.…

While I concur in the decision reversing the order appealed from in so far as it declared the execution sale to be void and in so far as it restrained the appellant from hypothecating or disposing of the property involved, I cannot agree with the grounds stated in the opinion by Mr. Presiding Justice Langdon as those upon which the decision has been reached. In my view of the law and of the duty of this court that opinion is objectionable in three particulars. First: In the opinion of the presiding justice it is stated that it is well settled that in a foreclosure proceeding the court cannot try the question of title of those claiming adversely to both the mortgagor and mortgagee. ( Murray v. Etchepare, 129 Cal. 318 , [ 61 P. 930 ]; Cady v. Purser, 131 Cal. 552 , [ 82 Am. St. Rep. 391 , 63 P. 844 ].) This rule is correctly applied in the further statement that "the order in the present case annulling the deed to the appellant cannot be justified, therefore, upon the ground of an adjudication of title as between the appellant and the mortgagor and those claiming under it, because the lower court was powerless to make such an adjudication." Based upon this statement and a review of…