chapter, including such vein or lode, upon the payment of five dollars per acre for such vein or lode claim, and twenty-five feet of surface on each side thereof. The remainder of the placer claim, or any placer claim not embracing any vein or lode claim, shall be paid for at the rate of two dollars and fifty cents per acre, together with all costs of proceedings; and where a vein or lode, such as is described in section twenty-three hundred and twenty, is known to exist within the boundaries of a placer claim, an application for a patent for such placer claim which does not include an application for the vein or lode claim shall be construed as a conclusive declaration that the claimant of the placer claim has no right of possession of the vein or lode claim; but where the existence of a vein or lode in a placer claim is not known a patent for the placer claim shall convey all the valuable mineral and other deposits within the boundaries thereof." The patents for the Carson Hill and Blue Mountain claims contain express reservations in conformity with these provisions, as follows: "(1) That the grant hereby made is restricted in its exterior limits to the boundaries of the said mining premises, and to any veins or lodes of quartz or other rock in place bearing gold, silver, cinnabar, lead, tin, copper, or other valuable deposits, which may have been discovered within said limits subsequent to and which were not known to exist on the 22d day of October, A. D. one thousand eight hundred and ninety-two. (2) That should any vein or lode of quartz or other rock in place bearing gold, silver, cinnabar, lead, tin, copper, or other valuable deposits be claimed or known to exist within the above-described premises at said lastnamed date, the same is expressly excepted and excluded from these presents." There are other reservations in the patents, but they are immaterial to the present discus sion.

The decisions of the Supreme Court of the United States and of other courts of high authority, both state and federal, have settled the construction of this provision of the Revised Statutes, and of these reservations in placer patents as applied to a great variety of cases, and especially as they apply to this case. A vein known to exist within the boundaries of a placer claim at the date of the application for patent, and not included in the application, may be located by an adverse claimant after the issuance of the patent, and a vein is known to exist within the meaning of the statute (1) when it is known to the placer claimant; (2) when its existence is generally known; (3) when any examination of the ground sufficient to enable the placer claimant to make oath that it is subject to location, as such would necessarily disclose the existence of the vein.

Iron S. M. Co. v. Mike & Star Co., 143 U. S. 403, 12 Sup. Ct. 543, 36 L. Ed. 201; Lindley on Mines, § 781 and cases cited. In this case it does appear that the Emerald, the Dead Cow (now the Democrat), the Cape Horn, and perhaps other veins, were known to the defendant several years before his grantors applied for the placer patents. It is reasonably certain that their existence was, prior to that date, generally known, and known to defendant's grantors. On this point we think the plaintiff's case was clearly proved, and without substantial conflict in the testimony. But upon another point essential to his case there was a failure of proof. A quartz vein which contains so small a percentage of gold, silver, etc., as to be of no value for mining purposes is not a known vein within the meaning of the law, and whether it is of any practical value is always a question for the jury (or in the absence of a jury for the court). Iron S. M. Co. v. Mike & Star, supra; Migeon v. Montana Cent. Ry. Co., 77 Fed. 249, 23 C. C. A. 156, and cases therein cited. In this case there was not only a failure on the part of plaintiff to prove that any of the veins claimed by him could ever be expected to pay the cost of extracting the ore, but there was, on the contrary, a preponderance of evidence that, at the date of the application for the placer patents, they were generally regarded as valueless, and have since proven to be so. Upon this ground, therefore, if upon no other, the finding against plaintiff's claim of ownership is clearly supported by the evidence.

The questions asked by plaintiff's attorney on cross-examination of defendant, to which objections were sustained by the court, were clearly not proper as cross-examination, and the ruling of the court was correct. The real complaint of the plaintiff respecting this matter seems to be that he was not allowed to make the defendant his own witness. This the court had the right, in its discretion, to allow or to refuse, and we think its discretion was not abused in refusing to hear further evidence on the point to which the questions were directed. They related exclusively to defendant's knowledge of the existence of quartz veins within the boundaries of the placer claims prior to the application for patents. That fact had already been satisfactorily shown, but was immaterial for two reasons: First, because it was not his knowledge, but that of his grantors, and of the miners generally, that was important; and, second, because it had been shown that the veins were of no value, and not within the meaning of the law.

The judgment and order of the superior court are affirmed.

We concur: MCFARLAND, J.; HENSHAW, J.

(119 Cal. 647)

CRISMAN et al. v. LANTERMAN et al. (L. A. 1,635.)

(Supreme Court of California. Aug. 30, 1906.) 1. MORTGAGES REMEDIES OF MORTGAGEEEFFECT OF RELEASE OF MORTGAGE.

A mortgagee who releases the mortgage to a grantee of the mortgagor, without the latter's consent, cannot hold such mortgagor personally liable for the debt.

[Ed. Note. For cases in point, see vol. 35,

Cert. Dig. Mortgages, in

2. SAME-MERGER OF SECURITIES-INTENTION OF PARTIES.

Whether a mortgage is merged and extinguished by the subsequent execution of a deed of trust on the property to the mortgagee securing the same with other indebtedness depends on the intention of the parties.

[Ed. Note.-For cases in point, see vol. 35, Cent. Dig. Mortgages, $ 897.]

3. SAME.

A grantee of mortgaged property executed a deed of trust thereon to the mortgagee, to secure the mortgage debt and other unsecured indebtedness, which recited that it was given "for the purpose of further securing any of said promissory notes which may now be secured by any mortgage," and provided that in case a sale thereunder should not realize sufficient to pay the entire indebtedness the creditors should "retain, have, and possess the same remedies to enforce the payment of said promissory notes or any of them which they would have or possess if this deed of trust had not been executed." The mortgagor whose note was secured by the mortgage consented to the giving of said deed. Held, that the mortgage was not merged in such trust deed, and that the right of the mortgagor to have the proceeds of the property applied to the payment of her note was not affected thereby.

4. TRIAL FINDING OF FACTS EFFECT OF STIPULATION OF FACTS.

Where a cause is tried to the court on a stipulation as to the facts in detail, but not embracing an ultimate fact in issue, it is the duty of the court to find such fact if it may be inferred from the stipulated facts, and such a finding is entitled to the same weight as one based on conflicting evidence.

[Ed. Note.-For cases in point, see vol. 46, Cent. Dig. Trial, § 880.]

-

5. EXECUTORS ESTOPPEL-MORTGAGE - RELEASE.

an

Defendant's testatrix executed a mortgage securing her note, and afterward gave to the mortgagee other notes signed also by her son and one by defendant, who was her husband, and afterward her executor. She subsequently conveyed the mortgaged property to the son, who, with her consent, executed a trust deed thereon to the mortgagee as additional security and securing all of the notes. After her death the property was sold under the trust deed free of incumbrance, and the purchase money was paid only on the execution of a release of the original mortgage and a certificate from abstract company that the property was free of incumbrance. Defendant attended the sale, made no objection to the terms, and demanded that the proceeds be applied first to payment of the later notes, but in this he acted individually, and not as executor. The money was so applied. leaving a balance due on the note of testatrix. Held, that the acquiescence and acts of defendant did not estop him as executor from defending against an action to charge the estate with liability for such balance on the ground that it was released by the failure to apply the proceeds of the sale thereon or by the release of the mortgage.

6. SAME.

A mortgagee who subsequently took a trust deed on the same property from a grantee of the mortgagor, securing the same and a further indebtedness, and sold the property thereunder free of incumbrance, releasing the mortgage, and realizing a sum sufficient to pay the mortgage debt but a part of which was applied to the other indebtedness, is estopped as against the purchaser from asserting the invalidity of the release, and, having no right to enforce the mortgage, cannot make it the basis of an action against the mortgagor to recover a deficiency judgment.

Department 1. Appeal from Superior Court, Los Angeles County; Curtis D. Wilbur, Judge.

Action by Albert J. Crisman and Dwight N. Lowell, executors, against J. L. Lanterman, executor, and others. Judgment for defendants, and plaintiffs appeal. Affirmed.

These

SLOSS, J. On June 18, 1895, Ammoretta J. Lanterman made her promissory note for $5,000, payable to Frederick S. Crisman or order, on or before 10 years after date. With the note, and as security for it, she delivered to Crisman a mortgage of the south 80 acres of lot 9 of the Rancho La Canada, in Los Angeles county, and certain shares of stock in a water company. The property mortgaged stood of record in the name of Ammoretta J. Lanterman, but, in fact, it be longed to Roy S. Lanterman, her son, and the note and mortgage were given in consideration of a loan of $5,000 by Frederick S. Crisman to Roy S. Lanterman, facts were known to the lender. In 1900 Ammoretta J. conveyed to Roy S. Lanterman the mortgaged property. In the meanwhile three other notes had been made by members of the Lanterman family to Crisman, to wit: A note for $1,000, dated January 6, 1896, payable on or before eight years after date; a note for $500, dated March 20, 1896, payable on or before eight years after date; and a note for $2,800, dated July 1, 1896, payable on or before six years after date. All three of these notes were signed by Ammoretta J. and Roy S. Lanterman, and the last, the one for $2.800, bore, in addition, the signature of J. L. Lanterman, the husband of Ammoretta. In October, 1900, Frederick S. Crisman died, leaving a will by which Albert J. Crisman and Dwight N. Lowell were named executors. The will was duly proved, and letters testamentary issued. On August 1, 1902, all of the principal of said four notes and some of the interest being unpaid, Roy S. Lanterman made a deed of trust to Albert J. Crisman, as trustee, whereby, as security for these notes, he conveyed to said Crisman lot 9 of the Rancho La Canada, with the shares of water stock above mentioned. The property described included that which was covered by the mortgage given in 1895. The deed of trust, in

which the grantor and his wife were described as parties of the first part, Albert J. Crisman as party of the second part, and the executors of Frederick S. Crisman's will as parties of the third part, provided for the sale of the property by the second party, in the event that any of the notes remained unpaid on the 1st day of May, 1903. In addition to the ordinary provisions of deeds of trust to secure indebtedness, the instrument contained certain recitals and provisions which will be referred to hereafter. The deed of trust was accompanied by a written consent to its execution, signed by Ammoretta J. Lanterman and her husband. In May, 1903, no payments having been made on account of either principal or interest since the making of the deed of trust, the trustee gave the required notice of sale to be had on June 2, 1903. Prior to this time, Ammoretta J. Lanterman had died testate, and her husband had been appointed executor of her will. At the time and place fixed, the trustee offered the property for sale. J. L. Lanterman was present, as was Frank D. Lanterman, one of his sons, together with M. W. Conkling, who was the attorney for the executor of Ammoretta's will and also for Frank D. Before calling for bids, the trustee read the published notice of sale, and a "statement of conditions of sale." The notice made no reference to any mortgage or other incumbrance, but the statement of conditions declared, among other things, that a deposit must be made by the successful bidder, and that the balance of the purchase price would be payable "as soon as the Title Insurance & Trust Company can certify that the title is in the successful purchaser, free and clear of all incumbrances." These papers having been read in the hearing of J. L. Lanterman and M. W. Conkling, neither of whom made any objection or said anything regarding the conditions of sale, J. L. Lanterman, by Mr. Conkling, stated that he would require the proceeds of the sale to be applied. First, upon the $2,800 note; second, upon the $500 note; third, upon the $1,000 note; and, lastly, upon the $5,000 note of June 18, 1895, executed by Ammoretta J. Lanterman alone. Thereupon the property was offered and struck off to Frank D. Lanterman for $10,000, that being the highest bid. The required deposit was made, and some two weeks later, Albert J. Crisman, as executor, acting under an order of court, executed a release of the mortgage of June 18, 1895. The deed was delivered to the purchaser, and the balance of the purchase money paid to the trustee, who applied it to the payment of the four notes in the order in which the application had been demanded. Thereby the three smaller notes were paid, and there remained a sum for application upon the principal and interest of the $5,000 note sufficient to reduce the unpaid part of such note to $2.274.41. For this amount the executors of Frederick S. Crisman's will pre

sented a claim (as upon a note secured by mortgage) to Ammoretta J. Lanterman's executor. The claim having been rejected, this action, in form one to foreclose a mortgage, was commenced. Separate answers were filed, the defendants relying, in substance, upon the release of the mortgage as a defense. The case was presented to the superior court upon an agreed statement of facts, and judgment went for the defendants. The plaintiffs appeal.

While the complaint is in the familiar form used in actions for the foreclosure of mortgages, the plaintiffs' theory really is that there is no mortgage to foreclose, and that they are entitled to a money judgment against Ammoretta's estate, payable in due course of administration. They concede, in effect, that if, at the time of the trustee's sale, the $5,000 note was secured by a subsisting mortgage on property which had been conveyed by the mortgagor, and, if the mortgagee, without the consent of such mortgagor (or her executor), gave to the owner of the land a valid release of the mortgage, they, as payees of the note, could not hold the mortgagor (or her estate) to a personal liability thereon. And this conclusion is, of course, inevitable under our statutory system of enforcing the payment of obligations secured by mortgage, as construed by this court. While a mortgage creates merely a lien as security for the debt, the Code provides that there can be but one action for the recovery of a debt so secured. Code Civ. Proc. 726. By the judgment in such action, the land is subjected to a sale for the purpose of satisfying the plaintiff's demand, and if the proceeds be insufficient a judgment for the balance is then docketed against the defendants personally liable for the debt. Until there shall be a deficiency on such sale, there can be no personal judgment against the mortgagor, who is entitled to have his debt paid out of the land so far as the proceeds realized on foreclosure sale may render payment possible. The land is thus made primarily liable for the payment of the obligation, and the mortgagor can be called on to pay only where the proceeds of a sale of the land are insufficient. He is, therefore, entitled to insist that the mortgagee shall not, by releasing the land, which should be made to pay the debt, throw upon him a personal liability therefor. Bartlett v. Cottle, 63 Cal. 366; Biddel v. Brizzolara, 64 Cal. 354, 362, 30 Pac. 609; Bull v. Coe, 77 Cal. 54, 18 Pac. 808, 11 Am. St. Rep. 235; Porter v. Muller, 65 Cal. 512, 4 Pac. 531; Barbieri v. Ramelli, 84 Cal. 154, 23 Pac. 1086; McKean v. German American Savings Bank, 118 Cal. 334, 50 Pac. 656; Woodward v. Brown, 119 Cal. 283, 51 Pac. 2, 542, 63 Am. St. Rep. 108. Recognizing these well. settled rules. the appellants deny their applicability here by contending: First, that by the execution of the trust deed, the mortgage became merged in the new security

with the consent of the mortgagor, so that the debt thereafter was not one secured by mortgage; second, that even if the mortgage survived the making of the trust deed, the estate of Ammoretta J. Lanterman consented, at the trustee's sale, to the release of the mortgage given, or (which would amount to the same thing) such estate is, by the conduct of the executor at the time of the sale, estopped to deny that it consented to the release. And, finally, if the court should be against the appellants on both these points, they urge, third, that the purported release of mortgage was (for reasons which will appear hereafter) void and of no effect, and therefore cannot destroy their right to a judgment, which, under this view, should be one foreclosing the mortgage. If any one of these propositions be sound, it destroys the effect of the contention that Ammoretta, as a mortgagor, is relieved by the release of the land from the lien of the mortgage. And it may be remarked incidentally that any of these positions, if it be well taken, is equally fatal to the respondents' contention (which appears to have been adopted by the learned judge of the trial court) that, under all the circumstances, Roy became, in equity, the principal on the mortgage debt sued on, and Ammoretta a surety, and that the estate of the latter was exonerated by the release of the mortgage without Roy's consent, and the consequent release of Roy, the principal debtor. For, if there was no mortgage after the deed of trust was given, Roy could not, nor could his surety, be affected by a paper purporting to release it; if the release was with the consent of the surety, it would not relieve such surety from liability; and, lastly, if there was no valid release, neither principal nor surety has ground for complaint. It is unnecessary, therefore, to decide the question, which is fully argued in the briefs, as to whether Ammoretta was, as to the Crisman estate, a principal debtor or a surety. Whether she was the one or the other, her estate is liable unless there was a subsisting mortgage which was released as to the owner of the land without her consent or that of her executor.

First. Did the execution of the deed of trust with the consent of Ammoretta supersede the mortgage? The appellants' contention is that the trust deed, being given to secure (with other notes) the same obligation secured by the mortgage, and furnishing, as security, the same property described in the mortgage, in favor of the same obligees, it must be assumed that the intention of the parties (including Ammoretta, who consented to the trust deed) was to substitute a new security, to wit, that of the deed of trust, for the existing security of the mortgage. that be so, the mortgage was, in effect, then released by mutual consent, and the subsequent formal release, following the trustee's sale, was a vain and idle act, not affecting

If

the substantial rights of any of the parties. Whether the execution of the deed of trust accomplished such a merger of the mortgage, or, as it may be termed, a novation of securities, is a question of the intention of the parties, to be derived from their acts. It is not, in a legal sense, impossible for a mortgage to continue to exist, where there has been given to the mortgagee a further security on the same land for the same debt. It is argued that such situation may produce anomalous results, as, for example, if, by a sale under the junior security, the title to the land should become vested in the holder of the prior mortgage. But this might happen in any case where a deed of trust is given on land subject to an existing mortgage, and, even where the legal title becomes vested in the mortgagee, equity will sometimes, to avoid injustice, treat the mortgage as alive in determining the rights of the parties. The language of the deed of trust here in question would seem to indicate an intention that the mortgage should continue to exist. The instrument first recites that Roy S. Lanterman had borrowed from Frederick Crisman the sums represented by the four promissory notes above mentioned (including the $5,000 note signed by Ammoretta), that the parties have agreed that all the notes shall be deemed to have matured on May 1, 1903, and that Roy agrees to pay all of the notes, whether executed by him or not, and then grants the lot 9 of the Rancho La Canada, in consideration of the indebtedness, "and for the purpose of further securing any of said promissory notes which may now be secured by any mortgage etc." The instrument contains, in addition, the provisions relative to reconveyance or sale which are customary in deeds of this character, and provides that in case of a sale which shall not realize sufficient to pay the entire indebtedness, "the said parties of the third part shall retain, have and possess the same remedies to enforce the payment of said promissory notes, or any of them, which they would have or possess if this deed of trust had not been executed." The clauses quoted certainly indicate that it was not the intention of the parties to have the new security supplant the old. It is described as "further security," which, in the ordinary acceptation of the term, means additional, not substituted, or superior, security; and, besides, the executors retain all the remedies they had before, one of which was to foreclose the mortgage on the $5,000 note. The argument that the parties would not be likely to intend to contract for two forced sales of the same property to satisfy (in part) the same debt does not seem to us a sufficient ground for disregarding any of the express provisions of their agreement. We think that even if the deed of trust had been made by Ammoretta, the mortgagor, herself, it should not be construed as accomplishing a merger of the mortgage. And, when we con

sider the terms of her consent to the deed, the conclusion that there was no substitution is strengthened. She signed a writing, which provided that "said trust deed shall not be deemed to in any manner whatsoever affect or waive any rights which the estate

* *

of F. S. Crisman, deceased, may now or hereafter have against the undersigned * * upon or by reason of the said promissory notes or any of them. This consent was intended to waive any defense which might be claimed to have accrued to Ammoretta on any of her notes by reason of the execution of the deed. But it was not intended to give new and greater rights against her. If the mortgage should be regarded as merged, her liability on her $5,000 note, which originally was merely "contingent on the fact that a sale of the mortgaged premises shall satisfy the debt and costs" (Biddel v. Brizzolara, supra), would be converted into a liability, which might be enforced (as it is sought to be enforced here) after the security had been applied to other debts, or, perhaps, without any recourse to the security at all. See Herbert Kraft. Company v. Bryan, 140 Cal. 73, 73 Pac. 745.

Second. Did the estate of Ammoretta J. Lanterman consent to the release of the mortgage? The answer to this question, depends largely upon the effect that is to be given to the findings of fact made by the trial court. Among them is a finding that the plaintiffs released the mortgage "without the consent of * the estate of Ammoretta J. Lanterman." As has been stated, the cause was tried upon an agreed statement of facts, and it is claimed by the appellants that where the facts are agreed, no findings are necessary, and that, if findings are made, they are entitled to no weight. There have been several rulings by this court to the effect that the want of findings affords no ground for reversing a judgment where the facts have been agreed upon. Gregory v. Gregory, 102 Cal. 50, 36 Pac. 364; Muller v. Rowell, 110 Cal. 318, 42 Pac. 804. But here the facts embraced in the stipulation were not the ultimate facts put in issue by the pleadings, but were (as to the question of consent) a recital of the circumstances surrounding the sale, from which the ultimate fact of consent is, as is claimed, inferable. If those circumstances would support an inference either way, it was not only proper but necessary that the trial court should make a finding of the ultimate fact. Such finding when made is entitled to the same weight as any other finding on conflicting evidence, and will not be overthrown unless the facts stipulated cannot by any reasonable inference support the conclusion reached by the trial court. The cases relied on by appellants as establishing the rule that no presumptions will be indulged in favor of the findings where all the evidence before the trial court was written (Wilson v. Cross, 33 Cal. 60; Lander v. Beers, 48 Cal. 546) are

not in harmony with later decisions. Reay v. Butler, 95 Cal. 206, 30 Pac. 208; Priest v. Brown, 100 Cal. 626, 35 Pac. 323; Sheehan v. Osborn, 138 Cal. 515, 71 Pac. 622. In the case at bar, the appellants rely upon the conduct of J. L. Lanterman at the trustee's sale as constituting consent by the estate of Ammoretta, or an estoppel to deny consent. One element of such conduct consisted of his failure to object when the trustee read the conditions, showing that the title would be certified to the purchaser free and clear of incumbrances. So far as this silence is concerned, we do not see that it conclusively established an estoppel. No doubt there are cases in which mere silence may work an estoppel. But to effect this, it is essential: First, that the party against whom the estoppel is invoked has stood by and seen the other party committing an act infringing upon his rights; and second, that his failure to speak has induced the person committing the act to believe that he assents to its being committed. De Bussche v. Alt, 8 Chan. Div. 286; Carpy v. Dowdell, 115 Cal. 677, 47 Pac. 695. Here the proposed sale, free of incumbrance, in no way infringed upon the rights of the estate represented by J. L. Lanterman (even if we assume that he attended the sale in his representative capacity). The release of the mortgage by the voluntary act of the mortgagee would not injure the estate, but would benefit it by relieving it of personal liability for the debt. Nor did his nonaction in any way mislead the plaintiffs or induce them to believe that the estate of Ammoretta consented to be held liable on the $5,000 note without foreclosure of the mortgage. The facts were as well known to plaintiffs as to Lanterman. He had no reason to suppose that they, represented at the sale, as they were, by counsel, were ignorant of the legal effect of their proposed conduct, and was under no duty to warn them that a release of a mortgage without the consent of the mortgagor relieved such mortgagor from personal liability. And the request or demand for the application of the proceeds does not raise a necessary inference that J. L. Lanterman, as executor, consented to the release of the mortgage, or that his testatrix's estate was estopped to deny consent. The demand was that the proceeds be applied to the payment of the smaller notes before the pay ment of the $5,000 mortgage note. The interests of the estate, as mortgagor, required either that the mortgage, which made the estate's liability contingent on a foreclosure sale, should remain, or that, if the mortgage was to be released, the proceeds of the sale should be applied first to the satisfaction of the mortgage debt. Considered by itself, then, the demand that the $5,000 note be paid last, would imply, not a consent by Ammoretta's estate that the land be sold free from the mortgage, but rather a requirement that the mortgage lien remain for the protec tion of the estate. Furthermore, J. L. Lan