Source: https://dtc-systems.com/wild-deeds-assignments-dangerous-innovation/
Timestamp: 2019-04-25 20:45:43+00:00

Document:
[6c] For the above reasons it appears that plaintiffs failed to prove a valid assignment of the note and third trust deed to them. As assignees they stand in the same position as their assignor, the Crestmore Company, and must prove their chain of title to the note in question.
The burden of proving an assignment falls upon the party asserting rights thereunder (Read v. Buffum, supra, 79 Cal. 77 [21 P. 555, 12 Am.St.Rep. 131]; Ford v. Bushard, 116 Cal. 273 [48 P. 119]; Bovard v. Dickenson, 131 Cal. 162 [63 P. 162]; Nakagawa v. Okamoto, 164 Cal. 718 [130 P. 707]).  In an action by an assignee to enforce an assigned right, the evidence must not only be sufficient to establish the fact of assignment when that fact is in issue (Quan Wye v. Chin Lin Hee, 123 Cal. 185 [55 P. 783]) but the measure of sufficiency requires that the evidence of assignment be clear and positive to protect an obligor from any further claim by the primary obligee (Gustafson v. Stockton etc. R. R. Co., 132 Cal. 619 [64 P. 995]).
TITLE INSURANCE AND TRUST COMPANY (a Corporation) et al., Defendants and Respondents; T. E. DENNY et al., Cross-Complainants and Respondents.
N. S. Crowley for Appellants.
Morris Lavine for Cross-Complainants and Respondents.
Plaintiffs and cross-defendants, Rowena F. Cockerell and Jeannie A. Hinds, appeal from a judgment entered against them in an action for declaratory relief.
On August 28, 1951, Ernest A. Coe and Helen Jean Coe, husband and wife, were the record owners of the real property here involved. This property was subject to a first deed of trustdated May 5, 1947, executed by Metropole Holding Company, Inc., a corporation, to LawyersTitle Company, trustee, to secure an indebtedness of $63,000. It was also subject to a second trust deed dated October 16, 1947, executed by Omart Investment Company, Ltd., toTitle Insurance and Trust Company, trustee, to secure an indebtedness of $27,500. It was subject to a third trust deed, dated September 23, 1948, executed by Russ Green and Ethyl Green to Security First National Bank of Los Angeles, trustee, to secure an indebtedness of $10,983.80 in favor of Crestmore Company. Plaintiffs’ claim is by virtue of an alleged assignment from the Crestmore Company.
Defendants and cross-complainants, T. E. Denny and Edna Denny, on August 28, 1951, held an unrecorded deed to the property which they had received from Ernest A. Coe and Helen Jean Coe.
On April 26, 1951, foreclosure proceedings in accordance with the provisions of section 2924 of the Civil Code were instituted by the Title Insurance and Trust Company, as trustee, under the second deed of trust. These proceedings culminated in a sale which was held on August 28, 1951. At this sale, the trustee Title Insurance and Trust Company received the sum of $25,950. The balance due, under the deed of trust so foreclosed, including the expenses of sale, amounted to $19,023.98 leaving a surplus yield of $6,926.02. This surplus yield is the subject matter of the controversy between plaintiffs and defendants. Plaintiffs claim as the owners of the third trust deed by virtue of assignment from the beneficiary, Crestmore Company; defendants claim as the owners of the unrecorded deed to the property. Both parties made demands for the surplus yield upon defendant trustee, TitleInsurance Company. Defendant trustee answered and cross-complained, and was permitted to deposit with the clerk of 287*287 the court the surplus funds amounting to the sum of $6,926.02 and the action was ordered dismissed as to it.
The trial court found that defendants, T. E. and Edna Denny, were the owners of the property involved; that there was a surplus yield of $6,926.02 after the foreclosure sale under the second deed of trust; that at the time of the trustee’s sale, there was on record a purported third trust deed, executed by Russ Green and Ethyl Green, to Security-First National Bank of Los Angeles, trustee, in favor of Crestmore Company, as well as a purported fourth trustdeed executed by T. E. and Edna Denny to Liberty Escrow Company, trustee, in favor of Ernest A. and Helen Jean Coe. It was found that the liens, if any, of the third and fourth trustdeeds, were extinguished by the foreclosure of the second deed of trust; that it was not true that plaintiffs were the owners of the note and third deed of trust by means of assignment by the Crestmore Company; that it was not true that there was an unpaid balance due plaintiffs on their alleged third deed of trust and note in the sum of $7,049.35. It was also found that Ernest A. and Helen Jean Coe had no right, title, or interest in or to the real property involved, or to the surplus yield; that plaintiffs had no right, title or interest in the surplus yield or the real property; that T. E. and Edna Denny, as joint tenants, were entitled to a judgment for the surplus yield.
It appears here that defendants did not, presumably, have knowledge as to how plaintiffs’ alleged assignor derived title since there is no allegation to that effect in the complaint, nor did they know how plaintiffs themselves derived title since the only allegations concerning it is the statement that they claim by virtue of an assignment from the Crestmore Company which, in turn, claimed under a trust deed executed by Russ and Ethyl Green who were, apparently, strangers to the title. It follows that under the circumstances here prevailing plaintiffs cannot now predicate error on the ruling of the trial court in denying their motion for judgment on the pleadings.
Plaintiff Hinds’ testimony with respect to the Crestmore Company and P. H. Wierman was received over objection that no foundation had been laid, that the answer called for a conclusion of the witness, and that her answers were hearsay. She testified that the signature on the reverse side of the note was that of a Mr. Paul Wierman who was a member of the291*291 Crestmore Company; that the Crestmore Company was a “limited company”; that “a party in San Bernardino” had told her. Defendants objected and moved to strike her testimony on the ground that it was not the best evidence of the partnership and that her answers were “conclusions.” The third trust deed was admitted in evidence over the objection that there had been no showing that it had been assigned, or any record of its assignment to the plaintiffs.
 Assuming for the moment that the assignment of the note, secured by the third trustdeed, was a valid assignment, no further assignment of the deed of trust was necessary. Section 1084 of the Civil Code provides that “The transfer of a thing transfers also all its incidents, unless expressly excepted; but the transfer of an incident to a thing does not transfer the thing itself.” (See, also, Hurt v. Wilson, 38 Cal. 263; Lewis v. Booth, 3 Cal.2d 345 [44 P.2d 560]; Marx v. McKinney, 23 Cal.2d 439, 443 [144 P.2d 353]; Union Supply Co. v. Morris, 220 Cal. 331 [30 P.2d 394].) In Lewis v. Booth, supra, 3 Cal.2d 345, it was held that an acknowledgement was not necessary to effect an assignment of the trust deed and that the endorsement of the note by the payee was sufficient to transfer the deed of trustwithout other assignment. In Santens v. Los Angeles Finance Co., 91 Cal.App.2d 197 [204 P.2d 619], it was held that the note carries with it the security and the trust deed was merely an incident of the debt and could only be foreclosed by the owner of the note.
 The burden of proving an assignment falls upon the party asserting rights thereunder (Read v. Buffum, supra, 79 Cal. 77 [21 P. 555, 12 Am.St.Rep. 131]; Ford v. Bushard, 116 Cal. 273 [48 P. 119]; Bovard v. Dickenson, 131 Cal. 162 [63 P. 162]; Nakagawa v. Okamoto, 164 Cal. 718 [130 P. 707]).  In an action by an assignee to enforce an assigned right, the evidence must not only be sufficient to establish the fact of assignment when that fact is in issue (Quan Wye v. Chin Lin Hee, 123 Cal. 185 [55 P. 783]) but the measure of sufficiency requires that the evidence of assignment be clear and positive to protect an obligor from any further claim by the primary obligee (Gustafson v. Stockton etc. R. R. Co., 132 Cal. 619 [64 P. 995]). [6b] Here there was an assignment on the back of the note secured by the thirdtrust deed which was purportedly signed by P. H. Wierman for the Crestmore Company; there was no competent evidence with respect to the Crestmore Company, its membership, or P. H. Wierman’s authority to bind that company.  Plaintiffs, claiming as assignees of that company, had the burden of proving the existence and membership of the firm in order to support their claim of ownership of the note and third trust deed (Welch v. Alcott, 185 Cal. 731 [198 P. 626]). In Bengel v. Kenney, 126 Cal.App. 735 [14 P.2d 1031], where the plaintiff claimed title under an assignment of a purported assignee of a corporation but the evidence failed to show that the assignment by the corporation was executed by a person having authority to do so, it was held that the evidence failed to show title in the plaintiff by reason of such an assignment. In Brown v. Ball, 123 Cal.App. 758 [12 P.2d 28], it was held 293*293 that the evidence was insufficient to establish the execution of an assignment where there was no evidence to show that it was executed by the person whose name purported to be signed thereto or that the signer had authority as agent to execute the instrument.
Plaintiffs contend that the trial court erred in finding that the balance allegedly due them under the third trust deed was not as alleged; that the liens of the third and fourth trustdeeds were extinguished by the foreclosure of the second trust deed; and that the defendants were entitled to the surplus funds as owners of an unrecorded deed to the property. Error is also claimed in the admission of testimony, over objection, of the consideration paid by plaintiff to the Crestmore Company.  In view of our conclusion that plaintiffs failed to prove a valid assignment to them of the note secured by the third deed oftrust, they have no standing to complain of the judgment awarding the surplus yield to the defendants who were the only other claimants therefor. The other errors complained of do not require discussion.
The judgment is, therefore, affirmed.
Gibson, C.J., Shenk, J., Traynor, J., and Spence, J., concurred.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.