Langerman v. Puritan Dining Room Co.

21 Cal. App. 637, 132 P. 617 (1913)

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Langerman v. Puritan Dining Room Co.

California Court of Appeal
21 Cal. App. 637, 132 P. 617 (1913)

Facts

The Puritan Dining Room Company (Puritan) (defendant) owed its bank $5,000. To secure the debt, Puritan granted the bank a deed absolute. To acknowledge the security arrangement, the bank then issued Puritan a defeasance—that is, a type of document laying out the parties’ rights as to the property—that stated that the deed was intended to serve as security “for all moneys due or hereafter to become due.” Later, the bank issued an additional loan to Puritan for $3,900 in exchange for a promissory note. Puritan defaulted on both obligations, and Albert Langerman (plaintiff), the bank’s assignee, sued to foreclose on the deeded property. The trial court held that Puritan had created a mortgage upon which Langerman could foreclose and which secured both the $5,000 and the $3,900 obligations. On appeal, affiliates of Puritan challenged the inclusion of the $3,900 obligation under the mortgage.

Rule of Law

Issue

Holding and Reasoning (Hart, J.)

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