This is an appeal by Mary Trobock from an order denying her motion for a new trial. The order was affirmed by Department, upon the following statement and opinion: —
"Judgment was rendered by the lower court against the appellant, Mary Trobock, and her co-defendant, Antonio Trobock, for the foreclosure of a mortgage for two thousand dollars and interest, executed to the plaintiff by the latter. Mary Trobock appeals from an order denying her motion for new trial.
"1. The main question in the case is, whether the action was barred, as against her, by the statute of limitations. The facts bearing on this question, as they appear from the pleadings and findings, are as follows: The complaint was filed *Page 443 July 23, 1896. The mortgage and note, which were payable three years after date, were executed December 8, 1886, in the name of Antonio, by Nicolas Trobock (husband of appellant), his attorney in fact, who represented to the plaintiff's trustee and attorney, and induced them to believe, that the money was borrowed for Antonio Trobock, and that he was the owner of the land mortgaged, and the title in fact so appeared from the records in the recorder's office, but in fact a deed had been made by Antonio to Nicolas Trobock in 1870, though never recorded, and the latter knew of this condition of the title. Nicolas died in 1889. The unrecorded deed was found among his papers by his wife, the appellant, and recorded September 2, 1889, and in the year 1890 the land was distributed to her by the final decree of distribution. The interest on the note and mortgage was paid by Nicolas during his lifetime, and afterwards, up to August 1, 1893, by the appellant. Antonio Trobock has been absent from the state of California, and a resident of Ragusa, Austria, ever since the maturity of the note.
"The specific objection of the appellant is, that there is no finding as to appellant's plea that the action was barred by the provisions of section 337 of the Code of Civil Procedure. But I think the issue was disposed of by the finding of the specific facts, as stated above; and it was unnecessary to find expressly that the action was not barred by the provisions of the section of the statute relied on.
"The unrecorded deed from Antonio to Nicolas, held by the latter at the time of the mortgage, was void as to the mortgagee, the plaintiff in this case. (Civ. Code, sec. 1214) The representations of Nicolas to the plaintiff's officers, to the effect that Antonio was the owner of the land mortgaged, was therefore, so far as the mortgage was concerned, in effect, true; and whatever title had accrued to him under the deed from Antonio became, by his own deliberate written act, subject to the mortgage. He probably so understood the effect of the transaction; and in view of the presumptions that a person is innocent of wrong, and that he intends the ordinary consequence of his voluntary act, it is to be presumed that he so understood it. (Code Civ. Proc., sec. 1963, subds. 1, 3.) But however this may be, Nicolas was, at all events, estopped by his express declarations as to the ownership of the property from setting up title in himself, *Page 444 except in subordination to the mortgage (1 Herman on Estoppel, sec. 3; 2 Id., secs. 730 et seq., 736; Code Civ. Proc., sec. 1962, subd. 3; Civ. Code, sec. 1709); and the estoppel is equally binding on his wife, the appellant, who succeeded to his interest as a mere volunteer. (1 Herman on Estoppel, sec. 20; Bigelow on Estoppel, 512, 607, 608.) Mrs. Trobock stands, therefore, precisely in the position of her predecessor. She took the title subject to the mortgage, and is equally estopped to deny that Antonio was the owner, and that, in the absence of a conveyance by him, he continued to be the owner."
After the decision in Department affirming the order of the superior court upon the grounds stated in the foregoing opinion, a rehearing was granted, because it was thought that the doctrine announced in Wood v. Goodfellow, 43 Cal. 185, was infringed by that part of the opinion in which it was held that the plea of the statute of limitations was disposed of adversely to the appellant by the specific facts found by the superior court and stated in the opinion. The case having been resubmitted to the court in Bank, we are now to consider whether, upon the facts as found, the statute of limitations was a bar to the action against Mary Trobock.
There can be no doubt that she is estopped to deny that Antonio Trobock was the owner of the land at the date of the mortgage, and that her title is subject to the mortgage; but we think there can be as little doubt that after she had recorded the deed from Antonio to her deceased husband, her position as successor to her husband became, and continued to be, no better and no worse than if the deed had been made the day it was recorded. By recording the deed she gave the same notice to the mortgagee of her rights that would have been given by the record of a deed of that date to her, or to any other person, and whatever rights accrue to any purchaser of mortgaged premises by the recording of his deed accrued to her. The estoppel raised by the representations of her deceased husband could only operate to protect the mortgagee from the consequences of the step it was induced to take by its belief in the truth of those representations. The only fact represented to the mortgagee was, that Antonio was the owner of the land and that his mortgage would bind it. Upon that representation the respondent made the loan and accepted the mortgage as security. To allow Nicolas or his successor now to set up a title under the deed of 1870, superior to the mortgage, would be to *Page 445 sanction a gross fraud, but nothing of the sort is attempted by the appellant. She concedes that her ownership of the land is subject to the mortgage, and only asserts the rights, whatever they are, of a subsequent grantee.
These are the rights which are denied her by the decree of the superior court, and the effect of the decree is to extend the estoppel to matters in no way involved in any representation made by Nicolas, and to protect the mortgagee against acts and omissions to which no prudent or reasonable man would have been induced by the belief that Antonio was the owner of the land at the date of the mortgage. To raise an estoppel, the representation must be such as would induce a reasonable person to act upon it, and it is only binding to the extent that it has been acted upon. Here was a representation which it is conceded was sufficient to induce a reasonable person to accept the mortgage as security, and it was so accepted; but was there anything said or done which could excuse the mortgagee for waiting seven years after the maturity of the note and the record of a conveyance from his mortgagor before commencing his action to foreclose? A mortgagee is bound to know that his mortgagor may convey the premises subject to his mortgage; and if the record of a subsequent conveyance will set the statute of limitations running in favor of the grantee, we cannot perceive any reason why the appellant may not avail herself of its bar. As a matter of the commonest business prudence, the respondent was bound to inform itself as to any recorded deed from Antonio Trobock, and the same care that would have enabled it to discover a subsequent conveyance would have revealed the existence of the conveyance under which appellant claims. If, therefore, the record of her deed made her a necessary or proper party to this action, — as it unquestionably did, — the right of action as to her accrued at the maturity of the note in December, 1889, and at that date the statute of limitations was set in motion in her favor, notwithstanding the absence of Antonio Trobock from the state. This is the clear result of the decision in Wood v. Goodfellow,43 Cal. 185. In its facts, that case differed in some particulars from this case; the plea of the statute was interposed by asubsequent grantee, but, as we have endeavored to show, that fact is of no consequence, and the first mortgagee in that case had actual notice of the subsequent liens more than five years prior to the commencement of the foreclosure *Page 446 suit, but the fact of actual notice was wholly irrelevant to the point decided. The doctrine of the case is contained in the following extract from Judge Crockett's opinion: "When the mortgagor has parted with his title to the property, and ceased to have any interest therein, those who have succeeded to his rights stand in the same relation to the mortgagee as if they had originally made the mortgage on their own property to secure the debt of the mortgagor. The mortgagor has no interest in the property, nor are they under obligation to pay his debt. Their property, however, is bound as collateral security for its payment, under the mortgage, which is a contract in writing, by which the property is pledged as a security for the debt. The mortgage, in such a case, has the same effect in law as if it had been originally made as a separate instrument by the parties succeeding to the rights of the mortgagor to secure his debt. If A make a mortgage on his own property to B, to secure a debt owing from C, the action to foreclose the mortgage must be brought within four years from the time when the debt became due. The time could not be prolonged by any stipulation between B and C to which A was not privy. But when the four years were about to expire, could C, under our law, indefinitely postpone the bar of the statute, and render it nugatory as to A, by absenting himself from the state and never returning? The argument of the plaintiff's counsel necessarily leads to this result. But we have not heretofore so interpreted the statute. On the contrary, we have uniformly held in analogous cases that the mortgage, as contradistinguished from the mortgage debt, in such cases is to be deemed a contract in writing, in the sense of the statute, on which the action must be brought within four years from the time when the action would lie, in order to avoid the bar of the statute. If we had any doubt, on reason or authority, whether the rule is proper, it has been too long established in this state to be now disturbed."
The deed under which the appellant claims was recorded before the maturity of the note, and it is the record of such a deed, not actual notice, which determines the right of the grantee to be made a party to the foreclosure in order to be bound by the decree. (Code Civ. Proc., sec. 726.) The appellant, therefore, was a proper party to this action nearly seven years before it was commenced, and as to her, on the *Page 447 facts found by the superior court, it was barred by section 337 of the Code of Civil Procedure.
The order denying her motion for a new trial is reversed.
Van Dyke, J., Temple, J., and Harrison, J., concurred.