I. If Revalk and his wife were the appellants, there could be no doubt as to the correctness of the decree of the Court below. Dillon v. Byrne , 5 Cal. 455; Birrill v. Schie , 9 Id. 104; Carr v. Caldwell , 10 Id. 380.) The only question is, whether the rule therein laid down extends to appellant, Swift, who is purchaser of the property after the death of Revalk's wife. The mortgage of respondentswas of record, and imparted notice to Swift. And if it were competent for him to impeach its validity by parol evidence of a homestead, it was just as competent for the respondents, by the same kind of evidence, to sustain it, which they did, by showing that, by the doctrines of subrogation, it was perfectly valid to the extent of the two prior mortgages, which had been made before any homestead had existed, and to cancel which it had been given. It was the duty of Swift, finding, as he did, a mortgage of four thousand dollars duly recorded, to inquire of the mortgagees as to the character of their claim. (1 Sug. Vendors, 8.) Swift relied on the fact of homestead as proving the mortgage null and void. But its invalidity did not depend alone on that fact. (Carr v. Caldwell, above.)
II. Respondents should have all the security which belonged to the mortgages to which they are subrogated. This action is a bill of review. (2 Barb. Ch. Prac. 90.) And on a bill of review a final decree can be opened and altered so as to make it conform to the justice of the case. (Bennett v. Winter, 2 Johns. Ch. 205.) The Court below not having authorized respondents to foreclose their mortgageagainst the whole lot, this Court has the power to correct the decree. (Grayson v. Guild , 4 Cal. 122.)
JUDGES: Baldwin, J. delivered the opinion of the Court. Terry, C. J. concurring.
OPINION
BALDWIN, Judge
One Revalk, an unmarried man, in 1854, owned a lot in San Francisco; Leck and Fontacelli had a mortgage of two thousand dollars, and Kraemer a mortgage of one thousand five hundred dollars, on this lot. Revalk married in 1857, and, after his marriage, made the mortgage, the validity and effect of which this suit questions. His wife did not join in the mortgage. The consideration of this last mortgage was that Kraemer canceled his prior mortgage of one thousand five hundred dollars and gave five hundred dollars in cash, in addition, to Revalk, and one Eisenhardt paid the prior mortgage of two thousand dollars to Leck and Fontacelli. The release of the old, and the redemption of the new, mortgages, were done on the same day. Revalk's wife died, and Swift, the plaintiff here, purchased the mortgaged premises. He claims now that, as he knew that the property was homestead at the time of the last mortgage, he was a purchaser without notice of any adverse claim, and that he takes the title free of the claim of the mortgagee. We do not think so. So far as the five hundred dollars is concerned, probably, within a recent decision, the husband had no right to incumber the property to that extent. But, as to the debts secured by the original mortgage to Leck and Fontacelli, and Kraemer, we regard the cancellation of the old mortgages and the substitution of the new, as contemporaneous acts. It was not creating a new incumbrance, but simply changing the form of the old. A Court of Equity, looking to the substance of such a transaction, would not permit a release, intended to be effectual only by force of, and for the purpose of, giving effect to the last mortgage, to be set up, even if the last mortgage was inoperative. It would not permit Revalk to take Kraemer and Eisenhardt's money and apply it in extinguishment of a prior incumbrance, and then claim that the property should neither be bound by the new mortgage or the old. These last mortgagees would be, in equity, assignees of the debts they paid, and be subrogated to the rights of their assignors; for, in equity, the substance of the transaction would be an assignment of the old mortgages in consideration of the money advanced. This, in effect, has been held in Dillon v. Byrne , 5 Cal. 455; Birrell v. Schie , 9 Id. 106; Carr v. Caldwell , 10 Id. 380.
Nor does Swift stand in any better position than Revalk himself. Swift can only claim that he bought with notice of a parol fact--not that he was the purchaser of an apparent legal title, and ignorant of any better title or equity. In other words, he bought with knowledge of the fact, which seemed to show a title in Revalk and wife. But this fact may be explained. What existed in parol might have been explained by parol. The mortgage on record was, at least, sufficient to lead him to inquiry, and then he was bound to make full inquiry. That would have resulted in information as to the true state of things. But we are not aware that it has ever been held that a party is estopped except by his own act or deed, or that of his privies. Revalk's possession of the premises, with his wife, was no estoppel of Kraemer to show that the premises were not homestead. If they seemed to be, from the fact of this family occupancy, and Swift bought on the strength of this appearance, he took the risk of this appearance turning out to be the reality; and, if he was deceived, it is one of the unfortunate blunders common to all speculation.
The decision of this Court in the numerous cases of Revalk touching this property, make nothing for the appellant, for this question was not involved in those cases; and facts are not settled by judicial precedents, but only questions of law.
Decree affirmed.