any such right in respect to the encumbered property after the commencement of the action without actual or constructive notice of the pendency thereof,12 the constructive notice to be given by the filing of a notice of pendency,13 is a

a

property, and he is, therefore, a necessary party in foreclosure action subsequently brought by the mortgagee: Randall v. Duff, 79 Cal. 115, 118, 121, 122, 128, 129, 19 Pac. 532, 20 Pac. 610.

12 Person Acquiring Right After Commencement of Action Without Notice of Pendency Thereof, Necessary Party. Thus a person without actual or constructive notice of the pendency of the action is a necessary party: Abadie v. Lobero, 36 Cal. 390, 400. Actual Notice.-On the other hand, a person with actual notice of pendency is bound: Wise v. Griffith, 78 Cal. 152, 20 Pac. 675; Sharp v. Lumley, 34 Cal. 611, 615.

The effect of actual notice is not changed by the requirement as to filing a notice of pendency: Simpson v. Lumley, 22 Cal. 200, 210, 211. (Notice of pendency-see note 13, below.)

Constructive Notice - A person with constructive notice of the pendency is bound: Daniels v. Henderson, 49 Cal. 242.

The wife of a party duly joined, who, after the commencement of the foreclosure action and the filing of a notice of its pendency, claims a homestead in the property involved, is bound by the judgment rendered therein, being a purchaser within the meaning of the code provision providing for the filing of a notice of pendency: Roach v. Riverside Water Co., 74 Cal. 263, 15 Pac. 776; McNamara v. Oakland Bldg. etc. Assn., 132 Cal. 247, 64 Pac. 277.

13 Constructive Notice of Pendency to be Given by Filing a Notice of Pendency.-The common-law rule that the commencement of an action is notice to all the world of its pendency is so modified by the provisions of the Code of Civil Procedure, section 409,

necessary party to an adjustment of the various rights claimed in respect to the property and to the passage of a clear title at the foreclosure sale of the property; but is not an indispensable party to a judgment determining the rights of the parties before the court as between themselves.14

106. Proper Parties.

Any holder of an obligation already due which. is secured by an encumbrance against any property superior to the encumbrance to foreclose which the action is commenced,15 any person secPractice Act, section 27, that a notice of the pendency of the action must be filed in order to impart notice of the pendency thereof to purchasers and encumbrancers becoming such after its commencement: Bentley v. Mountain Lake Water Co., 13 Cal. 306, 319, 73 Am. Dec. 575; Head v. Fordyce, 17 Cal. 149, 151; Richardson v. White, 18 Cal. 102, 107; Ault v. Gassaway, 18 Cal. 205; Horn v. Jones, 28 Cal. 194, 204; Sharp v. Lumley, 34 Cal. 611, 615.

14 Although Necessary Parties not Joined, Judgment may be Rendered Between Parties Before Court. That subsequent encumbrancers are necessary parties to a complete adjustment of all interest in the property is clear; but they are not indispensable parties to a judgment determining the rights of the parties before the court as between themselves: Montgomery v. Tutt, 11 Cal. 307, 315; Carpentier v. Brenham, 40 Cal. 221, 235.

Where an encumbrancer is not made a party in a foreclosure action, the judgment, while incomplete as to him, is, nevertheless, sufficient in other respects: Hayward & Co. v. Stearns, 39 Cal. 58, 60.

15 Superior Encumbrancer Whose Obligation is Due Proper Party.-Superior encumbrancers may be

ondarily liable on the secured obligation,16 and any inferior encumbrancer who becomes such after the commencement of the foreclosure action with actual or constructive notice of the pendency thereof,17 is a proper party in such action; but

made parties for the purpose of liquidating their demands and paying them out of the proceeds of the sale: San Francisco v. Lawton, 18 Cal. 465, 473, 79 Am. Dec. 187; Croghan v. Spence, 53 Cal. 15; Gutzeit v. Pennie, 97 Cal. 484, 489, 32 Pac. 584; Stockton Sav. etc. Soc. v. Harrold, 127 Cal. 612, 617, 60 Pac. 165; Van Loben Sels v. Bunnell, 131 Cal. 489, 494, 63 Pac. 773.

But the obligation secured by the superior encumbrance must be due. "A junior mortgagee has a right, in an action to foreclose his mortgage, to bring before the court the holder of a prior mortgage which has matured, and obtain a decree for the sale of the premises and the satisfaction of his own mortgage after the payment of the amount of the prior mortgage': Gutzeit v. Pennie, 97 Cal. 484, 489, 32 Pac. 584.

"In the exceptional cases, where prior mortgagees are made parties, this is done that the court may order the sale of the whole estate, and thus make a complete title in the purchaser. In such cases the complaint may be treated as in the nature of a bill to foreclose and to redeem from the prior mortgage. If the debt secured by the prior mortgage is past due, it would seem that the prior mortgagee may be compelled to accept the full amount of his claim from the proceeds of the sale of the mortgaged premises, without any interference with the obligation of his contract': McComb v. Spangler, 71 Cal. 418, 424, 12 Pac. 347.

In Rodgers v. Parker, 136 Cal. 313, 316, 68 Pac. 975, the court doubt whether a superior encumbrancer could be compelled to submit his rights to adjudication in an action to foreclose an inferior encumbrance, but held that as in the case before the court, the su

perior encumbrancer had in fact filed a cross-complaint, he must be deemed to have voluntarily submitted himself to the jurisdiction, and was bound by the judgment.

Whenever a superior encumbrancer is made a party defendant, it is his right to file a cross-complaint to foreclose his encumbrance: Van Loben Sels v. Bunnell, 131 Cal. 489, 494, 63 Pac. 773.

A superior encumbrancer is not, however, a necessary party: Carpentier v. Brenham, 40 Cal. 221, 237. Arerment and Its Effect.-"Under the usual allega. tion in a complaint of foreclosure, that a defendant other than the mortgagor claims some interest in the premises, and that such interest is subsequent and subordinate to that created by the mortgage, any prior interest held by such defendant is not affected by the judgment therein. Such an averment is not material to the plaintiff's cause of action, nor is it an issuable fact, and whether the court rendered judgment upon the default of the defendant, or upon an issue created by his denial of this averment, without setting forth the character of his interest, any prior interest held by him is not affected by such judgment': Beronio v. Ventura Co. Lumber Co., 129 Cal. 232, 238, 79 Am. St. Rep. 118, 61 Pac. 958. See, also, Elder v. Spinks, 53 Cal. 293, 294-296, and Sichler v. Look, 93 Cal. 600, 608, 29 Pac. 220, as cited under section 105, note 8, at end.

Insufficient Averment.-An averment that a claim is "subordinate" to a mortgage is but a legal conclusion, and the averment of fact upon which that conclusion depends-that the claim was subsequent to the mortgage-negatives any claim that it was prior thereto: Beronio v. Ventura Co. Lumber Co., 129 Cal. 232, 238, 79 Am. St. Rep. 118, 61 Pac. 958.

16 Person Secondarily Liable Proper Party.-An indorser of a note secured by mortgage is a proper party defendant in an action to foreclose the mortgage: Hubbard v. University Bank of Los Angeles, 125 Cal. 684, 58 Pac. 297.

17 In Certain Cases Inferior Encumbrancer Proper Liens-14

an adverse claimant to the encumbered property is never a proper party.1 18

107.

Certain Persons Need not be Made Parties. No person holding any right in respect to the encumbered property of which the plaintiff has neither actual nor constructive notice at the time of the commencement of the action,19 nor acParty. An inferior encumbrancer who becomes such after the commencement of an action to foreclose a superior encumbrance, but with actual notice (Montgomery v. Byers, 21 Cal. 107), or constructive notice (Richardson v. White, 18 Cal. 102; Ault v. Gassaway, 18 Cal. 205), thereof, is a proper party therein.

18 Adverse Claimant not a Proper Party: See section 99, and notes above.

19 See Code Civ. Proc., sec. 726, Practice Act, sec. 246, as amended 1868, in part as quoted under section 105, note 11, above.

Illustrations.-A grantee of a mortgagor, who becomes such before the action to foreclose the mortgage is commenced, but whose conveyance is not recorded until after the commencement, is bound by the foreclosure judgment, although not made a party to the action: Daniels v. Henderson, 49 Cal. 242, 248; Henderson v. Grammar, 53 Cal. 649; 66 Cal. 332, 335, 5 Pac. 488; Breedlove v. Norwich etc. Ins. Co., 124 Cal. 164, 166, 56 Pac. 770.

Where a mortgagor transfers the mortgaged property, but the conveyance is not recorded, the transferee is not a necessary party in a foreclosure action thereafterward brought by the mortgagee, and the proceedings in such action are conclusive against him: Aldrich v. Stephens, 49 Cal. 676.

Where an inferior mortgagee brought an action to foreclose his mortgage, and joined as party defendant the superior mortgagee in order to liquidate his claim, the judgment therein rendered is binding upon an assignee of the superior mortgagee whose assign