PART ONE.

MATTERS COMMON TO ALL ENCUMBRANCES FOR SECURITY ONLY.

TITLE 1.

NATURE OF ENCUMBRANCES FOR SECURITY ONLY.

1.

Encumbrances, how created.

2. Creation of encumbrance does not imply personal obligation.

3. Encumbrance deemed accessory to obligation se

4.

cured.

Encumbrance transfers no title.

5. Encumbrance is security for designated purposes only.

1. Encumbrances, How Created.

A charge or encumbrance against specific property as security for the performance of an obligation is created:

(1) by act of the parties; or

(2) by operation of law.1

2. Creation of Encumbrance does not Imply Personal Obligation.

The creation of an encumbrance for security 1 See Civ. Code, sec. 2881.

only does not of itself imply that any person is bound to perform the obligation secured thereby."

2 Personal Obligation not Implied.-Civil Code, section 2890: The creation of a lien does not of itself imply that any person is bound to perform the. act for which the lien is a security."

Civil Code, section 2928: "A mortgage does not hind the mortgagor personally to perform the act for the performance of which it is a security, unless there is an express covenant therein to that effect."

Moore v. Reynolds, 1 Cal. 351; London, Paris & American Bank v. Smith, 101 Cal, 415. 419, 35 Pac. 1027. Compare Shafer v. Bear River etc. Min. Co., 4 Cal. 294; Brown v. Orr, 29 Cal. 120.

"Liens upon property, where no person is bound to perform the obligation, are common in our law, especially in cases of taxation; and in cases of this character [that is, of street improvements to be paid for by special assessment in a case where the municipal corporation letting the contract for street im provement was exempted from personal liability], no personal liability can constitutionally be imposed upon the property owner": Hellman v. Shoulters, 114 Cal. 136, 139, 44 Pac. 915, 45 Pac. 1057.

Illustrations.-In the absence of a direct agreement to pay the money specified in a mortgage, the mortgage holder is confined to his remedy against the mortgaged property, and can have no personal judgment against the mortgagor: Union Water Co. v. Murphy's Flat Fluming Co., 22 Cal. 620, 626.

A mortgage providing that "this conveyance is intended as a conveyance to secure the payment of the sum of five hundred dollars of a certain promissory note made by R., October 18, 1894, for five thousand two hundred and twelve dollars and eleven cents, which said note is payable to C., or order, and these presents shall be void if such payment be made according to the tenor and effect thereof," does not create any personal obligation to pay the sum of five hundred dollars, but the land becomes the guarantor of the payment of the note to the

3. Encumbrance Deemed Accessory to Obligation Secured.

An encumbrance for security only is deemed accessory to the obligation for the performance of which it is a security, whether any person is bound for such performance or not."

4.

Encumbrance Transfers No Title.

Notwithstanding any agreement to the contrary, no encumbrance for security only, nor contract to create such encumbrance, transfers any title to the property affected thereby.4

5.

Encumbrance is Security for Designated Purposes only.

An encumbrancer cannot require as a condition. precedent to the discharge of his encumbrance. against the property the performance of any obligation the performance of which is not secured by that specific encumbrance.5

extent of the five hundred dollars: Carson v. Reid, 137 Cal. 253, 70 Pac. 89.

The

3 See Civ. Code, sec. 2909. This section refers to perfected and subsisting liens, not to the mere right of obtaining a lien (see section 550 below). thresher's lien being a perfected and subsisting lien is thus an incident of the primary obligation-the debt due the laborer: Duncan v. Hawn, 104 Cal. 10, 12, 37 Pac. 626.

4 See Civ. Code, sec. 2888. Also Haber v. Brown, 101 Cal. 445, 452, 35 Pac. 1035.

5 Encumbrance Security for Designated Purposes Only.-Civil Code, section 2891, provides: "The exist

ence of a lien upon property does not, of itself, entitle the person in whose favor it exists to a lien upon the same property for the performance of any other obligation than that which the lien originally

secured.'

"The general rule is, that the mortgagee cannot require as a condition of redemption the payment of any other debt not a lien upon the land. . . . . It is argued, however, that as the plaintiff is here seeking the aid of a court of equity, he should be compelled to do equity, but this maxim of equity jurisprudence only applies when the relief sought by plaintiff and the right demanded by defendant belong to or grow out of the same transaction. It has no application where the demand of the defendant is based upon a contract separate and distinct from that which forms the subject of the plaintiff's action': Mahoney v. Bostwick, 96 Cal. 53, 61, 31 Am. St. Rep. 175, 30 Pac. 1020.