## Facts

- Downer and Morris each owned an undivided one-half interest in certain real property.
- Downer mortgaged his undivided one-half interest to Goodenow and others to secure a \$2,000 note; the mortgage was recorded.
- Downer and Morris later conveyed an undivided one-third of the entire property to Ewer, leaving each of Downer, Morris, and Ewer with a one-third undivided interest; a portion of Ewer’s one-third derived from Downer’s mortgaged half and remained subject to the mortgage lien.
- After default, the mortgagees foreclosed against Downer only, obtained a decree of sale, and purchased at the sheriff’s sale; a sheriff’s deed later issued.
- After the foreclosure decree, Ewer acquired the remaining interests from Morris and Downer and took possession, receiving rents and profits.
- The mortgagees filed an equity action seeking (1) sale of the property in lieu of partition and (2) an accounting from Ewer for rents and profits, claiming their foreclosure purchase included the portion previously conveyed to Ewer.
- The trial court determined fractional interests, ordered sale, and addressed accounting; the mortgagees appealed.

## Issues

1. Whether a foreclosure decree and sale against the mortgagor alone, without joining a prior grantee of part of the mortgaged interest, can cut off or transfer that grantee’s interest.
2. Whether a cotenant in possession must account to another cotenant for the latter’s proportionate share of rents received after the sheriff’s sale.
3. Whether a foreclosure-sale purchaser is entitled to equitable reimbursement or adjustment of its bid based on a mistaken belief about the legal effect of the sale.

## Decision

- The court held that the foreclosure against Downer did not affect Ewer’s previously acquired interest because Ewer was not made a party to the foreclosure action.
- The court held that plaintiffs, as cotenants, were entitled to an accounting from Ewer for their proportionate share of rents received after the sheriff’s sale.
- The court denied plaintiffs’ request to recover part of their foreclosure bid, treating the asserted error as a mistake of law for which equity generally does not grant relief.
- The decree was affirmed as to the determination of interests and the order directing sale, and reversed and remanded for a new accounting consistent with the opinion.

## Legal Principles

- A foreclosure judgment binds only parties and privies; it cannot impair the rights of a person who held an interest before suit and was not joined.
- In California, a mortgage operates as a lien; foreclosure reaches only interests properly brought before the court through joinder.
- In partition-related proceedings, a cotenant in possession who receives rents must account to other cotenants for their proportionate shares, measured by the parties’ undivided interests and the relevant time period.
- Equity generally will not relieve a judicial-sale bidder from the consequences of a mistake of law about the interest conveyed.

## Conclusion

The court ruled that a foreclosure against only the mortgagor could not divest a non-joined prior grantee’s interest, required a proportionate rent accounting among cotenants, and refused to revise the foreclosure bid based on a mistake of law, affirming the sale order but remanding for a corrected accounting.


Goodenow v. Ewer, 16 Cal. 461 (Cal. 1860)