## Facts

- The Puritan Dining Room Company (Puritan) owed The Anglo‑Californian Bank, Limited (the bank) \$5,000.
- To secure that debt, Puritan executed and delivered to the bank a deed that was absolute on its face to certain real property.
- In connection with the deed, the bank issued Puritan a written defeasance stating the deed was intended as security and that it secured “for all moneys due or hereafter to become due” from Puritan to the bank.
- After the deed and defeasance were executed, the bank made an additional loan to Puritan for \$3,900 and took a promissory note for that amount.
- Puritan defaulted on both the \$5,000 obligation and the later \$3,900 note.
- The bank assigned the debts and the security arrangement (the deed and defeasance) to Albert Langerman.
- Langerman sued to foreclose on the property, alleging the security covered both the original \$5,000 debt and the later \$3,900 loan.
- The trial court treated the deed and defeasance together as a mortgage and entered a foreclosure judgment that included both debts.
- On appeal, parties aligned with Puritan challenged the trial court’s ruling that the mortgage secured the later \$3,900 indebtedness.

## Issues

1. Whether an absolute deed, when accompanied by a contemporaneous defeasance stating it is intended as security, is treated as a mortgage rather than an outright conveyance.
2. Whether a defeasance providing security “for all moneys due or hereafter to become due” secures a subsequent loan between the same debtor and creditor.

## Decision

- The Court of Appeal affirmed the judgment of foreclosure.
- The court held the deed and defeasance were parts of a single security transaction and, read together, created a mortgage.
- The court held the phrase “for all moneys due or hereafter to become due” was sufficiently broad to include the later \$3,900 loan as well as the original \$5,000 debt.

## Legal Principles

- An instrument that is a deed in form may be treated in equity as a mortgage when a contemporaneous writing shows the parties intended the deed to serve as security.
- Documents executed as part of the same arrangement are construed together to determine their legal effect.
- A clear all-indebtedness or future-advances clause (e.g., “all moneys due or hereafter to become due”) may secure later loans between the same parties, not merely the debt existing at the time of execution.
- An assignee of the creditor’s rights may foreclose the security interest to the same extent the original creditor could have done.

## Conclusion

Because the deed and defeasance were intended as security and expressly covered “all moneys due or hereafter to become due,” the court treated the instruments as a mortgage and upheld foreclosure for both the initial \$5,000 debt and the later \$3,900 loan.


Langerman v. Puritan Dining Room Co., 21 Cal. App. 637, 132 P. 617 (1913)