Altman v. McCollum

• Decision Date: 22 October 1951
• Citation: 107 Cal.App.2d Supp. 847,236 P.2d 914
• Court: California Superior Court
• Parties: 107 Cal.App.2d Supp. 847 ALTMAN v. McCOLLUM et al. Civ. 17. Appellate Department, Superior Court, Alameda County, California

Page 914

236 P.2d 914

107 Cal.App.2d Supp. 847

ALTMAN v.McCOLLUM et al.

Civ. 17.

Appellate Department, Superior Court, Alameda County, California.

Oct. 22, 1951.

Young, Ryan & Whitton and Richards & Rankin, Oakland, for appellant.

John L. McVey, Oakland, for respondent.

LEDWICH, Judge.

Defendants' appeal from a judgment of the municipal court in favor of plaintiff in an unlawful detainer action brought under Section 1161a, subdivision 3 of the Code of Civil Procedure by plaintiff, the purchaser at a sale under a deed of trust.The promissory note is dated October 12, 1946, in the principal sum of $12,500, payable in monthly installments of $100, or more, each month, commencing November 15, 1946.The note provides 'that each installment when paid shall be applied by the holder hereof, first so much thereof as shall be required, to the payment of interest accrued * * * and the balance thereof to the repayment of said principal sum'.The note was made payable to plaintiff and her since deceased husband, as joint tenants.

The note and deed of trust were executed by one Rogers and wife, as 'Trustor'.They sold and conveyed the property to defendants about September 15, 1949.The balance of principal then unpaid was $10,203.41, and interest was then paid to August 15, 1949.At that time Rogers and wife had paid approximately $2,300 on principal and all interest to August 15, 1949, or a total of approximately $4,100.If Rogers had paid plaintiff $100 every month, his total payments would have been $3,400 on September 12, 1951, so Rogers had then paid approximately $700 on principal in excess of what the note required.

In response to a request to do so, on September 12, 1949plaintiff deposited in escrow in connection with the purchase of the property by defendants from Rogers and wife, a statement signed by her that the balance then owing on the loan was $10,203.41 and interest was paid to August 15, 1949, as aforesaid.She made no mention of any previous defaults by Rogers and wife, or said anything to indicate that she did not consider the loan in good standing.The payment book was not deposited in escrow and defendants did not receive it until they made their first payment of $100 on October 13, 1949, when it was mailed to them by plaintiff, without comment.

The payment book, wherein all entries were made by plaintiff, and the endorsements on the note by plaintiff disclose that Rogers and wife on November 10, 1946(less than one month after the date of the note) paid plaintiff and her husband $1,152.05, of which amount $1,089.55 was credited to principal, thereby reducing the balance of principal as of November 10, 1946, to $11,410.45.

The payment book also shows that in 1948 Rogers and wife made six payments of interest only, the last of these payments being entered in the book on June 18, 1948, which paid interest to May 15, 1948.The book further shows that from June 22, 1948 to and including July 11, 1949 Rogers and wife made 12 monthly payments of $100 each, and the payment on July 11 paid interest to May 15, 1949.On August 30, 1949, two payments of interest only are entered in the book, which shows interest paid to July 15, 1949.On September 12, 1949(the date plaintiff placed in escrow her statement above mentioned), the book shows $104 paid, $51.28 thereof being credited to interest to August 15, 1951, (which was current), and $52.72 to principal, leaving a balance unpaid of principal of $10,203.41 (which was the condition of the loan when defendants acquired title to the property).

Defendants paid $100 a month in October, November, December of 1949, and January and February of 1950, the last of these payments being made February 26, 1950.The last two of these payments were made after the 15th of the month, but plaintiff made no objection to that.In accordance with her previous custom, she credited approximately half of each $100 payment on interest to the 15th of the previous month and the balance on principal, so that on February 26, 1950, the book shows that interest was paid to January 15, 1950.

Had plaintiff applied the February payment first to the payment of accrued interest, as the note provides, interest would have been paid to February 15, 1950 and been current.The only default by defendants on the note would then be approximately $50 in the payment of principal.In any event the total default of defendants in payments on the note itself, after the payment of February 26, 1950, was $50, whether the default be considered as one in payment of principal, or interest.

The defendants, however, were then in default in the payment of the first installment of taxes, $148.83, so that their total default was less than $200 on March 7, 1950.

On March 7, 1950the plaintiff, through her attorney, wrote the defendants a letter stating:

'You are delinquent in the matter of current payments under the deed of trust plus a small balance due prior to the time you purchased the property.In addition the taxes for the first installment of the current year in the amount of $140.41 plus $8.42 penalty are unpaid.

'I am instructed to take such proceedings as may appear to me to be appropriate unless you bring your payments to her up to date and pay the taxes forthwith.You will please govern yourself accordingly.'

Defendants made no reply to this letter.On March 24th defendants mailed plaintiff a check for $50.05, stating it was 'for interest for month of March.If amount is incorrect, please advise'.Plaintiff made no response to this letter, but on March 26, 1950, as had been her custom, she entered the interest of $49.77 paid for one month, to February 15, 1950.The next day, on March 27, 1950, plaintiff signed a notice of default and intention to sell under the deed of trust.She recorded this notice on March 29, 1950.

Neither plaintiff nor her attorney ever mailed a copy of this notice to defendants, or ever advised defendants in any manner, orally or written, that such notice had been recorded.Defendants had no knowledge thereof at all until about the ninth or tenth of August, 1950, when they learned that their property was being advertised for sale from a broker.Plaintiff's attorney was substituted as trustee on August 8, 1950.Notice of sale was published on August 9, 1950 and posted on the property on August 10, 1950, and the sale held October 5, 1950, it having been postponed at the request of defendants' attorney for 30 days.

Plaintiff mailed a copy of the recorded notice of default to the original Trustors, Rogers and wife, at the place specified by them in the deed of trust, namely, the property described therein, 5262 Foothill Boulevard, Oakland, California, which plaintiff knew was the residence of defendants.Defendants never saw or heard of this notice until after the notice of sale was published.

After plaintiff recorded the notice of intention to sell, she received from defendants and credited on the payment book three payments of $100 each and one payment of $50.She credited interest paid to the 15th of the previous month and the balance on principal, as had been her invariable practice with Rogers and defendants.These payments were entered as follows:

                          Pays Interest up to
                April 27, 1950--$100.00;  3"15"50
                May 31, 1950--50.00;      4"15"50
                June 28, 1950--100.00;    5"15"50
                July 31, 1950--100.00;    6"15"50
                

Defendants did not pay an insurance premium of $14.34 in April.Plaintiff paid this premium and added the amount to the balance of principal and so advised defendants.Defendants defaulted in the payment of the second installment of taxes in April, 1950.

When plaintiff received the $100 payment in April, she wrote defendants that it was not the April payment, and that she had paid the $14.34 insurance premium and added it to the principal.She also wrote 'How about the taxes?'She did not mention anything about the recorded notice of default, or any previous default by Rogers.

The Court found (Finding II) that defendants were 'in default' on March 29th 'in that they failed to pay $50.00 due on March 15, 1950' and failed to pay the first installment of taxes of $148.83.It further found that on said date defendants'had not paid arrearages which had accrued prior to the purchase of said real property by defendants in the sum of $500.00 or more'.

The Court found (Finding VIII), (in accordance with the uncontradicted evidence), that it was true 'that defendants did not discover the commencement of the foreclosure proceedings until August 10, 1950 after the first publication of the notice of sale, and defendants were informed regarding said publication by a friend who had read the notice in the Inter-City Express'.The Court further found (Finding IV) that it was untrue that plaintiff deliberately with intention to prevent defendants from reinstatement of the loan 'concealed' from defendants the recordation of said notice of intention to sell.

Defendants' Pleadings.

The defendants, in their answer, pleaded three 'separate and affirmative' defenses.In their first affirmative defense, they pleaded that they had made payments of $100 in April, June and July of 1950 and $50 in May of 1950, which payments plaintiff accepted without informing defendants of the recordation of the said notice of default and intention to sell and while defendants did not know of the existence thereof and that by plaintiff's 'concealment' of the recordation of said notice defendants were prevented from exercising their rights under Section 2924 of the Civil Code to cure their default in the payment of the taxes and $50 default in payment on the note.Defendants further allege that they were at all times ready, able and willing to pay 'taxes and any other arrearage' there may have been and offered and tendered said money in their answer and also offered and tendered $100 each for payments for the months of August, September and October, 1950.

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