Bisno v. Sax

• Decision Date: 02 December 1959
• Citation: 346 P.2d 814,175 Cal.App.2d 714
• Court: California Court of Appeals Court of Appeals
• Parties: Sally BISNO and Alexander BISNO, Plaintiffs and Appellants, v. Rose SAX, Special Administratrix of the Estate of Lillian Friedland, deceased; Bank of America National Trust and Savings Association, Defendants and Respondents. Civ. 24042.

Page 814

346 P.2d 814

175 Cal.App.2d 714

Sally BISNO and Alexander BISNO, Plaintiffs and Appellants, v. Rose SAX, Special Administratrix of the Estate of Lillian Friedland, deceased; Bank of America National Trust and Savings Association, Defendants and Respondents.

Civ. 24042.

District Court of Appeal, Second District, Division 2, California.

Dec. 2, 1959.

Hearing Denied Jan. 28, 1960.

Morris E. Cohn, Beverly Hills, for appellants.

Ted T. Ward, Beverly Hills, for respondent Rose Sax.

ASHBURN, Justice.

Action to enjoin trustee's sale under trust deed and for declaratory relief. Plaintiffs Sally Bisno and Alexander Bisno appeal from the judgment.

They are the makers of a note for $34,000 dated January 9, 1951, payable in installments of $250, principal and interest, on the first of each month; the note is secured by a trust deed upon appellants' Beverly Hills home. The payee and beneficiary was Lillian Friedland who died before the foreclosure proceeding was initiated. Defendant Rose Sax was appointed special administratrix of the Friedland estate and has acted as such throughout this controversy.

The Bisons defaulted upon certain monthly payments and defendant Sax delivered to the trustee, Bank of America National Trust and Savings Association, a 'Notice of Default and Election to Sell under Deed of Trust' which the trustee recorded on May 1, 1958, as required by § 2924, Civil Code. This notice was dated April 10, 1958, and specified as the default nonpayment of the installment of principal and interest due February 1, 1958, and 'all subsequent monthly installments of principal and interest due * * * not paid when due and * * * still unpaid.' It further says: 'That by reason thereof, the undersigned, the present beneficiary under such Deed of Trust * * * does hereby declare said indebtedness and all sums secured by said Deed of Trust immediately due and payable; and has elected to cause the property described in said Deed of Trust above referred to * * * to be sold in accordance with the provisions thereof, to satisfy the obligations secured thereby.' No mention is made of the beneficiary's claim of $500 as an amount incurred by her in the protection of her rights as beneficiary of the trust deed, hereinafter discussed. Alexander Bisno on May 8th inquired of the trustee as to '[w]hat would be the amount including interest and expenses that will be due you say, in about three months from now?' On the next day the trustee advised him of [t]he amounts including interest and expenses that could be paid on or before August 1, 1958.' itemizing (in part) as follows: '(1) Installment of principal and interest due February 1, 1958, of $250.00 per month, or payments for February 1 to May 1 amount to $1,000.00 (2) Legal charges by Ted T. Ward, attorney 500.00.' The same letter said that Mr. Ted Ward, the attorney for the beneficiary, stated he would require 'before the loan is re-instated' payment of taxes which, as shown by title report, amounted to $616.86 plus penalty. On July 31, Mr. Bisno tendered to the trustee the sum of $1,173.58 as the amount necessary to reinstate the trust deed and avoid a trustee's sale. The tender was rejected as insufficient. It is clear that Bisno Knew that to be the fact. In a letter of August 5, 1958, to Mr. Myron E. Wisch of Chicago (who apparently represented the holder of a second lien) Bisno said: 'This payment just covered the bare amount asked for by the Bank of America in their letter to me dated May 9, 1958. However, there are other payments that should be made to bring this account up to date.' This last sentence referred to payments due in June and July, according to Bisno's testimony.

The situation at the time of tender was that the $250 payments for March, April, May, June and July were delinquent, a total sum of $1,250. The notice of default specified February, March and April. But the February payment had been made to Mrs. Friedland during her lifetime through a check of February 3, 1958, payable to her order, which was cashed on the 17th day of that month. So the February installment was not delinquent at the time of declaration of default or at the time of Bisno's tender. However, it was necessary in order to cure the existing defaults under the trust deed that the trustor pay, within three months after recording notice of default (i. e., before August 1), 'the entire amount then due under the terms of such deed of trust * * * and the obligation secured thereby * * * other than such portion of principal as would not then be due had no default occurred * * *.' Civ.Code, § 2924c. Patently, a tender of $1,173.58 would not be sufficient to cure a $1,250 default. In addition to that sum taxes in the amount of $674.88 were also in default.

Appellants assert that the tender was refused because it did not include the $500 attorney fee claimed by Mr. Ward for services rendered the beneficiary Sax in the bankruptcy court. Mr. Bisno had been in bankruptcy since April 5, 1956. The encumbered property had belonged to plaintiff wife, Sally Bisno, since July, 1954. Mr. Ward had rendered some services in the bankruptcy court which are claimed to have resulted in an order releasing any possible rights of the bankruptcy trustee in the subject property and granting permission to proceed with foreclosure. The notice of default did not mention this claimed attorney fee. The statute (Civ.Code, § 2924) specifies that the notice and election shall contain 'a statement that a breach of the obligation for which such mortgage or transfer in trust is security has occurred, and setting forth the nature of such breach.' The statute must be strictly followed. Cf. 34 Cal.Jur.2d § 455, p. 130; Kleckner v. Bank of America, 97 Cal.App.2d 30, 33, 217 P.2d 28; Hayward Lumber & Investment Co. v. Corbett, 138 Cal.App. 644, 650, 33 P.2d 41; 37 Am.Jur., § 664, p. 115. Hence failure to include the amount of the claimed attorney fee in Bisno's tender would not render it insufficient; but, as above shown, the tender was defective in that it did not include all installments of principal and interest then delinquent.

Appellants argue that 'defendant's acceptance of all delinquent payments constituted an election not to proceed with the foreclosure.' The complaint was filed on September 10, 1958. On September 23rd a judge other than the trial judge granted a preliminary injunction against the trustee's sale, conditioned upon plaintiffs' payment to defendants of the following items: Monthly installments due on the 1st of March to September, 1958, inclusive; all delinquent real property taxes; the sum of $173.58 to apply on trustee's fees and expenses; also that '[p]laintiffs continue to pay, when due, all future monthly payments on said note, and real property taxes and assessments which shall accrued and become payable during the continuance of this Preliminary injunction.' Trial was had on December 5, 1958, and judgment etered January 2, 1959. It dissolved the preliminary injunction. At the trial counsel stipulated that plaintiffs had paid, pursuant to the preliminary injunction order, '[t]he sum of $1,925, in favor of the defendant Rose Sax; the further sum of $674.88 as and for all delinquent taxes and penalties; and the further sum of $750, consisting of three additional monthly payments of $250 apiece, representing the months of October, November and December'--with the qualification that the December payment was not made until the 2nd of the month, though due on the 1st. In this connection counsel for defendants Sax and Bank of America said: '[T]hat the payment which was due on or before December 1, 1958, was not accepted, it was a late payment, and the check is now being returned to the plaintiffs as a late payment, and let the record indicate that.' It is obvious from this that the check had been held from December 2nd until time of trial on December 5th and it is not shown that there had been any previous objection to the short delay in payment. The property had been purchased by the Bisnos for $45,000 and they had paid $11,000 in cash and given the purchase money trust deed for $34,000 which is the one now under consideration. At the time of trial that lien had ben reduced to approximately $20,000, according to Mrs. Bisno's testimony, thus creating an equity of $25,000. Appellants' opening brief says the unpaid balance of the debt was $22,000, which would make the equity $23,000 instead of $25,000. All payments due before December 1st had been made, as both sides concede. If there was any existing default at the time of trial it grew out of the one-day delay in making the December payment.

But one day's delay in making the December 1st payment did not effect a default, for time is not declared by the note or trust deed to be of the essence. Section 1492, Civil Code, provides: 'Where delay in performance is capable of exact and entire compensation, and time has not been expressly declared to be of the essence of the obligation, an offer of performance, accompanied with an offer of such compensation, may be made at any time after it is due, but without prejudice to any rights acquired by the creditor, or by any other person, in the meantime.' Katemis v. Westerlind, 120 Cal.App.2d 537, 543, 261 P.2d 553, 558: 'The general rule in equity is that time is not of the essence unless it has been made so by its express terms or is necessarily so from the nature of the contract. Williston on Contracts, vol. III (rev. ed. 1936), p. 2385. In Miller v. Cox, 96 Cal. 339, 31 P. 161, it is stated that the intent to make a particular date, or time, 'the essence of the contract must be clearly, unequivocally, and unmistakably shown by an express declaration. * * * In order to render time thus essential, it must be clearly and expressly stipulated that it shall be so; it is not enough that a time is mentioned during which or before which something shall be done [citations].' (96 Cal. at page 345, 31 P....