Chung v. Johnston

• Decision Date: 18 October 1954
• Citation: 128 Cal.App.2d 157,274 P.2d 922
• Parties: John CHUNG, Plaintiff and Respondent, v. George W. JOHNSTON and Katherine A. Johnston, Defendant and Appellants. Civ. 20135.
• Court: California Court of Appeals Court of Appeals

Page 922

274 P.2d 922

128 Cal.App.2d 157

John CHUNG, Plaintiff and Respondent, v. George W. JOHNSTON and Katherine A. Johnston, Defendant and Appellants.

Civ. 20135.

District Court of Appeal, Second District, Division 3, California.

Oct. 18, 1954.

Hall & Kent, Long Beach, for appellants.

Carl Yanow, Los Angeles, for respondent.

VALLEE, Justice.

Appeal by defendant from a judgment which decrees that plaintiff convey to defendants a parcel of realty; and that plaintiff have judgment against defendants for $7,086.34, secured by a lien on the property conveyed.

Plaintiff is an educated Korean but does not speak the English language fluently. Defendants are husband and wife; the husband, when he acted alone, will be referred to as defendant. Since 1946 defendant had acted as plaintiff's broker in buying and selling real estate and in investing his funds. The claim of plaintiff is that defendants induced him to convey to them a parcel of realty described as the Byram Street property, stating they would hold title for him; that the state condemned the property; that defendants received the proceeds from the state and delivered to plaintiff a purported accounting which included a charge for a parcel of realty described as the Fourth Street property and other claimed expenditures, all made without plaintiff's consent.

In 1946 plaintiff purchased the Byram Street property, subject to a first and a secand deed of trust. Plaintiff became delinquent in the interest payments on the second deed of trust, and some time thereafter defendant acquired it. On September 21, 1949, plaintiff by grant deed conveyed the Byram Street property to defendant to be held in trust for him. No written contract was entered into. Subsequently the state concluded to acquire the property. On April 3, 1951, plaintiff and defendants signed an agreement with the state by which the latter was to pay a total of $40,266.33 for the property--free and clear of all liens, encumbrances, and certain other items. On June 20, 1951, the state issued a check to plaintiff and defendants for $23,841.39, which represented the purchase price less the first deed of trust and other items.

Defendants had at one time sold to William Coulter property described as the Fourth Street property. On January 27, 1951, defendants entered into a written agreement with Mr. Coulter to buy back the Fourth Street property on or before June 1, 1951. The property was 'farming land' on the front of which defendant had his real estate office and in the rear there was a house. Plaintiff testified he never was consulted about this property until July 16 when he refused to buy it because he didn't want that kind of property. Plaintiff had always bought 'apartment house income property.'

On June 16, 1951, in an instrument prepared by defendant, Charles Rubio, Jr., agreed to sell and plaintiff agreed to buy property known as the Euclid Avenue property for $3,800. The instrument stated, 'It is understood and agreed that we shall receive our cash on or before July 15th, 1951, as the buyer shall receive his cash from the California Highway Commission.' There was a duplex on the property and defendant offered to find a tenant for one of the apartments for plaintiff.

On July 13 defendants received the check from the state. On July 16 Mr. and Mrs. Coulter went to defendant's office and executed the deed conveying the Fourth Street property to plaintiff. Mr. Coulter testified he signed the deed naming plaintiff as grantee at the request of defendants who stated they wished the title to run directly from Coulter to plaintiff. He also testified he never had negotiated with plaintiff and when he executed the deed plaintiff was not there, nor had he ever met plaintiff. Defendants admitted they had no writing with plaintiff concerning this property. They never told plaintiff they had previously owned the property nor that they had an option to repurchase it. Defendants did not require a title policy of any kind from Coulter, and the transaction did not go through escrow although previous transactions had. The next day, July 17, plaintiff went to defendant's office and received the deed. He recorded the instrument the same day. Plaintiff testified that he was not told the deed which he received was for the Fourth Street property; it was not until August 16 that he discovered he had purchased this particular piece of property; he thought the deed was for the Euclid Avenue property. When plaintiff learned he had purchased the Fourth Street property, he told defendant to take it back, that he didn't want that kind of property because he had no use for it.

On July 17 plaintiff learned that defendants were intending to withhold the purchase price of the Fourth Street property from the state funds then in their hands and to account to him only for the balance. Plaintiff endorsed the check on the representation of defendants that they would deposit it and as soon as a computation could be made he would receive what was coming to him. From July 17 onwards plaintiff made numerous demands on defendants for an accounting.

On August 16, when plaintiff tried to move his furniture into the duplex on Euclid Avenue, he learned for the first time that he had not purchased that property. Without plaintiff's authorization defendant had the furniture placed in a store on Whittier Boulevard. Later defendant Mrs. Johnston received three bills from the moving company and paid a total of $261.10.

On August 20 defendants issued a check to plaintiff for $9,345.89 and told him to sign a receipt which read: 'Received of K. A. Johnston, George W. Johnston and Johnston Agency, the sum of Nine Thousand three hundred forty-five and 89/100 Dollars ($9,345.89) as payment in full of all claims of whatsoever nature in connection with the operations of our businesses, up to this date.' Plaintiff testified he told defendants he 'figured there is too much shortage of money, I am supposed to get around nineteen or twenty thousand and here is just nine thousand'; that defendants said that when the down payment for the duplex, the Euclid Avenue property, and the escrow fee are deducted he would have $5,600 less, and he (plaintiff) said 'Well, have to be in there or else I won't sign,' that defendant replied, 'If you don't sign we will just keep it and just hold it in trust fund just as we have done many years, you sign this if you want to see your money again'; at that time he was in need of money and defendants stated they would give him an accounting. He then signed the receipt.

On September 7 defendants forwarded an accounting to plaintiff in which they charged him $2,000 as a commission for the sale by them of the Byram Street property although there was no written contract with plaintiff for a commission. Defendants also charged plaintiff with the purchase price of the Fourth Street property and certain other items which they claimed to have laid out in the month of March with respect to that property. Defendants collected the August, September, and October rents from the tenant of the house on the Fourth Street property, and sent them together with the rent for their real estate office on the same property to plaintiff. Plaintiff cashed all the checks except the October rent check for $25 from defendants. He offered to return it to them. In October plaintiff appointed Mayer Royal as his collection agent. In November defendants moved from the Fourth Street property. Thereafter and up until the time of trial the real estate office remained vacant. Plaintiff continuously collected the rent from the tenant of the house, made mortgage payments on the property, and paid the taxes.

After September 17 plaintiff made numerous demands on defendants for the return of his money and tendered to them a deed to the Fourth Street property. The demands were ignored. In December 1951 plaintiff brought this action for money had and received.

The trial court found: the purported disbursements and deductions shown in the accounting for the purchase of the Fourth Street property in the sum of $5,222, the commission of $2,000 for the sale of the Byram Street property to the state, the expenditure of $71.17 for repairs on the Fourth Street property, and the payment of half the expense in moving plaintiff's furniture in the sum of $130.55--total charges of $7,423.72--were made without plaintiff's consent, with a fraudulent intent on the part of defendants to deceive and defraud plaintiff and to deprive him of his money; plaintiff made numerous demands on defendants for the return of his money, but they refused and failed to do so; he tendered to them a deed of the Fourth Street property; the receipt given by plaintiff to defendants did not release them from the claim sued upon. The court decreed: 1) plaintiff deed back to defendants the Fourth Street property; 2) plaintiff account for the receipts of rent during such time as he had the same, less certain expenditures, and that defendants be credited with the difference of $337.38; 3) plaintiff have judgment for the sum of $7,423.72 less the credit of $337.38, or $7,086.34, with interest, which judgment should constitute a first lien on the Fourth Street property. Defendants appeal from the judgment.

Defendants' specifications of errors are: 1. The evidence is insufficient to support the finding that plaintiff did not execute a receipt in full settlement. 2. The evidence is insufficient to support the finding that plaintiff by his conduct did not accept or ratify the transfer of the Fourth Street property and the settlement. 3. There is no evidence to support the finding that defendants concealed from plaintiff the fact that the state intended to condemn his property for a highway. 4. There is no evidence to support the finding plaintiff demanded that defendants reconvey the Byram Street property to him. 5. The court abused its discretion in denying defendants' motion to reopen the...