Fisher v. Nash Bldg. Co.

• Citation: 113 Cal.App.2d 397,248 P.2d 466
• Court: California Court of Appeals
• Decision Date: 30 September 1952
• Parties: FISHER v. NASH BLDG. CO., Inc. et al. Civ. 18506.

Page 466

248 P.2d 466

113 Cal.App.2d 397

FISHER v. NASH BLDG. CO., Inc. et al.

Civ. 18506.

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

Sept. 30, 1952.

Hearing Denied Nov. 25, 1952.

H. J. Kleefisch, San Francisco, for appellant.

A. V. Muller, San Luis Obispo, for respondents.

VALLEE, Justice.

Appeal by defendant Tesseyman from a judgment for plaintiffs in an action in which plaintiffs, as sellers, sought to recover from defendant Nash Building Co., Inc., a corporation, as buyer, the balance unpaid on the purchase price of plaintiffs' motel and its furnishings and fixtures. The only part of the judgment which affects Tesseyman is that which provides that his interest in the property is subordinate and subject to the prior lien claim and rights of plaintiffs. In addition to adjudging that plaintiffs recover from the buyer, the court ordered that all deeds and bills of sale, covering the real and personal property deposited in excrow, be retained by the escrow holder until 'further order of the court.' This provision was inserted because, as hereafter appears, the question of title as between Tesseyman and the Nash Building Co., Inc., was involved in the companion case of Tesseyman v. Fisher, Cal.App., 248 P.2d 471. The two judgments are entirely consistent with each other and for practical purposes should be read together as if they had been rendered in a single action.

Prior to March 23, 1949, plaintiffs and a Mr. and Mrs. Cleo S. Clinton were the owners of a motel. On that day they sold, and Nash Building Co., Inc., (called Nash Company) bought the hotel, its furnishings and fixtures, and an on-sale liquor license, for $155,000. The terms of the sale are evidenced by escrow instructions dated March 23, 1949, and signed by the buyer as follows: 'Nash Building Co., Inc., a corp. By George H. Jovick, Pres. Approved Charles Tesseyman.' The sum of $61,840.94 cash and a promissory note for $14,103.19 secured by a chattel mortgage, were deposited in the escrow. The balance of $79,055.87 was to be paid by the buyer on or before close of escrow and was to be disbursed to the sellers when the escrow holder obtained a deed to the real property showing title in the buyer and a bill of sale to it covering the furnishings and fixtures. Out of the money deposited, $7,500 was to be paid for the transfer of the liquor license which was to be in the name of Tesseyman, and $25,000 was to be paid to the Fishers and Clintons upon the signing of the escrow instructions.

On April 11, 1949, the escrow instructions were amended to provide that instead of paying $79,055.87 cash, called for under the instructions of March 23rd, the buyer would, on or before August 15th, deposit $33,023.86 cash and assume a note and trust deed on the motel in the amount of $46,032.01. These amended instructions were signed by the buyer: 'Nash Building Co., Inc. By George H. Jovick, Pres. Approved: Charles Tesseyman.'

The terms of the escrow were fully performed by the sellers. They executed a deed and a bill of sale to the property in the name of the buyer, the liquor license was transferred to Tesseyman, and possession of the motel was delivered. The buyer, however, failed to pay the balance of $33,023.86 remaining on the purchase price, and prorations of taxes and fire insurance. The escrow has not been closed. Mr. and Mrs. Clinton quitclaimed to plaintiffs all their right, title and interest in the sale and the benefits under the escrow. On March 31, 1950, plaintiffs made written demand upon the buyer and Tesseyman to complete the performance of the terms of the sale, which they failed to do.

Thereafter, plaintiffs brought this action against Nash Company and others, including Tesseyman and Jovick, (1) to recover the balance due on the purchase price, prorations of taxes and fire insurance, interest, and costs, (2) to establish a lien on the property as security therefor, and (3) to have whatever interest defendants Tesseyman and Jovick claimed in the property decreed subordinate and subject to plaintiffs' prior lien. Jovick and Tesseyman were joined as parties defendant only for the purpose of having whatever interest they claimed in the property decreed subordinate to the interest of plaintiffs. The Nash Company and Jovick defaulted. Tesseyman answered. Among other things, his answer denied that his interest in the property was subordinate to plaintiffs' rights; admitted the escrow instructions and amendments thereto were known to him and were approved in writing by him. As a part of his answer, Tesseyman adopted 'insofar as the allegations in the complaint * * * are applicable to the defense of this answering defendant [Tesseyman],' the allegations of the complaint in action 17745, filed in the Superior Court of San Luis Obispo County prior to the instant action, wherein he, as plaintiff, sued the Nash Company, Jovick, the Fishers, the Clintons, and others. ¹

The complaint in 17745 is predicated on an alleged oral agreement between Tesseyman and Jovick with the Nash Company, the 'intermediate title holder' or 'dummy', to trade a hotel, then owned by Tesseyman, for the motel involved here, then owned by the Fishers and Lintons, together with an on-sale liquor license. Epitomized, the complaint in 17745 alleges that: pursuant to this oral agreement, Tesseyman executed a deed and bill of sale covering the hotel and its furnishings to the Nash Company, which were placed in escrow, as were deeds and bills of sale relating to the motel from the Fishers and Clintons to Nash Company and from it to Tesseyman, for delivery to Tesseyman; relying upon representations made by Jovick that it was necessary in order to consummate the trade, Tesseyman authorized the escrow holder to record the deed and bill of sale relating to the hotel; thereupon, the Nash Company, through its officers, Jovick and Jacobsen, sold the hotel and furnishings; the proceeds derived therefrom, including a promissory note in the sum of $14,103.19, secured by a chattel mortgage on the hotel furnishings, were retained by defendants, including the Fishers and Clintons; the onsale liquor license was transferred to Tesseyman, and with the knowledge and consent of the Fishers and Clintons, Tesseyman entered into possession of the motel property and, since March 25th, has been in actual possession; Tesseyman has paid certain sums to the holder of the trust deed and chattel mortgage on the motel on account of interest and principal; defendants claim an interest in the property which constitutes a cloud on Tesseyman's title; Tesseyman is entitled to receive title to the motel, but defendants refuse to deliver the conveyances until he has paid 'a sum of money which he did not agree to pay and in no way is obligated to pay,' as a 'condition prerequisite' to the delivery of such conveyances; Tesseyman has been damaged by defendants' failure to deliver the conveyances.

Tesseyman moved to stay proceedings in the present action and to consolidate it with action 17745. The motions were denied.

After plaintiffs introduced their evidence and rested, and Tesseyman was testifying, objections to the testimony were made and sustained. Tesseyman then made several offers to prove (1) the source of the funds in escrow; (2) that he has paid the full consideration he had offered to pay for the property; (3) that Jovick was the agent of Fisher; (4) that he was induced to sign the escrow instructions upon Jovick's representation that the transaction was a trade; (5) that the sums of money in escrow were paid by him; (6) that Fisher and Jovick delivered possession of the motel to him; (7) that 'practically two-thirds of the consideration was paid' by him.

The offers were rejected as 'not being proper at this time' in view of the fact that it had been determined to keep the two actions separate, and the facts included in the offer were germane to action 17745, his rights would be protected in that action, and, as appears by the court's remarks in the margin, ² he would be given an opportunity to present the offered evidence at that time. Tesseyman then rested.

Judgment was rendered for plaintiffs. The judgment provides: (1) plaintiffs recover from Nash Company the...