Fitch v. La Tourrette, 4197

• Decision Date: 25 November 1959
• Docket Number: No. 4197,4197
• Citation: 346 P.2d 704,75 Nev. 484
• Parties: LeRoy FITCH and Irene Fitch, his wife, Appellants, v. Gene LA TOURRETTE, Thomas McKeown, Washoe Title Insurance Company, a Nevada Corporation, First National Bank of Nevada, a National Banking Corporation, Samuel F. Beardsley and Florence W. Beardsley, his wife, and William H. Schaefer and Grace M. Schaefer, his wife, Respondents.
• Court: Nevada Supreme Court

Page 704

346 P.2d 704

75 Nev. 484

LeRoy FITCH and Irene Fitch, his wife, Appellants, v. Gene LA TOURRETTE, Thomas McKeown, Washoe Title Insurance Company, a Nevada Corporation, First National Bank of Nevada, a National Banking Corporation, Samuel F. Beardsley and Florence W. Beardsley, his wife, and William H. Schaefer and Grace M. Schaefer, his wife, Respondents.

No. 4197.

Supreme Court of Nevada.

Nov. 25, 1959.

Ernest S. Brown, Reno, for appellants.

Emile J. Gezelin, Sidney W. Robinson, Reno, for respondents.

BADT, Justice.

The parties to the appeal will be referred to by abbreviated names.

Fitch owned six lots in Reno. He sold them through his real estate agents and brokers, LaTourrette and McKeown, to LaRoque for $13,500 under a written agreement that such sum was payable on or before eighteen months. Deed was executed and recorded. Nothing was paid down, but LaRoque executed and recorded a deed of trust to secure the entire purchase price. The contract of sale contained, among others, the following provisions:

'1. Buyers contemplate the construction of a dwelling house upon each of the said lots, the cost thereof to be financed by loans from Union Federal Savings and Loan Association at Reno, Nevada, or some other lending agency and to give as security for the payment of each such loan a deed of trust upon the particular lot upon which such improvements are placed and which said deed of trust shall be superior to the deed of trust of the Sellers to the extent of monies advanced for such construction costs.

'2. Upon the sale of each of the said dwelling house units the Sellers shall be entitled to receive the sum of two thousand two hundred fifty dollars ($2,250.00) and upon such payment shall release the lot so sold from the lien of the trust deed securing payment of the sums due them hereunder.

'4. Sellers agree to pay a real estate commission of one thousand, three hundred fifty dollars ($1,350.00) to LaTourrette & McKeown in connection with this transaction.'

The brokers mentioned in paragraph 4 above quoted were not parties to the contract of sale and there was, at the time, no independent written or oral contract as to when the brokers' commissions were payable.

Three lots were sold, each as a separate transaction, and in each case a construction loan was financed through the First National Bank. In each case the bank's commitment was dependent upon its receiving a deed of trust as a first lien on the property. In each case escrow papers were put through the title company. In each case Fitch executed an authorization to the title company to execute a reconveyance of the particular lot involved. In each instance of these three sales Fitch had to wait, not only for the whole construction period, but until the expiration of the period for filing labor and material liens against the property, to the end that he was paid his purchase price of the lot (less the commission, which went directly to LaTourrette and McKeown) out of the final moneys that were made available by the bank. On each occasion no advance to any extent whatsoever was made by the bank until the recording of the partial reconveyance by the trustee under Fitch's written instructions and the execution of a title certificate by the title company to the effect that the bank's deed of trust was a first lien.

On the occasion of Fitch's execution of the first authorization for the title company to reconvey he was told by McKeown that he was fully protected by his deed of trust, but that he ought to be advised by his own attorney. He phoned an attorney, telling him that he wanted his advice to like extent as if he were protecting his own property. The attorney told him that he could safely sign the papers. Fitch kept reiterating that McKeown assured him that he, Fitch, was protected by his deed of trust. On this first sale McKeown admitted that he so advised Fitch, but explained at the trial that this was because he felt that Fitch was amply protected by the lien of his deed of trust on the remaining five lots. McKeown insisted however that he had not made such statements on the occasion of any of the later sales.

As noted, there were ample funds to pay Fitch on the first three sales and construction contracts and likewise to pay out of such money the commissions to the brokers.

The situation arising out of the last two sales--the sales to Beardsley and to Schaefer, gave rise to the present litigation. Fitch and his wife signed the authorizations for reconveyance. These papers authorized the title company to record the reconveyance at once. Fitch testifies that his understanding was that the papers would not be recorded until his sale price of $2,250 was either on deposit with the title company for him or the payment definitely assured. McKeown denies this. He testified that he told Fitch that these last sales would go through the regular normal procedures, the same as the former sales. Fitch testified that it was agreeable to him that payment to him would be delayed until the expiration of time for filing liens, but that it was not agreeable to him to waive his first lien without assurance of payment. So far, then, as this appeal attacks the judgment absolving LaTourrette and McKeown of fraud, it is apparent that the trial court accepted the testimony of McKeown, supported, as it was, by the circumstances attending the first three sales. With such finding this court will not interfere.

When it appeared that LaRoque became insolvent and that the...