Greene v. Wilson

• Decision Date: 24 October 1962
• Citation: 25 Cal.Rptr. 630,208 Cal.App.2d 852
• Court: California Court of Appeals Court of Appeals
• Parties: George M. GREENE, Plaintiff and Appellant, v. Doris WILSON, Defendant and Respondent. Civ. 25880.

Page 630

25 Cal.Rptr. 630

208 Cal.App.2d 852

George M. GREENE, Plaintiff and Appellant, v. Doris WILSON, Defendant and Respondent.

Civ. 25880.

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

Oct. 24, 1962.

As Corrected Oct. 29, 1962.

Rehearing Denied Nov. 9, 1962.

Hearing Denied Dec. 19, 1962.

Spiegel, Lincoff & Wolfson and Gerald G. Wolfson, Santa Monica, for appellant.

Beardsley, Hufstedler & Kemble, Los Angeles, for respondent.

FORD, Justice.

On June 19, 1959, the plaintiff, George M. Greene, obtained a judgment in the amount of $16,635.65 against Gordon Wilson in an action on a promissory note dated February 14, 1947. Mr. Wilson and Doris Wilson were husband and wife from December 31, 1933, until the entry of a final judgment of divorce on December 11, 1956. Mr. Greene was not able to satisfy his judgment by recourse to assets of Gordon Wilson, there having been a return nulla bona with respect to the writ of execution. He brought the present action against Doris Wilson for the purpose of subjecting to his judgment real property and business assets received by Mrs. Wilson by virtue of the final judgment of divorce. ¹ This appeal is from a judgment in favor of Mrs. Wilson.

It was determined in the interlocutory judgment in the divorce action that the community property of the Wilsons consisted of a residence and the furnishings therein, their personal effects, insurance on the life of Mr. Wilson and on the life of Mrs. Wilson, and two businesses theretofore known respectively as Tri-Color Laboratories and Tri-Color Multiprint. Reference will hereinafter be made to the businesses under the designation of Tri-Color Laboratories. The matter of the disposition of the community property was deferred until the time of the final judgment. In the final judgment of divorce the community property, other than Mr. Wilson's personal effects and the insurance on Mrs. Wilson's life, was awarded to Mrs. Wilson, except that a Mercury automobile which was a business asset was awarded to Mr. Wilson and he was ordered to pay the unpaid portion of the purchase price thereof. However, Mr. Wilson was given a lien in the sum of $25,000 on the assets of the businesses which lien was to be discharged by Mrs. Wilson by means of monthly payments in specified amounts. It was further ordered that Mrs. Wilson assume and pay all community obligations owed to Ona Kimball and hold Mr. Wilson harmless therefrom. A similar burden was placed on Mr. Wilson with respect to community obligations owed to Anna E. Wilson and Doris Seligman. Each was ordered to assume and pay one-half of certain income tax obligations.

In the present action the trial court found in part as follows: 1. At the time of the rendition of the final judgment of divorce the equity in the residence was of a value of approximately $17,000, but the business known as Tri-Color Laboratories was insolvent, its condition being that 'the debts exceeded the fair market value of the assets thereof, and said business was unable to meet its obligations as they became payable' and it 'had no fair market value.' 2. The lien in the amount of $25,000 in favor of Gordon Wilson has been satisfied and discharged, and the other obligations assumed and paid by Doris Wilson, pursuant to the final judgment of divorce and in satisfaction of certain tax liens on the business in excess of $21,500, exceeded the value of the assets awarded to her. 3. On numerous occasions during the pendency of the divorce action and during the pendency of the action against Mr. Wilson on the promissory note, the plaintiff Greene stated and represented to the defendant Doris Wilson and to her attorneys and to persons who later lent money to her that he intended to, and would, collect his claims only against Gordon Wilson, and that he would never assert any claim against Doris Wilson or any property she might acquire in the divorce action. 4. The plaintiff Greene knew that Doris Wilson, her attorneys and the persons who later lent money to her would rely on those statements and representations. 5. In reliance thereon, she and her attorneys made no attempt to protect her from that liability in the final judgment of divorce, and persons to whom the statements and representations were made 'advanced money to and guaranteed loans to Doris Wilson in excess of $60,000.00.' 6. In reliance on such statements and representations of the plaintiff Greene, Doris Wilson 'purchased thousands of dollars of new equipment for Tri-Color Laboratories and made representations of her own financial condition to equipment sellers and trade creditors,' on which representations such creditors relied. 7. In reliance on the plaintiff's statements and representations, Doris Wilson represented to the subsequent purchasers of the business that Mr. Greene had no claims against the business and the purchasers relied on such representations. ²

One of the conclusions of law drawn by the trial court was that the plaintiff Greene was 'barred and prevented by the doctrine of promissory estoppel from enforcing the claim sued upon' against the defendant Doris Wilson.

As stated in Mayberry v. Whittier, 144 Cal. 322, at page 325, 78 P. 16, at page 17: 'It is clearly the general rule that, upon a division of community property under a divorce decree, the former husband and wife each take the part awarded subject to prior liens; and it has been held that the part awarded either wife or husband is subject to community debts not reduced to liens.' (See also Vest v. Superior Court, 140 Cal.App.2d 91, 95, 294 P.2d 988.) Consequently, the plaintiff Greene was entitled to pursue the property awarded to Doris Wilson in the divorce suit for the purpose of subjecting it to the satisfaction of his judgment, unless there was conduct on his part of such a nature as to prevent his successful recourse to that remedy. (Bank of America etc. Ass'n v. Mantz, 4 Cal.2d 322, 326-327, 49 P.2d 279.)

The doctrine of promissory estoppel is recognized in this state. (Drennan v. Star Paving Company, 51 Cal.2d 409, 413, 333 P.2d 757.) In section 90 of the Restatement of Contracts the doctrine is expressed as follows: 'A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.' (See also Morrison v. Home Savings & Loan Ass'n, 175 Cal.App.2d 765, 768, 346 P.2d 917; Van Hook v. Southern California Waiters Alliance, 158 Cal.App.2d 556, 570, 323 P.2d 212; Henry v. Weinman, 157 Cal.App.2d 360, 366, 321 P.2d 117; Graddon v. Knight, 138 Cal.App.2d 577, 582-583, 292 P.2d 632; Wade v. Markwell & Co., 118 Cal.App.2d 410, 420, 258 P.2d 497, 37 A.L.R.2d 1363; Hunter v. Sparling, 87 Cal.App.2d 711, 725, 197 P.2d 807; 31 C.J.S. Estoppel § 80.) ³ In Drennan v. Star Paving Co., supra, 51 Cal.2d 409, at page 414, 333 P.2d 757, at page 760, it is said: 'The very purpose of section 90 is to make a promise binding even though there was no consideration 'in the sense of something that is bargained for and given in exchange.' (See 1 Corbin, Contracts 634 et seq.)' Whether, in a particular case, such an estoppel exists is a question of fact, unless but one inference can be drawn from the evidence. (Henry v. Weinman, supra, 157 Cal.App.2d 360, 366, 321 P.2d 117.)

There is substantial evidence in the record in this case in support of the defense of promissory estoppel. Mrs. Wilson testified with respect to several conversations she had had with Mr. Greene. After she heard that he had sued Mr. Wilson, she made a trip to Scottsdale, Arizona, about Easter in 1956 and spent several days with Mr. Greene and his mother in their home. She had known Mr. Greene since he was eleven years old and at one time he had lived with Mr. and Mrs. Wilson. In Scottsdale she told Mr. Greene the circumstances of her divorce litigation and that she was seeking all of the community property. She further testified as follows: 'I told him * * * that I wanted to know from him what he was suing on, if he was suing me, if he was including Tri-Color in his suit, and he said, 'No,' he was just suing Gordon Wilson and that he was not going to sue me, he had turned the notes over to some attorneys * * * on a contingency basis. * * *' She also testified that Mr. Greene 'repeated that he was not going to ever sue me for this money or include me in the suit or ever ask me for the money, or Tri-Color.' The reason he gave was that 'he felt Gordon Wilson owed it to him'; he mentioned that Mr. Wilson had induced him and his mother to loan him money and then had found various ways of avoiding repayment.

Prior to December 10, 1956, when Mr. Greene was in Los Angeles for the trial of his action against Mr. Wilson, Mrs. Wilson saw Mr. Greene on several occasions. She testified to a discussion which occurred at the home of an attorney, Mr. Henzie, who was representing her in the divorce suit. In Mr. Henzie's presence, Mr. Greene said that he was looking to Gordon Wilson alone for the money. Mr. Henzie said that he was asking him directly about the matter because it was a subject he would want to consider in the divorce proceedings if Doris Wilson was involved in the matter of the payment of the debt. At a later time, Mr. Greene telephoned her and said that he and his wife would not come to her home because they were returning to Scottsdale since his lawsuit with Mr. Wilson had been settled by an agreement for the payment of a sum of money in monthly instalments.

Pursuant to the final judgment of divorce Mrs. Wilson took over the operation of the business of Tri-Color Laboratories on December 11, 1956. In her opinion, at that time the assets had a value of approximately $54,000, but the business appeared to have 'no value, because of the net deficit, the net worth deficit of $27,000,' exclusive of...