Kline v. Robinson
| Decision Date | 25 May 1967 |
| Docket Number | No. 5146,5146 |
| Citation | 428 P.2d 190,83 Nev. 244 |
| Parties | Lewis Edward KLINE and Ella L. Kline, Appellants, v. W. Scott ROBINSON and Marjorie L. Robinson, Respondents. |
| Court | Nevada Supreme Court |
Jones, Wiener & Jones, Las Vegas, for appellants.
Jones & Holt, Galane & Wines, Las Vegas, for respondents.
This appeal is from an order of the trial court directing a verdict for respondents Robinson (plaintiffs below) under NRCP 50(a) and dismissing appellant's Kline (defendants and counterclaimants below) counterclaims under NRCP 41(b) and (c). We feel the orders to be in error, reverse and remand for further proceedings.
This is an action on a $22,600 promissory note. Respondents recovered a judgment against appellants for $17,866.84 and for 'foreclosure' of a second deed of trust. 1 Appellants admitted the amount due under the note but affirmatively defended on the ground the entire sum was unpaid usurious interest. Appellants' counterclaims sought cancellation of deeds of trust and a chattel mortgage as security for a promissory note representing the unpaid balance of usurious interest, and recovery of $111,514.51 as usurious interest previously paid respondents, because they contend the transaction was a loan and not a sale.
In considering respondents' motion for a directed verdict under NRCP 50(a), the rule of Bliss v. DePrang, 81 Nev. 599, 407 P.2d 726 (1965), controls. The trial court must view the evidence and all inferences most favorable to the party against whom made, and may not test the credibility of the witnesses nor weigh the evidence. If there is no question of fact remaining to be decided, the order directing the verdict is proper. We must apply the same test as the trial court.
Likewise, in considering the motions to dismiss Klines' counterclaims under NRCP 41(b) and (c), the rule of Schmidt v. Merriweather, 82 Nev. ---, 418 P.2d 991 (1966), controls. The same test of the evidence and inferences must be applied by the trial court and this court as in the case of a directed verdict.
Our review of the record summarizes evidence and inferences favorable to the Klines. In 1963 they bought real property for $135,000 in Las Vegas for purposes of investment and improvement, intending to build a shopping center. They paid down $40,000, assumed a pre-existing deed of trust in the amount of $42,000, and gave a new deed of trust for $53,000. Klines approached Robinsons for a construction loan of $235,000. Robinsons agreed to a loan of only $165,000 when the $42,000 pre-existing deed of trust holder would not subordinate to the construction loan. Robinsons required the loan to be in the form of a sale of the property by Klines with the option to repurchase upon completion of construction, but in no event was the repurchase to occur before six months had elapsed. This was to allow Robinsons the long-term capital tax advantage under the federal tax law. Robinsons assumed the $53,000 purchase money deed of trust, but paid Klines no other money for the conveyance of the property. Klines additionally agreed to make the payments due under the $42,000 pre-existing trust deed, which they did to the extent of $2,925.81. Robinsons later paid the balance due of $39,074.19 on this secured debt without request of Klines or obligation under the contract.
To lend additional credence to their theory of sale, Robinsons required Klines to enter a five-year lease for the identical premises with monthly rental reserved. Terms of the lease required Robinsons, as lessors, to construct a shopping center at a cost not to exceed $165,000, Klines had the option to purchase the premises within three and not later than five years for $247,250. No rentals were ever demanded or paid under this lease. It was substantially, if not totally, disregarded by the parties.
Upon commencement of construction of the shopping center, Robinsons, as owners, caused to be prepared and recorded a 'Notice of Non-responsibility' to disclaim responsibility to suppliers of labor and materials under NRS 108.040. 2
During construction of the shopping center the initially agreed advance of $165,000 by Robinsons proved inadequate, and subsequently they advanced an additional $25,000 and ultimately a total of $227,710 to complete the program. The advances beyond $190,000 were not the subject of further written contracts between the Robinsons and Klines.
Robinsons' total advancements to this project were $315,765.75. This consisted of $227,710 in construction costs and $88,055.75 in satisfying the two purchase money deeds of trust.
When the shopping center was completed, Klines applied to and were granted by First Western Savings & Loan Company of Las Vegas a loan of $450,000. They received net from the loan $431,773, from which expenses of the escrow were deducted, leaving a balance of $422,547 available to them. Robinsons demanded $445,147.11 to resell the shopping center to Klines, which included a penalty of $200 per day or $2,000 for a ten-day closing delay following January 20, 1964. The Klines were short $22,600 in meeting the price demanded by Robinsons from the money received from First Western, and they gave Robinsons their note in that amount. Payments made on the note reduced the obligation to $17,866.84, the money judgment directed by the trial court in favor of Robinsons and from which this appeal is taken.
The transaction resulted in a profit to Robinsons of $129,381.35 (difference between $445,147.11 and the sum of $227,710 and $88,055.75) for the period from July 16, 1963 to January 27, 1964, an elapsed time slightly in excess of six months. Robinsons apparently qualified under the long-term capital gain law in reselling the property to Klines after holding it in excess of six months (actually six months and eleven days).
Two areas of testimony by respondent W. Scott Robinson are particularly pertinent to the issue here. Testimony by him relating to the time within which he resold the shopping center to Klines is as follows:
3
Testimony by him whether the transaction was one of loan or sale reveals as follows:
The trial judge in concluding there was no disputed factual issues to be presented to the jury, ruled that the evidence clearly and convincingly disclosed a sale with right of repurchase, and not a loan. Hence there was no question of usury. In light of the evidence reviewed above, he was not entitled to withdraw from the jury's consideration the nature of the transaction, as either a loan or sale. The distinction between a sale and a loan has been succinctly defined in Milana v. Credit Discount Co., 27 Cal.2d 355, 163 P.2d...
To continue reading
Request your trial
-
Robinson v. Durston
...The doctrine is universal in its application, and underlies many special rules of equity. ***" This Court recently, in Kline v. Robinson, 83 Nev. 244, 428 P.2d 190 (1967) (incidentally the same Mr. Robinson here involved in a similar type transaction), stated in connection with the factual ......
-
Pease v. Taylor
...to the substance of the transaction and the intent of the parties in determining whether an agreement is usurious. Kline v. Robinson, 83 Nev. 244, 428 P.2d 190 (1967). In the absence of actual expense, the exaction of additional compensation for the use of money under the guise of a 'broker......
-
Kitchin v. Mori
...v. Cal-Neva Lodge, Inc., 71 Nev. 336, 291 P.2d 1054 (1955); Schmidt v. Merriweather, 82 Nev. 372, 418 P.2d 991 (1966); Kline v. Robinson, 83 Nev. ---, 428 P.2d 190 (1967). There is testimony in the record from Kitchin 1 that he wanted Mori to give him back part of his money. He testified he......
-
Bates v. Chronister
...one action rule. NRS 40.430.2 The only Nevada authority which the parties cite as providing a definition of "sale" is Kline v. Robinson, 83 Nev. 244, 428 P.2d 190 (1967), ovr'ld on other grounds, Pease v. Taylor, 88 Nev. 287, 496 P.2d 757 (1972). There, the court distinguished between a sal......