Mackay v. Whitaker
| Decision Date | 05 March 1953 |
| Citation | 253 P.2d 1021,116 Cal.App.2d 504 |
| Court | California Court of Appeals Court of Appeals |
| Parties | MACKAY et ux. v. WHITAKER et al. Civ. 15255. |
Robert H. Kroninger, Oakland, for appellants.
Royal E. Handlos, San Francisco, Lewis P. May, Oakland, for respondents.
This is an appeal by all of the defendants (although it is conceded that only the Emslies are beneficially interested) from a judgment, in a declaratory relief and quiet title action, quieting the title of the Mackays, enjoining interim conveyances of the property, compelling the execution of certain conveyances upon certain conditions, and decreeing that upon the performance of those conditions the Emslies shall deliver possession of the property to the Mackays. On this appeal the Emslies urge (1) that the judgment is one for specific performance, and, as such, is erroneous because of the failure of plaintiffs to plead or to prove or the trial court to find that the consideration agreed to be paid for the property was fair and adequate, and (2) that the trial court improperly prohibited the Emslies from showing that the consideration was inadequate. Both contentions are sound, and, for that reason, a reversal must be ordered.
This case was before us on a prior occasion when this court denied a motion to dismiss the appeal. Mackay v. Whitaker, 112 Cal.App.2d 112, 245 P.2d 521. At that time the general background of the proceeding was set forth as follows, 112 Cal.App.2d at page 114, 245 P.2d at page 522:
note a new installment note should be executed. The agreement then provided that in the event the Emslies defaulted in payments on the first deed of trust loan, or on their payments to the Mackays, the Mackays had the option, on the 61st day after such default, to purchase the property for the balance then owed to them, upon their assumption of the obligations of the first deed of trust.
The complaint is entitled 'Complaint for Declaratory Relief, to Quiet Title; and for Money,' and purports to state four causes of action. The first alleges execution of the note by the Emslies, nonpayment, demand and election by the Mackays to declare the whole principal sum and interest due. The making of the contract is also alleged, the failure of the Whitakers to execute a third deed of trust or to convey the fee upon the Mackays exercising their option to purchase. It is then alleged that a controversy exists. The second cause of action realleges the above and, in addition, sets forth the Mackays' equitable ownership of the property, the adverse claims of the defendants, and the Mackays' right to a conveyance. The third cause of action is for attorney's fees, while the fourth is for money damages for breach of contract and refusal to convey.
The prayer of the complaint requests (1) a determination of the interests of the parties in the property; (2) that the court order the execution and delivery of the conveyances and documents needed to give effect to the agreement; (3) that the Mackays' title be quieted against the claims of all defendants; (4) that the court order the Emslies to surrender possession of the property; (5) that interim conveyances or further advances by Philips be enjoined; (6) that the Mackays be awarded $20,000 damages or (7) in the alternative, if the above relief be not granted, that they be awarded the amount of the note with interest; (8) that they be awarded attorney's fees, and (9) costs; and (10) a prayer for further relief.
The Philips and Whitakers answered with general denials, as did the Emslies, who, in addition, pleaded that the parties were partners; that the note was executed to protect the present and future investments of the Mackays in the partnership; that when the note was executed the Emslies were advised that the correct amount involved was $8,000 and that later an accounting would be had to correct the note and agreement, and that an accounting had been refused. By way of cross-complaint and defense the Emslies also pleaded an oral agreement, made upon the creation of the partnership, to the effect that no payments should be made on the note until the partnership was dissolved.
On these pleadings the cause proceeded to trial. The Mackays testified to the arrangements between the parties but denied the existence of any partnership; Mackay then testified that he had made advances to the Emslies of $9,265.37 at the time the agreement was drawn and at that time turned over his interest in certain dogs to the Emslies, bringing the figure to $10,000. Mackay was unable to produce an actual contemporaneous record of the advances but did produce a statement, which was admitted, purporting to list them. During Mackay's cross-examination some uncertainties were developed in this statement.
The Emslies testified that the agreement between the parties was executed in some haste because a creditor of the Emslies was threatening foreclosure and Mackay refused to pay off this creditor unless an agreement was signed. The Mackays denied any coercion. The then attorney for the Mackays who drafted the agreement testified that in the first discussions between the parties he had used 'round' figures, but that before the discussions ended the $10,000 figure was agreed to by all the parties. The Mackays corroborated this. Mr. Emslie testified that about a month before the agreement was executed the Mackays had sent him a list of the items claimed to be due, and he had requested time to check the list; that he had complained about many items on the list; that the $10,000 figure was agreed upon subject to an agreement that it was to be corrected upon an accounting after going over the checks. The Emslies claimed that the maximum amount owed to the Mackays was $8,000, and at one place in the record claimed that they owed but $6,200. But when the Emslies sought to testify about the correctness of the various items presented by the Mackays they were met with a series of objections that to controvert the $10,000 figure would be to vary the terms of the contract. These objections were sustained.
The trial court found all of the major allegations of the complaint to be true, except as to the allegation of damage, the court finding that damages had been waived in open court. The court also found 'that the...
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