Martyn v. Leslie

Decision Date17 November 1955
Citation290 P.2d 58,137 Cal.App.2d 41
PartiesMarty MARTYN and Ted Kneeland, Plaintiffs and Appellants, v. Jacques LESLIE, Philip Wain, Joseph Shane, Richard Hungate, Defendants and Respondents. Marty MARTYN and Ted Kneeland, Plaintiffs and Appellants, v. Jacques LESLIE and Richard Hungato, Defendants and Respondents. Civ. 20786, 20787.
CourtCalifornia Court of Appeals Court of Appeals

Minter & Feder, Hollywood, Stanley M. Arndt, Los Angeles, for appellants.

Belcher, Kearney & Fargo, Los Angeles, for respondents.

NOURSE, Justice pro tem.

The above entitled actions were consolidated for trial. The action in which Leslie and Hungate are the only defendants will be hereinafter designated the second action. The lower court did not follow the rule laid down in Wolfson v. Beatty, 118 Cal.App.2d 392, at page 398, 257 P.2d 1017, but made findings of fact and conclusions of law and judgments in each action. The record here, therefore, consists of one reporter's transcript and two clerk's transcripts.

The plaintiffs appeal from the judgment in favor of the defendants in each action. What we will hereafter say will apply to both appeals unless the context indicates to the contrary.

The issues will be clarified by an analysis of the pleadings. In the following analysis the amounts set forth in brackets are taken from the allegations in the second action. In substance, the plaintiffs allege that plaintiffs were partners doing business under the fictitious name and style of 'Marted'; that defendants Leslie and Hungate were at all times mentioned in the complaint joint adventurers and partners in the transactions therein set forth and that the defendant Leslie acted for himself and as the duly authorized agent of the defendant Hungate; that the defendants loaned to the plaintiffs the sum of $36,000 [$28,000] and that contemporaneously with the making of the loan, the plaintiffs executed the written instruments labeled 'Assignment', a copy of which is annexed as Exhibit A to the complaint. That pursuant to the terms of Exhibit A, the plaintiffs executed to defendants their promissory note in the sum of $35,500 [$27,500] payable on or before six months after its date and bearing interest at 5 per cent per annum [6 per cent] and secured by chattel mortgage. A copy of the note is set forth and incorporated as Exhibit B. That by the terms of Exhibit A plaintiffs agreed to sell and assign to defendants 15 per cent of their right, title and interest in a series of television programs which were described in Exhibit A and known as 'Double Play', in consideration of the payment by defendants to plaintiffs of the sum of $500. That said Exhibit A further provided that plaintiffs were granted an option to reacquire said 15 per cent interest for the sum of $8,000 [$6,750], said option to be exercised in writing within thirty days after the expiration of six months from the time of sale. That as partial security, the defendants required that defendant United Television Programs, Inc., and its president, one King, execute a written guaranty for the payment of said promissory note, a copy of that guaranty being annexed to the complaint and incorporated as Exhibit C. That as part of the transaction and prior to making the loan, the defendants further required United and King to execute 'a guaranty agreement' guaranteeing that if the plaintiffs failed to exercise their option to repurchase said 15 per cent interest from the defendants, then United and King would, upon demand, purchase said interest for the sum of $8,000 [$6,750]. The copy of said alleged guaranty is made a part of the complaint as Exhibit D. That in truth and in fact the sale of said 15 per cent interest by the plaintiffs to the defendants, the option granted to plaintiffs to repurchase said 15 per cent, and the guaranty of United and King to purchase said interest in the event plaintiffs failed to do so, was a sham, subterfuge, trick and device on the part of defendants to exact a bonus of $7,500 [6,250] in addition to the interest reserved by the promissory note and for the loan of the $36,000 [$28,00] and to evade the Usury Act of the State of California and Article XX, § 22 of the Constitution of this State. That plaintiffs paid to the defendants the principal of said promissory note together with the interest reserved therein and within the option period paid to the defendants the sum of $8,000 [$6,750] and that of said sum of $8,000 [$6,750] the sum of $7,500 [6,250] was in truth and in fact a bonus paid to the defendants for the loan of $36,000 [$28,000] and over and above the interest reserved by the promissory note. That the return of interest charged by the defendants for said loan is not clearly or otherwise expressed in writing, nor was any return of interest clearly expressed in writing, other than the 5 per cent set forth in the promissory note. That the defendants and each of them have exacted, demanded and received in the aggregate $8,036.21 [$6,931.61] for the use of the amount of $36,000 [$28,000] actually loaned to the plaintiffs. That treble the amount so received, to wit, $24,108.63 [$20,794.83] is payable to plaintiffs from the defendants.

By a second cause of action which is in the form of a common count for money had and received, plaintiffs allege that the defendants are indebted to them in the amount of the interest and alleged bonus paid and that no part of said sum has been paid.

The defendants by their answer admit the execution of all the instruments referred to in the complaint. They deny that Leslie and Hungate were partners or joint venturers in the transactions described in the complaint or that Leslie acted as agent for Hungate in those transactions. They allege that Leslie at all times mentioned in the complaint was a joint venturer with the plaintiffs and that acting as such and as the agent for the plaintiffs, participated in the transactions involved. They deny that they had loaned to the plaintiffs the sum of $36,000 [$28,000] or any amount in excess of the sum of $35,500 [$27,500], and allege that concurrently with the making of said loan they had purchased from the plaintiffs for the sum of $500, a 15 per cent interest in the proposed television series described in the complaint and had granted the plaintiffs an option to repurchase said interest for the sum of $8,000 [$6,750]. They deny that they had required the execution of the guaranty agreements annexed to the complaint, but allege that said guaranty agreements were executed by United and King as an inducement to the defendants to make said loan and to purchase said 15 per cent interest. They deny that the option and guaranty agreements were a sham, subterfuge, trick or device to exact a bonus in any sum whatsoever. They admit the payment to them of the principal and interest provided for in the promissory note and admit the receipt from the plaintiffs of the further sum of $8,000 [$6,750], but allege that prior to the payment to them of said sum plaintiffs had voluntarily exercised their option to repurchase said 15 per cent interest and that upon the payment to them of said sum they retransferred and reassigned to plaintiffs said interest. They deny that said sum of $8,000 [$6,750] or any part thereof was paid or received as a bonus for any loan. They acknowledge receipt of the interest reserved under the terms of the promissory note, but deny that they exacted, demanded or received any bonus or additional interest and deny that there is any sum due to the plaintiffs. They deny the material allegations of the second alleged cause of action. In an affirmative defense defendants plead facts which they assert estopped plaintiffs from asserting that the monies paid to them were paid as a bonus or interest or were usurious. It is not necessary here to go into the details of these affirmative allegations. In the second action, defendant Leslie cross-complained against the plaintiffs.

From this analysis of the pleadings it appears that the issues of ultimate fact tendered by the pleadings were:

First, was assignment to the defendants with the option to the plaintiffs to repurchase and the agreement of United and King to purchase the 15 per cent interest, a subterfuge and sham to cover the real transaction between the parties?

Second, was there in fact a loan to the plaintiffs of the sum of $39,000 [$28,000]?

Third, were the amounts paid by the plaintiffs in the exercise of the alleged option in fact the payment of a bonus for the loan rather than the payment of a purchase price?

Fourth, were the plaintiffs estopped?

Upon all of these issues of fact, the trial court made findings against the plaintiffs and in favor of the defendants. The appellants make four assignments of error on this appeal: (1) that the court erred in not holding that usury was involved; (2) that the court erred in its ruling as to the admission of evidence; (3) in giving judgment to the defendant Leslie on his cross-complaint; and (4) that certain findings are contrary to the evidence.

Appellants' First and fourth assignments of error in reality constitute a claim on their part that the findings are contrary to and not supported by the evidence. We have come to the conclusion that the findings, with certain exceptions hereafter noted, are supported by substantial evidence.

The following facts were established either without contradiction or by substantial evidence:

The defendant Leslie was at all times material to the controversy here the attorney for the plaintiffs and acted as such in the drafting of all of the pertinent instruments and in the negotiations between the plaintiffs and the other defendants involved in the first action and between the plaintiffs and himself and the defendant Hungate involved in the second action. He was also, at all times, the owner of an interest in the business conducted by the plaintiffs and to...

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    • United States
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    • 16 Septiembre 2021
    ...in the loan agreement, the lender is not "subject to the laws of any state of the United States." But see Martyn v. Leslie , 137 Cal. App. 2d 41, 57, 290 P.2d 58 (Ct. App. 1955) ("[N]o borrower is estopped from asserting usury merely because he has knowingly met the usurious exactions of th......
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    ...& Trust Co., 128 Ark. 640, 194 S.W. 29 (1917); Klett v. Security Acceptance Co., 38 Cal.2d 770, 242 P.2d 873 (1952); Martyn v. Leslie, 137 Cal.App.2d 41, 290 P.2d 58 (1955); Harrison v. Arrendale, 113 Ga.App. 118, 147 S.E.2d 356 (1966); Griffin v. New Jersey Oil Co., 11 N.J. Eq. 49 (1855); ......
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    • 30 Septiembre 1977
    ...(Dukes v. Kellogg, 127 Cal. 563, 564, 60 P. 44; Lewis v. Firestone, 170 Cal.App.2d 129, 139, 338 P.2d 953; Martyn v. Leslie, 137 Cal.App.2d 41, 61-62, 290 P.2d 58; Cunningham v. DeMordaigle, 82 Cal.App.2d 620, 621-622, 186 P.2d 423.) Here, of course, the first amended complaint indicates th......
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    • 25 Abril 1967
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