McDonald v. Jones

• Decision Date: 14 December 1954
• Citation: 277 P.2d 477,129 Cal.App.2d 519
• Court: California Court of Appeals Court of Appeals
• Parties: John Winston McDONALD and Gladys Williams, Plaintiffs, Cross Defendants, Appellants, v. Bueford JONES, Floreda Jones, Robert B. Newman, Gertrude B. Newman, Mutual Mortgage Company, a Corporation, John 1, John 2, Jane 1, Jane 2, A and B, a coparnership, and Black Co., a Corporation, Defendants, Bueford Jones, Floreda Jones, and Robert B. Newman, Cross Complainants, Respondents. Civ. 20066.

Page 477

277 P.2d 477

129 Cal.App.2d 519

John Winston McDONALD and Gladys Williams, Plaintiffs, Cross Defendants, Appellants, v. Bueford JONES, Floreda Jones, Robert B. Newman, Gertrude B. Newman, Mutual Mortgage Company, a Corporation, John 1, John 2, Jane 1, Jane 2, A and B, a coparnership, and Black Co., a Corporation, Defendants Bueford Jones, Floreda Jones, and Robert B. Newman, Cross Complainants, Respondents.

Civ. 20066.

District Court of Appeal, Second District, Division 2, California.

Dec. 14, 1954.

Rehearing Denied Jan. 3, 1955.

Hearing Denied Feb. 10, 1955.

A. V. Falcone, Los Angeles, for appellants.

Thomas G. Neusom, Los Angeles, for respondents.

MOORE, Presiding Justice.

Plaintiffs appeal from the judgment which determines that they have no title to or interest in lot 67 of Granada Tract. The court found that on December 21, 1951, respondents Jones became the owners of such lot; that appellants have no title or right thereto and concluded that Bueford and Floreda Jones, cross complainants, are owners in fee simple, and entitled to the possession of lot 67 subject to the lien of a trust deed in favor of the Broadway Federal Savings and Loan Association and that such owners are entitled to judgment quieting their title to the lot against appellants.

It appears that prior to February 24, 1950 appellant McDonald as owner of lot 67 had borrowed $3,000 from Robert and Gertrude Newman and conveyed the lot by a second trust deed to the Liberty Escrow Company to secure their promissory note in the sum of $3,000. ¹ On February 24, 1950 appellants made a new loan from the Newmans and delivered a new note for $3,000 and a new second trust deed conveying lot 67 to secure the debt. The latter instrument was executed also in favor of Liberty Escrow Company, trustee for the benefit of the Newmans. It was thereafter assigned to the Joneses. By reason of default in the payments required by the note, the trustee declared default, its election to sell, recordation of the notice and thereafter sold the property as public sale and Bueford and Floreda Jones bid it in. Appellants' alleged grievance arises out of that sale.

As grounds for reversal, appellants assert: (1) a proper determination was impossible because of 'considerable confusion'; (2) exclusion of evidence of confidential relations; (3) misapplication of the law of conspiracy; (4) the court's prejudicial criticisms of appellants' counsel; (5) erroneous rulings on the admissibility of evidence.

No such confusion appears to have occurred as would have led or as did lead the court into error. Counsel who appeared for appellants at the trial ² was not prompt or orderly in presenting his evidence and erroneously offered incompetent or irrelevant proof. The court patiently advised the counsel to improve his own knowledge of the case and explained the difficulties encountered. Claim is now advanced that the court found appellants were not in default on their second note. Such contention is without support. By their own admission there was due a total of $2,448.40 on such note and trust deed and $1,849.77 due on their first trust deed, a total of $4,298.17. The record of the trial discloses no confusion except that of appellants' trial attorney.

In their second amended complaint appellants allege that defendants entered into a wrongful conspiracy to defraud appellants of their title and interest in lot 67 and that pursuant to such conspiracy Newman assigned the trust deed dated February 24, 1950, to Bueford and Floreda Jones 'without plaintiffs' consent,' then defendants 'conspired to defraud plaintiffs, and orally stated to plaintiffs that if they would persuade Eva Gordon, as holder of the $10,000 trust deed,' to assign it to Bueford Jones as security, and that defendants would hold same as additional security and that if plaintiffs would pay $50 as incidental costs, defendants would make additional advances from time to time to prevent the first trust deed's foreclosure and would grant plaintiffs a year to refinance the property and repay all sums due defendants.

Pursuant to such pleading, appellants attempted to establish their confidential relationship with defendants, especially with Mr. Newman. They now complain that the court excluded their offers of proof of such relations. The court correctly ruled that evidence of such relationship was limited to the immediate transaction; that other transactions were irrelevant; that friendliness and social relations were not proof of confidential relations. Appellants were, indeed, nothing more than debtors first of Newman, then by virtue of the latter's assignment, of Jones. In the absence of proof of the exercise of undue influence, mere friendship is not a confidential relationship. To sustain the presumption of constructive fraud, more is required than mere confidence in another's integrity. Hausfelder v. Security First National Bank, 77 Cal.App.2d 478, 482, 176 P.2d 84; Mead v. Smith, 106 Cal.App.2d 1, 5, 234 P.2d 705; Jackson v. Gorham, 98 Cal.App. 112, 116, 276 P. 391. In no instance cited by appellants does it appear that the court misunderstood either the law of confidential relations or of conspiracy. Nothing in the record shows any fraudulent act of respondents. The money was loaned by Newman to appellants on their application. Newman assigned the notes to Jones who thought maybe they should be paid. Appellants did not pay them according to their terms. There is no reason why Newman should have notified appellants of his assignment to Jones. That he did not do so is not fraud. That Newman, as a broker, served Jones; that Jones declared appellants in default on their notes; that he declared a default and caused a sale and purchased the property--these are innocent acts, done every day many times. They do not prove a fraud or a conspiracy. No showing was made that defendants or any of them combined to accomplish by concerted action a criminal purpose, or a lawful purpose by a criminal means. See Wells v. Lloyd, 6 Cal.2d 70, 72, 56 P.2d 517; Rose v. Ames, 53 Cal.App.2d 583, 588, 128 P.2d 65; Lynch v. Rheinschild, 86 Cal.App.2d 672, 676, 195 P.2d 448.

Appellants complain of rulings on the admission of writings and testimony, viz.:

1. The exclusion of a third deed of trust. It was res inter alios acta.

2. Permitting McDonald to testify that he had given a deed to his sister, Eva Gordon, who at McDonald's request, had signed several documents. Neither those rulings nor any others disclose a prejudicial error. The issues were rather simple. The affairs between other parties were not relevant. Only the written documents proving the debts and the trust deeds securing them were material, pertinent or competent as to the cross complaint. The rulings on the issues of fraud and conspiracy raised by the second amended complaint were all correct.

Now with reference to the assignments of miscellaneous rulings:

(1) Appellants' offer in evidence of an assignment by Eva Gordon to Bueford Jones was properly rejected. That...