Murphy v. Wilson
| Decision Date | 07 August 1957 |
| Citation | 314 P.2d 507,153 Cal.App.2d 132 |
| Parties | A. L. MURPHY, Plaintiff and Appellant, v. W. D. WILSON (sued as W. D. Willson), Respondent. W. D. Willson, Citizens Bank of Clovis, et al., Defendants. Civ. 22139. |
| Court | California Court of Appeals Court of Appeals |
Porter C. Blackburn, Burbank, Paul E. Gervais, Hollywood, Nathan Newby, Jr. and Wendell P. Hubbard, Los Angeles, for appellant.
W. D. Wilson, in pro. per.
In 1950, plaintiff A. L. Murphy contracted with the United States Reclamation Bureau to construct a diversion dam on the Pecos River, near Fort Sumner in New Mexico.
Unfortunately Mr. Murphy did not have enough capital to carry on his contract. He had increasing trouble financing the work. He had underestimated the cost of labor, and his bid was too low. On the trial of this action, one of the witnesses said that he left all of his profits on the desk when he picked up his contract. He had difficulty with his bonding company, And he finally got into such desperate circumstances that he couldn't meet his pay rolls or buy fuel for his motorized equipment.
In 1951, while Mr. Murphy was struggling to keep his contract going, defendant, W. D. Wilson, of Clovis, New Mexico, agreed to advance money to him. To secure repayment of this money Mr. Murphy and Mr. Wilson made what they called an escrow agreement. The agreement provided: That Mr. Wilson would make available to Mr. Murphy $50,000. That Mr. Murphy would put a bill of sale and chattel mortgage of his vehicles and equipment in use on the dam and a deed to his home in Los Angeles into the escrow. That if Mr. Murphy paid Mr. Wilson $75,000 before June 1, 1951, the conveyances would be returned to him, but if he didn't pay Mr. Wilson $75,000, the conveyances would go to Mr. Wilson.
The Reclamation Bureau declared Mr. Murphy's contract in default for failure to properly pursue the construction work, and Mr. Wilson took possession of all of the property to which title had been put into the escrow. Mr. Wilson rented and sold some of the equipment, and eventually sold the rest of it, together with Mr. Murphy's home. To use an old, old idiom, Mr. Murphy just about lost his shirt on that deal.
Now we come to this litigation.
Mr. Murphy brought this action for declaratory relief, and to adjudge the conveyances mortgages.
At the trial the parties testified that the escrow agreement was a loan of $50,000 by Mr. Wilson to Mr. Murphy, with a bonus to Mr. Wilson of $25,000.
The trial judge found that the agreement was in fact a mortgage loan, and that Mr. Murphy was charged a rate of interest 'in excess of that permitted by the statutes of the state of New Mexico then in force, and the Court finds that said agreement is usurious under said statutes.' The judge also found that Mr. Wilson did not foreclose on Mr. Murphy's equipment under the terms of the chattel mortgage, and that he had sold outright the equipment and Mr. Murphy's home.
Mr. Murphy appeals from a judgment for him for only $2,238.
Mr. Wilson has filed a typewritten brief in pro. per., answering some parts of Mr. Murphy's brief. This court cannot see that the case of Stiff v. Fogerson, 58 N.M. 193, 269 P.2d 743, cited by Mr. Wilson, is controlling under the facts in this case. This court has had to work out the financial obligations of these two men as best it can from the record and the briefs.
The trial court found that Mr. Wilson advanced to Mr. Murphy $42,348.96.
Out of that sum Mr. Wilson paid attorneys in New Mexico $5,000, and charged that amount to Mr. Murphy.
So Mr. Murphy actually received from Mr. Wilson for construction work on the dam, $37,348.96.
It is argued in Mr. Murphy's brief that the attorneys' fee should not have been charged to him. On the trial he said, referring to one of these attorneys who prepared the loan agreement, 'He was acting as my attorney, and had been for some time.' And again, 'I thought he was my lawyer.'
Mr. Wilson said that when the escrow agreement was prepared he and Mr. Murphy told this lawyer he could act for both of them.
This court, therefore, will go along with the trial court's finding that the fee was properly charged to Mr. Murphy.
It follows then that Mr. Wilson charged Mr. Murphy, under the terms of the loan agreement, $32,651.04 more than he advanced to him.
It thus becomes obvious that the trial judge's conclusion that Mr. Murphy should have judgment for $2,238 is wrong.
This conclusion is stated in the findings of fact, as follows:
'That the plaintiff is entitled to be credited with $42,348.96, the amount received for the sale of the personal property, and $2,238.00, the amount received as rental of a portion thereof, for a total credit in the amount of $44,586.96; that defendant W. D. Wilson is entitled to credit in the amount of $42,348.96, being the total sums advanced to or on behalf of plaintiff; that plaintiff is entitled to judgment against defendant W. D. Wilson in the sum of $2,238.00.'
It is also obvious that Mr. Wilson converted Mr. Murphy's property to his own use (Gruber v. Pacific States Sav. & Loan Co., 13 Cal.2d 144, 88 P.2d 137; Mears v. Crocker First Nat. Bank, 84 Cal.App.2d 637, 191 P.2d 501), for which he must pay Mr. Murphy the fair market value of the property so converted as of the date he took it into possession (Calimpco, Inc., v. Warden, 100 Cal.App.2d 429, 224 P.2d 421), together with interest on the value of the property converted. Gruber v. Pacific States Sav. & Loan Co., supra. Also that Mr. Wilson must account to Mr. Murphy for rentals of the equipment.
Therefore, this Court makes the following accounting between the parties:
Credit Mr. Murphy
Equity in Mr. Murphy's home sold by Mr
Wilson. $15,000.00
Value of equipment sold by Mr. Wilson 42,348.96
Rentals on equipment received by Mr
Wilson. 2,238.00
__________
Total $59,586.96
Credit Mr. Wilson:
Paid to Mr.
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