Pixley v. First Federal Savings & Loan Ass'n of Santa Monica
| Citation | 110 Cal.App.2d 427,243 P.2d 100 |
| Court | California Court of Appeals |
| Decision Date | 21 April 1952 |
| Parties | PIXLEY et al. v. FIRST FEDERAL SAVINGS & LOAN ASS'N OF SANTA MONICA. Civ. 18751. |
Samuel J. Crawford and Robert D. Ogle, by Joseph T. Enright, Santa Monica, for appellant.
Scudder & Forde, Pacific Palisades, and Morris W. Young, Los Angeles, for respondents.
This is a suit for damages for breach of a contract to convey a residential property.
The defendant savings and loan association, the appellant, contended in the lower court, as it likewise contends here, (1) that its escrow instructions--which together with the instructions signed by plaintiffs comprised the written contract between the parties--were not binding upon it as they were signed in its behalf only by its secretary and not by its secretary and its vice president; (2) that there was a mutual mistake of law and fact which voided the contract; and (3) that the trial court erred in finding the defendant was guilty of bad faith in refusing to convey and in its allowance of damages based on that theory.
The defendant in 1946 made a construction loan to one Grosbach in the sum of $8,000 and as security took back a trust deed on the property here involved. The defendant did not inspect the property prior to recording the deed to ascertain whether any building material had been deposited, or work done, upon the premises which might give mechanics' liens subsequently filed a priority over the lien of the trust deed. Evidently this failure was due of the inadvertence of some one or more employees of the defendant charged with such duty. More than a year later four mechanics' liens were filed against the property; one, in August, 1947, and three in January, 1948, but at the trial no evidence was offered to show that any of these mechanics' liens were entitled to priority over defendant's trust deed and for want of such evidence the court found they had no priority.
In October, 1948, the defendant caused notice of default under the terms of its trust deed to be filed, but the trustee's sale was not had until July 19, 1949, at which time the defendant bid in the property for the sum of $8,378.55.
Prior to the trust deed sale the plaintiffs had several conferences with one Kibbe, vice president of the defendant, in which they sought to purchase the property. At a conference had on July 11, 1949, the parties orally agreed, subject to the approval of the defendant's board of directors, that plaintiffs should not bid at the trustee's sale, but that the defendant should purchase the property upon said sale, and resell it to plaintiffs at a price totaling the balance due on defendant's trust deed, plus interest, foreclosure expenses, buyers' and seller's escrow expenses, title policy costs, and a $500 profit to defendant, and thereupon it would deliver a good title evidenced by a policy of title insurance. In these conferences there never was any discussion concerning mechanics' liens.
On July 22nd Kibbe having received the trustee's deed along with its bill for fees and expenditures prepared a memorandum listing the sum of $9,244.05 as being the amount payable by the plaintiffs. The items aggregating this sum were the bid price of $8,378.55; interest thereon $12.12; policy of title insurance $45; internal revenue stamps and recording $12.45; taxes $295.93; agreed profit for defendant $500. He next procured from the board of directors a resolution which recited it was 'Resolved, that the officers are hereby directed to sell' the lot involved Thereupon, Kibbe and Gibbons executed the corporation's grant deed of the property to the plaintiffs as grantees, 'subject to general and special taxes for 1949-50; covenants, conditions, restrictions, reservations, easements, rights and rights of way of record.' Kibbe thereupon telephoned the plaintiffs that he had procured the necessary resolution from the board of directors to sell the property for $9,244.05 and requested that they come to defendant's office on July 25th with that sum prepared to enter into an escrow. Kibbe further stated that defendant's escrow officer would prepare the escrow instructions and handle the transaction as he would have to be out of town. All this was orally agreed to by the plaintiffs. Before leaving for out of town Kibbe handed the grant deed and his price computation memorandum to the escrow officer. On July 25th the escrow officer prepared both the seller's and the buyers' escrow instructions. She then caused the plaintiffs to sign the buyers' instructions and secretary Gibbons to sign the seller's instructions in behalf of the corporation. Likewise she accepted the sum of $9,244.05 from the plaintiffs and placed that sum along with the defendant's deed into escrow. At that time she stated to plaintiffs that Mr. Kibbe would sign on the line she had provided for his signature as soon as he returned. This signature was never placed on the instructions. Immediately thereafter the escrow officer forwarded the defendant's deed to the Title Insurance and Trust Company along with an order requesting it to issue a title policy in favor of plaintiffs but instructing it to hold the deed for further orders. Upon receiving the usual preliminary title report the escrow officer advised the plaintiffs she was deferring action until Mr. Kibbe's return as the report showed mechanics' liens of record. On his return Kibbe advised the plaintiffs he would have defendant's attorney clear the record. However, about a month later, Kibbe upon learning that the title company would not insure...
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