Redondo Beach School Dist. of Los Angeles County v. Flodine

• Decision Date: 23 August 1957
• Parties: REDONDO BEACH SCHOOL DISTRICT OF LOS ANGELES COUNTY, Plaintiff and Respondent, v. Ida FLODINE, also known as Ida C. Flodine; City of Redondo Beach, County of Los Angeles, State of California; et al., Defendants, B & A Investment Co., Inc., a California Corporation (sued and designated by fictitious name and capacity), Appellant. Civ. 22342.
• Court: California Court of Appeals Court of Appeals

Page 581

314 P.2d 581

153 Cal.App.2d 437

REDONDO BEACH SCHOOL DISTRICT OF LOS ANGELES COUNTY, Plaintiff and Respondent, v. Ida FLODINE, also known as Ida C. Flodine; City of Redondo Beach, County of Los Angeles, State of California; et al., Defendants B & A Investment Co., Inc., a California Corporation (sued and designated by fictitious name and capacity), Appellant.

Civ. 22342.

District Court of Appeal, Second District, Division 1, California.

Aug. 23, 1957.

Hearing Denied Oct. 16, 1957.

Samuel Maidman, Los Angeles, for appellant.

Harold W. Kennedy, County Counsel, Los Angeles County, and Lloyd S. Davis, Deputy County Counsel, Los Angeles, for respondent.

FOURT, Justice.

This is an appeal by defendant B & A Investment Co., Inc., from an interlocutory judgment in a condemnation action. The plaintiff School District commenced the action on March 15, 1956, for the purpose of acquiring the property in question for an elementary school.

From the evidence, and by the way of background, it is fair to state that Ida C. Flodine and Eric Flodine were husband and wife and the owners, as joint tenants, of a parcel of real property, irregularly shaped, known as Lot 1, Block 8 of Tract 11,336, as per a recorded map, and containing about 3.20 acres, located at or near the southwest corner of Manhattan Beach Boulevard and Inglewood Avenue, in the city of Redondo Beach. Eric Flodine died November 28, 1952, and the property in question was listed as an asset in his estate.

On July 30, 1954, Ida C. Flodine, as the seller, and B & A Investment Co., Inc., a corporation, as the buyer, executed certain escrow instructions wherein appellant was to put up $500, and agreed to deposit 'the further sum of $19,500, plus funds to cover my buyers charges and prorations, when the conditions of this Escrow are met and prior to its closing.' The property involved in that escrow consisted of the entire Lot 1, Block 8 of Tract No. 11,336, as per a designated map. It was also set forth, under the buyer's section of the escrow, that the purchase os the property was subject to the buyer procuring a rezoning of a part of the property, and subject to the buyer getting suitable financing. Further it was provided that separate and apart from all other provisions of the escrow, that the buyer would have the privilege to acquire a separate deed, during the period of the escrow, to a parcel 150 feet by 150 feet of the larger, or entire lot, which amounts to about .52 acres, at the corner, upon paying $20,000 through the escrow, which amount would be deducted from the entire purchase price, leaving a balance of $45,000 due for the remainder of the lot. The $45,000 was to be paid through a system of notes, secured by second trust deeds on the property.

On August 20, 1954, Ida Flodine, individually, and as the executrix of the estate of Eric Flodine, deceased, as the owner, entered into an agreement with B & A Investment Co., Inc., for the sale and purchase of the entire parcel of land known as Lot 1, Block 8 of Tract No. 11,336. The agreement set forth that it did not cancel the escrow instructions heretofore referred to, but that it was intended to clarify the instructions, and if there was any conflict between the escrow instructions and the agreement, that the agreement was to prevail. The agreement provided, among other things, that the appellant would pay the sum of $65,000, for the entire property, payable $20,000 cash and $45,000 by the execution of promissory notes secured by trust deeds upon the property, section and subject to a first trust deed for a construction loan which appellant proposed to obtain for the purposes of financing its proposed construction work on the property.

It appears in the agreement of purchase and sale just mentioned that 'Eric Flodine in his lifetime entered into an agreement in writing with the City of Redondo Beach, California under the terms of which certain improvements consisting principally of the laying of sidewalks and curbing around said property were to be done by said Eric Flodine' and that Ida Flodine was 'now obligated to said City for the doing of said work, or paying for the same.' The appellant, by the agreement of sale and purchase, agreed to make the improvements required by the city, or such substitute improvements as might be satisfactory to the city. It was also provided that an escrow would be opened and that during the escrow period the appellant would have the right to acquire a separate deed to the parcel 150 feet by 150 feet, on the corner of the larger parcel, on the condition that $20,000 be paid to the seller through escrow, which $20,000 was to be deducted from the total purchase price of $65,000, leaving a balance of $45,000 for the purchase price for the remainder of the property. The appellant was to proceed with a subdivision of the premises. The seller was to take appropriate steps to procure court approval of the agreement, or to close the probate proceedings in her husband's estate. The appellant was to be given ninety days to arrange financing and 'that if he fails to procure the necessary financing within said time, either Party may, at their election, cancel this agreement and terminate the escrow.' And, further it was provided, 'Neither this agreement, nor the escrow instructions to which it refers, may be regarded as an option, but is in effect an actual sale subject only to the failure of Second Party to procure, after diligent effort, from the City of Redondo Beach, favorable action with regard to the proposed subdivision and the zone changes herein referred to, or the financing herein referred to.'

On January 24, 1955, two new escrows were set up by Ida Flodine, individually, and as executrix of the estate of Eric Flodine, deceased, as the seller, and appellant, as the buyer. In each of such new escrows it was provided that the signing of 'these Escrow Instructions by the buyer and seller will cancel and supersede * * * Escrow Instructions as dated July 30, 1954.' It was provided in the first of the new escrow instructions that the buyer would deposit $22,500 on or before April 30, 1955, for the purchase of, and the seller would accept such sum for, the parcel 150 feet by 150 feet on the northeast corner of Lot 1, Block 8 of Tract No. 11,336, as per described recorded map.

On February 21, 1955, instructions were filed in the first of the new escrows by Ida Flodine, individually, and as executrix of the estate of Eric Flodine, deceased, modifying the previous instructions. The escrow holder was directed by her to withhold from the payment to her, and to keep in that escrow for payment of certain street improvements, the sum of $13,000, the money to be used as follows:

'On March 6, 1950 I entered into a contract (with my husband) with the City of Redondo Beach wherein we agreed to make certain improvements in Tract No. 11336, Block 8, in the City of Redondo Beach, in accordance with plans and profiles mentioned in said agreement. Said improvements were to be made to the satisfaction of the City of Redondo Beach. Such improvements I will not make, and said sum of $13,000 is set aside for the payment of same. However, I have agreed with the City of Redondo Beach that the payment of labor and material and all construction costs of the improvements described in said contract made on March 6, 1950 will only be made out of said $13,000 when and if and as approved by Mr. F. E. Hopkins, City Manager and Street Superintendent of said City of Redondo Beach. You will therefore hold said $13,000 in escrow for said purpose and pay the same to parties furnishing materials for or doing work upon the streets and public places in said tract in the performance of said agreement, upon an order signed by me and approved by Mr. F. E. Hopkins, City Manager and Street Superintendent of said city, and not otherwise. In the event said work is completed to the satisfaction of said city, and you have an approval and authority from the said Mr. F. E. Hopkins so to do, any balance remaining in said fund, after the payment of said bills and expenses, will be paid to me.'

On May 6, 1955, there were further supplemental escrow instructions filed in the first of the new escrows wherein it was set forth that Ida Flodine delivered into the escrow a deed executed by her individually, which was to be recorded concurrently with an executrix' deed theretofore delivered into the escrow, which was in accordance with an order confirming sale in the estate of Eric Flodine; that certain assessments, demands and taxes were to be paid, and with reference to the $13,000 item it was set forth that 'a certain portion of the cost of said work is to be undertaken by the buyer relative to improvement immediately adjacent to the 150' by 150' corner'.

The second of the new escrows had to do with Lot 1, Block 8, excepting therefrom the 150 foot by 150 foot parcel at the corner, containing about 2.68 acres, and which is the real property involved in this action. In this escrow the buyer agreed to deposit $1,000 upon the signing of the instructions, and further, 'that the within named buyer will proceed with the necessary engineering and maps for the purpose of subdividing the herein described land into suitable lots or building sites, to be approximately 18 Lots; and you are instructed that the undersigned seller and buyer have agreed that at the proper time the buyer will execute in favor of the Seller separate Second Trust Deeds and Notes, which by their terms will be second and subject to the separate 1st trust deed construction loans, to be dated concurrently or subsequent to said 1st Trust Deed documents, and are to describe and be a lien against a separate lot, as per Subdivision Map to be engineered and filed for record in the regular channels of forming a proper legal subdivision. The amount of each 2nd Trust Deed & Note is to be determined, and you will be given proper Supplemental Escrow...