Roseleaf Corp. v. Radis

• Decision Date: 21 December 1953
• Court: California Court of Appeals Court of Appeals
• Parties: ROSELEAF CORP. v. RADIS et al. Civ. 19477.

Page 964

264 P.2d 964

122 Cal.App.2d 196

ROSELEAF CORP. v. RADIS et al.

Civ. 19477.

District Court of Appeal, Second District, Division 3, California.

Dec. 21, 1953.

Alvin P. Jackson, Hollywood, and Martin Goldman, Los Angeles, for appellants Max Radis, Jean Radis, Martin Goldman and Sylvia Goldman.

Benjamin J. Goodman, Los Angeles, Victor J. Obegi and Jess F. High, Van Nuys, for appellant Victor Malley.

Pacht, Tannenbaum & Ross, Clore Warne and Leo Altshuler, Los Angeles, for respondent.

SHINN, Presiding Justice.

By the judgment in this action it was declared that defendants Max Radis, Jean Radis, Martin Goldman and Sylvia Goldman, should credit $3,824 and interest upon the principal of a trust deed note of $65,500, executed by plaintiff's predecessors, Isadore Rosenblot and Dora Rosenblot, in favor of said defendants. The credit was to be made by defendants within ten days, or in case of default, by a commissioner, and if the credit should not be made plaintiff was to have execution for the amount of the judgment. Plaintiff also recovered judgment against defendant Victor Malley in the sum of $5,844, plus interest, but it was provided that if the credit on the note was entered, or if plaintiff recovered $3,824 from the four defendants above named, the amount of the credit or the amount collected from said defendants should be credited on the judgment against Malley; otherwise, plaintiff should have execution against Malley for the total amount of the judgment. Defendants Radis and Goldman appeal, and Malley appeals separately. The record on appeal consists of a clerk's transcript and certain exhibits. We will hereafter refer to defendants Radis and Goldman as appellants.

As to appellants, liability was imposed by reason of an agreement contained in a trust deed executed by them in favor of Malley by which they promised to pay the cost of refinancing encumbrances upon a property known as the Hollywood-Melrose Hotel and a second agreement in which they made the same promise to plaintiff's predecessor, Rosenblot. The basis of the judgment against Malley was false and fraudulent representations made to plaintiff by reason of which it refinanced the encumbrances on the hotel at a cost of $5,844.

On or about November 26, 1946, appellants acquired title to the Hollywood-Melrose Hotel property by purchase from defendant Malley, and as a part of the purchase price they executed their note dated August 13, 1946, in favor of Malley, for $146,500, secured by a trust deed on the hotel property. At that time there were prior encumbrances consisting of trust deeds, the beneficiaries and original amounts being Ohio National Life Insurance Co. $60,000, Laura J. Hinkle $12,675, and Herbert A. McCallister $6,500, or a total of $79,175. Appellants' trust deed to Malley contained a provision for refinancing the encumbrances. ¹ The clear meaning is that both trustor and beneficiary would accept a new loan on the specified terms and conditions.

On July 23, 1948, appellants sold the property to Isadore Rosenblot and his wife Dora, subject to the four trust deeds, and in this transaction the Rosenblots gave their promissory note to the sellers in the amount of $65,500, secured by a fifth trust deed on the property. This trust deed provided: 'Trustor is to receive a credit on the note secured hereby for any refinancing expenses, costs, bonuses or premiums incurred by trustor under the provisions of said One Hundred Forty-Six Thousand, Five Hundred Dollar ($146,500) trust deed of record, such credit to apply on the current installments of principal and interest on the note secured hereby.' On July 30, 1948, the Rosenblots conveyed the property to plaintiff, Roseleaf Corporation, subject to the five trust deeds.

On November 8, 1948, Malley negotiated and plaintiff accepted a new loan with the firm of Salk, Ward & Salk as lender, for $125,000, secured by a first deed of trust on the hotel property and a $25,000 third trust deed on property known as the Barker Hotel, which also was owned by plaintiff. From the proceeds of the $125,000 loan the Ohio National and Hinkle trust deeds were paid off, the McCallister trust deed having already been paid; Malley received in cash $64,723.48 and a new trust deed for $20,000, being the balance unpaid of the $146,500 trust deed. Appellants subordinated their $65,500 trust deed to the $125,000 trust deed, and Malley subordinated his new trust deed to the one held by appellants. The encumbrances then were: A first of $125,000; a second of the balance unpaid on the $65,500 trust deed; and a third of $20,000 in favor of Malley. In this refinancing the expenses paid by plaintiff amounted to $5,844. These consisted of a commission for obtaining the loan, fee for policy of title insurance, escrow fee and miscellaneous expenses.

By its findings and conclusions the trial court determined that plaintiff had demanded and been refused a credit on the note held by appellants and that appellants were obligated to plaintiff in the amount of expenses that would have been incurred had the refinancing been for the sum of $75,000. This amount was found to be $3,824, which was the amount of the judgment against appellants.

The record on appeal consists of the clerk's transcript.

The complaint set out the agreement of appellants with Malley, the later agreement with Rosenblot and the furnishing of the refinancing, but did not allege exact performance by plaintiff. Upon the contrary, it listed seven particulars, including an increase in the amount from $75,000 to $125,000 in which the terms of the new loan differed from those specified in the agreement. It alleged that the loan was arranged pursuant to the refinancing agreement, that appellants accepted it, orally waived compliance with the terms specified for a new loan in all particulars in which there was nonconformance, and in writing subordinated their trust deed to the new trust deed. It pleaded that appellants were estopped to deny liability. The answer of appellants admitted they had accepted of new loan and subordinated their trust deed thereto, but denied that it was provided or accepted pursuant to the agreements for refinancing, and denied they had waived any of the conditions of their agreement with Malley.

The findings to be presently considered on the appeal of Radis and Goldman are: (XV) 'On or about December 20, 1948, and as a part of said refinancing transaction, the defendants Radis and Goldman did agree in writing in a document entitled 'Subordination Agreement,' that the deed of trust in their favor against said property should be inferior and subordinate to said new loan of $125,000.00, and did in said written agreement approve of the execution of said new loan in the amount of $125,000.00 as a first lien against said property. Said new loan was consummated and the costs and expenses in connection therewith were incurred by plaintiff'; (XVI) 'The defendants Radis and Goldman did not waive any of the conditions of the $146,500.00 trust deed, orally or in writing'; (XVIII) 'Defendants Radis and Goldman have not been estopped by any act or conduct of said defendants.' It was also found that Radis and Goldman suffered no 'monetary nor any damage' by reason of the fact that the new loan did not conform to the terms and provisions specificed in the Malley trust deed.

Since voluntary acceptance of the new loan, as found by the court, was indisputably a waiver of appellants' right to refuse a new loan in an amount exceeding $75,000, the finding that they did not waive any of the conditions of the trust deed could mean only that they did not accept the new loan as full performance by plaintiff and Malley, but as imperfect performance, with a reservation of the right to claim damages for failure of plaintiff to render full performance. This interpretation is consistent with the fact that the question of appellants' damage was tried and determined as a matter in issue. The significance of these admitted facts and findings will be discussed later.

From the facts found the court drew the following conclusions: I. 'The terms and provisions found in the $146,500.00 trust deed, providing for refinancing, were not conditions precedent to the obligation of defendants Radis and Goldman, but were promises, the breach of any of said promises not excusing said defendants from performance, but allowing said defendants a credit to the extent they were able to show monetary damage by reason of said breach'; II. 'In the refinancing agreement made in the said $146,500.00 trust deed, the defendants Radis and Goldman agreed to pay for all of the refinancing costs and expenses in connection with refinancing the hotel property up to the sum of $75,000.00, and that the refinancing costs in that respect amounted to $3,824.00'; VII. 'Construing the terms of the $146,500.00 deed of trust and the $65,500.00 deed of trust together, defendants Radis and Goldman agreed to credit to plaintiff on their note for $65,500.00 the refinancing costs in connection with refinancing up to $75,000.00.'

Plaintiff says these three statements of conclusions were findings of fact and that it must be presumed there was evidence to support them under the rule that where the evidence is not brought up it will be presumed that it was sufficient to support the findings. Transportation Guarantee Co. v. Jellins, 29 Cal.2d 242, 174 P.2d 625; Freeman v. Gray-Cowan, Inc., 219 Cal. 85, 25 P.2d 415. The rule has no application.

The conclusions were not misplaced findings, but only the court's interpretation of the agreements. Conclusions II and VII are merely incomplete recitals of the terms of the agreements and do not purport to be findings of any facts that were not admitted or otherwise found. There was an express finding that the expense of financing to the amount of $75,000 was $3,824. Conclusion I was only an interpretation of the terms and provisions of the agreement with...