Opinion
Rehearing Denied March 1, 1929
Hearing Granted by Supreme Court March 28, 1929
Appeal from Superior Court, Los Angeles County; Charles S. Burnell, Judge.
Action by the Title Guarantee & Trust Company against Francis W. Henry and another, in which defendant named filed a cross-complaint. Judgment for defendants, and plaintiff appeals. Affirmed. COUNSEL
E.W. Sargent, E.J. Vaughn, G.B. Colby, and Tanner, Odell & Taft, all of Los Angeles, for appellant.
I. Henry Harris, of Los Angeles, for respondents.
OPINION
PLUMMER, J.
Plaintiff instituted this action to obtain a decree quieting its title to certain city lots hereinafter mentioned, and to have canceled and delivered up a certain contract of purchase bearing date of February 1, 1923. The defendants had judgment, and the plaintiff appeals.
The amended complaint, which sets forth two causes of action, after alleging certain preliminary facts, pleads, in its second paragraph of its first cause of action, as follows: "That plaintiff, Title Guarantee & Trust Company, is the owner in fee simple of all that real property described as follows: Lots 188 and 189 of Tract number 2189 (otherwise known as Pellissier Square), in the city of, and county of Los Angeles, State of California, as per map recorded in book 22 at page 57 of Maps, in the office of the County Recorder of Los Angeles County." The second paragraph of plaintiff’s second cause of action, so far as material here, is as follows: "That on or about February 5, 1923, the defendant Emma Summers was proposing to purchase the above-described real estate and to place the same in the name of Francis W. Henry, above mentioned as a defendant, for the sum of $27,500.00, on terms and conditions to be contained in a written contract and to be approved by one Marie Julie Pellissier. That plaintiff caused to be prepared contracts for the sale of said real estate in duplicate, a copy of which is hereto annexed marked Exhibit ‘A,’ and had signed the same, but said contracts were not complete or ready for delivery and had not been approved by said Marie Julie Pellissier. That on or about said date the defendant Emma Summers had deposited with plaintiff checks in the sum of $2,500.00, which said checks would be accepted and applied on account of said contract as soon as said contract should be ready for delivery. *** That said defendant Emma Summers surreptitiously and without the knowledge or consent of the plaintiff or its said employee took one of said duplicate copies of said alleged contract and departed from the office, and is now claiming that said contract was delivered to her."
The answer of the defendants denies generally the allegations of the complaint that the defendant Francis W. Henry has no right, title, or interest in or to the property, etc.; and also denies the proposal to purchase the property referred to on terms and conditions to be inserted in a contract to be approved by one Marie Julie Pellissier; also denies that the contract was not completed, and denies the nondelivery thereof; and further denies that possession of the contract was surreptitiously taken by the defendant Emma Summers. The answer also contains a cross-complaint by the defendant Henry, setting forth the execution of the contract of sale and purchase, and asks that the plaintiff take nothing by reason of this action, that the defendant Henry have specific performance, and, generally, for such other and further relief as to the court may seem proper.
The findings of the court are to the effect that on the 1st day of February, 1923, and at the time of the execution of the contract referred to, the plaintiff (which we will hereafter call the title company) was the owner in fee simple of lots 188 and 189 in tract No. 2189 referred to in plaintiff’s complaint; that on or about the 1st day of February, 1923, the plaintiff and the defendant Francis W. Henry made and entered into and executed the contract referred to in plaintiff’s complaint; that thereafter, and on or about said 1st day of February, 1923, said contract having been duly executed by the plaintiff, by and through its duly authorized officers, was by the plaintiff delivered to the defendant Emma Summers as agent for defendant Francis W. Henry; that, at the time of the execution of said contract and delivery thereof, the defendant Henry paid to the plaintiff the sum of $2,500, being the amount specified as the first payment of the purchase price for said lots; that thereafter, and on or about the 17th day of March, 1923, the defendant Francis W. Henry tendered to the plaintiff the further sum of $2,500 as the second payment on said contract of purchase; that the plaintiff wrongfully repudiated said contract and refused to receive the said sum of $2,500 so tendered as the second payment on said contract. The court further found that the sum of $27,000 was an adequate consideration for the purchase of the lots referred to. The court further found, in finding No. 11, that it was not true "that on or about the 5th day of February, 1923, or at any other time, the defendant Emma Summers was proposing to purchase the above-described real estate, and to place the same in the name of defendant Francis W. Henry, for the sum of $27,500, on the terms and conditions to be contained in a written contract, and to be approved by one Marie Julie Pellissier." The court further found: "That it is true that the defendant" (evidently a misprint for ‘plaintiff’) "caused to be prepared contracts for the sale of said real estate, in duplicate, a copy of which is annexed to the complaint and marked Exhibit ‘A,’ and had signed the same." The court further found "that it is not true that said contracts were not complete or ready for delivery; but that it is true that the plaintiff made and executed said contracts with the intent to deliver the same upon the terms and conditions set forth therein, and that in truth and in fact did deliver said contract and did receive payment as provided in said contract, in the sum of $2,500; that at the time of the execution of said contract the plaintiff was the record owner in fee simple and that neither the defendant nor his agent Emma Summers were informed, had or received any notice that Marie Julie Pellissier had any interest in said property or that it was necessary for her to approve the contract between the plaintiff and the defendant Henry." Other portions of the plaintiff’s complaint, including the allegation that the defendant Emma Summers surreptitiously obtained possession of the contract, are found against the plaintiff.
Appellant’s opening brief states that the only controverted issues tendered by the pleadings are as follows: (1) Character of the ownership of the title company; (2) whether Marie Julie Pellissier had to approve the contract before it was delivered; (3) whether the contract was complete and ready for delivery; (4) whether there was a delivery of said contract; (5) whether Henry or Mrs. Summers was the true purchaser. The allegations of the complaint as to the ownership of the premises in fee simple by the title company were found to be true by the trial court. There are no allegations in the complaint that approval of the contract on the part of Marie Julie Pellissier was necessary prior to its delivery. As stated herein, the allegations contained in paragraph 2 of the plaintiff’s second cause of action sets forth simply that the contract had not been approved by said Marie Julie Pellissier. It is nowhere alleged in the complaint that such approval was necessary. An inspection of the contract as tendered to the trial court was sufficient, we think, to justify the trial court in coming to the conclusion that the instrument upon its face appeared to be complete. That the plaintiff attempted to write something into the contract by way of an interlineation or red ink entry after its execution, does not in any particular lessen the force and effect of the testimony produced before the trial court, and its right to come to a conclusion after an inspection of the instrument. It is true that there is one blank space left in the contract, but the testimony introduced in the transcript shows this to be wholly immaterial. It is in the fifth paragraph of the contract where, after providing that the residence to be erected shall face the front line of the premises, namely, on (here a blank space is left for the name of the street). It is readily seen that this omission is wholly immaterial, as whether the name of the street on which the premises fronted was given or not given would not change the street upon which the premises actually fronted. And the contract itself also shows that it was approved by W.H. Taggert, assistant trust officer, following the signatures to the contract of the Title Guarantee & Trust Company, by its officers, A.F. Morlan, vice president, A.R. Kilgore, secretary, and the signature of the defendant Francis W. Henry. The seal of the corporation is also attached. The testimony of the trust officer was to the effect that Mrs. Pellissier did not O.K. all of the contracts, but that she would write a letter of approval to the title company, and that the officers of the title company would execute a contract upon the approval of the witness.
While the amount of the first payment stipulated in the contract of purchase was made in the way of checks, it does not appear that the plaintiff at any time objected to that form of payment or raised any objections whatever to the contract, other than, after the date of its execution and delivery thereof to the defendants, as found by the court, it sought to recall said contract for the asserted reason that it had not been approved by Mrs. Pellissier, and had not been delivered. It is also argued by appellant that the finding of the court that the defendants had no notice that Marie Julie Pellissier had any interest in the property was a finding outside of the issue; that in the language of the brief "no issue was presented, as we have before pointed out, on which a finding could be based. Without such finding, no judgment for defendants could have been entered." If no issue was tendered by the plaintiff as to whether the purchasers had notice of any interest of Mrs. Pellissier in and to the property, it is certainly not injured by the finding referred to. The plaintiff itself alleged that it was the owner in fee simple of the premises, and a finding in accordance therewith is in line with plaintiff’s allegations, and the further finding that the defendants had no notice that any other person claimed an interest therein would simply be equivalent to a finding that the defendants had no notice that the allegations of the plaintiff’s complaint were untrue. It hardly lies in the mouth of the plaintiff to complain of the finding of the trial court, which is simply in effect that the plaintiff’s allegation of ownership in fee simple is true and correct. Whether true or untrue, a pleader cannot be heard to say that a finding that the allegations of his complaint are true constitutes prejudicial error.
It appears from the transcript that during the course of the trial, without any request whatever to amend its pleadings, the plaintiff attempted to introduce in evidence an agreement of trust entered into between the plaintiff and Marie Julie Pellissier in the year 1913, at the time the said Marie Julie Pellissier conveyed to the plaintiff, by an instrument of conveyance absolute in terms, the premises involved in this action. This attempt appears to have been for the purpose of showing that the agreement of trust contained a clause to the effect that the title company "should issue contracts of sale and conveyance to such person or persons, at such prices and upon such terms as it shall be hereinafter instructed by the said party of the first part," etc. And further, "that the party of the second part shall impose such restrictions, covenants and conditions in all agreements and deeds executed by it as it shall be, in writing, requested to do so by the said party of the first part." An inspection of the agreement shows further that the parties executing the same agreed as follows: "Any conveyance made by the Title Guarantee & Trust Company to the purchasers of lots shall vest in such purchasers an absolute and unassailable title, and there shall be no obligation on the part of the purchasers to see to the application of the purchase money, it being expressly understood by all parties hereto that any conveyance made by the party of the second part shall be binding upon all parties hereto, and should the party of the second part violate any of the provisions hereof, then the beneficiary shall have recourse only against the party of the second part." The trial court refused to admit this agreement in testimony, and the appellant alleges error in such ruling. There is no claim made, and there is nothing in the record indicating that any persons had knowledge of this agreement prior to its production in court, other than the title company and Mrs. Pellissier. The deed referred to conveying the premises to the title company was recorded. The trust agreement was withheld from record, and knowledge thereof was possessed only by the parties executing the same, at least so far as the record discloses. Had this agreement been admitted in testimony, we do not readily perceive that it could have influenced the judgment of the trial court in view of the seventh provision contained therein which we have quoted, whereby the parties covenanted and agreed that any conveyance made by the title company should vest in the purchaser an absolute and unassailable title. By that very provision the trustor agreed to look to the title company only in the event it violated any of the terms of the agreement. After alleging that it was the owner in fee simple of the premises contracted to be conveyed to the defendant Francis W. Henry, it did not lie in the mouth of the title company to elect to disaffirm its contract on the ground that it had violated its agreement with the person from whom it obtained title. That Mrs. Pellissier might have an action against one who had obtained either a contract of purchase or a deed of conveyance from the title company with knowledge that the title company was violating the terms of an agreement under which it was acting, is an entirely different matter. Also, that Mrs. Pellissier might maintain an action against one obtaining a contract of purchase or conveyance from the title company with knowledge that she (Mrs. Pellissier) was the beneficial owner, and that the contract was being executed or the conveyance made in violation of the terms of the trust agreement, does not aid the plaintiff in any particular. That the plaintiff had rendered itself accountable to Mrs. Pellissier does not entitle it to proceed against an innocent purchaser with whom it has entered into a contract of purchase and sale, and thus recoup itself and relieve itself from its own wrong by passing the penalty on to the intending purchaser. In view of the findings of the court that the defendants had no knowledge of the interest of Mrs. Pellissier, nor of the trust agreement, what we have stated in relation to the attempt of the appellant covers the gist of the appellant’s argument.
The supplemental brief filed by the appellant, showing that in an action prosecuted by Mrs. Pellissier against Francis W. Henry, Emma Summers, Paul M. Reidy, and the title company, a different trial judge had arrived at different conclusions upon conflicting testimony, cannot be considered in this case. This case can only be decided upon the pleadings and facts and the findings of the trial court disclosed by the record in this case.
While, as stated in the case of Frascona v. Los Angeles Ry. Corp., 48 Cal.App. 135, 191 P. 968, and the numerous cases there cited, it is not necessary that the findings follow the precise language of the proceedings, "it is essential that they be so drawn that the truth or falsity of every material allegation can be demonstrated therefrom." But, unless an issue is appropriately presented by the pleadings or treated as an issue, a finding is unnecessary, and, as heretofore stated, if a finding outside of the issues is not prejudicial, no cause of complaint is given.
There is testimony in this case, shown by the record, justifying the trial court in finding that for some time prior to the 1st day of February, 1923, Mrs. Emma Summers applied to one Donahue, the real estate broker having charge of the sale of the two lots in controversy, to make purchase thereof; that, after some negotiations had been carried on, Mrs. Summers offered for the premises the sum of $27,500; that this offer was accepted by Mr. Donahue; a preliminary contract of purchase was executed, which contract did provide that it was subject to the approval of the owner, without naming the owner; that the agent Donahue advised the title company of the contemplated sale of the two lots; that the title company had prepared, in duplicate, a contract for the sale of said lots, and delivered the contract to Donahue, who took the duplicate copies to the residence of Mrs. Summers, where it was signed by the defendant Francis W. Henry; that at the time of the execution of the preliminary contract $500 was paid by the defendants to the agent Donahue; that, a day or two after the contract of purchase had been signed in duplicate by the defendant Henry, Mrs. Summers went to the office of the title company with a letter of introduction to the title company, given her by Mr. Donahue, and at that time tendered and delivered to the title company a cashier’s check for the further sum of $2,000; that at said time the trust officer Taggert stated the contract had not been executed, proceeded to get said duplicate contract from the place where it was kept, took it to the appropriate officers, and had it signed by the title company, by its vice president and secretary, and the seal of the company attached, his own approval being indorsed upon both of the duplicate copies, the contract being signed by all parties in duplicate. The testimony of Mrs. Summers is that the contract was handed to her. The testimony of Taggert is that he handed the contract to Mrs. Summers only for inspection. The fact that Mrs. Summers and the defendant Francis W. Henry had theretofore had the duplicate copies of the contract at the residence of Mrs. Summers, where it was signed, was a fact to be taken into consideration by the trial court in weighing the testimony of whether Taggert did or did not hand the contract to Mrs. Summers simply for the purpose of inspection.
The question of delivery is the main bone of contention in this case, and, even though another trial judge has held the contrary on this question, where the testimony was conflicting, we think the following is sufficient to sustain the finding of the trial court in this case. Mrs. Emma Summers testified in this particular, in substance, as follows: Mr. Taggert was on the second floor of the Title Guarantee & Trust Company Building, in the trust department. I gave him a letter from Mr. Donahue. He said, "All right, I’ll get the contract," and he got the contracts; I don’t know where he got them from; he left me to go and get them; he got them right away and brought them immediately back to the desk. I gave him Mr. Henry’s check for $2,000. They were not signed yet when I got in. He said (referring to Taggert), "Sit down and wait and I’ll go and have the proper officers sign." I don’t know whether he said the president and secretary or just "proper officers" sign, execute the contract, and finish it. I sat down in a chair and waited until he came back, and presently he came back. Mr. Morlan and Mr. Kilgore had signed the contract. The witness also testified in answer to the question: "Did he give you anything" (referring to Mr. Taggert)? "Well, I just said he handed me the contract." The witness’ attention was then directed to a certain receipt, and the witness testified to the execution and delivery to her of a receipt for the $2,000. The witness further testified that at that time no one said to her that the contract had to be approved by Mrs. Pellissier. This witness testified that she went back to the office two or three days after the receipt of the contract and had a conversation with Mr. Keogh as to the blank in the contract which we have heretofore referred to, where the name of the street on which the premises fronted was not written, and was informed by Mr. Keogh that that was immaterial. From the transcript it is somewhat uncertain whether the contract was handed to Mrs. Summers before or after it was signed by the officers of the company, but what we have set forth we think is amply sufficient to sustain the finding of the court that the contract was delivered. It is true that Mr. Taggert testified that he handed the contract to Mrs. Summers only for inspection. It is true that Mr. Taggert testified that there were some questions asked by Mrs. Summers about the contract at that time relative to the street on which the lot should face, and also relative to the number of houses which should be built upon the lots, but the testimony of Mr. Keogh, Mr. Donahue, and Mr. Taggert, taken together, in relation to this might very well lead the court to the conclusion that this conversation took place two or three days after the contract was executed and delivered, and that it was then that Mr. Taggert made an interlineation in the copy of the contract in possession of the title company, and sought afterwards to obtain possession of the copy of the contract from the defendants in order that he might make the same changes therein. It is not for us to say which version is correct, but, if the record before us is sufficient to support the finding of the trial court in this case, it must be supported, irrespective of the results reached in some other case.
In view of section 369 of the Code of Civil Procedure, we do not think that it now lies in the mouth of the appellant to raise the objection that Mrs. Pellissier was not made a party to the action. If the appellant had thought that Mrs. Pellissier was a necessary party to the action, it should have made application for permission to bring her in as a party either as plaintiff or defendant. By the section of the Code of Civil Procedure to which we have referred, the appellant could have set up all the facts relating to the transaction, but it preferred to stand upon its naked title, and not having established to the satisfaction of the trial court that the defendants had knowledge that it was only a trustee prior to the execution of the contract, it cannot complain that so far as the title company is concerned, it must be held bound by its own contract. See, also, 25 Cal.Jur., p. 351, sec. 197, as to the right of the trustee to amend an action in his own name. Again, section 869 of the Civil Code comes to the aid of the defendants in view of the findings of the trial court. That section reads: "Where an express trust is created in relation to real property, but is not contained or declared in the grant to the trustee, or in an instrument signed by him, and recorded in the same office with the grant to the trustee, such grant must be deemed absolute in favor of purchasers from such trustee without notice, and for a valuable consideration."
Subdivision 3 of section 3367 of the Civil Code we think a complete answer to the appellant’s contention that the relief granted to the defendants is wholly void. It is there provided that the relief may be by "declaring and determining the rights of parties otherwise than by an award of damages." This is in line with section 1060 of the Code of Civil Procedure on the subject of declaratory relief. The respondents, under the two sections referred to, had a right to a decree of the court in this case upholding the validity of their contract and declaring that, if complied with, they were entitled to a conveyance. As the contract had some period of time to run, immediate specific performance or immediate conveyance could not be compelled without payment of the balance due, and, under the terms of the contract executed and delivered by the plaintiff to the defendant Henry, time was given for the payment of the balance of the purchase money, and this time appellant could not accelerate or declare a forfeiture of the contract until the time of payment on the part of Henry had arrived; nor could Henry demand conveyance until he had fully paid the purchase price of $27,500. The appellant cites a number of cases relating to the rights of a bona fide purchaser where one not having a title conveys property, which cases follow the rule "that the vendee of real estate who has received a conveyance of the title and has paid a part of the purchase money, but who, before he pays all of it, receives notice of the fact that his vendor obtained the real estate by fraud from the previous owner, is not, under ordinary circumstances, entitled to protection as a bona fide purchaser, except to the extent of the money paid by him before receiving such notice, and that the defrauded party can obtain the land from such vendee, but that he can do so only upon the condition that the vendee is reimbursed what he had paid before notice." See Henry v. Phillips, 163 Cal. 135, 140, 141, 124 P. 837, 839 (Ann.Cas.1914A, 39). These cases are not applicable because the appellant is not in the position of a defrauded owner. It is simply in the position of a party who, according to its own argument, seeks to avoid the result of its own alleged wrongdoing and pass the burden on to the parties with whom it had contracted. Under the findings of the trial court, this does not appeal to us a good cause for the interposition of a court of equity.
Being of the opinion that the record before us in this case contains sufficient testimony to support the findings of the trial court, and that the issues material to be found have been passed upon, the judgment of the trial court must be, and it is hereby, affirmed.
I concur: FINCH, P.J.