Woods v. Kern County Mutual Building and Loan Assn.

BARNARD, P. J.

In this action the plaintiff sought to recover a judgment canceling a trust deed, for the return of two stock certificates, and for the cancellation of a grant deed upon the grounds that these instruments had been obtained by the defendants without consideration and in violation of the Home Owners’ Loan Act of 1933. (48 U. S. Stats, at Large, 128; Title 12, U. S. C. A., sec. 1461 et seq.) A demurrer to a second amended complaint was sustained without leave to amend and the plaintiff has appealed from the judgment thereafter entered.

Among other things, the complaint in question alleged that on February 25, 1931, the appellant executed and delivered to the respondents a note for $3,000 se'cured by a trust deed covering certain real property in Bakersfield; that on October 16, 1933, at the suggestion and upon the instigation of the respondents she applied to the Home Owners’ Loan Corporation for a loan in order to pay and discharge the aforesaid indebtedness; that on May 16, 1934, the respondents, by written agreement, consented to accept the sum of $2,334 in Home Owners ’ Loan bonds with $25 in cash and thereupon

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to release their claim; that thereafter the appellant executed and delivered to Home Owners’ Loan Corporation a note and mortgage for $2,400; and that on or about January 16, 1934, the respondents falsely and fraudulently stated to her that in order to obtain the said Home Owners’ loan it would be necessary for her to execute and deliver to them a note for $700 secured by a second trust deed on the same property, to assign and transfer to the respondents two described certificates of stock of the face value of $100 each, and to deliver to the respondents a grant deed for her one-third interest in certain other real property, in order to secure the balance of the original loan after deducting the face value of the Home Owners’ Loan bonds, and that the said grant deed would be recorded upon h.er failure to make the monthly payments upon the $700 second trust deed.

It is then alleged that, being a woman of little business experience, the appellant relied upon the statements made to her by the respondents; that on June 19, 1934, she executed and delivered to the respondents a note for $700, secured by a trust deed; that on February 19, 1935, she transferred and assigned the two paid-up certificates of stock of the face value' of $100 each; that some time during the year 1934, the exact date of which she does not recall, she executed and delivered to respondents the grant deed covering her equity in the other real property to which we have referred; that she executed and transferred these instruments in the belief that such acts were necessary in order to obtain the benefits of a Home Owners’ loan; that the statements made to her by the respondents were false in that these things were not necessary for the obtaining of a loan under the Home Owners’ Loan Act; that on January 1, 1937, she learned for the first time that the statements made to her by the respondents were false and that it was unnecessary for her to deliver to them anything of value for the purpose of obtaining a loan under the Home Owners’ Loan Act; and that on April 30, 1937, she demanded of the respondents that they return to her the various documents and evidence of title thus transferred and delivered to them, which demand was refused.