Sellman v. Crosby

SPENCE, J.

Plaintiffs sought to set aside a sale under a deed of trust and to cancel the trustees’ deed. Defendant

[563]

Agnes Crosby, hereinafter referred to as defendant or respondent, filed a cross-complaint to quiet title. The trial court entered judgment decreeing that plaintiffs take nothing by their action and that defendant’s title to the premises be quieted. Plaintiffs appeal from said judgment.

On October 5, 1926, plaintiffs executed a trust deed upon certain real property in the city of Oakland to secure their promissory note to defendant in the sum of $5,500. Principal and interest on said note were payable in monthly instalments of $40 each on the 5th day of each month. The note provided, “In case any of said installments are not paid within thirty days after the same shall become due, then the whole balance of said principal sum shall immediately become due and payable at the option of the holder hereof without notice.”

Plaintiffs made the payments at a bank for the account of defendant. Each payment was entered by the bank in a book held by plaintiffs showing the month to which the payment was credited and the amount applied to principal and to interest. Between July, 1931, and January, 1934, plaintiffs failed to make eleven of the $40 payments due under the note. There were conversations and correspondence between the parties concerning these delinquencies and in January,

1934, plaintiffs assured defendant that they would make payments regularly each month and that they were expecting to win a certain lawsuit, in which event they would pay the total amount due out of the money received. Although plaintiffs did receive some money as they hoped, they failed to apply it upon their indebtedness to defendant. Plaintiffs did pay $40 per month to the hank on the 5th day of each month from January, 1934, to and including March, 1935, each of which payments was credited by the bank, as noted in plaintiffs’ book, to the instalment longest past due. (Civ. Code, see. 1479.) Upon plaintiffs’ failure to make a payment on April 5, 1935, defendant ascertained that the taxes on the premises had been permitted to go delinquent. On April 20,

1935, defendant recorded a notice of default and election to sell as required by section 2924 of the Civil Code. In this notice, defendant gave notice of the exercise of the option to declare the entire indebtedness payable as provided in the acceleration clause of the note. Thereafter plaintiffs made a $40 payment in April and a similar payment each month