London v. Marco

WILSON, J.

Plaintiff has appealed from an order denying his motion for a preliminary injunction to restrain a foreclosure sale of property under a deed of trust.

Defendants Marco sold a single-family dwelling to plaintiffs. Pursuant to the terms of the escrow relating to the sale plaintiffs took possession of the property and some or all of them have occupied it continuously since September 15, 1949. As a part of the consideration the Marcos accepted a promissory note secured by a third deed of trust executed by plaintiff Theodore London for an amount in excess of $40,000, payable in installments. By reason of the nonpayment of the installment of $9,000 which became due on March 15, 1950, the trustee on April 11, 1950, gave a 90-day notice of declaration of default. After a lapse of 59 days from the date of the notice plaintiffs served a notice of rescission of the transaction. The 90-day notice of declaration of default elapsed on July 11, 1950. On that date the entire amount of the promissory note, plus interest, attorney’s fees and costs, became due, in the sum of $40,867.97.

Notice of trustee’s sale was published and shortly before the date fixed for the sale plaintiffs filed an action to restrain the sale. Upon the hearing of the order to show cause why a preliminary injunction should not issue counsel for plaintiffs stated that all taxes, including those due in the preceding April, had been paid. The court granted a preliminary injunction enjoining the sale of the property, in which order the court directed that plaintiffs make all payments of taxes assessed or payable against the property when the same were required and due. About 18 days after the issuance of the

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preliminary injunction defendants ascertained that the taxes which became due and delinquent in April had not been paid, amounting to the sum of $3,394.11, and that on April 22,1950, prior to the issuance of the preliminary injunction, an income tax lien had been filed against the property in the sum of $15,222.82. Thereupon defendants made a motion to dissolve the preliminary injunction on the ground that plaintiffs had misrepresented essential facts to the court with reference to the taxes. The motion was granted and the preliminary injunction dissolved on August 28, 1950, upon the ground that plaintiffs had perpetrated a fraud upon the court through their misrepresentations upon which the court had relied.