Powell v. Johnson

California Court of Appeal Mar 24, 1942 No. Civ. 2690Published

Before: Marks

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Holding. The court held that a trial court's failure to make findings on material issues of fact, specifically regarding the actual consideration for a promissory note, constitutes an error of law requiring reversal.

Issues

Whether the maker of a promissory note may prove that the actual indebtedness is less than the face value of the note.
Whether the trial court erred by refusing to make findings on material issues of fact raised by the defendant's special defenses.

Disposition. reversed

Quotations verified verbatim against the opinion

“It is a thoroughly established rule in California that the maker of a promissory note may prove the actual consideration given for it and may prove that the actual amount of the indebtedness is less than the face of the note.”

“The special defenses presented a material issue on which the trial court should have made findings.”

“It has been repeatedly affirmed that where a court renders a judgment without making findings upon all material issues of fact, the decision is against law”

MARKS, J.

This is an action to foreclose a mortgage on real property in Kern County. Plaintiffs were given the usual decree of foreclosure directing that the property be sold to pay $6,500, the principal of the secured note, $4,389.72, accrued interest, $40, cost of the title search, and $1,250, attorneys’ fees.

Earl F. Long loaned Isaac H. Vogle, his aged uncle, various sums of money over a period of years, taking notes secured by mortgages on Tulare and Kern County properties.

The documents affecting the Tulare County property are the following: Note for $2,000, dated January 3,1922, secured by a mortgage recorded January 13, 1922. Release of this mortgage recorded June 21, 1929; note for $2,980, dated December 28, 1928, secured by a mortgage recorded December 29, 1928. Contract dated December 4, 1933, pertaining to the last mentioned note and mortgage reciting that “the balance owing upon said promissory note is $1,500.00” and extending the due date of that sum to “on or before the 28th day of December, 1938.”

The documents affecting the Kern County property are the following: Note for $1,800, dated September 14,1923, secured

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by a mortgage recorded September 22, 1923. Release of that mortgage recorded June 21, 1929. Note for $3,207.66, dated June 15, 1929, secured by a mortgage recorded on June 21, 1929. Release of that mortgage recorded December 6, 1933. Note dated December 15, 1932, for $6,500, secured by a mortgage recorded December 6, 1933.

There was also an unsecured note dated June 19, 1929, for $50.

All of the foregoing notes were signed by Mr. Vogle and were made payable to Mr. Long who died on May 5, 1935, a resident of Franklin County, Ohio, where his estate was probated. Ancillary letters were taken out in Tulare County. Ownership of the unpaid notes together with the mortgages passed to plaintiffs.

Actions were started in Tulare and Kern Counties against Fogle to foreclose the mortgages. Fogle died and the actions were continued against Glenn M. Johnson as administrator of the estate.

The Tulare County action was tried first. While the pleadings are not before us it is apparent from the findings that a special defense was interposed putting in issue the total amount of the indebtedness, alleging that it was less than the $8,000 principal of the two notes and asking for an accounting to determine the amount due and unpaid on the notes.

Powell v. Johnson

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MARKS, J.

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