Petit v. Blenkiron

YORK, J.

On June 25, 1926, defendants William Blenkiron and Frederick C. Wolter executed two promissory notes, one in the sum of $16;500 in favor of Title Guarantee and Trust Company, due three years after date; the other in the sum of $40,000 in favor of Joseph N. Hanson and Helen M. Hanson, due five years after date. This latter note, upon which a payment of $10,000 was subsequently made, was assigned to the plaintiffs and is the subject of the present action. On the same day and as a part of the same transaction, these two defendants executed a declaration of trust in the nature of a subdivision trust naming the Title Guarantee and Trust Company, as trustee. From this declaration of trust it appears that both notes were given as part of the purchase price of two separate parcels of real property which had theretofore been transferred to said title company by two deeds executed on June 15 and June 22, 1926, as security for the payment of the two notes. At the time of the execution of the trust indenture, the two named defendants were the owners in equal shares of the entire beneficial interest therein. -Default was subsequently made in the payment of principal and interest due on the notes, and declaration of default was made by the holder of the $16,500 note. Notice of default and election to sell was recorded by the trustee on December 7, 1933, and at the trustee’s sale of the property held on May 5, 1934, the property was bid in by the Title Guarantee and Trust Company for the full amount of its $16,500 note with costs. The complaint in this action was filed on December 4, 1934. Nineteen assignments of beneficial interests in the trust were alleged in the complaint, and judgment was sought against William L. Blenkiron and Frederick C. Wolter for the full unpaid balance of $30,000 and interest due upon the note in favor of Joseph N. Hanson and Helen M. Hanson, and against the remaining defendants in proportion to the beneficial interests assigned to them. Judgment was rendered as prayed for in the complaint, and from this judgment defendants Frederick C. Wolter, Alonzo J. Wolter and Dora Louise Wolter have appealed.

[753]

Appellants contend (a) that plaintiffs’ action is barred by the provisions of subdivision 1, section x337, Code of Civil Procedure; and (b) that “the sale and assignment of beneficial interests to Alonzo J. Walter and Dora Louise Wolter were void for the reason that no permit for their issuance was procured from the commissioner of corporations of the state of California: Hence, no rights accrued thereunder to the holders of the promissory note sued upon”.