Harlow v. United Title Guaranty Co.

GRIFFIN, J.

Plaintiff and appellant brought this action to cancel a deed of trust and promissory note executed by her on December 5, 1945, on the ground it was paid by certain credits due her. Defendant and respondent Citizens National Trust and Savings Bank, Riverside, is the executor of the will of Richard C. Hattan, deceased. The note and trust deed were assigned to said deceased during his lifetime. Defendant and respondent United Title Guaranty Company is the trustee under the deed of trust.

Plaintiff was an employee of deceased. Hattan owned some real estate, was in the process of subdividing it, and had sold some of the lots at the time of his death. Plaintiff claims deceased agreed to give her one-half of the net profits of the sale of lots, and on July 8, 1952, she presented her creditor’s claim against the estate totaling $29,404.19, for participation

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rights in sold and unsold lots, and for 59 months unpaid salary at $100 per month. The claim was rejected on July 15, 1952, and no action was commenced thereon by the plaintiff. On December 5, 1952, she commenced this action to declare a balance of $4,213.58 due on said note and trust deed, paid by virtue of this unpaid claim.

Her testimony, received over defendants’ objections, was to the effect that she assisted Hattan in the preparation and sale of the subdivision lots and that he signed a written agreement that she was to have a one-half interest in the net profits; that she let Hattan have the agreement about two weeks before he died and she never saw it after that time. She claimed it “was something to the effect” that he would pay her one-half of the proceeds and $100 per month for “bookkeeping, etc.”, but she “couldn’t say positively”; that she discussed this agreement with Hattan on various occasions and went to his accountant with him for the purpose of preparing his income tax returns for the years 1947, 1948 and 1949; that Hattan told the accountant to set forth therein that one-half of the profits of the sale of the subdivision property was hers and that he did so; and that later, about two weeks before his death, Hattan gave her a memorandum of items “that I had paid to him through my work”; and he said “I had paid the loan.” No such memorandum was produced in evidence. The income tax return does disclose that a sale of lots took place in 1947; that the accountant showed plaintiff’s participation to be $3,564.67; and a deduction in this amount was taken. Also, the return for 1948 showed a similar participation for $2,600. All of these returns were prepared on a cash basis and the accountant testified this was done in accordance with the instructions of Hattan. The trust deed and note were found in the effects of the deceased with no indication that they were paid. The only notation thereon was a balance due of $4,213.58, on January 5, 1948.