Birch Ranch & Oil Co. v. Campbell

California Court of Appeal Mar 24, 1941 No. Civ. 12270Published

Before: Doran

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Holding. The court held that a levy and sale of property in an action to which the plaintiff was not a party does not cast a cloud on the title, rendering any subsequent payment to release the property voluntary and non-recoverable. Furthermore, because the plaintiff failed to show actual damages, it could not recover for injury to credit or punitive damages.

Issues

Whether a levy and sale of real property in an action to which the plaintiff is not a party creates a cloud on title.
Whether money paid to release property from a levy that does not cloud title is recoverable as an involuntary payment.
Whether a plaintiff can recover punitive damages in the absence of actual damages.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The levy and sale complained of were made under an execution issued in an action to which plaintiff was not a party and therefore failed to cast a cloud upon plaintiff’s title to its real property.”

“Money paid to redeem real property sold under execution, where such sale did not cast a cloud upon the title, must be held to have been paid voluntarily and may not be subsequently recovered in an action therefor.”

“plaintiff has shown no actual damages, and exemplary damages, being mere incidents and not the basis of a cause of action, are not recoverable in the absence of a showing of actual damages.”

DORAN, J.

The plaintiff, in an action for damages for a wrongful levy upon and sale of real property, appeals from a judgment dismissing the action after a general demurrer to the second amended complaint was sustained without leave to amend further.

[626]

The complaint in question contains the following allegations, the truth of which must be presumed on this appeal from a judgment after demurrer: That plaintiff is a California corporation possessing large assets and extensive business activities, chief of which are ranching on a large scale and drilling for and production of oil; that during all times material to the action plaintiff was the owner of certain described real property; that on or about April 1, 1938, and ever since, plaintiff has been greatly in need of additional finances for use in its operations, and at said time it became necessary for plaintiff to sell the said real property and also to obtain a substantial loan; that on or about April 14, 1938, the defendant, who had obtained a judgment against A. Otis Birch and wife, caused the sheriff of Los Angeles County to make a levy of execution upon all right, title and interest of said A. Otis Birch and wife in the said real property, knowing that said Birch and wife had no interest in the property and knowing plaintiff’s needs above mentioned and the necessity for plaintiff to sell the property. The complaint further alleges that plaintiff on May 2, 1938, without knowledge of the said levy of execution, entered into an agreement to sell the said real property, the terms of which agreement provided that plaintiff would deliver satisfactory title to the purchaser within a reasonable time and would deliver a certificate of title thereon, and the transaction was accordingly placed in escrow. It is then alleged that plaintiff first learned of the said levy of execution on June 10, 1938, through receipt of a notice of sale by the sheriff of the real property under execution; that defendant caused the sheriff to hold the sale on July 5, 1938, notwithstanding the demand of plaintiff’s attorney at the sale to cease and desist, and that at the said sale the property was sold to the defendant, who caused the sheriff to issue a certificate of sale based upon the said purported sheriff’s sale, and who then recorded the said certificate in Los Angeles County; that thereafter the title company completed the title search on the said property and informed plaintiff that the escrow was ready to be closed and that satisfactory title to the said property was ready to be delivered pursuant to the terms of the escrow, except for the said levy, sale and certificate of sale; and the title company informed plaintiff that because of the said levy and sale it would not deliver a certificate of title, which refusal was

Birch Ranch & Oil Co. v. Campbell

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DORAN, J.

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