Johnson v. Flanery

PULLEN, P. J.

Plaintiff, as trustor, in a deed of trust executed in favor of defendants as trustees for Frank Casey, is endeavoring by this action to recover from respondents as such trustees $1974.16, together with interest. The facts in this case are substantially the same as are set forth in

Casey

v.

Nishihara et al.,

213 Cal. 467 [2 Pac. (2d) 778], so we need not again repeat them except to say that the trust deed in question was executed by plaintiff and appellant F. E. Johnson upon a piece of real property in the county of Tuba, and was given to secure the repayment of $14,340.72. At the time of the execution of the deed of trust the sum actually owing was $12,366.56. There was then existing, however, and a charge against the real property, certain delinquent taxes in the sum of $1974.16. Upon the promise of Casey to discharge these tax delinquencies for Johnson this amount was added to the principal obligation. Casey failed to keep his promise to discharge these tax liens, and had not done so up to and at the date of sale of the property under the deed of trust. The property was sold by the trustees at public auction to the beneficiary, Casey, for $15,799.46, which amount included the $1974.16 for delinquent taxes. Subsequent to the purchase by Casey, he paid the sum of $1974.16, together with

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all accruing costs, penalties and charges, and redeemed the real property from the delinquent taxes.

It is the contention of appellant that he, as trustor, has a right to recover from the trustees the difference between the amount that the beneficiary bid at the time of the sale and the amount actually owing under the promissory note for which the trust was executed as security.

One of the points urged by appellant is that Casey in bidding an amount greater than the actual amount due, thereby prevented others from bidding, but the trial court specifically found, and we have no evidence to the contrary before us, that there was no competitive bidding for the property at the sale.

It must be admitted that the bid of Casey was, to the extent of $1974.16, in excess of the amount actually due at the time of the sale, but inasmuch as it was specifically agreed between Casey and Johnson when the note was signed that Casey was to pay this item of delinquent taxes, the application by Casey of this amount was with the express permission of the trustor, and having thus discharged his obligation by the payment of the tax out of the surplus arising from the sale, the trustees cannot now be considered as holding this surplus for the use of trustor. There can be no doubt that if Casey had paid the tax prior to the sale it would have been a proper charge against the land, and because he paid it after the sale in accordance with the prior agreement as to payment, does not entitle the trustor to claim the amount.