Aspeitia v. California Trust Co.

VALLÉE, J.

Plaintiffs brought this action against California Trust Company, now California Bank, as. executor of the will of Cayetano Minjarez, deceased, to recover moneys alleged to have been paid in violation of the usury law. Plaintiffs had judgment. Defendant appeals.

On December 20, 1950, Minjarez loaned plaintiffs Marcus and Manuel Aspeitia $560; on January 24, 1951—$1,700; on February 16, 1951—$300; on April 3, 1951—$1,440; a total of $4,000. On April 3, 1951, Marcus and Manuel, as first parties, and Minjarez, as second party, entered into a written agreement by which the Aspeitias fictitiously acknowledged receipt of $5,600 and agreed to deliver to Minjarez (1) a third deed of trust for $4,000 on a parcel of realty; (2) a second deed of trust for $4,000 on another parcel of realty; and (3) a chattel mortgage for $1,600 on the fixtures and equipment of a meat market. Marcus and Rose Aspeitia executed two deeds of trust in accord with the agreement naming California Trust Company as trustee and Cayetano Minjarez and his

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sister as beneficiaries, and executed the chattel mortgage. The agreement provided:

“The above loan has to be paid off at the rate of $100.00 per month beginning on May 1st, 1951 and continuing until the sum of $4,000.00 has been paid.

“Payments of $50.00 per month on the Chattel Mortgage to start on April 1st, 1952, and continuing until the sum of $1,600.00 has been paid in full. . . .

“When the sum of $5,600.00 has been paid within 41 months from this date, the above documents held as guarantee will be reconveyed. It is understood that payments will be $100.00 for the first year and thereafter $150.00 per month. Time is of the Essence.”

There was much evidence that only $4,000 was loaned and that the $1,600 was interest. At the trial, counsel for defendant stated “there is no question in my mind that perhaps in this situation they might have paid usury. ’ ’ By January 3, 1953, plaintiffs had paid $2,000 on the obligations. Minjarez died on April 25, 1953, and defendant is the executor of his will. On July 21, 1954, proceedings were commenced to foreclose the two deeds of trust referred to in the agreement. The foreclosure sale was noticed for December 7, 1954. On December 6, 1954, defendant demanded that plaintiffs pay an additional $4,073.73, consisting of $3,890.95 claimed principal and interest and $182.78 foreclosure costs. Plaintiffs borrowed $4,073.73 from a Mr. Nordin and gave him a promissory note in that amount, and a chattel mortgage and an assignment of rents as security therefor. On December 6 Nordin paid the $4,073.73 to defendant in behalf of plaintiffs.