Ciulla v. Telschow

MUSSELL, J.

This is an action for foreclosure of a first deed of trust and for reformation of a second deed of trust and note secured thereby on the same real property. The trial court denied the foreclosure, reformed the second promissory note so as to provide for the payment of interest from December 15, 1953, instead of from August 1, 1956, as provided in said note. The court also denied plaintiffs’ prayer for attorneys’ fees. Plaintiffs appeal from that part of the judgment denying their prayer for attorneys’ fees and defendants appeal from the judgment insofar as reformation of the second promissory note is decreed therein.

Plaintiff Diego Ciulla and his son, William, were the owners as joint tenants of a four-unit apartment building in the city of San Diego. Diego Ciulla, aged 71 years, had less than one school year of formal education and immigrated to the United States from Sicily when he was approximately 21 years old. He testified at the trial he could not read and write “like you people that go to school”; that he was introduced to defendant Charles A. Northcutt by a mutual friend and had several discussions with Northcutt relating generally to the terms and conditions of the sale of the apartment building to Northcutt. Thereafter, on or about December 15, 1953, Diego Ciulla and Northcutt went to the Union Title Insurance and Trust Company in San Diego to execute escrow instructions and the necessary documents for the sale of the property to Northcutt for the sum of $18,000. Diego Ciulla testified that he understood and it was agreed that there would be one trust deed and not two, and that the trust deed and note would bear interest from December 15, 1953, the date it was executed. However, pursuant to escrow instructions, defendant Northcutt paid $500 cash and executed a first deed of trust on the apartment building and on other property, securing a promissory note

[600]

for $4,500. This deed of trust and note were payable $150 per month, including interest at 6 per cent for the first year, and at the rate of $175 per month for the second year, beginning February 1, 1955. A second note and deed of trust were given by Northeutt to Giulia for the balance of the purchase price of $18,000, to wit, the sum of $13,000. This second note, by its terms, was payable at the rate of $175 per month, with interest at the rate of 6 per cent per annum from July 1, 1956, payments including principal and interest to begin on August 1, 1956, and to continue thereafter until the note was paid in full. In this connection Diego Giulia testified that he did not know until he started foreclosure proceedings that the second note did not provide for the payment of interest until 1956.