County of Yuba v. Central Valley National Bank, Inc.

Opinion

KANE, J.

The County of Yuba (County) appeals from a judgment following nonjury trial denying recovery upon its complaint filed against Central Valley National Bank, Inc. (Bank), for damages resulting from an alleged breach of an instrument of credit.

In 1961, C.G.O. Enterprises, Inc. (CGO) purchased a 60-acre parcel of unimproved, agricultural land located about six miles southwest of Marysville for the purpose of constructing inexpensive single-family residences for personnel at nearby Beale Air Force Base. A tentative map proposing a subdivision containing 298 lots was thereafter filed, and financial commitments were obtained from Bank.

The proposal was later revised to encompass merely a portion of the 60-acre parcel, containing 50 lots and designated Tract 120. County’s Board of Supervisors (Board) approved a final map of Tract 120 and accepted streets and easements offered therein for dedication on August 8, 1962.

Later, CGO initiated plans for construction of a similar development on

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the remaining portion containing 52 lots and designated Tract 131. On May 6, 1963, pursuant to Business and Professions Code section 11611,

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and a County ordinance, CGO and County executed a subdivision agreement in which County agreed to approve the final map of Tract 131 and accept lands, rights of way and easements offered therein for dedication on condition that CGO complete required improvement work upon streets and drainage facilities within 12 months and, pursuant to section 11612, file an acceptable instrument securing the faithful performance of the improvement work in the sum of $35,020. An instrument of credit for said sum was executed and filed by Bank, and County’s Board approved a final map of Tract 131 and accepted streets and easements offered therein for dedication.

At about this time, however, a major program at Beale Air Force Base was discontinued, resulting in considerable reduction of base personnel. Consequently, CGO was unable to sell all houses built in Tract 120 and some loans extended by Bank to CGO respecting Tract 120 were foreclosed. Moreover, CGO was unable to obtain financing for Tract 131, and no construction or development of it was ever begun. At the date of trial, February 1969, Tract 131 remained as unimproved agricultural land.