Furesz v. Garcia

[795]

Opinion

ELKINGTON, Acting P. J.,

Plaintiff Julianna Furesz’ appeal is from “that portion of the judgment ... in favor of defendants Andres C. Garcia and Rachel A. Garcia ... providing that plaintiff was not entitled to unaccrued interest after defendants’ breach on their obligations under a promissory note and deed of trust for the sale of certain real property.”

There is no substantial dispute as to the relevant facts.

Plaintiff and her now deceased husband were the payees of a promissory note executed by defendants in 1969 for $24,000, payable in monthly installments of “principal and interest” of $193.35

(not

“or more”) over a period of 20 years. The promissory note was secured by a trust deed, of which defendants were trustors, on real property consisting of an improved building lot, and it contained the following provision: “In the event the herein described property or any part thereof, or any interest therein is

sold, agreed to be sold, conveyed or alienated

by trustor, or by the operation of Law or otherwise, all obligations secured by this instrument, irrespective of the maturity dates expressed therein,

at the option of the holder thereof and without demand or notice shall immediately become due and

payable.” (Italics added.)

Eight years later, when there was a principal balance on the promissory note of approximately $18,000, defendants “sold, agreed to be sold, conveyed or alienated” the subject real property. In the course of the transaction defendants tendered plaintiff the amount of principal and interest then due, in order that the real property might be “refinanced.” Plaintiff rejected the tender upon defendants’ refusal to add another $3,500, a figure which approximated income taxes on capital gain resulting from the prepayment, if made. (Somehow defendants’ sale transaction was consummated, apparently by the placing of funds by defendants in escrow as required by a title insurance company.)

Plaintiff thereupon filed the instant action under Code of Civil Procedure section 726 against defendants. She