Rabinowitz v. Kandel

Opinion

FLEMING, J.

In their third cause of action plaintiffs Rabinowitz and Bernstein, doing business as The Wilshire Company, sought to recover from defendants Maurice Kandel and wife the balance of $9,165.12 due on a $10,000 promissory note dated 1 November 1962.

As an affirmative defense to this third cause of action the Kandels pleaded that on 6 November 1962 plaintiffs orally agreed to accept an assignment of proceeds due the Kandels from a certain escrow in full and complete satisfaction of the $10,000 note, and that such an assignment had been made by defendants and accepted by plaintiffs.

The proof showed that on 1 November 1962 plaintiffs borrowed $10,000 from their bank and lent it to the Kandels on an unsecured 30-day note. On 6 November the Kandels in writing assigned to plaintiffs from a particular real estate escrow the sum of $10,000 which they said would become payable to them on the closing of the escrow.

On 10 December the Kandels, learning that $10,000 cash would not be forthcoming from the escrow, cancelled the $10,000 assignment to plaintiffs and gave the escrow holder instructions that not to exceed $1,000 from the escrow, “together with $4,200 third trust deed and note in its present condition (Unassigned to The Wilshire Company), together with any other papers due seller [the Kandels] at close of escrow are to be forwarded to The Wilshire Company...”

Thereafter, two notes payable to Maurice Kandel and purportedly secured by deeds of trust were forwarded by the escrow holder to plaintiffs. One was a $4,200 note of Elizabeth Farrington, the other a $4,600 note of Betty Escollies. Kandel did not make any written assignment of either note to plaintiffs, not did he make any assignment of the deeds of trust to which the notes referred.

On 23 January 1963 plaintiff Rabinowitz wrote Maurice Kandel:

“I have been trying and trying to get to talk to you but you never call me back. If you recall, the $10,000.00 is long overdue on the note and the bank has been insisting upon payment.

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“As to the Elizabeth Farrington type of person, it is very, very difficult to get anywhere with them. I have spent a great deal of time with them but without any results. Therefore, we would like to have you straighten up with us at once since the payment to the bank is long overdue; however, Alex and I, in view of the fact that we have spent so much time in this matter and are acquainted with all of the facts, are willing to represent you in trying to collect money from them, if possible. It may be necessary to foreclose on them. With this type of people, it is not advisable to leave a long period of time expire—but you must show action. I told her, in no uncertain manner, that unless they come up with money, that we will start foreclosure action.