Duarte v. Lake Gregory Land and Water Co.

[103]

Opinion

KAUFMAN, J.

This action for declaratory relief results from a dispute between the previous owner and the present owners of a motel near Lake Gregory in San Bernardino County as to which of them is entitled to $45,000 paid to their joint account by Lake Gregory Land and Water Co., whose negligence resulted in mudslide damage to the motel property. The trial court divided the disputed sum between the parties and they each appeal from the judgment, each claiming exclusive right to all of said $45,000.

Material Facts

On February 25, 1969, the motel property was partially destroyed and damaged by a landslide from adjoining property owned by the Lake Gregory Land and Water Co. The damage to the motel property amounted to at least $45,000, and for purposes of this appeal it is established that the landslide resulted from negligence on the part of Lake Gregory Land and Water Co. Lake Gregory Land and Water Co. has paid to the joint account of plaintiff and defendants the sum of $45,000.

At the time of the mudslide damage, the motel was owned by plaintiff. Defendants held a promissory note secured by a deed of trust on the motel property. Thereafter, plaintiff fell into default on the promissory note and deed of trust, and defendants initiated proceedings to sell the motel property under the power of sale in the deed of trust. On October 31, 1969, defendants purchased the motel property at the trustee’s sale at which the trustee, on defendants’ behalf, bid in the unpaid balance of the promissory note together with interest and costs of sale in the amount of $25,341.93. The deed of trust, incorporating the provisions of another recorded deed of trust, contains the following provision: “Any award of damages in connection with any . . . injury to said property or any part thereof is hereby assigned to Beneficiary ....”-

By its findings of fact and conclusions of law, the trial court determined that the amount due from plaintiff to defendants on the promissory note at the time of the trustee’s sale including costs and interest was $25,341.93; that after the trustee’s sale, defendants paid $2,253.47 taxes on the motel property; that the total of these two items is $27,595.40; that the true value oí the property at the time of the trustee’s sale was $6,750; and that, deducting the $6,750 from $27,595.40 leaves $20,845.40, the sum to which defendants are entitled out of the $45,000 paid by Lake Gregory Land and Water Co. The court found that plaintiff was entitled to the balance of said $45,000, to wit, $24,154.60.