Sugiyama v. Cuneo

BRAY, P. J.

Plaintiff appeals from an adverse judgment in favor of defendants.

[398]

Question Presented

Is the judgment supported by the evidence ? This depends upon whether defendants Cuneo were entitled under the circumstances to stand upon their technical right to foreclose their second deed of trust without notice to their junior encumbrancer, plaintiff.

Evidence

This is purely a factual ease, with very little conflict in the evidence.

Certain land in the San Francisco Western Addition Redevelopment Area belonged to the Reverend Brown. Prior to demolishment it contained a church with four apartment rental units above. It was originally subject to three deeds of trust, the first to MeKeever for $9,000, the second to defendant Bories for $7,000, and the third to Bories for $13,500. However, Bories sold the second deed of trust to defendants Cuneo and the third to plaintiff Sugiyama. In the sale to the latter, it was agreed that plaintiff was to collect the first $11,500 principal and interest and Bories would receive the $2,000 balance, if collected.

Reverend Brown made payments on all three deeds of trust until February 1959, although apparently the payments had been slowing down for some time, and Cuneo had on occasion received rental checks that were not cashable. The redevelopment program was under way. Certain buildings in the area had already been demolished. The Redevelopment Agency appraised the property at $22,000 and opened an escrow with a title company to acquire the property. On May 15, 1959, the title company was notified by the agency that a controller’s warrant for $22,000 was available to be used for the purchase of the property. The title company then requested of Brown and the lienholders that they place their notes and deeds of trust, reconveyance, deeds, instructions and demands in escrow.

On April 21, Brown, evidently realizing that as the total amount of principal due on the liens (to say nothing of interest) was greater than the amount the agency would pay for the property, deposited a deed of his interest, with instructions to the title company to pay the entire purchase price to the lienholders. The deed and instructions were prepared for Brown by Cuneo. MeKeever then deposited his note, deed of trust and request for reconveyance with instructions that he was to receive $8,669.64 plus interest. May 4, Cuneo deposited his note, deed of trust and request for reconveyance