Warington Lumber Co. v. Fullerton Mortgage & Escrow Co.

GRIFFIN, P. J.

Defendant-appellant, Fullerton Mortgage & Escrow Company, appeals from a judgment in favor of plaintiff-respondent, Warington Lumber Company, for $26,756.27 in a breach of contract action brought by plaintiff-respondent, a building materials dealer who sold lumber and other building materials to Hintz Development Corporation. Hintz became delinquent in its account with plaintiff, owing about $120,000. Funds were being furnished to Hintz under a construction loan from a savings and loan company. Defendant had obtained this loan for Hintz and received a fee for this service. Upon learning that the payments or “draws” were being paid by the savings and loan company by means of cheeks payable to Hintz and J. W. Hartman, president and general manager of defendant escrow company, plaintiff informed defendant of its claim and said it would file a “withholding” notice with the savings and loan company unless defendant company would agree that plaintiff’s claim would be taken care of out of the checks received from the savings and loan company. Defendant agreed to take care of plaintiff and sent the following letter, dated September 19,1959, to it:

“Warrington

[sic]

Lumber Company 620 Vance Street Santa Ana, California

“Attn: Charles Hester “Dear Sir:

“Please be advised that Mr. Jack Hints, president of the Hintz Development Company, has authorized us to withhold the sum of $30,000.00 from each of the following draws, dated September 28, October 5, 12, and 19, until a total of $120,000.00 is paid in satisfaction of your indebtedness on tract 2511.

“Prior to release of funds to you on the draw of Octo

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ber 19, we will want a statement of agreement between you and Hintz Development Company as to the balance due and final settlement.

“Sincerely,

“John W. Hartman

President

“APPROVED BY:

“HINTZ DEVELOPMENT COMPANY