Mann v. Earls

SHINN, P. J.

The appeal is by plaintiff from a judgment foreclosing a lien on the real property of defendants Earls. The ground of the appeal is that the judgment was for an insufficient amount.

By contract entered into May 3, 1961, Central Home Improvement Co., as contractor, agreed to furnish material and labor, to install footing and to do certain other construction work upon defendants’ house in Los Angeles. The contract stated “Cash Selling Price $1,600.00, Down Payment Cash none, Trade-In none, Description none ... Unpaid Balance $1,600.00; Service Charge $740.00; Time Sale Price $2,340.00; Time Balance $2,340.00.” Defendants executed their note for $2,340, payable in 60 monthly installments of $39 each. The note provided for acceleration of maturity by the holder in case of default and for attorney’s fees for collection. Both the contract and the note gave the contractor a lien upon the real property as security for performance by defendants. The contract was transferred to plaintiff for a consideration of $1,350. Defendants did not appear in the action; their default was entered and judgment was given upon the evidence of plaintiff for the principal sum of $1,600, interest upon that sum for one year in the amount of $112, attorney’s fees and

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costs. The property was ordered sold at public auction, the judgment to be paid from the proceeds of the sale.

Plaintiff contends that the judgment should have been for the full amount of $2,340 with interest at 7 per cent per annum from the date of filing the complaint, plus attorney’s fees and costs. Defendants Earls have made no appearance on the appeal and an amicus curiae brief has been filed by the county counsel on their behalf. By this brief, the judgment for less than the full contract price is justified upon the ground that the suit is in equity, plaintiff was awarded $1,600 with interest for a year and that to have awarded an amount for unearned interest and other charges for the entire five years would have amounted to a forfeiture in violation of section 3369, Civil Code, and the exaction of a sum that was not justly due to plaintiff in violation of familiar principles of equity. Such was the reasoning of the trial court.

Plaintiff does not question that an action for foreclosure seeks equitable relief or that a court in such an action will refuse to enforce grossly unfair contracts or penalties or forfeitures. The rights of the parties, he contends, are governed by the Unruh Act (Civ. Code §§ 1801 et seq.), a comprehensive enactment governing installment sales. He quotes section 1802.10 of the act which provides “ ‘Time price differential’ or ‘service charge’ means the amount