Algeri v. Tonini

PETERS, P. J.

Plaintiff brought this action against the defendants for the judicial foreclosure of a deed of trust and for a deficiency judgment if the proceeds from the sale were insufficient to pay plaintiff’s claim. The trial court granted this relief. Milton and Bertha Tonini appeal. Their sole contention is that the deed of trust in question was a purchase money deed of trust and that, under the provisions of section 580b of the Code of Civil Procedure, no prospective deficiency judgment should have been allowed.

The issue as to whether or not this was a purchase money deed of trust was not presented in the pleadings nor at the trial. So far as the Toninis are concerned, the complaint alleges that on August 5, 1952, they executed and delivered to plaintiff their promissory note for $14,102 payable on or before one year from date; that the note was secured by a deed of trust upon certain real property; and that no part of the principal or interest has been paid.

The Toninis did not deny the major allegations of the complaint. Their sole defense in their answer and at the time of trial was that there was no loan at all from the plaintiff to them; that the plaintiff had entered into an oral joint venture agreement with the Toninis to purchase the property and to hold it for resale; that title was to be taken in the Toninis’ name and plaintiff was to receive the promissory note and trust deed to secure the funds advanced by her in the joint venture; that the note was to be paid only from the proceeds of the sale of the property; that in no event was the plaintiff to receive any payment from the Toninis until the sale of the property; that since the property had not been sold, no payment was due to the plaintiff.

The case was tried upon the sole issue of whether or not the transaction was a loan, or a joint venture. The court

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found it to be a loan and entered its judgment accordingly.

The conclusion that the transaction was a loan secured by a deed of trust is supported by the evidence. The plaintiff, of Italian heritage, who reads and speaks English with great difficulty, and who gave some of her testimony through an interpreter, testified that, prior to August 5, 1952, she had money on deposit in a bank at 2 per cent interest; that on that day she withdrew $14,102 and turned it over to Milton Tonini; that it was a loan to Tonini; that he took her to a title company where she paid over the money; that Tonini told her it was for a speculation he was interested in; that he told her that she was loaning the money to him for this speculation and that she would get 6 per cent interest; that she had been taken to see the property later given as security in October of 1951; that she received a title insurance policy as a receipt for the money loaned to Tonini, and got a note and deed of trust from the Toninis; that Milton Tonini told her, on many occasions, that she would get 6 per cent interest; that he never told her that she would receive 25 per cent of the profits when the property was sold; that she never received from Tonini a memorandum to this effect; that on several occasions when she asked Tonini for the money he replied that she should not worry because she was getting 6 per cent interest. Although her testimony is somewhat difficult to follow, it is clearly to the effect that she did not advance the money to purchase any real property, but loaned it to Tonini on his promise to pay her 6 per cent interest. The unpaid interest at the date of trial amounted to $3,128.96.