W. B. Scarborough Co. v. Colver

HOUSER, J.

So far as is deemed material to this appeal, the facts herein appear to be as follows:

On April 24, 1913, defendants executed a trust deed conveying certain real property (on which was erected an apartment house) to a trustee for the purpose of securing a loan made by the plaintiff to defendants, which trust deed contained the usual provision that in case of default in the payment of either the interest or the principal, upon giving notice as provided in said trust deed, the trustee was empowered to sell the property. Contemporaneously with the execution of the trust deed, the plaintiff and defendants entered into a written agreement which, among other things, contained a provision that defendants were “to turn over the

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entire income from the apartment house on the property to the plaintiff, and out of the income the plaintiff to pay the interest on a prior trust deed, and insurance premiums, and the balance of tíie income to be applied on the principal of the second deed of trust executed therewith.”

Defendants failed to pay the indebtedness secured by the deed of trust as therein provided, and on November 24, 1917, the trustee sold the said property. At such sale the plaintiff' became the purchaser of the property, and the trustee thereupon executed a deed therefor to the plaintiff. During all the time after the execution of the trust deed, and up to the time of the sale of the property by the trustee, defendants were in possession of said property and were operating the same as an apartment house.

The evidence admits of the conclusion that after the date of the sale of the property the plaintiff employed defendants to remain thereon and to operate the same, with the understanding that defendants were to account to the plaintiff for the rents received. On March 20, 1923, the plaintiff served on defendants a written notice which, among other things, in effect terminated the arrangements theretofore existing between the plaintiff and defendants and canceled the authority of defendants to thereafter collect rents from tenants for the use and occupation of any of the apartments or rooms in said apartment house. Notwithstanding such notice, and during the months of April, May, June and July, 1923, defendants actually collected and received rents from the tenants in the rooms or apartments of said apartment house aggregating the sum of $2,715. No part of the sum so collected having been paid to the plaintiff, the action at bar was brought for money had and received, the complaint alleging: ‘ ‘ That within one year last past the defendants, Kate Colver and Fred Colver, and each of them, became and are now indebted in the plaintiff in the sum of Two Thousand Dollars ($2,000.00) for money had and received by the said defendants, and each of them, for the benefit of the plaintiff, and no part of which sum has been paid.” Defendants’ answer is a denial that they are indebted to the plaintiff in any amount whatsoever.