Camp v. Oakland Mortgage & Finance Co.

California Court of Appeal Dec 17, 1932 No. Docket No. 8390.Published

Before: King

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Holding. The court held that the plaintiff's claim to the loan funds was inferior to the surety company's equitable lien because the conditions for payment of the draft were never met and the owners were not entitled to the funds while unpaid liens existed.

Issues

Whether an accepted assignment of loan funds is superior to the equitable lien of a surety company that paid lien claimants following a contractor's default.
Whether the plaintiff is entitled to payment when the conditions of the draft were not satisfied and the owners were not entitled to the funds.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The draft, by its terms, was not payable until the receipted bill was attached, and this was never done.”

“If they themselves could not collect it, if the contractor could not collect it, then plaintiff, the assignee, is in no better position.”

“it is true that the equitable lien of defendant upon the unpaid balance of the building loan is superior to that of plaintiff”

KING, J.,

pro tem.

The action is to recover from the Oakland Mortgage & Finance Company the residue or balance of a loan fund remaining in the hands of the Mortgage Company, the loan having been theretofore arranged by one George Phillips and wife to meet progress payments on a building erected for them by one G. R. Sterne as contractor.

This instrument reads:

“Oakland, California, June 8, 1927.

“Oakland Mortgage & Finance Co.

“1432 Franklin St.

“You are hereby requested to pay to M. A. Camp or order two thousand and 00/100 dollars, $2000.00 for repay

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ment of funds advanced to G. E. Sterne furnished on job at Bast side of Seventy Third Avenue, 100 feet South Foothill Blvd. Value received and charge same to loan of undersigned in amount of $10,000.00.

“George Phillips

“Nora Phillips.

“Part of final payment.

“This draft will not be honored unless receipted bill is attached.

“Accepted for payment when 4th payment on Loan is due and payable 35 days after filing notice of completion and building completed.

“Oakland Mortgage

Finance Co.,

“John A. Brennan, Manager.”

Several other persons made demand for the balance remaining in its hands under the loan arrangement, and being unable to determine to whom it should pay the same, the Oakland Mortgage & Finance Company moved the court below, in accordance with the requirements of section 386 of the Code of Civil Procedure, before answer filed, for an order discharging it from liability and dismissing it from the action, upon payment into court of the sum in dispute, and substituting in its place all of the adverse claimants. This order the court granted.

Camp v. Oakland Mortgage & Finance Co.

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KING, J.,

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