Richbart v. Ullman

YORK, J.

This is an appeal by plaintiff from a judgment in favor of defendants, who were the guarantors of a promissory note for $25,000 payable to plaintiff, maturing five years after its date—March 5, 1928—bearing interest at twelve per cent per annum and secured by a deed of trust.

As against defendant M. H. Horton, the appeal has been dismissed, by reason of his discharge as a bankrupt.

The loan was handled through an escrow held by American Safe Deposit Company, the parties to the escrow being plaintiff and the corporate maker of the note, Theatrical Enterprises, Inc., the latter not being named a party defendant in the suit. The escrow instructions providing, among other things, that plaintiff handed the escrow-holder his check for $25,000 payable to Theatrical Enterprises, Inc., but that it was

not to present

the check for payment until it held for the account of plaintiff a deed of trust covering four parcels of real property and the note secured thereby, together with a guarantee of title showing the trust deed a prior encumbrance upon the property. The instructions were dated March 5, 1928, and it was provided that they were not to run longer than a period of ten days from their date. On

March 5, 1928,

when the check was delivered to

[398]

the escrow-holder, plaintiff did not have sufficient funds on deposit with the bank to meet the check, but on March 17th he learned that all necessary papers were' in the hands of the escrow-holder and that the check was about to be presented to the bank, and thereupon deposited the amount of the check in the bank upon which it was drawn, and on

March 21, 1928,

the check was paid.

Upon trial of the action it was found by the court that “plaintiff L. Riehbart asked, demanded and charged a greater sum for the loan of said $25,000.00- than at the rate of $12.00 per $100.00- for one year; that it is true that he thereby violated the provisions of Act 3757 of the General Laws of the State of California; that it is true that he asked, demanded and charged interest at the rate of 12% per annum on the sum of $25,000.00 from the 3rd day of March, 1928, for a period of five years thereafter and that he did not actually loan said sum of $25,000 until the 21st day of March, 1928”.