Van Lee Hood v. Verdugo Lumber Co.

MORTON, J.,

pro tem.

Plaintiffs brought this action for an injunction and accounting. Defendants all answered and cross-complaints were filed by Verdugo Lumber Company, a corporation, and Emil P. Swanson, doing business under the fictitious firm name and style of Eagle Rock Lumber Company. Judgment was for cross-complainants and plaintiffs and cross-defendants appeal.

Plaintiffs executed and delivered to one Harold L. Shaw a promissory note for $5,000, together with a trust deed securing same, both dated November 3, 1928, for the purpose of enabling Shaw to purchase building materials of defendants Verdugo Lumber Company and Eagle Rock Lumber Company, with which to erect and construct for them certain improvements upon the real property described in the trust deed. The note and trust deed were placed in escrow with the Security First National Bank of Los Angeles, a national banking association, in accordance with escrow instructions which provided that if $4,200 was paid to the escrow-holder by Van Lee Hood for the account of Verdugo Lumber Company and Eagle Rock Lumber Company within thirty-five days after the filing of notice of completion, then the note and' trust deed were to be delivered to Van Lee Hood. If the money was not so paid then the note and trust deed were to be delivered to the aforesaid lumber companies, together with an owner’s offset statement dated January 5, 1921, by Van Lee Hood and Arnette McLean Hood. The credit of $4,200 was to be divided equally between the lumber companies and the balance of the purchase price for materials used was to be paid in cash by Van Lee Hood and wife “as per building progresses”. Certain discounts were to be allowed by the lumber companies if the materials used were paid for on or before thirty-five days after the filing of the notice of completion. An issue developed over the amount due for the building materials used and plaintiffs by this action asked an accounting. In their answer the defendant lumber

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companies alleged that Shaw was only the agent of and superintendent of construction for plaintiffs; the note and trust deed were executed and delivered by plaintiffs for the purpose of obtaining discounts on the price of the building materials if paid for within a specified time and if not so paid for then the note and trust deed were to be used as security for the building materials furnished. In their cross-complaints it was alleged that plaintiffs failed to take advantage of the discount provisions and that the materials were furnished at the special instance and request of plaintiffs and that they promised to pay the reasonable value thereof. The trial court rendered judgment in favor of the lumber companies and this appeal is on the judgment-roll alone.