T. L. Reed Co. v. Kruse

PRESTON, J.

Action for an accounting upon sale of land by a surviving trustee pursuant to the provisions of a deed of trust. Plaintiff alleged that the money received by defendant trustee at the time of sale was $15,000 in excess of the sum required to discharge the indebtedness under the trust deed, together with advancements and expenses, including costs of sale. Defendant answered, alleging that he sold the property for $61,043.30, the exact sum required to satisfy said items. Upon conflicting evidence the court found that defendant received from the purchase price of said property $5,000 in excess of the amount required to discharge the indebtedness of plaintiff and sums otherwise advanced and secured by said deed of trust. Judgment followed for plaintiff accordingly and defendant appealed.

The record fails to show the particular items which went to make up the $5,000 award to plaintiff but it does contain evidence amply sufficient to support the findings and judgment, as hereinafter set forth.

[183]

The trust deed was given to secure a $40,000 promissory note and later advancements made in behalf of plaintiff. Plaintiff defaulted and defendant took possession of and conducted farming operations on the premises from January 2 to June 10, 1929. At sale of the property, held on the latter date, it was bid in by the beneficiary named in said deed of trust for the exact amount due according to its records, to wit: $61,043.30. In calculating the sum to be bid, the beneficiary included the principal debt, interest, costs and expenses, and in addition, a $2,000 attorney’s fee and expenses incurred in farming the land during the aforesaid period of occupation, including $1500 for services of a supervisor who had possession of and operated the farm. During said occupancy a number of fruit-trees were severed and the wood therefrom was cut and partly corded. After sale of the property, this wood, which had remained thereon, was sold by the purchaser at a profit of perhaps $1500 but plaintiff was not given credit for such sum or any part thereof.

The deed of trust provided that the trustee should pay the expenses of sale, including an attorney’s fee in a fixed amount. But here no fee was actually paid to any attorney. Apparently necessary legal duties were performed by general counsel for the beneficiary, an insurance company. These facts justify disallowance of the attorney’s fee of $2,000. The purpose of said provision of the trust deed was to place a limit upon the amount of fee which could be charged, not to bind the trustor to pay such a sum if it was not actually expended or incurred as an expense of the sale.