Morris v. Rickmeyer

BARNARD, P. J. This is an action to cancel and set aside a sale of real property under a trust deed and to declare a grant deed to be an equitable mortgage securing an indebtedness which had previously been secured by the trust deed.

The defendant held a note for $4,500 secured by a trust deed, both executed by the plaintiff on September 16, 1926, the note being payable three years after date. On January 28, 1933, while in default in the payment of principal, interest and delinquent taxes, the plaintiff executed a deed conveying the property to the defendant, which deed recited that the conveyance was made in full payment and cancellation of the above-described note. On the same day the parties hereto signed an agreement providing that the grant deed, together with the agreement, should be left with a certain bank in which both kept deposits; that the plaintiff, on or before June 1, 1933, should pay all delinquent interest and taxes on the property; that if he failed to do so the bank should immediately deliver the deed to this defendant; that the intention of the agreement was to convey the property to the defendant without expense and without foreclosure of the trust deed, in case the payments were not made before June 1, 1933; that if the payments were made the defendant would extend the note secured by the trust deed for a specified time; and that the plaintiff thereby instructed the bank to [255]deliver the deed to the defendant at any time after June 1, 1933. The agreement and the deed were placed in escrow with the bank.

Nothing was paid prior to June 1, 1933. Shortly thereafter the plaintiff asked the bank not to deliver the deed until the parties could see if they could work out some other plan. On August 8, 1933, the plaintiff sent $50 to the bank for the defendant, saying in a letter that he could not understand “your mention of foreclosure, except that Mr. Bickmeyer thought I didn’t keep my promise”, and further saying that he would come on August 21st, and “I would suggest that any foreclosure action await until that time”. On September 23, 1933, the defendant caused to be recorded a notice of default and election to sell under the original trust deed. The plaintiff requested of the defendant and obtained various postponements of this sale from time to time until April 9, 1935. In the meantime he paid several payments amounting to $275, $240 of which was paid at the time of asking for postponements of the sale and upon condition that such requests be granted. In a letter dated June 28, 1934, requesting a further postponement of the sale the plaintiff stated that the defendant “holds a trust deed now in process of foreclosure”.