Buley v. Murdoff

TUTTLE, J. This action was brought to rescind a contract for the sale of real property, and to recover possession of certain notes and stock assigned by respondent to appellant. Rescission was denied by the trial court, but judgment was entered ordering the return of said notes and stock to plaintiff. Defendant appeals from the judgment.

Throughout this opinion we have designated but one appellant, Frank L. Murdoff. The other appellant is his wife, but her name appears as a mere formality.

In the month of May, 1929, defendant sold plaintiff a tract of land in Los Angeles County. The purchase price was $52,699, and title was taken subject to a mortgage for $7,500 in favor of one Barnard. As part of the purchase price, plaintiff executed a note and deed of trust in favor of defendant, in the sum of $45,199.

The complaint states an action for rescission, based upon alleged fraudulent representations made by defendant. It also alleges that, subsequent to said purchase, plaintiff was induced to deliver to defendant 125,000 shares of stock in Western Borax Company, Ltd., “by reason of the false and fraudulent statements and representations made by defendant Murdoff, as hereinbefore alleged’’. The allegations of fraud referred to are matters which took place prior to the sale, and not to any statements and representations made subsequent thereto in relation to the stock transaction. The trial court found that there was no fraud whatever in connection with the sale, and denied a rescission. Judgment, however, was rendered that the said shares of stock be redelivered by defendant to plaintiff, and the appeal is taken therefrom by defendant.

[176]Within a short time after the sale, plaintiff became delinquent in his monthly payment of $1,000 upon the note mentioned. Finally, on July 28, 1931, the parties entered into an agreement, the purpose of which was to extend the time when defendant could sell the property under his deed of trust. Under its terms, 90,000 shares of the Borax Company were assigned and delivered to defendant, Frank L. Murdoff, who was the party of the first part. It provided that:

“All moneys received by first party from the sale or disposal of said stock or from second party, shall be applied to the payment of the balance due of the principal and interest on a note in the sum of $45,199.00 made out in favor of Frank L. Murdoff and his wife, secured by a deed of trust, and the further sum of the principal and interest due on a note secured by a first mortgage, both encumbrances being imposed upon the property hereinabove described, and the further sum of $200.00 for past expenses in connection with this transaction.”