Hacienda Homes, Inc. v. Peck

NOURSE, P. J. Defendant appeals from a judgment in favor of plaintiff in an action to quiet title to real property.

On July 1, 1925, plaintiff who owned a large subdivision of property entered into a written contract for the sale of a parcel of the property to defendant for $7,253.67; the contract acknowledged receipt of a $5,000 down payment which was made by defendant’s release of a claim for a legal fee; the contract provided for payment of the balance in monthly installments of $75 plus interest, and for the pajnnent by defendant of certain road assessments and taxes; the contract contained a forfeiture clause and a clause making time of the essence. On the same day plaintiff executed a mortgage on the entire property to Anglo-California Trust Company to secure the payment of bonds in the amount of $650,-000, but expressly protecting the rights of defendant in the lot covered by his contract. On November 27, 1926, plaintiff executed as grantor a deed of grant, bargain and sale to Mercantile Trust Company, now known as American Trust Company. Contemporaneously with the execution of the deed the parties executed an agreement stipulating that the transaction was a mortgage, and also protecting defendant’s interest in the particular lot. Defendant never took possession of the property and paid none of the balance of the purchase price except $8.02 on May 24, 1928; he paid no road assessments or taxes after March, 1929, and paid the interest only until November 30, 1930. Plaintiff and American Trust Company wrote many letters to defendant requesting payment but defendant failed to respond except to suggest that he be allowed to trade his equity for a lot which would be fully paid up. He was advised to take up that question with an officer of the trust company but failed to do so. A conference between the parties on April 3, 1934, brought no offer by defendant to pay, [39]and a letter written by plaintiff’s attorney on April 18, 1934, brought no response. On May 16, 1934, American Trust Company notified defendant that unless he performed his contract by June 16, 1934, his rights thereunder would be forfeited. Defendant made no reply and on August 17, 1934, plaintiff commenced the instant action to quiet title. Defendant filed his original answer, counterclaim and cross-complaint in December, 1934, alleging that plaintiff breached the contract by encumbering the property. On December 31, 1936, defendant filed an amended answer, counterclaim and cross-complaint alleging that plaintiff induced him to enter into the contract by fraudulently misrepresenting its intentions because it intended to encumber the property without protecting defendant, and that plaintiff twice encumbered the property without protecting defendant; hence defendant sought to rescind the contract and recover the $5,000 down payment. Plaintiff and cross-defendant answered that the vendee’s rights were protected in the encumbrances, and that the cross-complaint was barred by the statute of limitations. During the trial of the case upon stipulation of counsel defendant’s amended answer, cross-complaint and counterclaim was amended to allege that plaintiff never tendered a deed to defendant. The trial court found that plaintiff owned the property, that defendant had no interest therein, that defendant’s rights were protected in the encumbrances, that there was no fraud, and that defendant’s cross-complaint was barred by the statute of limitations. The judgment quieted plaintiff’s title and denied a recovery to defendant; defendant’s motion for a new trial was denied and he appeals upon a bill of exceptions.