Gaudio v. Hoskins

MOOBE, P. J. Bespondent sued to have a deed absolute declared to be a mortgage and to establish her right to a cancellation thereof upon tender of the amount of her debt. Upon all of the issues raised by the pleadings the court made findings favorable to respondent and entered judgment declaring that the deed is a mortgage given as security for the loan of $1,850; that respondent is sole owner and entitled to a reconveyance of the realty and to an accounting by appellant upon payment of the amount of his lien. The principal ground for reversal urged is that the evidence does not sustain the findings and the judgment. The following brief résumé of the evidence adopted by the trial court will suffice to dispel such illusion.

Prior to May 19,1944, respondent was associated with appellant in the ownership and operation of a restaurant. As a result of such association and of four years of friendship she believed in his integrity and his good judgment, and in all business dealings relied upon his advice. Prior to May, 1944, appellant, having arranged to return to the real estate business, stated to respondent he had an exclusive listing of a flat building on south Detroit Street in Los Angeles, hereinafter referred to as Lot 56, and advised her to purchase it for $15,000; that he had a buyer for her home in Beverly Hills, the sale of which would enable her to acquire Lot 56. When he notified her that such buyer had failed him, she hesitated to go further with her plan to make her purchase but her fears having been banished by his assurances that her home could be sold, she entered into an escrow for the purchase of the flat building on his statements that (1) she could borrow $5,000, (2) that he would loan her the amount of his commission, and (3) that he would loan the balance of her down payment, which with a loan of $8,500 from one Mrs. Curran on Lot 56 would enable her to consummate the deal. He negotiated the $8,500 loan and procured a loan on her home, the net of which was $4,847.51. The combined proceeds of the two loans having been less than $15,000, appellant [683]loaned her $1,850 to enable her to close the transaction, “such sum to be repaid upon the sale of her home, ’ ’ which he promised to effect promptly, ‘ ‘ as property was selling at the time. ’ ’

Prior to close of escrow and about July 18, appellant asked respondent to call at the bank to sign some papers. When he met her there he stated, “I want to secure my loan . . . suppose you die . . . how would anyone know that I had any money in the property.” She inquired, “Is that the way you do it?” “Yes,” said he, “sign here, and make it secure for you and for me. After the house is sold you can pay me back. ’ ’• She signed as he requested, and he agreed to take care of the property and collect the rents until she had gained experience.