Joslin v. Gertz

FOX, J. Plaintiff provided her sister (Jo Guynn), the deceased herein, funds for the purchase of a home. Reimbursement not having been made prior to the sister’s death on May 15, 1955, plaintiff filed a claim with the executor, who disallowed it. Plaintiff brought this action in two counts: (1) an open book account, and (2) an account stated. From a judgment in plaintiff’s favor, the executor has appealed.

In 1949 plaintiff and her husband loaned plaintiff’s sister Jo $5,000. This loan was evidenced by a promissory note secured by a trust deed on property that Jo owned in Santa Cruz. An account of the periodic payments by Jo on the loan was kept by plaintiff on page 147 of the account book here in question. This loan was paid off in 1953 when Jo sold the Santa Cruz property.

In March, 1952, Jo entered into an escrow for the purchase of a home in Morro Bay. On the 28th of the month, plaintiff withdrew $3,000 from her savings account which, on the 31st, she paid into the escrow to enable it to be closed.1 On April 16, 1952, plaintiff withdrew $4,000 from her funds. A little more than $3,500 of this money was used to pay off the bank’s first lien on the property Jo Guynn had purchased and the balance was applied on the second lien of the sellers.

On page 148 of the account book plaintiff entered these transactions. The heading reads:

“Loaned Jo Guynn on her Morro Bay house at 1170 Bonita St.”

Then there are these entries:

“March 31, 1952 at 3% interest $3,000.00

April 16, 1952 " 3% " $4,000.00”

[65]The book was kept in. plaintiff’s possession and the entries were in her handwriting. The funds were her separate property.

Approximately a month after the second transaction, plaintiff’s husband was present in their home when plaintiff exhibited the above entries in the book to her sister Jo. He testified: “She [Jo] said it was the correct amount she had borrowed, after she showed her the ledger.” A little later he phrased the matter in this fashion: “She [Jo] said the amount my wife had entered in the book was correct.”

The court found that initially “Jo Guynn was indebted to plaintiff on an open book account in the principal sum of-$7,000 plus interest as alleged in paragraph I of plaintiff’s first cause of action,” but that approximately one month after the second advance (that is the $4,000 transaction on April 16, 1952) “an account was stated by and between plaintiff and decedent Jo Guynn, as alleged in paragraph I of plaintiff’s second cause of action, and that said account stated constituted a new contract between plaintiff and decedent Jo Guynn whereby decedent Jo Guynn became indebted to plaintiff in the principal sum of $7,000.00 together with interest thereon, as alleged in paragraph I of plaintiff’s second cause of action.”