Pagel v. Bailard

WOOD (Parker), J. Plaintiffs sought a declaration that they have the right to construct a motel and stores on a lot which was purchased from defendants; and they also sought damages allegedly caused by defendants in prosecuting an action against plaintiffs to reform a deed and to enjoin them from constructing a motel and stores on the lot. In a non-jury trial, the judgment was that plaintiffs have the right to construct a motel and stores, and they are not entitled to recover damages. Plaintiffs appeal from the portion of the judgment which denies recovery of damages.

Appellants contend that the evidence is insufficient to support the findings that defendants commenced the action for reformation and injunction in good faith; that there was no malice; and that there was probable cause for commencing the action.

There was a prior appeal in this action. That appeal was by plaintiffs from a judgment of dismissal after a demurrer to their third amended complaint had been sustained with leave to amend, and after they had refused to amend. Upon that appeal, the judgment was reversed. (Harden v. Bailard, 124 Cal.App.2d 458 [268 P.2d 809].) The allegations of the complaint are stated in detail in that action.

A general statement of the alleged basis for the present action is as follows: In 1943 Muriel Harden purchased Lot 21 of certain real property from defendants Mr. and Mrs. Bailard, and she received a grant deed which stated that the conveyance was subject to building restrictions which had been placed upon the lot by the Marblehead Land Company. About December 1, 1946, Mrs. Harden (and her children to whom she had conveyed an interest in the lot) started to excavate the lot for the purpose of constructing a motel and stores thereon. On December 5, 1946, the Bailar ds commenced an action against Mrs. Harden (and other owners of Lot 21), alleging that by mutual mistake the restrictions, referred to in Mrs. Harden’s deed, did not limit the use of Lot 21 to residential purposes; and the Bailar ds, as plaintiffs in that action, asked that the deed be reformed, and that defendants be enjoined from constructing a motel and stores. The trial court rendered judgment on February 4, 1949, reforming the deed and enjoining the defendants. The judgment was reversed on March 12, 1951. (Bailard v. Marden, 36 Cal.2d 703 [227 P.2d 10].) On [504]July 12, 1951, upon motion of the Bailards, the trial court dismissed the action.

On August 10, 1951, Mrs. Marden and the other owners of Lot 21 commenced the present action against the Bailards, seeking, as above stated, a declaration that the plaintiffs have the right to construct a motel and stores on the lot, and also seeking damages allegedly resulting from the injunction which deprived them of the use of the lot, and resulting from the prosecution of that action.