Adams v. Herman

California Court of Appeal Apr 17, 1968 No. Civ. No. 31323Published

Before: Roth

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Holding. The court held that a voluntary quitclaim of property, which divested the owners of dominion over the property, constituted a 'resale' triggering the maturity of a promissory note conditioned upon such resale. Alternatively, the court held that if the quitclaim did not constitute a resale, the law implies a reasonable time for payment when the condition for payment can no longer occur.

Issues

Whether a voluntary quitclaim of property satisfies a promissory note condition payable 'upon resale' of said property.
Whether a reasonable time for payment is implied when a condition for payment can no longer occur.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The court in effect found that the quitclaim divested appellants from any further dominion over Moorpark was in effect a resale and held the note became due on the day of the quitclaim”

“It is the law that where an event has been named as a time for the payment of money and such event can never occur, a reasonable time is by implication fixed as the maturity date of the promise to make payment.”

ROTH, P. J. Respondents, owners of an apartment house located at 15470 Moorpark, Sherman Oaks, were desirous of exchanging it for real estate located on Haskell Avenue in Van Nuys. Harry Herman, one of appellants, a licensed real estate broker, was engaged to effect the exchange. It could not be consummated.

The owner of the Haskell property was willing, however, to sell. Herman, to enable respondents to buy the Haskell property suggested to them that they sell the Moorpark property to him and his wife. An agreement, among other things, as part of the consideration from appellants to respondents required delivery of a promissory note in the principal sum of $5,000, without interest, made by appellants to respondents and delivered out of escrow. The due date of said note as written on its face was “Upon resale of . . . Moorpark, . . . after date. ...”

Appellants took and remained in possession of the Moor-park property for approximately 18 months. During said period it was operated at a loss. Appellants defaulted in payments of taxes and installments on the first and second trust deed. To avoid foreclosure, appellants, on June 9, 1964, quit-claimed and delivered possession of the Moorpark property to the holder of the second trust deed.

Respondents on the theory that the note had become due on June 9, 1964 (date of the quitclaim) sued on the $5,000 note and recovered judgment for the principal, attorneys’ fees as required by the note and interest from the date of quitclaim, to wit: June 9,1964.

Appellants pleaded in defense that the Moorpark property had not been resold. The trial court, predicated on the above facts, held there was a sale.

On the submitted facts as outlined above, appellants contended that the note was payable only out of profits from a resale. There is no such provision in the note, no such provision is included in the escrow instructions or any other agreement, there was no such separate defense pleaded and there is no finding on the subject.

The question is whether the voluntary quitclaim by appellants conformed to the condition “Upon re-sale of . . . Moorpark, . . . after date. ...” The court in effect found that the quitclaim divested appellants from any further dominion over Moorpark was in effect a resale and held the note became due on the day of the quitclaim, to wit; June 9.

[236]

Adams v. Herman

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