137 Cal. App. 647 | Cal. Ct. App. | 1934
This is an appeal by the defendants, Joseph Welder and Maria Welder, from a judg
On February 26, 1926, appellants executed three promissory notes which were made payable to Virginia L. Armstrong. Bach note was in the amount of $10,000. One note was payable on December 1, 1927, another on December 1, 1929, and the third on December 1, 1931. Payment of the principal amount of the notes and interest at the rate of seven per cent per annum was secured by a mortgage on certain real property located in Riverside County, which was likewise executed by appellants on the above-mentioned date. On June 7, 1929, the payee named in said notes instituted an action to recover the indebtedness represented by said notes and to foreclose the mortgage. With the exception of appellants, all persons who were named as defendants in the action, and who were served with process, defaulted and their defaults were regularly entered. The action was set for trial on June 3, 1932, and the trial was' commenced on this date. At this time the notes and the mortgage were admitted in evidence. An assignment of the mortgage executed by the mortgagee to respondent on January 16, 1930, was also admitted in evidence and the plaintiff in said action thereupon moved the court that respondent be substituted as party plaintiff in the action in her place. This motion was granted and the court made its order of substitution. Appellants thereupon moved the court for a continuance of the trial for the purpose of amending their answer. The motion was granted and the court ordered that trial of the action be continued to June 24, 1932. On said date appellants filed an amended answer which contained a general denial of the material allegations of the complaint and two separate and further defenses to the action. The first of said special defenses alleged payment in full of the principal and interest of the notes. The second of such special defenses alleged that on July 10, 1929, appellants and two other persons were the owners of the mortgaged
The action proceeded to trial on July 1,1932, and was concluded and submitted on said date. On November 2, 1932, and before the case was decided, respondent gave notice to appellants that he would make application to the court for permission to file a supplemental complaint in the action. The application was granted and the supplemental complaint was filed on November 10, 1932. This pleading alleged that on June 30, 1929, appellants had conveyed whatever interest they had in the mortgaged premises to the corporation known as “Eden Hot Springs, Inc.” and that on May 26, 1931, this corporation had executed a promissory note in the amount of $13,714.96, made payable to respondent on demand and a deed of trust of the mortgaged premises to secure payment of said note, that nothing had been paid either on account of the principal or interest of said note. The pleading concluded with a prayer that any surplus of the proceeds that should be realized from the sale on foreclosure of the mortgage should be paid to respondent as the holder of the last-mentioned note and trust deed. Appellants filed a demurrer to 'the supplemental complaint setting forth various grounds on November 10, 1932. So far as the record shows, the court took no action on the demurrer and on November 19, 1932, signed findings of fact and conclusions of law and on November 21, 1932, rendered judgment which decreed that the mortgaged premises should be sold to satisfy the indebtedness secured by the mortgage and that if there should be any surplus remaining from the proceeds of the sale after satisfying such indebtedness it should be applied on the note executed in respondent’s favor by Eden Hot Springs, Inc., on May 26, 1931.
The chief contention advanced by appellants is that the purchase of the notes and mortgage by respondent after he had become president of Eden Hot Springs, Inc., was a violation of the trust imposed upon him as an officer and director of the corporation- and that he was therefore without right
It is immediately apparent that an examination of the circumstances surrounding a transaction of the character which was presented to the trial court in the instant case involves a pure question of fact and that a reviewing court is powerless to interfere with the finding of the trial court that no fraud existed and that the circumstances do not indicate that it would be inequitable to carry the transaction into effect if there is any evidence to sustain such a finding.
The record herein discloses that the following facts were established by evidence produced-during the trial: Respondent, who had become president of “Eden Hot Springs, Inc.”
Appellants object, that the trial court failed to make a finding as to the value of the mortgaged premises and it is declared that there was evidence indicating that the market value of the property was $200,000. It must be remembered that this action was for the foreclosure of a mortgage and that it is elementary that the value of the mortgaged premises is not material in such an action. It is said that it is material here as bearing on the question of respondent’s good faith in dealing with corporate property and as 'tending to show that under the circumstances it would be inequitable to decree foreclosure of a mortgage of approximately $30,000 upon property having a value of $200,000. It is perhaps only necessary to point out that the value of the property, conceding its materiality, was merely a probative fact, and that the ultimate fact was respondent’s good faith. It may, however, properly be further noted that the evidence that the value of the property was $200,000 consisted of the testimony of the appellant, Joseph Welder, and that the amended answer of this appellant filed on June 24, 1932, alleged that the property was of a reasonable market value of $100,000, and further that this witness testified that he had purchased the property seven years prior to the trial of the action for $63,000, that he had been in possession of the property for approximately two years prior to the trial and had derived no financial profit from its operation. These facts were ample to warrant the court in drawing an inference that the bald statement that the property had a market value of $200,000 at the time of the trial was a gross exaggeration.
Appellants further complain that the record discloses that the cause was not at issue since it appears that
For reasons stated, the judgment is affirmed.
Barnard, P. J., and Jennings, J., concurred.