271 P. 356 | Cal. Ct. App. | 1928
This is an appeal by the defendant Eagle Indemnity Company, a corporation, from a judgment rendered in seven cases consolidated and tried as one, for the foreclosure of certain mechanics' liens.
On or about the twenty-seventh day of May, 1924, one I.G. Simons, the owner of certain real property in the city and county of Los Angeles, entered into a building contract with one Robert W. Clark for the erection of a five-story apartment and store building. The cost of said building named in the contract was $82,869, payable as follows: A first trust deed in the sum of $45,000; a second trust deed in the sum of $27,500; final payment in cash of $10,369 upon completion of the building. At the time of the execution *372 of the contract the contractor, as principal, and the Eagle Indemnity Company as surety, entered into an undertaking in the sum of $73,000, the surety bond containing the usual covenants providing that it should inure to the benefit of both the owner, laborers, and materialmen; the contractor and surety undertaking to complete the building and agreeing to pay for all labor and materials. The contractor proceeded with the construction of the building as provided for in the building contract, and completed the building on or about the fifth day of November, 1924, on which last-named date notice of completion was filed in the office of the county recorder of Los Angeles County.
During the course of the construction of said building the owner informed the contractor that he would not be able to pay the $10,369 called for in the contract upon the completion of the structure. Thereupon, and on or about the thirteenth day of August, 1924, Simons, as owner of the premises, executed a deed of conveyance to the contractor, Robert W. Clark. This deed was recorded in the office of the county recorder of Los Angeles County. At the same time Clark executed and delivered to Simons a promissory note in the sum of $17,500, and as security for the payment thereof executed and delivered to Simons a trust deed covering the property that had been conveyed to him by the deed just referred to as executed and delivered by Simons. Thereupon, the following words were written upon the building contract just referred to: "In consideration of $10.00 and other good and valuable considerations paid to said owner by said contractor, receipt of which is hereby acknowledged, it is mutually understood and agreed that this agreement is cancelled, terminated and discharged. (Signed) Robert W. Clark, contractor, I.G. Simons."
In relation to the transaction just referred to, the trial court found as follows: "That on or about the 13th day of August, 1924, the said Isaac G. Simons transferred and conveyed said real property above described to the said Robert W. Clark under the agreement and understanding between said parties that the said Robert W. Clark should complete said building, but after the completion thereof, said property should be sold. That out of the proceeds of said sale Robert W. Clark should first receive and be paid the full amount of his contract, and that any balance *373 thereof then remaining should be given and paid to the said Isaac G. Simons." The cancellation of the contract, as shown by the above writing, was also found by the court, but in relation thereto the court found as follows: "That none of the plaintiffs above named had any knowledge or information concerning the transfer or conveyance of said property to said Robert W. Clark or the termination of said building contract prior to the completion of said building, as aforesaid, but at all times prior to the completion of said building, said plaintiffs thought and believed that the said Robert W. Clark was constructing said building as contractor, under and pursuant to the terms of said building contract described in paragraph III hereof."
The record shows that the property was sold on or about the twenty-sixth day of June, 1925, under the second trust deed hereinbefore referred to, which deed was prior in right to the mechanics' liens owned by the respective plaintiffs, and judgment therefor was entered against the Surety Company for the amount of the liens and foreclosure upon the property denied.
[1] The appellant strongly urges that the evidence is insufficient to sustain the finding of the court which we have quoted herein to the effect that there was an understanding between Clark and Simons relative to the completion of the building that the building should be sold and out of the proceeds the contractor was to receive his contract price, and the owner whatever balance should remain. The contractor, Robert W. Clark, called as a witness under the terms of section 2055 of the Code of Civil Procedure, testified upon direct examination as follows: "I started work upon the construction of the building, and about the time the roof was on Simons informed me that it would be impossible for him to pay me the money that would be due under the contract. . . . We simply agreed that inasmuch as he, Simons, did not have the money to pay me on the contract, that this agreement was made in order to see if it would be possible it might work out. These transfers were made to secure me as to my contract price. Over and above the contract price, he was to get any proceeds of the sale." Upon cross-examination by counsel for the appellant herein, this witness modified his testimony to some extent and testified as follows: "I gave Simons the third *374 trust deed for $17,500.00, an agreement to that effect, or a statement to the effect that I would finish the things as successfully as possible and sell it; that I was to receive my full contract price. Then he was to receive what balance there might be up to the $17,500.00, and that I was to receive all the balance if there was any." Upon redirect examination, referring to a deposition theretofore given by the witness, the witness testified: "I testified that there was a separate agreement to the effect that if the building were disposed of for a sufficient amount to give me my full payment of the contract, Simons was to get all over and above that money. I gave Simons a third trust deed for $17,500 on the premises, which was the amount we agreed as being the value of the lot, and incidentally, a separate agreement to the effect that if the building were disposed of for a sufficient amount to give me my full payment of the contract, Simons was to get all over and above that money." Again, the record shows that upon examination by counsel for appellant, the witness gave a different version of the transaction and testified that Simons was to get only $17,500, and he, the witness, was to get his contract price and also all over and above the $17,500. Our attention has not been called to the testimony of any other witness relative to this transaction, and as the trial court had the benefit of the witness Clark appearing before him, and being able to judge of the manner in which he testified, just what was the correct version was and is distinctly a matter for the trial court, and if the trial court believed the version given by the witness under his direct examination conducted under the provisions of section 2055 of the Code of Civil Procedure, the finding of the trial court is sufficient to support it and cannot be disturbed on appeal.
[2] Again, the finding of the court that none of the laborers or materialmen knew of the so-called cancellation clause indorsed upon the contract is challenged by the appellant. Here, again, the testimony is in conflict. The witness Clark testified that he notified the laborers and materialmen; his testimony in this particular is contradicted by a number of witnesses. The court resolved this conflict in favor of the lien claimants, and being based upon conflicting evidence, must be accepted as correct. *375
[3] The main reliance of appellant is based upon section 2836 of the Civil Code, which reads in part as follows: "A surety cannot be held beyond the express terms of his contract," and quotes to some extent from the cases of Alexander v.Bosworth,
[4] It is further insisted that the recording of the transfer from Simons to Clark, and the execution of the trust deed by Clark in favor of Simons was notice to the lien claimants. We do not well see how this would in anywise release the surety for the payment of the materials that went into the described building. While not expressly so found by the trial court, the transaction was, in effect, one *377 designed simply to secure the contractor in the payment of the contract price, and as the finding that the so-called cancellation clause written on the contract was not brought home to the lien claimants, we do not find any tenable theory upon which the surety should be relieved from the terms and provisions of the bond executed by it.
[5] The argument of appellant that the cancellation clause attached to the contract after the building had been partly completed, is not covered by the provision of section
The minor points urged for reversal by the appellant have been examined, but do not demand extended consideration herein.
The judgment of the trial court is affirmed.
Hart, J., and Finch, P.J., concurred.