Opinion
Rehearing Denied Aug. 7, 1974.
Page 683
Gorsuch, Kirgis, Campbell, Walker & Grover, John L. Ferguson, Denver, for plaintiffs-appellees.
Robert W. Smedley, Littleton, for defendant-appellant.
COYTE, Judge.
Franchise Funding, Inc., appeals from entry of summary judgment against it and denial of its claim of title to certain real estate which was subject to foreclosure and sale under a deed of trust. We affirm the judgment of the trial court.
On November 16, 1970, Gilbert and Josephine Howell entered into a contract to convey certain real property to Computer Centers, Inc. The terms of the agreement called for a $15,000 down payment, assumption of a first deed of trust, payment of an additional $62,047 in the year 1970, and execution of a promissory note secured by a second deed of trust in the amount of $638,503. The contract of sale, the promissory note, and the deed of trust were executed by George Mariscal in his representative capacity as president of Computer Centers,' Inc. The contract designated Computer Centers, Inc., as the Buyer and expressly provided:
'In entering into this agreement, the Sellers are relying upon the good faith and reputation of Geroge Mariscal, who is the principal owner of the Buyer.'
Various payments were made pursuant to the agreement, but payments were subsequently in default.
In January of 1972, Computer Centers, Inc., brought suit against Howells, the public trustee, and Key Savings and Loan, seeking rescission of the promissory note and second deed of trust on the ground that Mariscal was unauthorized to enter into the transaction. The complaint also sought restitution of the amount of corporate funds paid to the Howells under the agreement. The Howells filed a counterclaim seeking foreclosure of the deed of trust which secured their note. Howells also filed a separate complaint naming Computer Centers, Inc., George Mariscal, and the Public Trustee as defendants and asked for foreclosure of the deed of trust. Meanwhile, Mariscal brought a separate suit against Computer Centers, Inc., alleging that he and certain other parties personally provided the funds for the purchase of the property and claimed beneficial ownership of the property. During the course of taking depositions, it developed that Mariscal and the other parties had entered into an agreement whereby they sought to convey their beneficial ownership of the property to Franchise Funding, Inc. The various suits were consolidated for trial.
As a result of foreclosure proceedings commenced through the public trustee, on December 21, 1972, the public trustee sold the property to the Howells on February 6, 1973. Subsequently, the Howells filed an amended complaint to quiet title under C.R.C.P. 105 which named Franchise Funding, Inc., as an additional defendant, and abandoned their foreclosure proceeding through the court. The Howells and Computer Centers, Inc., entered into a settlement agreement whereby the Howells obligated themselves to pay $60,000 to Computer Centers, Inc., to settle its restitution claim against them.
Thereafter, the Howells moved for summary judgment. The court found that it was undisputed that Mariscal represented himself to the Howells as the chief corporate officer for Computer Centers, Inc., and that he had represented that Computer Centers, Inc., was the buyer of the property. The trial court ruled as a matter of law that Mariscal was estopped from claiming any right, title or interest in the property and that Franchise Funding, Inc., which had derived its interest from Mariscal, could claim no greater interest than that held by Mariscal. The trial court granted the motion for summary judgment against Franchise Funding, Inc.
This appeal concerns itself solely with title to the real property involved in the original contract for sale and purchase between plaintiffs and Computer Centers, Inc., and does not involved the dispute between defendants concerning corporate control and conduct of the corporate business of Computer Centers, Inc., or Franchise Funding, Inc. On appeal, Franchise Funding, Inc., argues that the trial court erred by granting the Howells' motion for summary judgment. It does not dispute the essential aspects of the transaction, but rather, disputes the legal significance of the facts. It contends that the facts fail to establish an estoppel against Mariscal and further argues that the facts establish a resulting trust in favor of Mariscal. We disagree with both contentions. Summary judgment is a drastic remedy and not warranted unless there is a complete absence of a genuine issue of material fact. Credit Investment & Loan Co. v. Guaranty Bank & Trust Co., 143 Colo. 393, 353 P.2d 1098. Moreover, summary judgment should be used sparingly and cautiously to resolve the issue of waiver or estoppel. See School District No. 6 v. Grant, 156 Colo. 328, 399 P.2d 101. Nevertheless, where there is no genuine issue of material fact, a case involving estoppel or waiver may properly be resolved by a summary judgment. Bituminous Trucking & Equipment Co. v. Delta Air Lines, 7 Cir., 189 F.2d 307.
In the instant case, Franchise Funding, Inc., concedes that Mariscal took title to the property in the name of Computer Centers, Inc. Moreover, the contract of sale expressly states the Howells' reliance upon Mariscal's good faith in acting in behalf of Computer Centers, Inc. That this reliance worked to their detriment can hardly be disputed. As stated in Green v. Hulse, 57 Colo. 238, 142 P. 416:
'Where a person, with actual knowledge of the facts, induces another by his words or conduct to believe that he acquiesces in or ratifies a transaction, or that he will offer no opposition thereto, and the other, in reliance on such belief, alters his position, such person is estopped from repudiating the transaction to the other's prejudice. (citing cases) 'In cases involving the title to real estate, the doctrine of estoppel by conduct rests upon the broad principle of equity that one who encourages by representations, or even stands by and sanctions the acquisition of land by another, will be estopped to defeat the purchase by afterwards asserting title in himself.' Patterson v. Hitchcock, 3 Colo. 533; Yates v. Hurd, 8 Colo. 343, 8 P. 575.'
Accordingly, we conclude that the trial court properly granted the Howells' motion for summary judgment.
Additionally, appellant's claim that it has a beneficial interest in the property under a 'resulting' trust is without merit. As stated in 5 A. Scott, Trusts s 457 (3d ed.):
'In order to raise a resulting trust it is necessary that a person other than the grantee prior to or at the time of the purchase should pay or assume an obligation to pay the purchase price. It is not enough that subsequent to the purchase he pays or agrees to pay the purchase price.'
The record reveals that neither Mariscal nor other parties claiming a beneficial interest in the property incurred any obligation or made any payment until some time after the date that Computer Centers, Inc. purchased the property.
Judgment affirmed.
SILVERSTEIN, C.J., and ENOCH, J., concur.