Opinion
Rehearing Granted Oct. 29, 1930.
Appeal from Superior Court, City and County of San Francisco; George H. Cabaniss, Judge.
Action by George M. McWhinney and wife against Grace Ewers and another, as individuals and copartners, doing business under the firm name and style of Ewers & Gorham. Judgment for plaintiffs, and defendants appeal.
Affirmed.
COUNSEL
W.D. Brown and Henry F. Wrigley, both of San Francisco, for appellants.
Joseph A. Brown, of San Francisco, for respondents.
OPINION
STURTEVANT, J.
The plaintiffs commenced an action to recover a judgment for money. The defendants answered, denying the allegations of the complaint. A trial was had before the trial court sitting without a jury. The court made findings in favor of the plaintiffs, and, from the judgment entered thereon, the defendants have appealed.
The defendants assert that the plaintiffs did business with them knowing that they were acting as agents of a disclosed principal. Continuing, they assert that any moneys they received were received for the account of their principal and not for the account of the plaintiffs. On the 1st day of February, 1928, the plaintiffs entered into a written agreement to purchase from the defendants as such agents a lot near the corner of Sixteenth Avenue and Alota street in San Francisco. At that time there was being constructed on the lot a dwelling. The plaintiffs paid down $100, which is acknowledged in the contract to purchase. The contract was signed by the purchaser and by the defendants as agents of the seller, and an approval in writing was signed by the owner. That approval also contains a covenant by the owner to pay commissions to his agents. Under the terms of the contract the purchase price was $9,250. It was payable $500 down and the balance of the purchase price was payable $75 per month, including interest, at the rate of 6 per cent. on the first mortgage and at the rate of 7 per cent. on the balance. The dates of these payments are not specially designated. However, the contract provides that the purchaser shall have ten days from the date of the filing of the notice of completion within which to examine the title and state his objections thereto. The record does not disclose that a notice of completion was given. Nevertheless, on February 1, 1928, the purchaser paid $100, and on May 31, 1928, she paid $505.86, and the record discloses these payments included the $500 down and $105.86, the cost of the transfer. The record does not affirmatively show that after taking possession on June 1, 1928, the plaintiffs made formal objection to the title, but it does disclose that a preliminary report was made by the title company, that mechanic’s liens had been put on the property and had not been removed, and that the title was not in a condition to be transferred by the seller in accordance with the terms of the contract at any time prior to the notice hereinafter mentioned by the terms of which the plaintiffs asked to have their deposits returned. Both of said payments were made to the defendants at their office for the account of the owner, and the record discloses that at the date of the demand for the return of the payments the defendants had not paid over to their principal any of the moneys received by them. The contract provided as follows:
"Conditions of Sale: ten days from date of filing notice of completion are allowed the purchaser to examine the title to said property and to report in writing any valid objection thereto, to Ewers & Gorham at their office. If no such objection to title is reported, the balance of said purchase price shall be paid by said purchaser at the expiration of said time to said Ewers & Gorham for account of the seller, and said seller shall thereupon deliver to said office, a properly executed and acknowledged deed of grant, bargain and sale of said property. If any such objection to title is reported, the seller shall use all due diligence to remove it within ninety (90) days thereafter, and if so removed, the balance of said purchase price shall be paid within five (5) days after said objection has been removed and upon delivery of said deed as hereinabove provided; but if such objection can not be removed within the time allowed, all rights and obligations hereunder may at the election of the purchaser, terminate and end, and said deposit shall be returned to the purchaser, unless he elect to buy said property subject to said defect."
The record discloses that the owner was financially embarrassed to such an extent that he made an assignment on the 19th day of July, 1928. There is evidence to the effect that on numerous occasions the plaintiffs demanded of the defendants that the defendants execute to them a deed. In this connection there is evidence also that when such demands were made there were mechanic’s liens standing against the property, and that the seller was unable to convey title subject to two mortgages, but stated that there would have to be a third mortgage. On September 22, 1928, the plaintiffs vacated the house, surrendered the keys, and served a notice on the defendants demanding the return of their deposits. It will be noticed that such demand was specially authorized by one of the covenants contained in the contract. Although no notice of completion was given, the plaintiffs entered into possession, and that act on their part was equivalent to a notice of completion and would support notices of liens thereafter filed. Code Civ.Proc. § 1187. In view of the language used in the contract adopting the expression "notice of completion," we see no reason why the parties to the contract as well as mechanics should not be held by the same rule. On May 31, 1928, the house was, or it was not completed. If it was not, the defendants had no right under the terms of the contract to accept the "down payment," and they have no right to hold it. If, on said date, the house was completed, then the money was properly received, but, at the same time, the deed should have been delivered to the plaintiffs. Before commencing their action no tender was necessary by plaintiffs. They had anticipated that duty by making the payment they made May 31, 1928. There was nothing remaining for them to do.
The defendants cite and rely on Bogart v. Crosby, 80 Cal. 195, 22 P. 84. It is not applicable. These agents hold the money to which in equity and good conscience they have no title— the money has not been paid to the owner. Under the particular covenants of this particular contract the defendants undertook to do the collecting and to pass the title papers. Within the life of their contract they collected, but they neglected to deliver the title papers.
When in due time and in due form the plaintiffs demanded the return of their deposit, under the terms of the contract, they were entitled to the payment thereof. Anderson v. Berger (Cal.App.) 282 P. 416.
We find no error in the record. The judgment is affirmed.
We concur: NOURSE, P.J.; SPENCE, J.