Opinion
Hearing Granted Sept. 11, 1944.
Appeal from Superior Court, Los Angeles County; Roy V. Rhodes, Judge.
Action by Betty Ruth L. Viner, a married woman, Business Women’s Association, and Western States University against Mary Untrecht, also known as Mary Holdstein, to enforce a resulting trust and for other relief, wherein defendant cross–complained. From a judgment for plaintiffs, defendant appeals.
Affirmed. COUNSEL
Arthur E. Briggs and J. B. Mandel, both of Los Angeles, for appellant.
S. L. Kurland and W. L. Pollard, both of Los Angeles, for respondent.
OPINION
MOORE, Presiding Justice.
This action was brought to enforce a resulting trust. All of the material allegations of the complaint were found to be true and those of the cross-complaint substantially contrary to the complaint were found to be untrue. Also, the court found that defendant’s maintenance of her claims of ownership of the realty and of her claims of lien upon certain movables of plaintiffs was in bad faith by reason of which plaintiffs were awarded punitive damages in the sum of $500 and attorney’s fees in the sum of $1,000. From the ensuing judgment defendant has brought this appeal upon seven grounds which may be summed up in one phrase: Insufficiency of the evidence to support the findings and the judgment.
Prior to November 15, 1940, plaintiff, Betty Ruth L. Viner, herein at times referred to as Ruth, was president of the Business Women’s Association, a nonprofit California corporation. She and her corporation were associated with the Western States University, also a non-profit California corporation. The two corporations having interests in the several properties involved in this action joined with Mrs. Viner as plaintiffs to establish their respective claims against a common adversary. Inasmuch as the right of each of the plaintiffs as against one another is immaterial to a decision, no effort will be made to keep distinct their respective interests in so far as they relate to defendant.
Prior to November 1, 1940, Ruth had become associated with Mary Untrecht. About that date, having investigated and negotiated for the acquisition of a house on behalf of the association, Ruth decided to undertake the purchase of a 14-room residence, herein referred to as "La Brea house," for the sum of $6,300, on terms, 10 per cent payable in cash, the balance in deferred payments. In order to effect such purchase, Ruth, on behalf of the association, agreed with Mary that if the latter would lend the association as much as $1,500 in order to consummate the transaction, to make certain improvements, to buy certain furnishings and to pay the accrued taxes and assessments, she should be repaid her advances with interest at 7 per cent per annum compounded; receive instructions in comptometry and bookkeeping; and have the use of a residential room free of charge. As security for the repayment of her loan, it was agreed that the title to the property should be vested in appellant. Arrangements for the purchase were concluded on January 3, 1941, when Mary deposited in the escrow the sum of $715, and she was named grantee in the conveyance of La Brea house. The association installed its furniture and furnishings, leased to Mrs. Viner certain residential rooms, which lease was ratified by appellant, and, pursuant to the loan agreement had Mary occupy the room she had selected for herself. Ruth moved her furniture into the house, and both women continued to reside there until the repudiation of the loan contract by Mary. In the following month appellant advanced an additional $200 to the association and thereafter made other payments on account of the property.
Simultaneously with the foregoing events the association leased certain space in the building to the University for the storage of its 165 law books, comptometer and other equipment, and this tenant agreed to carry out the association’s contract with appellant by giving her the promised technical training. For 15 months Mary continued to reside in the house and to receive instructions from the University which tuition was of the reasonable value of $300. After the occupancy of the house by the two women Ruth made practically all of the installment payments on the purchase price, paid the taxes and assessments, the utilities and expense of operation. This continued until January 3, 1942, when the association extended Ruth’s lease for another year in consideration of her continuing the same payments. This she did until July 15, 1942.
On July 4, 1942, appellant informed the association that she was the owner, demanded possession of the property; declared the association had no interest therein, and repudiated all agreements theretofore made with Ruth. The association requested a statement of its indebtedness on account of moneys advanced by Mary but that lady denied the existence of any such indebtedness. Following her oral and written demands for possession of the realty, Mary asserted a lodging-house lien upon the furniture and furnishings of Ruth and of the association and on September 10 she posted notice of sale of such effects pursuant to section 1861, Civil Code, for the purpose of satisfying her demand for moneys advanced in the sum of $3,142. The total of all moneys advanced by Mary in connection with the purchase and improvement of the property was $1,679.62. Besides her own occupancy, after her repudiation, Mary received net rentals as income from the house $623.55. The University owns the movables it had placed in the house under its lease from the association. Although Mary had no interest in them she took them away and held them without any claim of right. Their value is $3,000. That corporation and Ruth were both required to employ counsel to effect a recovery and the reasonable value of such service to each of them is the sum of $500.
The foregoing facts having been found to be true the court’s conclusions logically followed:
(1) At all times the association was the equitable owner of La Brea house. (2) Appellant held title for the association, subject to her lien for advances; but (3) she had no right to the possession of the property to the exclusion of respondents. (4) By virtue of their leases, Ruth and the University were entitled to occupy certain rooms which they entered as tenants of the association and occupied February 1, 1941; (5) neither was Mary a boarding-house keeper, nor was Ruth her guest, but on the contrary, (6) she was herself a mere lodger in the house. (7) She had no lien upon, claim to, or legal interest in, the law books and bookkeeping machines taken by her from the University or to any of the chattels claimed by Ruth, therefore Mary should pay to Ruth and the University the $1,000 counsel fees and (8) Mrs. Viner is entitled to punitive damages in the sum of $500 for the arbitrary, wrongful and oppressive taking and holding of her belongings and for appellant’s wilful maintenance of her unjust contentions. (9) The association is entitled to all moneys heretofore collected as rentals on the La Brea house and to an accounting of all moneys paid her as rentals therefor after July 4, 1942, besides the $623.55 she accounted for prior to judgment.
It is fundamental that where a judgment is attacked on the ground that it is not supported, the power of the appellate court ends when it shall once have determined that there is substantial evidence which will support the conclusions of the trial court. Drabkin v. Bigelow, 59 Cal.App.2d 68, 74, 138 P.2d 750; Crawford v. Southern Pacific Co., 3 Cal.2d 427, 45 P.2d 183.
The proof found to support the findings and judgment consists of two classes, to-wit: (1) the declarations and affidavits of appellant and (2) the testimony of respondents and their witnesses. Appellant testified that she purchased the La Brea home for herself and that the association was never mentioned in reference to the property. However, on October 29, 1940, she executed an affidavit to be filed in her divorce action in the superior court in which she averred that her sole possession was a $200 interest in a life insurance policy. On June 19, 1941, six months after taking title to the La Brea property she filed her verified complaint in the same action alleging that she was indigent. In the same case she testified that she was holding title to the La Brea house and its furnishings as trustee for the association and that she had no interest therein. In the verified divorce pleading she alleged that she was so ill from October 1940 to June 1941 that she was unable to do any work. In the present action she alleged under oath (1) that during the same period she acted as secretary, office attendant, and instructor for the association in its downtown office and that such services were worth $1,540; and (2) that during the same period she was acting as house keeper for respondent and did all of the work for the roomers and for respondents in the upkeep of the 14-room house with its six bedrooms, and that such services were reasonably worth $1,690.
The testimony of Mrs. Viner established that she located the La Brea house as a desirable property and that Mary accompanied her to visit the premises. They had many meetings at which the house was shown to certain members of the association and Mary finally agreed to lend to the association funds not to exceed $1,500 in order to complete the purchase and repairs. Ruth conducted all negotiations; dictated all letters for Mary’s signature and told the agent of the grantor that the title would be taken in the name of appellant in order to comply with the requirements of the bank which declined to convey to an eleemosenary corporation. Mary was present at all of the conferences had with the seller or its agent; was present at the time the escrow was opened; advanced $715 for the down payment and other outlays and later gave Ruth $200 as a part of the sums she had promised to advance. At the time the escrow was opened Mary stated to her that she hesitated to take title to the property in her own name by reason of the pendency of her divorce action.
The witness Ware, licensed real estate broker, testified that, in his presence at about the time the escrow was opened, appellant stated that they could not buy the property under the name of the association on account of its credit standing and that it was taken by her in trust for the association to be conveyed to it at the proper time. The witness Kohan, sister of Ruth, established that in the summer of 1942 Mary told her that the property belonged to the association; that she desired to collect the moneys she had loaned to make the purchase; that it could be sold at a profit if she and Ruth could share in it; that if it were not sold "she would use any means possible to make her sell it so she could get her loan therefrom." One Shoup made a contract for the painting of the house with Mrs. Viner and Mrs. Snyder, president and secretary of the association. He testified that he never discussed the painting with appellant during the several weeks he was there employed. No proof has been designated to show that appellant at any time prior to July 4, 1942, ever made claim to ownership of La Brea house and we find none. When she gave notice of her repudiation her language was that "all agreements between you and Mrs. Untrecht are hereby terminated and cancelled." From such language of her counsel, in the light of other proof, it is a reasonable inference that appellant acknowledged that she had made a contract with Mrs. Viner on terms advantageous to the latter.
Contrary to the contention of appellant there is no express trust alleged. Neither was one proved. The only agreement expressed was one for the loan of moneys by appellant to the association to enable it to effect the purchase of the house and lots. There is no more trust involved in the transaction with the association than it would have been had the money been borrowed from Mrs. Snyder or any other member of the association. After an agreement to lend the money to the association the legal effect of the actual payment to the bank was the transfer of the money from Mary to the association. Brown v. Spencer, 163 Cal. 589, 126 P. 493. A transaction such as that in the case at bar is denominated as a loan by the grantee to the beneficiary. The vesting of title in the lender as security for her loan and the subsequent repudiation by the grantee of the relation of borrower and lender operates as a legal fraud upon the beneficiary and gives rise to a resulting trust in the property in favor of those to whom the loan was made. Webb v. Vercoe, 201 Cal. 754, 759, 258 P. 1099, 54 A.L.R. 1200. Equity will not permit a trustee, such as appellant is shown here to have been, to take advantage of an existing confidential relation out of which the trust arose and by repudiating such trust obtain an unconscionable advantage of the confiding beneficiary. Bradley Co. v. Bradley, 165 Cal. 237, 240, 131 P. 750; Lauricella v. Lauricella, 161 Cal. 61, 118 P. 430. The contention that there was no promise made to repay appellant is immaterial. The loan of the money created an implied promise to repay it. No other promise was necessary to constitute or accentuate the trust relation between the parties. Brown v. Spencer, 163 Cal. 589, 126 P. 493, supra. Neither does the fact of the advancement of moneys to pay on the purchase price and improvements prevent the establishment of the resulting trust. Watson v. Poore, 18 Cal.2d 302, 115 P.2d 478. Nor is it defeated by the failure of the association to tender the borrowed moneys. Mary’s declination to render a statement and her repudiation of the loan agreement and the trust rendered further tenders idle and unnecessary. Penziner v. West American Finance Co., 133 Cal.App. 578, 586, 24 P.2d 501.
No other equitable ground is alleged or proved that would justify a judicial defeat of the trust relationship. Appellant was free to make the loan. She received a valuable consideration for it. She continued to enjoy the relationship for 18 months at the expiration of which she was free to enforce her lien for the moneys she had advanced.
It is thus demonstrated that the findings with reference to the La Brea property find abundant and substantial support in the record leaving this court without power to alter the conclusions derived by the court below.
We have examined the authorities cited by appellant in support of her numerous points. Wittenbrock v. Cass, 110 Cal. 1, 42 P. 300; Donohoe v. Mariposa Land & Mining Co., 66 Cal. 317, 5 P. 495; Holtze v. Holtze, 2 Cal.2d 566, 42 P.2d 323; Feeney v. Howard, 79 Cal. 525, 21 P. 984, 4 L.R.A. 826, 12 Am.St.Rep. 162; Barr v. O’Donnell, 76 Cal. 469, 18 P. 429, 9 Am.St.Rep. 242; Lincoln v. Chamberlain, 61 Cal.App. 399, 214 P. 1013; Dimity v. Dixon, 74 Cal.App. 714, 241 P. 905; 65 C. J., p. 423, § § 184, 185; Kirk White & Co. v. Bieg-Hoffine & Co., 6 Cal.App.2d 188, 44 P.2d 439. These authorities merely restate old rules and familiar principles. Nothing in them is contrary to the decision we have derived. For a case to be of guiding value its facts must parallel or assimilate those under review.
The evidence is equally abundant to support the findings that the University owns the personal property which it claimed, that Ruth was not a guest of Mary; that appellant is not the owner of the chattels used by the association in the La Brea house and that the only moneys advanced by Mary to the association were those used for the purchase and for taxes and improvement of the property. Appellant witnessed the conversation whereby Ruth was employed to operate the house. The latter engaged a number of employees to do the menial tasks from February 1941 till May 1942. By her own testimony and that of Mrs. Munson, Mrs. Schneider and Miss Yaryan, Ruth established that Mary neither brought any furniture into the house nor made a payment on that which was purchased, and that she did no work either as a domestic or as an instructor for the respondents. Because of such proof and its acceptance by the court, appellant’s asserted claims of a lien as an innkeeper upon the personal property in the La Brea house are utterly without right (Fox v. Windemere Hotel Apartment Co., 30 Cal.App. 162, 157 P. 820), and the award of punitive damages and counsel fees is justified. Sec. 3294, Civil Code.
Finally, appellant complains that the amount of her award should have been $2,489.31 instead of $1,679.62, allowed by the judgment. In support of this she cites her own testimony with reference to a payment she made to the painter, the "constant tendency of Mrs. Viner to exaggerate," and the misstatement of Exhibit 39. For reasons heretofore recited we cannot retry the comparative veracity or accuracy of the witnesses. On the contrary, the findings and decision determined that Mary is entitled to a total of $1,679.62, the full amount of her loans, but that she is indebted to respondents for net rentals collected, $623.55; punitive damages, $500; counsel fees, $1,000, aggregating $2,123.55, besides costs in the sum of $208.35. It is thus shown that if her contentions as to the computations of the court should be adopted, she would have but an inconsequential amount in her favor. Of course we cannot go behind the findings under the circumstances.
The judgment is affirmed.
McCOMB, J., concurs.