City of Santa Cruz v. Wood

252 Cal. App. 2d 52, 60 Cal. Rptr. 26, 1967 Cal. App. LEXIS 1481
CourtCalifornia Court of Appeal
DecidedJune 27, 1967
DocketCiv. 23443
StatusPublished
Cited by4 cases

This text of 252 Cal. App. 2d 52 (City of Santa Cruz v. Wood) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Santa Cruz v. Wood, 252 Cal. App. 2d 52, 60 Cal. Rptr. 26, 1967 Cal. App. LEXIS 1481 (Cal. Ct. App. 1967).

Opinion

ELKINGTON, J.

Appellants, who were defendants in an eminent domain action, appeal from a judgment entered upon a jury verdict awarding them $257,352.48 for 29.54 acres of land. The intended public use was a sewage disposal facility of the City of Santa Cruz. The condemned property is part of a parcel of 44.81 acres purchased by appellants in 1962 for $250,000.

Appellants ’ first assignment of error is stated as: The trial court committed prejudicial error in refusing to admit evidence of a contract to sell the condemned property for the sum of $750,000.

The contract which was not allowed in evidence is entitled “Deposit Receipt.” By its terms appellants purport to have received from “Earl J. Green or assignee” $1,000 as a deposit on appellants’ “43.3 [stc] acres.” The total price is fixed at $750,000, “$216,500.00 by cash and the balance of $532,000. by note and trust deed, said note payable $50,000. or more per year with no interest until paid—Beneficiary to release 4 acres upon payment of each $50,000. annual payment or any 4 acres upon payment of $50,000. ”

Earl J. Green, named in the contract, did not appear at the trial. In support of the contract’s admissibility appellants produced Noel Atkinson, a “real estate consultant.” His testimony was taken out of the presence of the jury.

Atkinson testified'that another party had been interested in purchasing the property in question. He (Atkinson) went to a lending institution for the purpose of arranging the necessary financing. The financing did not materialize and the deal fell through; Atkinson explained this was because he had recommended against the financing. He then presented the deal to his “very first investors and they took it immediately.” These investors consisted -of a certain Kaplan family.

The Kaplans, according to Atkinson, were worth millions. They had extensive holdings in Europe and South America. Atkinson was familiar with their business affairs. They had “ developed roughly thirty large parcels of property into resk dential subdivisions, shopping centers, apartments, et cetera’’ in California, Atkinson had sold them (as broker)-several of *54 these properties. The Kaplans were the principals in the instant Santa Cruz transaction; they were “putting up all the money,’’ and it was to he cash.

Elsewhere in his testimony Atkinson told the court that Earl J. Green, who had a net worth of $200,000, was going to put up one half of the money and that the Kaplans had “contacted several lending institutions ... to arrange financing to consummate the deal. ’ ’ This proposed financing appears to have been planned on the security of the land here in question. They received only a “tentative commitment.” Atkinson admitted, as to the other transactions in which the Kaplans had been involved, he had not known them to have put up as much as $100,000. He had known them, however, to put up as much as $100,000 worth of security in one deal. That security consisted of an equity in a ranch which was already mortgaged for $100,000.

Describing Green’s part in the transaction Atkinson said he had “acted as the disclosed agent for an undisclosed principal on behalf of the Kaplans on a number of locations.” When appellants’ trial counsel asked, “ [I]s it your nature to handle these things through a ‘dummy,’ Mr. Atkinson?” he replied, “There is a very common trait to hide the names of prominent individuals to prevent sticking their names on deposit receipts.” It appears that the contract in question was mutually rescinded when Atkinson learned about the proposed condemnation proceedings. He testified that he advised appellants against a specific performance action on the contract, recommending instead the condemnation suit with the city.

In support of their contention that the contract here was admissible on the issue of value, appellants cite County of Los Angeles v. Faus, 48 Cal.2d 672 [312 P.2d 680]. That well known ease, decided in 1957, seems reasonably applicable here, although it concerned sales of similar property as evidence of value. Fans allows such evidence within what it calls “safeguarding limits.” (P. 678.) Quoting and approving McCormick on Evidence, the court there stated that these safeguards among others are the following: “. . . that the price realized for the other land may fairly be considered as shedding Ught on the value of the land in question. Manifestly, the trial judge in applying so vague a standard must be granted a wide discretion.... ‘In any event, the sale must be genuine, and the price must be actually paid or substantially secured.’ ” (Italics added; pp. 678-679; see also People ex rel. Dept. of *55 Public Works v. Kawamoto (1964) 230 Cal.App.2d 18, 21 [40 Cal.Rptr. 685]; Los Angeles City High School Dist. v. Kita (1959) 169 Cal.App.2d 655, 662 [338 P.2d 60]; People ex rel. Dept. of Public Works v. Murata (1958) 161 Cal.App.2d 369, 375 [326 P.2d 947].) And in an analysis of Fans it has been stated that if the evidence in question is of slight weight, the judge is justified in excluding it entirely because of its prejudicial or dangerous effect. (Los Angeles City High School Dist. v. Kita, supra.)

Applying the rule of Faus we have little difficulty in holding the court’s rejection of the proffered evidence to have been well within its area of discretion, and proper. The contradictions of Atkinson’s testimony, the unwillingness of the real party in interest to be bound by the contract, the improbability of Green himself being able or willing to perform, and the clear speculative nature of the transaction, create much doubt as to the genuineness of the sale and whether the stated price would actually be paid or secured. Indeed, the apparent necessity for the Kaplans “to arrange financing [on the security of appellants’ land] to consummate the deal” makes it uncertain as to whether it was intended that appellants hold a first or second trust deed as security for the contract’s deferred payments.

The court could, and probably did, conclude that the Kaplans planned to put little or no money into the deal—but instead to have substantially the entire purchase price financed on the security of the property itself. If defendants expressed dissatisfaction with such an arrangement the Kaplans were free to remain out of the picture, leaving their “dummy” Green as the only person from whom enforcement of the contract, or damages, could be sought.

In commenting on the offer of proof the court said, “... I feel that it is not a fair indication of the value of the property. .. . [I] t is not the type of evidence that would help the jury in ascertaining the fair markét value.” We agree.

The second assignment of error is:

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Bluebook (online)
252 Cal. App. 2d 52, 60 Cal. Rptr. 26, 1967 Cal. App. LEXIS 1481, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-santa-cruz-v-wood-calctapp-1967.