Wooton v. Coerber

213 Cal. App. 2d 142, 28 Cal. Rptr. 635, 1963 Cal. App. LEXIS 2708
CourtCalifornia Court of Appeal
DecidedFebruary 19, 1963
DocketCiv. 26192
StatusPublished
Cited by27 cases

This text of 213 Cal. App. 2d 142 (Wooton v. Coerber) 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
Wooton v. Coerber, 213 Cal. App. 2d 142, 28 Cal. Rptr. 635, 1963 Cal. App. LEXIS 2708 (Cal. Ct. App. 1963).

Opinions

HERNDON, J.

This appeal is taken by plaintiffs from a judgment entered in favor of defendants after a nonjury trial wherein plaintiffs sought to recover treble damages for alleged usurious interest charges. As their grounds for urging a reversal, appellants argue that the evidence is insufficient to support the trial court’s findings: (1) that the money advanced by respondents was their contribution to a joint venture involving the purchase of real estate, and not a loan; [145]*145(2) that respondents held an option to purchase the real estate involved; and (3) that “there was an accord and satisfaction by and between the plaintiffs and the defendants on or about December 9, 1958.”

As recently stated in Gruner v. Barber, 207 Cal. App.2d 54, at page 57 [24 Cal.Rptr. 292] : “We find ourselves immediately presented with the oft-repeated and time-honored rule that when a finding of fact is attacked on the ground that there is not any substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence, contradicted or uncontradicted, that will support the finding, and when two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. (Brewer v. Simpson, 53 Cal.2d 567 [2 Cal.Rptr. 609, 349 P.2d 289].)”

In Giorgi v. Conradi, 199 Cal.App.2d 82 [18 Cal. Rptr. 588], the last quoted rule was restated and its application in a case involving an allegedly usurious transaction was stated as follows at page 85: “Whether a business transaction is usurious depends on its own facts. The presumptions are that such transactions have been fair, regular and legal (Code Civ. Proc., § 1963, subds. 19 and 33 ; Hersum v. Latham, 120 Cal.App.2d 325, 328 [260 P.2d 988] ; Stafford-Lewis v. Wain, supra, [128 Cal.App.2d 614 (276 P.2d 157)], at pp. 620 and 621). It is a question of fact as to whether a particular transaction is or is not usurious (Wheeler v. Superior Mortgage Co., 196 Cal.App.2d 822, 829 [17 Cal.Rptr. 291]). Where, as here, the form of the transaction makes it appear that to be nonusurious, it is for the trier of fact to determine whether the intent of the parties was that disclosed by the form adopted, or whether such form was a mere sham and subterfuge to cover up a usurious transaction (Janisse v. Winston Investment Co., 154 Cal.App. 2d 580, 582 [317 P.2d 48, 67 A.L.R.2d 225]). The burden is upon the one who charges the extraction of usurious interest to prove his charges by a preponderance of the evidence (Advance Industrial Finance Co. v. Western Equities, Inc., 173 Cal.App.2d 420, 428 [343 P.2d 408] ; Sharp v. Mortgage Securities Corp., 215 Cal. 287 [9 P.2d 819]).”

In the instant case, the facts relating to the transactions between the parties were essentially uncontradicted, so that the problem of the trial judge was to decide what were the [146]*146more reasonable inferences to be drawn from those facts. Prior to October 17, 1957, appellants had entered into a transaction wherein they had undertaken to purchase certain property for approximately $53,000. It is not clear from the record whether they were to pay $15,000 or $16,000 down; but, in either event, after the down payment was placed in escrow, they were to assume an existing encumbrance of over $37,000. They were convinced that if they could acquire title they would be able to make a very substantial profit by a quick resale. However, they found themselves unable to put more than $500 into the escrow. They were faced with the necessity of finding someone to advance the remainder of the required down payment or they would suffer a complete forfeiture of their rights.

Through the agency of a so-called “finder,” respondents, who are husband and wife, were contacted by appellants and some preliminary negotiations were had concerning their putting up the required capital and coming into the transaction as full partners or as coequal joint venturers on a percentage basis. No actual percentages were ever agreed upon because respondents, apparently for tax reasons, felt that they could not await the full consummation of a resale, which would doubtless entail the taking of second trust deeds, before they realized a return of their investment.

On October 17,1957, by adapting and modifying a standard form of “Sale Escrow Instructions” to the point where it was rendered practically unintelligible, the parties arrived at a highly ambiguous agreement. It was provided therein that respondents, who were sometimes referred to as “lenders,” were to pay $15,500 into an escrow created for the purpose of effectuating this transaction. The escrow agent was authorized immediately to transfer this money into the escrow previously set up to handle appellants’ purchase of the real property involved.

Appellants, on their part, were to pay to respondents via this new escrow the $15,500 invested by the latter, plus $1,550 cash and an assignment of a $2,500 third-party note secured by a second trust deed on other property. Further, appellants were to give respondents their own note for the $17,050 payment provided for, said note being made payable on or before January 2, 1958, and secured by a second trust deed covering the property being purchased.

Finally, there was to be deposited in this escrow a grant deed vesting in respondents the title to the real property [147]*147which was being purchased. The escrow company was authorized to record this deed on January 3, 1958, if the $17,050 payment to respondents had not been made in full. It appears to have been understood by all concerned that appellants hoped for a quick resale of the property wherein the down payment would produce sufficient cash to enable them to make the repayment required by respondents’ investment on or before the specified date.

Appellants argue that the terms of the hopelessly ambiguous “Sale Escrow Instructions,” and certain testimony of the parties to the effect that respondents did not wish to go into the deal as full partners, or as coequal joint venturers, lead inescapably to the conclusion that respondents loaned appellants $15,500 for a period of less than ninety days with “interest” in the amount of $1,550 cash and a third-party note in the face amount of $2,500.

Respondents contend, on the contrary, that it is clear from the evidence that the parties intended to combine in a joint venture involving the purchase and sale of real estate and that respondents, who were advancing practically all the capital, had chosen to take their profit in a fixed amount from the anticipated down payment immediately upon a resale rather than from the much larger profit which might be realized upon final completion of the expected resale.

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Bluebook (online)
213 Cal. App. 2d 142, 28 Cal. Rptr. 635, 1963 Cal. App. LEXIS 2708, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wooton-v-coerber-calctapp-1963.