Atkinson v. Foote

44 Cal. App. 149 (1919)

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Atkinson v. Foote

California Court of Appeal
44 Cal. App. 149 (1919)

Facts

Alfred Borchard and Mabel Borchard owned a piece of real property. The Borchards borrowed money from Mary Phleger in exchange for a promissory note and executed a first deed of trust on the property as security. The first deed of trust provided that it would also serve to secure optional future advances on the promissory note. Later, the Borchards executed a second deed of trust in favor of A. B. Atkinson (plaintiff). Atkinson foreclosed on the property and purchased the property at the foreclosure sale. Shortly thereafter, Alfred’s mother, Luise, purchased the promissory note and first deed of trust from Phleger. Luise lent Alfred and Mabel additional funds, which she represented as advances of the type provided for in the first deed of trust. Through her attorney, Luise was at all times fully aware of all transactions involving the property and Atkinson. Luise then foreclosed under the deed of trust and purchased the property at the foreclosure sale for $600 more than the initial face value of the promissory note. Atkinson sought the $600 for himself as excess. Luise claimed the right to the $600 to cover the advances she had made. Atkinson sued, and the trial court ruled in his favor. Luise appealed.

Rule of Law

Issue

Holding and Reasoning (Hart, J.)

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