Findings of Fact 154 Ct. Cl. John C. Ralphs as beneficiary, in addition to a deed of trust note for $41,600, payable in stipulated installments. Both the deed and the deed of trust described the property involved in the transfers as the south half of tract 44. This description coincided with the description in the court's order of August 15 entered pursuant to Tom's petition to purchase the property, except no acreage was mentioned in the deed and deed of trust (finding 7, supra). The duly executed deed and deed of trust were recorded on August 9 and 27, 1923, respectively. Apparently there was no awareness on the part of the parties involved that the property thus deeded by John C. Ralphs, Sr. and his wife to Charles B. Ralphs represented only one-half of the entire tract 44, which the former had been deeded in 1911 by George H. Reed. The south half of section 25, as the property had been designated prior to the 1908 survey, had been erroneously translated by the lawyers into the south half of tract 44, whereas in reality it was the entire tract 44. This was the second major error in the series, and it is chargeable to Attorney Hellyer. 9. Attorney Hellyer was not satisfied with the petition which had been prepared by Attorney Randall and filed by Tom for leave to purchase the property for Mary, nor with the order entered by the court pursuant thereto, because of some ambiguity in describing the amount to be paid for the property. On September 11, 1923, Hellyer wrote to Tom's attorney Randall, and enclosed a copy of a proposed amended petition and order. Simultaneously Hellyer prepared and sent to Charles B. Ralphs a deed to the property which was to be executed after the entry of an order under the amended petition. By this time Hellyer had apparently discovered that the original petition, the order thereto, and the deed and deed of trust between John C. Ralphs, Sr. and Charles B. Ralphs executed the preceding month had erroneously described the property as the south half of tract 44, for in the proposed amended petition and the proposed deed from Charles B. Ralphs and wife to Mary the property description correctly appeared as the whole of tract 44. In fact the draft of the proposed deed clearly refers to tract 44 as being “formerly known as the South Half of Section 25". The amended petition erred (the third, by count) in reciting that the prop 130 Findings of Fact erty was subject to a deed of trust, for technically only the south half of the property described in the amended petition was so encumbered, namely, the deed of trust recorded August 27, 1923, by Charles B. Ralphs for the benefit of John C. Ralphs, Sr. covering only the south half of tract 44. It surpasses understanding why Attorney Hellyer did not take immediate steps to correct the deed and deed of trust which had been recorded between the two Ralphs, since he must have known that the deed and deed of trust between the Ralphs applied only to the south half of tract 44. This was error number four, chargeable to Attorney Hellyer. It is reasonable to conclude that the deed and deed of trust between John C. Ralphs, Sr. and Charles B. Ralphs were intended to cover the whole of tract 44 containing 320 acres. 10. On or about November 14, 1923, John C. Ralphs, Jr., who was a banker and therefore more conversant with such matters than either his father or his brother, Charles, prepared a letter for Charles to sign and deliver to the title company in El Centro with a signed deed to tract 44 executed by Charles B. Ralphs and wife to Mary, with instructions to the title company to deliver the deed to Mary or her guardian on payment of a certain sum of money to close the transaction. There is no proof that this letter was actually delivered by Charles B. Ralphs to the title company, but the letter does constitute evidence that as of that time the Ralphs intended to transfer the whole of tract 44 to Mary, and had overlooked the fact that Charles B. Ralphs had title from his father only to the south half of tract 44, while title to the north half of tract 44 remained technically in the father. 11. At about this time Tom apparently engaged other counsel to represent him in the proceeding, for Attorney Hickcox represented Tom in the preparation and filing on January 7, 1924, of a petition in the Superior Court to purchase land for Mary described as the north half of tract 44, consisting of 320 acres, at a price of $48,000 to be paid on terms to be arranged. This petition was granted by the court's order dated January 18, 1924, which also described the property as the north half of tract 44. The misdescription in the petition and order was error number five and chargeable to Attorney Hickcox. Speculatively, he may Findings of Fact 154 Ct. Cl. have been trying to supplement the original petition and court order of August 1923 which applied to the purchase of only the south half of tract 44 (finding 7, supra), but adding the two acreages together for the north and south halves of tract 44 would have given tract 44 a total of 640 acres, an absurdity which should have been plain on its face. Soon Attorney Hickcox became aware of his mistake and, by petition filed February 21, 1924, he procured an amended court order on February 29, 1924, which correctly described the property to be purchased by Tom for Mary as the whole of tract 44, but neither the new petition nor the order referred to the property as being subject to a deed of trust. Error number six, chargeable to Attorney Hickcox. Moreover, the petition and order last referred to continued to overlook the fact that Charles B. Ralphs had title only to the south half of tract 44. 12. In the meantime, by grant deed executed February 9, 1924, and recorded March 6, 1924, Charles B. Ralphs and wife conveyed to Mary tract 44 "subject to a Trust Deed in the amount of $41,600, recorded in Book 1, Page 446 of Deeds, Records of Imperial County". The trust deed in question was that referred to in finding 8, supra, executed by Charles B. Ralphs to the south half of tract 44 and recorded on August 27, 1923. In receiving the above deed, Tom, as guardian for Mary, did not sign a new note or a new deed of trust to secure the seller, but merely assumed the obligation executed by Charles B. Ralphs to his father. As mentioned in the footnote to finding 6(a), supra, this may have been due to the strictures of California's Alien Land Law. The preparation of the deed granting to Mary more property than Charles B. Ralphs owned was error number seven, a reaffirmation of preceding errors, and chargeable to Attorneys Hellyer and Hickcox. 13. The plaintiff maintains that, in the negotiations leading up to the February 9, 1924 deed of tract 44 to her, Tom asked John C. Ralphs, Sr. that only the south half of the property be subjected to a deed of trust encumbrance so that Tom would be able to secure credit on the unencumbered north half in order to have operating capital. The evidence of such an arrangement relies solely on Tom's unsupported testimony 130 Findings of Fact It of a private conversation he had with John C. Ralphs, Sr. in 1923, in the course of which Tom allegedly was given specific permission to keep the north half of the tract unencumbered so that he could raise money on it to grow cantaloupes, etc. Actually, Tom did not mortgage the north half but secured the necessary money for his farming operations by means of ordinary crop loans. Both John C. Ralphs, Jr. and Charles B. Ralphs testified that there was no such arrangement and at least the former was in a position to know. John C. Ralphs, Sr. was not available for testimony, having died in 1931. is not reasonable to believe that the seller would have been content to benefit the buyer by restricting his security to only one-half of the property sold, especially where it must have been apparent contemporaneously that Tom would not need the north half unencumbered in order to raise operating capital, since he managed to borrow enough on loans against his crops. Mere friendly feeling by Ralphs, Sr. would not justify a supposition that the omission was deliberate. In view of the fact that even the title company and the attorneys for both parties during the months in question were apparently unaware that only the south half of the property conveyed to Mary was mortgaged, and were furthermore implicated in the series of errors which led to the conveyance to Mary by Charles B. Ralphs of the north half of tract 44 which he did not technically own, it is difficult to understand how an unlettered Japanese farmer like Tom could have perceived a flaw which eluded the professionals. It is apparent, however, that Tom was aware of the true situation at least as early as November 1940, when he had prepared for Mary's signature an application to the Federal Land Bank for a loan on the technically unencumbered north half of the property and in listing liens made no reference to the Ralphs' deed of trust on the form which Mary signed. It is concluded that the subjection of only the south half of tract 44 to the existing encumbrance at the time Mary received a grant deed purporting to convey the entire tract to her was the product of errors attributable to the attorneys handling the various transactions which have been related in the preceding findings, and was not the result of a private, intentional arrangement between Tom and John C. Ralphs, Sr. Findings of Fact 154 Ct. Cl. 14. Between February 9, 1924, and July 8, 1940, payments totaling over $58,000 were made by Mary, or by Tom for her, on the principal and interest under the deed of trust note on tract 44 which reduced the principal to an agreed amount of $18,000 on the latter date. The deed of trust note contemplated complete payment by August 1, 1929, but Tom was delinquent and made payments when it suited him. During the 1930's taxes were delinquent at times on tract 44, but the delinquencies were cleared up. 15. Following the death in 1931 of John C. Ralphs, Sr., leaving seven heirs, repeated efforts were made by the heirs to get Tom to make payments on the deed of trust note. Charles B. Ralphs, who was one of the heirs but was also Tom's neighbor and friend, interceded for him to prevent foreclosure. 16. (a) Because of the delinquency in payments on the deed of trust note, John C. Ralphs, Jr. and Charles B. Ralphs discussed the matter with Tom sometime in 1940. It was agreed that a security arrangement would be entered into regarding the agreed $18,000 balance remaining on the deed of trust note to which the grant deed of February 9, 1924 was subject. The payment terms were to be liberalized in order that they could be met by Tom. By July 1940 Mary was over 21 years of age. On July 8, 1940, Mary executed a deed of trust note and a deed of trust. The note read as follows in pertinent part: $18,000.00 San Bernardino, California, July 8, 1940 In installments as herein stated, for value received, I promise to pay to The Heirs and Devisees of John C. Ralphs, deceased, subject to the Administration of his estate, or order, at San Bernardino, California the sum of Eighteen Thousand and no/100--Dollars, with interest from date on unpaid principal at the rate of five per cent per annum, payable December 1st and May 1st of each year; principal payable in installments of Eight Hundred Thirty-three and 34/100_. Dollars or more on the 1st day of May and December each year, beginning on the 1st day of December, 1940, and continuing until said principal and interest have been paid. It is provided that if payments are made on principal and interest as set out above, credit of $1,000.00 will be given on the principal upon the making of each of said principal payments. |