Page images


Findings of Fact

The note was prepared on a form of the bank of which John C. Ralphs, Jr. was a vice-president.

(b) The deed of trust signed by Mary on July 8, 1940, to secure the above note was made out to a bank trustee for the benefit of the Heirs and Devisees of John C. Ralphs, Deceased, and the property covered by the deed of trust was described as the south half of tract 44. This constituted error number eight, merely a logical consummation of earlier errors, but chargeable to the Ralphs who should have known better. The deed of trust contained the same description as that in the original deed of trust note made out by Charles B. Ralphs and recorded August 27, 1923 (finding 8, supra), to which the grant deed of the property to Mary in February 1924 had been subject. The new deed of trust was recorded August 26, 1940. On September 4, 1940, the original deed of trust was released by the trustee to "the person or persons legally entitled thereto", and the release was duly recorded.

17. On August 10, 1940, in connection with the foregoing transaction, the El Centro branch of the Pioneer Title Insurance and Trust Company wrote to Tom advising him that it had completed a title examination of the south half of tract 44. On August 26, 1940, this company issued its policy of title insurance insuring the heirs and devisees of John C. Ralphs, deceased, that title to the south half of tract 44 was in Mary and listing liens and encumbrances, none of which are germane here. Since the title company was called upon to search only the title to the south half of tract 44, the property to which Mary's new deed of trust related, it cannot be said that the title company committed an error on that occasion.

18. On September 6, 1940, the refinancing operation having been completed, John C. Ralphs, Jr. wrote to Tom enclosing a copy of the note and stating further:

I hope, Tom, that you will make every effort humanly possible to keep up with the payments as now written. I know you appreciate the treatment you have received. It has been rather hard for me to get everybody to agree

to it, but we finally did. 19. The first payment under the July 8, 1940 note and deed of trust was due in December 1940 in the amount of 154 Ct. Cl. Findings of Fact $833.34. The first and only payment made on the note was $1,000 on April 25, 1941.

20. (a) In the late 1930's the soil in the Imperial Valley, including the tract 44 in suit, became increasingly alkaline, or salty, because the water used for irrigation was heavily alkaline and, as it evaporated from or filtered through the irrigated land, left its salt mineral content suspended in the earth. A deep ditch had been dug through part of tract 44 by the Irrigation District to help alleviate the salt condition by attracting the flow of ground water which would leach out the salt, but this was effective in its purpose only within an area of 200 to 300 feet on either side of the ditch. By 1942 tract 44 and many farms in that area were so alkaline that there were many crops which could not be grown profitably, if at all. For example, lettuce, flax and cantaloupes are not salt tolerant and cannot be successfully cultivated in salty soil. Asparagus and barley are more tolerant to such conditions. High alkalinity reduces the yield of almost any crop in direct proportion to the relative salttolerance of the particular crop. The preferred way to reclaim highly alkaline farmland is to level it, install an elaborate network of drainage tiles, and to flood it with water so as to leach out the salt and drain it out of the soil. In 1942 tiling of land for drainage purposes was relatively new in the Imperial Valley. Another reclamation method is to plant a crop of rice which, because of the large quantities of water used, will in two or three years remove much of the salt and at the same time produce a money crop. By 1940 tract 44 had decreased in value because of its alkalinity and thus offered impaired security for outstanding encumbrances. As further evidence of this, in 1940 Mary applied to the Federal Land Bank for a loan of $4,900 on the north half of tract 44, and it was not granted because its alkaline condition had impaired marketability of the property. The soil conditions in the north half of tract 44 were superior to those in the south half.

(b) Tom had the entire tract 44 planted in asparagus for about 14 years preceding 1941. Asparagus is a perennial crop and will keep producing for as much as 25 years before playing out. By 1941 the alkaline condition of tract 44



Findings of Fact had substantially curtailed the yield of Tom's asparagus crop on tract 44 and so he plowed up almost all of it in the summer of 1941 with intention of eventually converting a great part of it to rice cultivation for soil restoration purposes. He reasoned that flooding the land for growing rice would rot the matted asparagus roots and convert them into useful fertilizer for the rice. As interim crops prior to actually building rice levees and sowing his rice Tom planted 40 acres to flax, 240 acres to barley, and two acres to tomatoes. This was done in 1941 with the idea that he could reap these harvests prior to the time for planting rice. In March and April 1942 these crops were in being on tract 44, interspersed with asparagus which, despite being plowed up, continued to push up through the stands of barley and flax. There is conflicting evidence as to whether Tom had built any rice levees on tract 44 or had any rice under cultivation there as of March 1942, but this is not material since there is no claim by plaintiff for loss of rice grown on tract 44.

(c) Tom was regarded as a capable and energetic farmer. In general, 1942 and the succeeding war years were prosperous years for Imperial Valley farmers, and most crops cultivated on suitable land were profitable. There was no grave shortage of farm labor in the Imperial Valley until the fall of 1942. The years 1948–1952 were the most prosperous years for Imperial Valley farmers since 1930.

21. Following the tragedy at Pearl Harbor on December 7, 1941, public sentiment against persons of Japanese ancestry ran high in the Imperial Valley. Grounds existed for the plaintiff and her family to fear bodily harm. By March 2, 1942, the exclusion of persons of Japanese ancestry from Military Area No. 1, which included the Imperial Valley, was imminent.

22. On February 26, 1942, Mary executed an assignment to Charles B. Ralphs of 40 acres of flax and 240 acres of barley then growing on tract 44. On the same date Mary executed another assignment to Charles B. Ralphs of 80 acres of barley then growing on nearby rented land. On March 14, 1942, the District Attorney of Imperial County wrote the following letter to John C. Ralphs, Jr., as executor of the estate of J. C. Ralphs, Sr., deceased.

154 Ct. CI. Findings of Fact On examination of your questionnaire I find that you sold land in 1921 in the Imperial County to one Mary Sonoda, a minor, with Thomas Sonoda as guardian for said minor.

From the information given, I understand that the payments on this contract are several years in arrears and I suggest to you that at this time an effort be made to cancel this contract and secure the possession of the land for the estate. As you know, eventually all Japanese will be removed from Military Zone AI, which includes all of Imperial County.

Will you kindly advise me as to your attitude in this matter? 23. On March 16, 1942, plaintiff made a will, witnessed by Ross Hickcox, her attorney, appointing Charles B. Ralphs as executor. On the same date the plaintiff executed a General Power of Attorney wherein she named Charles B. Ralphs as her attorney in fact to perform and carry out certain duties, obligations and responsibilities spelled out in the instrument, including the collection of moneys due, payment of debts, and to "farm for me, and in my name, place and stead [tract 44] *** and to do everything needful and necessary to carry out my farming operations as he may deem best thereon.” Tom and Mary hoped that the property could be saved for their return from internment. Charles B. Ralphs accepted the power of attorney and subsequently paid many of Mary's debts out of her account but did not make any payments on the deed of trust note against tract 44 which Mary had signed in 1940 as reported in finding 16, supra. Nor did Ralphs, so far as the record discloses, take any steps to operate the farm in the sense of planting additional crops as the existing crops were harvested so as to produce future income. However, he leased the property to one George H. Jones for one year starting July 1, 1942, as described in finding 31, infra. John C. Ralphs, Jr. had some hesitancy about his brother Charles serving as Mary's attorney in fact, for on March 23 he wrote to Charles enclosing an opinion from a lawyer whose advice was that Charles should not accept the power of attorney because the fiduciary relationship it created between Charles and Mary would put him in an embarrassing position if Mary's deed of trust, in which he had an


Findings of Fact

interest, was foreclosed. For example, in the event of a foreclosure suit Charles B. Ralphs would be one of the plaintiffs, and theoretically if not actually might have also been named as a defendant in his capacity as attorney in fact for Mary. Ralphs himself consulted Attorney Whitelaw as to this problem of legal conflict. In his March 23 letter John C. Ralphs, Jr. also stated that the heirs had met and decided two days before to foreclose if Mary refused to execute a deed to the property and deposit it in escrow. From this letter and circumstances surrounding it, it is reasonable to conclude that there was no hope by the heirs that Mary would pay the note off, and that as of March 23, the date of the letter in question, it had not yet been discovered by the interested parties that the 1940 deed of trust covered only the south half of tract 44, or that Mary had an imperfect title to the north half. In spite of the advice given, Charles B. Ralphs functioned as Mary's attorney in fact under the power of attorney on many subsequent occasions, including his signing as Mary's attorney in fact a lease to tract 44 in June 1942 to George H. Jones for one year commencing July 1, 1942. It had apparently been discussed earlier that the property be sold to the said George H. Jones, for in June 1942 a sales agreement was drawn contemplating the sale to Jones by the estate (not Mary) of tract 44 for $18,000 provided the estate could convey a clear title within nine months. The proposed sales agreement recited that "Time is of the essence of this contract." Quite clearly the as-yet-undiscovered errors in the title and deed of trust had nothing to do with initiating the decision of the heirs to foreclose on the deed of trust. Discovery of the errors referred to came about by reason of the facts related in the following finding.

24. (a) Prior to January 1942 the plaintiff borrowed approximately $2,328.92 from several produce companies, giving as security the tomato crop under cultivation at the Niland farm. The tomatoes were to be shipped to the produce companies which were to deduct from the sales proceeds of the tomatoes shipped the amount of the indebtedness and remit the balance, if any, to the Sonodas. The papers representing these crop loans were sold at a discount to one Ben

« PreviousContinue »