Beeler v. American Trust Co. , 28 Cal. 2d 435 ( 1946 )

SPENCE, J.

This is an appeal from a decree of foreclosure and sale made as the outgrowth of previous litigation between the parties (Beeler v. American Trust Co., 24 Cal.2d 1 [147 P.2d 583].) The propriety of the allowance of interest on the obligation established by the prior judgment is the sole point here in issue.

As appears from the findings in this ease, judgment in the original action was entered on November 6, 1939, whereby a deed absolute was declared to be an equitable mortgage of certain real property; plaintiff’s indebtedness to defendant was fixed at the sum of $60,000, plus the sum of $477.88 for taxes advanced, the former sum to bear interest at the rate of 5 per cent per annum.and the latter sum to bear interest at the rate of 7 per cent per annum from the date of judgment ; and provision was made that if plaintiff should fail to pay such sums and interest within 60 days from the date upon which the judgment became final, defendant might apply for a decree of foreclosure and sale. On appeal by defendant, this court modified the original judgment to allow defendant the additional sum of $430, making a total of $907.88, for taxes advanced. As so modified the judgment was affirmed on April 3, 1944, and the remittitur was filed on May 6, 1944. Meanwhile defendant, during the pendency of the appeal, made additional advances for taxes, reimbursement for which was secured under the terms of the judgment declaring plaintiff’s right to a conveyance upon satisfaction of the indebtedness constituting a lien against the property. Plaintiff failed to make the payments within the 60 days from the date the judgment became final. Defendant thereafter applied for and obtained on November 14,1944, after due hearing, the decree of foreclosure and sale from which this appeal is taken.

Appellant objects to the decree’s schedule of his interest indebtedness which was computed on the following basis: $60,000 as the sum of the principal obligation, plus interest at 5 per cent per annum, and $907.88 as tax advance, plus interest at 7 per cent per annum, both amounts accruing interest from the date of the judgment, November 6, 1939; and additional sums for taxes advanced since the judgment, with interest from the date of payment at the rate of 7 per cent per annum; in all, making a total of $81,490.99, after deduction of certain undisputed credits in favor of appellant, as the amount secured by the mortgage and bearing interest at the rate of 7 per cent per annum from date of said decree. It is appellant’s position that said sums under the original judgment should not bear interest until the date that judgment became final—May 3, 1944. Neither the record nor the applicable law supports appellant’s position.

The original judgment as rendered and modified on appeal provided expressly for interest from its date of entry on the respective sums of $60,000 and $907.88, as above stated. This court’s previous consideration of the propriety of interest accrual with reference to the adjudicated mortgage indebtedness of $60,000 was directed solely to such allowance from the date such amount became due under the parties’ agreement, and the trial court’s finding, under the accredited evidence, that a rejected tender of payment prior to such due date stopped the running of interest on the obligation, was affirmed. (Beeler v. American Trust Co., supra, 24 Cal.2d 28-29.) By such decision the provisions for interest as carried in the original judgment were in nowise disturbed. On the contrary, in affirming said judgment, this court limited the modification to the single point of substituting the increased figure for the tax advance (24 Cal.2d 29) and in connection with such right of reimbursement, expressly stated that said amount of $907.88 should bear “legal interest . . . from the date of entry of the decree.” (24 Cal.2d 27.) The modification, of course, related back to the date of the original entry of the judgment. (Barnhart v. Edwards, 128 Cal. 572, 575 [61 P. 176].)

Appellant concedes that the only offer of payment made was that prior to the institution of the original litigation. Its full effect was determined in the resulting judgment, and accordingly the interest accrual was expressly related to the date of entry of such adjudication. Said judgment is now final, and its provisions for allowance of interest are not open to attack on this appeal. (Code Civ. Proe., § 1908.) Contrary to appellant’s claim, it was in no sense an interlocutory decree by reason of provision for possible future foreclosure proceedings in satisfaction of the judgment. Bather it “was a complete and final determination of the rights of the parties” then in controversy and it became “none the less so because it reserved for future consideration [an] independent branch of the case.” (Perry v. West Coast Bond & Mortgage Co., 136 Cal.App. 557, 559 [29 P.2d 279].)

Appellant next argues that regardless of the terms of the original judgment, the appeal therefrom operated of itself to stop the interest from running until the obligation became due under decision of this court—Beeler v. American Trust Co., supra, 24 Cal.2d 1. In this connection he asserts that during the pendency of the appeal, defendant bank persisted in its claim of absolute ownership of the property and refused to recognize his rights under the terms of the adjudicated mortgage; that it therefore would have been futile for him to have offered payment as prescribed in the judgment; and that these circumstances will not support a claim of interest on the indebtedness prior to the date of finality of decision, May 3, 1944. But the law is otherwise. An appeal does not stop the running of interest, and to obtain such result the obligor must make a sufficient tender. (Ferrea v. Tubbs, 125 Cal. 687, 692 [58 P. 308].) Appellant makes no claim that a tender or offer of payment was made after the entry of judgment or pending the appeal, but merely assumes that it would have been rejected if made. In such assumption, appellant indulges in pure speculation as to a olaim which could easily have been demonstrated as a matter of fact. The only way in which appellant could have avoided or terminated his liability to pay interest during pendency of the appeal was to have made an actual tender. (Western Lithograph Co. v. Vanomar Producers, 62 Cal.App. 644, 648 [217 P. 534].) Otherwise, analogous considerations would require that in any case in which the proper amount of a money judgment might be at issue on appeal, a tender of the amount admitted to be owing would be unnecessary because it presumably would be rejected and the running of interest should therefore automatically be stopped until the decision becomes final upon appellate review. The impropriety of such position has been considered in those cases where a monejr judgment on appeal is reduced in amount, and the judgment in its modified form nevertheless bears interest from the date of the original entry —not from the date of modification. (Barnhart v. Edwards, supra, 128 Cal. 572, 575; Niles Sand, Gravel & Rock Co., v. Muir, 55 Cal.App. 539, 541 [203 P. 1009].) And even on a contract claim where an obligee demands more than is later found by the court to be owing under the parties’ agreement, the obligor is nevertheless required to make a tender or offer of payment in order to stop the running of interest on the obligation as adjudicated. (Western Lithograph Co. v. Vanomar Producers, supra, 62 Cal.App. 644, 648.)

Moreover, the trial court, in rendering the decree of foreclosure with its interest calculations here under attack, did not infer from the facts before it that the mere appeal from the former judgment established that a tender of payment would have been futile and constituted a waiver of a claim of interest oh the adjudicated obligation pending appellate review. Appellant, in answer to the foreclosure application, did not make any specific allegation as to the futility or waiver of tender, but all his allegations which might be regarded as bearing upon such contention were found to be untrue. Thus, the trial court found against appellant on his claim of ability and willingness to pay in connection with his allegation that “since November 6, 1939 (the date of the original judgment) defendant . . . has continuously refused to accept the indebtedness due”—essential considerations in substantiating an offer of payment. (Civ. Code, § 1495.) The burden, of course, was upon appellant to plead and prove the circumstances of waiver. (Caspar Lumber Co. v. Stowell, 37 Cal.App.2d 58, 63 [98 P.2d 744].) Under the circumstances, the trial court’s resolving of the issue in its finding that interest was owing on the adjudicated indebtedness in accordance with the terms of the original judgment is binding on this appeal. (Northwestern P. C. Co. v. Atlantic P. C. Co., 174 Cal. 308, 312 [163 P. 47].) While the rule that “a tender is not necessary where the conduct or declarations of the vendee are such as to show that it would be unavailing” (Hoppin v. Munsey, 185 Cal. 678, 685 [198 P. 398]) is true as a general principle of contract law in establishing the futility of an offer of performance, an appeal is not classifiable as a declaration of position on the same basis to constitute a waiver of interest on a judgment as provided by law (Code Civ. Proe., § 1033) nor does it dispense with the formality of tender to stop the interest running on the adjudicated obligation. (Ferrea v. Tubbs, 125 Cal. 687, 692 [58 P. 308].)

Appellant’s final point of challenge to the foreclosure decree relates to its provision for the allowance of interest on respondent’s advances for taxes from the respective dates of payment. As quoted in the findings, the original judgment provided that “plaintiff, within sixty days from and after the date this judgment becomes final, shall pay to defendant the said sums and interest above found to be due, together with any advances made by defendant for taxes, if any, subsequent to the trial.” The advances for taxes made prior to the trial—$907.88, as above noted—expressly carried “legal interest . . . from the date of entry of the decree.” (Beeler v. American Trust Co., supra, 24 Cal.2d 1, 27.) Respondent on the same basis would be entitled to reimbursement for subsequent advances for taxes during the pendency of the appeal, and a reasonable interpretation of the original judgment with reference to that point would so indicate regardless of its failure to provide expressly for the accrual of interest. In fact, even without mention at all in the judgment, respondent’s advances for taxes to protect its own interest would have become part of the indebtedness secured by the mortgage. (Civ. Code, § 2876; Weinreich v. Hensley, 121 Cal. 647, 656 [54 P. 254]; McMillan v. O’Brien, 219 Cal. 775, 780 [29 P.2d 183]; Diehl v. Hanrahan, 68 Cal.App.2d 32, 37 [155 P.2d 853].) And such advances, in the absence of express agreement or provision to the contrary, bear interest at the legal rate from date of payment. (Semi-Tropic S. Assn. v. Johnson, 163 Cal. 639, 642 [126 P. 488].)

The decree of foreclosure provides for interest payments in strict accord with the terms of the original judgment as considered in this court’s prior opinion (Beeler v. Amrican Trust Co., supra, 24 Cal.2d 1), and accordingly, the decree is affirmed.

Gibson, C. J., Shenk, J., Edmonds, J., Traynor, J., and Dooling, J. pro. tern., concurred.