San Diego Municipal Credit Union v. Smith

San Diego Municipal Credit Union (Credit Union) appeals a judgment in favor of Martin A. Smith based on equitable estoppel. We affirm.

I

Smith bought a Porsche automobile in September 1979. He borrowed $20,000 from Credit Union for that purpose and, on September 7, 1979, signed a promissory note and a security agreement in favor of Credit Union.

In November 1979, Smith proposed to sell the Porsche to Daniel Steele. Smith took Steele to Credit Union’s office on November 21, 1979, for the purpose of having the note paid off and transferring title of the Porsche to Steele. An employee of Credit Union determined the balance due on the note was $19,971.41. Steele gave the employee a check payable to Credit Union for that amount, and the Credit Union employee asked Smith to sign the title documents for the Porsche over to Steele, and other documents, and Smith did so. Smith assumed the Credit Union employee verified the check was good. Smith was given a copy of the promissory note and a copy of the security agreement, both stamped “Paid 11/21/79,” and initialed by the employee. Having signed over the title documents, Smith turned the Porsche over to Steele. Steele shortly…