Federated Mortgage Investors v. American Savings & Loan Association

Federated Mortgage Investors, a business trust (Federated) filed an action against American Savings and Loan Association of California, a California corporation (American) to recover $31,89s with interest an accounting and for exemplary damages. After nonjury trial the court made findings in favor of American and denied relief to Federated. Judgment was entered accordingly. Federated appeals from the judgment.

Facts

Federated’s claim for $31,895 arises out of a complex state of facts which were established by oral testimony and a written stipulation which incorporated various documents. The facts relevant to the issues involved herein may be briefly summarized as follows:

Eichler Corporation (Eichler) built a building—Central Towers—in San Francisco. A portion of the costs of construction ($4.2 million) was supplied by American who acquired a first trust deed dated October 21, 1963, recorded October 28, 1963. This trust deed gave American the right, inter alia, to receive rents, issues, and profits as additional security. In April of 1965 Federated’s predecessor (Kirkeby-Natus) loaned Eichler $1.8 million and acquired a second trust deed (recorded Apr. 9, 1965) which…