Jefferson Savings and Loan Association, Etc. v. Lifetime Savings and Loan Association, Etc.

In 1963 Jefferson Savings and Loan Association, a Colorado corporation (Jefferson), purchased from Lifetime Savings and Loan Association, a California corporation (Lifetime), a seventy-five per cent interest in thirty-seven loans secured by trust deeds on California real estate. These loans had been made by Lifetime. A “Loan Participation Agreement” delineated the rights of the parties, and provided, inter alia, that after foreclosure:

In 1963 eight of the loans became delinquent. Lifetime foreclosed the trust deeds and at the Trustee’s sale, acquired in its own name title to the eight parcels of real estate. Lifetime sold three of the tracts to one Durham and paid Jefferson seventy-five per cent of the purchase price. There is no controversy as to these parcels.

The remaining five parcels, together with six other parcels standing in Lifetime’s name but in which Jefferson had no interest, were sold under a single contract to David Durham and wife. The Durhams paid no cash. The purchase agreement provided that if the Durhams should pay within ninety days, the price would be $88,000.00, but if not, then they would have to pay a “long term” price of $105,500.00. This indebtedness…