55 Cal. 2d 588, 12 Cal. Rptr. 266, 360 P.2d 906 (1961)
Some time before 1954 plaintiffs purchased the Granrud Garden Apartments in Las Vegas, Nevada.1
In 1954 the property was encumbered by a first deed of trust given to secure an installment note payable to third parties and a second deed of trust given to secure an installment note payable to Granrud at $200 per month plus interest.2 In July 1954, there remained unpaid approximately $11,000 on the note secured by the first deed of trust and approximately $24,000 on the note payable to Granrud.3
At that time Granrud wished to buy a trailer park and asked plaintiffs to refinance their obligations and pay a substantial part of their indebtedness to him.4 At a meeting in Las Vegas he stated that if plaintiffs would do so, he would provide by will that any debt that remained on the purchase price at the time of his death would be cancelled and forgiven.5
Plaintiffs then arranged for a new loan of $25,000, the most they could obtain on the property, secured by a new first deed of trust.6 They used the proceeds to pay the balance of the loan secured by the existing first deed of trust and $13,114.20 of their indebtedness to Granrud.7 They executed a new note for the balance of $9,227 owing Granrud, payable in installments of $175 per month secured by a new second deed of trust.8 This deed of trust contained no subordination provision.9 The $13,114.20 was deposited in Granrud's bank account in Covina, California and subsequently used by him to buy a trailer park.10 Plaintiffs incurred expenses of $800.90 in refinancing their obligations.11
Granrud died testate on March 4, 1956, a resident of Los Angeles County.12 His will, dated January 23, 1956, was admitted to probate, and defendant was appointed executrix of his estate.13 His will made no provision for cancelling the balance of $6,425 due on the note at the time of his death.14 Plaintiffs have continued to make regular payments of principal and interest to defendant under protest.15
Plaintiffs brought this action to have the note cancelled and discharged and the property reconveyed to them and to recover the amounts paid defendant after Granrud's death.16 Plaintiffs appeal on the clerk's transcript from a judgment for defendant as executrix of the estate of John Granrud.17 They contend that the findings of fact do not support the judgment.18
In the present case, however, there is no finding as to where Granrud was domiciled at the time the contract was made.19
Whether the action founded on the oral agreement could properly be maintained against the executrix without joining the beneficiaries of Granrud's estate as indispensable parties?20
Probate Code section 573 authorizes actions founded upon contracts to be maintained against executors and administrators in cases that would not abate upon the death of the testator.21 Beneficiaries are not indispensable parties when plaintiffs seek only a determination that an obligation has been discharged rather than enforcement of a trust against estate beneficiaries.22
Yes. The present action is founded on contract and involves an adverse claim to an interest in real property, making it properly maintainable against the executrix under Probate Code section 573.23 Plaintiffs do not seek to enforce a trust against any beneficiaries of Granrud's estate, so none of those beneficiaries qualifies as an indispensable party.24 Instead, plaintiffs seek only a determination that their liability on the note has been discharged pursuant to the contract with Granrud and that the security interest in the property thereby released.25
Under these circumstances the executrix represents all persons interested in the estate, just as she would if she had sued to enforce the note and encountered a defense of discharge.26
The action founded on the oral agreement could properly be maintained against the executrix without joining the beneficiaries of Granrud's estate as indispensable parties.27
Whether plaintiffs were required to file a claim against the estate before bringing suit and were barred from testifying to pre-death events?28
When plaintiffs seek only a determination that their obligations have been discharged rather than a money judgment payable from estate assets, they are not required to file a claim under Probate Code section 707.29 They are not precluded by Code of Civil Procedure section 1880 subdivision 3 from testifying to events occurring before the decedent's death.30
No. Plaintiffs do not seek a money judgment payable out of the assets of the estate but only a determination that their obligations have been discharged.31 They were not required to file a claim against the estate. Because no claim against the estate is involved, plaintiffs were not barred by subdivision 3 of section 1880 of the Code of Civil Procedure from testifying to events occurring before Granrud's death.32
Plaintiffs were not required to file a claim against the estate before bringing suit and were not barred from testifying to pre-death events.33
Whether the California statute of frauds applies to the oral contract made and performed in Nevada involving refinancing of obligations secured by interests in Nevada real property?34
In the absence of a plain legislative direction to the contrary, California's statute of frauds does not apply to a contract made and performed in Nevada by Nevada residents.35 The contract involves refinancing of obligations arising from the sale of Nevada land and secured by interests therein.36 The basic policy of upholding the reasonable expectations of the parties precludes such an application even if the promisor later moves to California and dies here.37
No. Plaintiffs were residents of Nevada, the contract was made in Nevada, and plaintiffs performed it there by refinancing their obligations on the Las Vegas apartments.38 Even assuming Granrud was domiciled in California when the contract was made, plaintiffs were not bound to anticipate that California's statute of frauds would ultimately be invoked against them, because California would have no interest in applying its statute unless Granrud remained here until his death.39 The policy of protecting the reasonable expectations of the parties therefore precludes application of the California statute of frauds to this Nevada-centered transaction.40
The California statute of frauds does not apply to the oral contract made and performed in Nevada involving refinancing of obligations secured by interests in Nevada real property.41
Whether the Nevada statute of frauds governing real property transactions applies to an agreement providing for discharge of a debt secured by a deed of trust on Nevada land?42
An oral agreement providing for the discharge of an obligation to pay money secured by an interest in real property is not within the real property provision of the statute of frauds.43 The termination of the security interest is merely incidental to and follows by operation of law from the discharge of the principal obligation.44
No. The agreement provided that Granrud would cancel any remaining debt on the purchase price at his death if plaintiffs refinanced and paid a substantial portion of their indebtedness to him.45 The termination of the security interest in the Nevada apartments follows automatically from the discharge of the underlying note, rendering the real property statute of frauds inapplicable under Nevada law.46 Nevada therefore treats the contract as valid and enforceable, creating no conflict with California's policy of enforcing lawful contracts once the California statute of frauds is held inapplicable.47
The Nevada statute of frauds governing real property transactions does not apply to an agreement providing for discharge of a debt secured by a deed of trust on Nevada land.48