Mulligan v. Wilson

[665]

SHINN, P. J.—

Plaintiffs appeal from a judgment in favor of Phillip L. Wilson and wife, herein called defendants, after the sustaining of a demurrer to the second amended complaint without leave to amend. Other persons were named defendants but were not served. Plaintiffs denominated their action as one for declaratory relief to quiet title, to impress a trust, and for damages. Their claims arise out of an agreement with defendants concerning two city lots in Los Angeles.

On February 20, 1946, plaintiffs paid $500 for an option to purchase the lots from Mary C. Durant for $50,000, payable $10,000 down and $40,000 within five years at 5 per cent interest. Plaintiffs sold the option to defendants for $500 and in further consideration of an agreement which recited that the Wilsons had deposited in escrow $9,500 in cash and had executed a trust deed in the amount of $40,000 securing five promissory notes each in the amount of $8,000 with interest at 5 per cent per annum “said cash and deed of trust being in full payment of the purchase price of the real property hereinbefore described. ’ ’ Plaintiffs were to receive on a sale of the property one-half of the profits. The option agreement and the agreement between plaintiffs and defendants are set out in the opinion of the court rendered upon a former appeal by plaintiffs from a judgment declaring the rights of the parties under the same agreement

(Mulligan

v.

Wilson,

94 Cal.App.2d 286 [210 P.2d 526].) Upon completion of the escrow $9,500 was paid to the seller and defendants ’ five notes for $8,000 each payable in one, two, three, four and five years after August 20, 1946, also were delivered to the seller. The note which fell due August 20, 1947, was paid by defendants. The principal and interest which fell due August 20, 1948, were not paid. Shortly before the due date defendants demanded of plaintiffs that they pay one-half of the note, which plaintiffs refused to do, claiming that it was the duty of defendants to pay the notes and interest as they fell due. On August 18, 1948, plaintiffs brought an action in which they sought a judgment declaring that it was the duty of defendants to pay the notes and to act in good faith in carrying out the agreement. The judgment rendered in that case declared the rights of the parties and was affirmed on the former appeal. It declared that defendants owned the property and that plaintiffs had no rights therein except those created by the agreement; defendants had a right to sell the property for $85,000, or more, or could purchase the same through an agent or dummy for $85,000,