Simon Newman Co. v. Tully

SEAWELL, J.

Defendant appeals from a judgment quieting plaintiff’s title to land in Merced County. Said land, and other property in San Luis Obispo and Alameda Counties, was transferred to plaintiff corporation in satisfaction of a promissory note and deed of trust theretofore executed in its favor.

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Defendant contends that by reason of certain facts which she learned for the first time shortly after plaintiff corporation brought the present action, the indebtedness for which said promissory note and deed of trust were given had been discharged before execution of said instruments, with the result that they were without consideration. Since plaintiff has sold and transferred the San Luis Obispo and Alameda County lands deeded to it in satisfaction of the note and deed of trust, and has contracted to sell the Merced County land, which is the subject of the present action, defendant contends that as a condition to quieting its title to the Merced County land, plaintiff should pay her the proceeds realized by it from the lands theretofore sold and conveyed by it, and also the amounts realized from its contract to sell the Merced County lands.

In September, 1919, defendant ‘Alice Tully was the owner of the lands above referred to. Her brother, Ernest Tully, was indebted to plaintiff corporation in the sum of $86,736.90 on account of advances to him in connection with his farming operations. This indebtedness was secured by deed of trust on 160 acres of land near Los Banos, Merced County, owned by him, and by a chattel mortgage on livestock and farm equipment. On September 13, 1919, defendant executed a promissory note for $30,000 and a deed of trust to plaintiff corporation upon the Merced, San Luis Obispo and Alameda County property, as further security, according to her testimony, for the indebtedness of her brother to plaintiff, to the end that plaintiff would not “close out” her brother.

Thereafter, defendant paid $3,000 on the principal of said note. On December 27, 1924, a renewal note and deed of trust were executed by Mary A. Tully, mother of Alice Tully, in whom record title was vested by virtue of a quitclaim deed from Alice Tully. Said property, with the exception of a parcel in Alameda County upon which the mother and daughter resided, was, on February 17, 1927, conveyed by Mary A. Tully to plaintiff corporation, which had filed a notice of election to sell under the deed of trust, and accepted by it in satisfaction of the indebtedness. Prior to execution of the renewal note and deed of trust, Mary Tully had executed deeds retransferring to her daughter the property covered by the deed of trust, but said deeds were not recorded