Archer v. Edwards

California Court of Appeal Feb 15, 1937 No. Civ. 11075Published

Before: York

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Holding. The court affirmed a judgment for the respondent, holding that the respondent was entitled to recover money paid for a note and trust deed because there was a total failure of consideration and the action was not barred by the statute of limitations.

Issues

Whether the Negotiable Instruments Law applies to the transaction.
Whether the action is barred by the statute of limitations.
Whether the rule of caveat emptor applies to the sale of the note and trust deed.
Whether there was a total failure of consideration.

Disposition. affirmed

Quotations verified verbatim against the opinion

“the record discloses that the statute of limitations was tolled by the action of the parties and the decision of the trial court”

YORK, J.

Early in the year 1927, one Kate Trout, the owner of a certain parcel of real property, exchanged the same for some stock owned by parties named Taylor. The Taylors on May 13, 1927, executed a promisory note due in one year for the sum of $4,000 in favor of one Jess Chenoweth, and to secure the same executed a trust deed on the property which they had obtained from Kate Trout. On June 15, 1927, Chenoweth assigned the note and trust deed for

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a valuable consideration to the appellant, Charles M. Edwards, endorsing the note on the back thereof: “Without recourse. For value received, I do hereby transfer and assign the within note to C. M. Edwards, together with all rights, accrued or to accrue under the Deed of Trust securing the same so far as the same relate to this note and without recourse on me. Jess Chenoweth. ’ ’ A few days thereafter, to wit, on June 21, 1927, appellant sold the note and trust deed to the respondent for $3,805 cash, endorsing the note as follows:

“Los Angeles, California, May 27, 1927.

“For value received, I do hereby grant and assign to R. P. Archer the within note together with all rights accrued or to accrue under the Deed of Trust securing the same, so far as the same relate to this note.

“Chas. M. Edwards.’’

The note not being paid at maturity, respondent Archer caused the property covered by the trust deed to be sold, he himself bidding in the property at said sale for $4,500, and on June 23, 1928, he received a trustee’s deed therefor.

On November 5,1928, Kate Trout served notice of rescission on respondent Archer and other parties to the exchange transaction first above mentioned, demanding a return of the real property which she had exchanged for the stock owned by the Taylors, and on January 8, 1929, she commenced an action to quiet title to the real property which was then held by respondent Archer by virtue of his trustee’s deed. The trial court in that case found that the deed executed by Trout, which did not contain the name of the grantee at the time it was executed, was null and void, but in order to secure respondent Archer for the sum of $4,611.16 due him at the time of the foreclosure sale, awarded him a lien against the real property involved for that amount. Upon appeal, the Supreme Court, under date of April 30, 1934, held that the deed executed by Kate Trout was void

Archer v. Edwards

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YORK, J.

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