Essey v. Phillips

HOUSER, J.

The pertinent facts adduced by the evidence introduced on the trial of the action in the trial court appear to be as follows:

One Herman was the owner of certain real property subject to the lien of a mortgage thereon in the sum of $11,000, which real property he sold to Maud P. Phillips, appellant herein, for the sum of $18,000;—in payment of which Mrs. Phillips gave to Herman $3,000 in cash, a promissory note executed by her in favor of Herman for the sum of $4,000 secured by a deed of trust (or second lien) on the property; and assumed the existing indebtedness of $11,000 thereon. Thereafter Mrs. Phillips sold the property to Babdaty, who assumed not only the payment of the original indebtedness of $11,000 against the property, but as well the payment of the balance then due on the $4,000 promissory note secured by the deed of trust. After making several payments on account of the $4,000 promissory note, Babdaty defaulted. Thereupon in due course a “foreclosure” of the deed of trust was had, which resulted in the sale of the property for the sum of $1,000, which sum, after deducting therefrom the expenses incident to the sale, was credited as a payment on the $4,000 promissory note. Shortly after such sale had taken place, Babdaty again purchased the property from Herman. In doing so, and as a part of the transaction, Herman sold and assigned

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the $4,000 promissory note executed by Mrs. Phillips to one Essey (respondent herein), who paid no consideration therefor, but who at all times was the agent of Babdaty. Essey then commenced an action in the superior court against Mrs. Phillips to recover a judgment for the balance then due and unpaid on the original $4,000 promissory note.

By the answer to the complaint, in substance the defendant in the action set up three several alleged defenses thereto, as follows:

“ (1) That the note had been paid in full;

“(2) that the amount bid for the property at the foreclosure sale under trust deed was inadequate;

“(3) that there was a failure of consideration.”

The findings of fact by the trial court were in accordance with the allegations of the complaint, and against the ultimate facts upon which the several defenses of the defendant were predicated. From the ensuing judgment in favor of the plaintiff, the defendant has appealed to this court.