Harpold v. Slocum

JAMES, J.

Appeal from a judgment entered in favor of the plaintiff upon a promissory note alleged to have been executed by the defendants. The note was set out in full in the complaint and its execution was not denied by the defendants, except that it was affirmatively alleged in the answer that the note was given in connection with a separate contract as security only to the plaintiff that the defendants, parties to the alleged separate contract, would perform the obligations imposed upon them thereunder. This alleged separate contract was made on the second day of December, 1909, and the note on November 28, 1910. In so far as the facts relating to the transaction were agreed to, they show: That prior to December 2, 1909, plaintiff

[52]

and the defendants had jointly owned a garage in a California town. In addition to his interest in the garage business, the plaintiff held a mortgage upon the building in which the business was being done to secure payment to him of the sum of one thousand dollars. It being mutually agreeable to all, an exchange was effected by trading the garage property for a house and lot in the city of Los Angeles, title to which was taken in the name of defendant Thomas A. Slocum. Thereupon an agreement was signed by the three, which in its material parts provided as follows:

“That all three of the parties are the owners of a certain house and lot, on Twenty-fifth street near San Pedro, for which they have traded the garage in Santa Paula, on which building C. Harpold owned a mortgage for one thousand (1000) dollars; therefore be it understood and agreed between all parties hereto, that as consideration for surrendering the mortgage, aforesaid, the said C. Harpold shall receive as an interest in such property, or out of any money received for the sale of the aforesaid house and lot, or any trade that is made on or with said property as a basis, the first thousand (1000) dollars after which all the remainder shall be divided among the several parties hereto in equal parts. It is understood and agreed among the three parties to this agreement that for convenience in handling the deed shall be made out in the name of Thos. A. Slocum, though the ownership shall be held in all three in the ratio aforesaid and that the said Thos. A. Slocum shall act as Trustee.”

It has been noted that the promissory note was made in November, 1910, almost a year after the exchange of properties was effected and the contract referred to executed. At this point the contentions of the plaintiff and defendants and the testimony as to the facts concerning the execution of the note are divergent. Plaintiff testified as follows: “At the instance of Tom Slocum we traded the garage for the property in Los Angeles. This contract we have been talking about was made at the time we traded for the Los Angeles property. The understanding according to the contract, based on our dealings at Santa Paula, was, Slocum wanted a power of attorney or whatever you call it. He wanted to sell the property or do something with it, and that is the reason they gave me that contract