McLaughlin v. Clausen

Works, J. This is an action upon a promissory note for four hundred dollars, dated December 27, 1887, and payable four months after date, with interest from maturity.

The answer admits the making of the note, and that plaintiff is the owner thereof, and that no part of it has been paid, and then, by way of avoidance, alleges that on the day of its date, “the plaintiff and defendant made and entered into the following contract.” A copy of the contract is then set out, and in it twenty persons, the defendant being one of them, are named as parties of the first part, and the plaintiff is named as party of the second part. The substance of the contract is, that the parties of the first part, in consideration of the advantages to be derived by them from the extension and operation of a certain steam-dummy railroad, from a point named to another point named, agree to pay to the party of the second part the sum of money subscribed by them set opposite their names. Each of the sums is to be evidenced by two promissory notes of the subscriber, one payable two months after the date thereof, and when the grading is done and the iron is on the ground, and the other payable four -months after its date, and on completion of the road. The road is to be extended from its present terminus to the other point named “ within four months, weather permitting.” The notes, when executed, are to be deposited with George H. Bone-brake, at the Los Angeles National Bank, to be held in trust until the conditions specified in the contract shall be performed by McLaughlin, and the certificate of the constructing engineer of the road that the conditions have been, performed shall be served upon the said trustee. Upon the delivery to the trustee of the engineer’s certificate that the grading is done and the rails are on the ground, the two-months’ notes are to be given to McLaughlin, and upon a like certificate that the road [325]is completed and in running order, the four-months’ notes are to be given to him.

The contract is signed by three of the parties named therein as parties of the first part, and by McLaughlin, but not by the defendant.

After setting out the contract in hiec verba, the answer proceeds to allege that the note in suit “was made and given by this defendant to the plaintiff in pursuance of and on the conditions set forth and expressed in said contract, and not otherwise, and for no other or different considerations in said contract than those by the plaintiff covenanted to be by him carried out on his part.”