McCroskey v. Ladd

Harrison, J.— The plaintiff made an agreement in writing with the defendants and two others on the 25th of August, 1887, to sell and convey to them certain real estate in Hollister for the sum of $6,500, of which $650 was to be paid at that date, and the balance within sixty [457]days thereafter. The agreement also contained the following clause: “And said McOroskey, upon receiving said payments, agrees to make a deed of said property to said persons, and convey title to said premises to them, and if said persons fail to make said payments as herein named, they shall forfeit all right to said property and all right to all payments made herein. If said title is not sufficient and good, then said money paid shall be refunded.” Instead of paying the $650 in money upon that day, the defendants, for themselves and their associates, executed to the plaintiff their promissory note for $650, payable one day after date. After the execution of the agreement, the parties thereto had some negotiations regarding the examination of the title to the property, which resulted in. the vendees being dissatisfied therewith, and a demand by the defendants that the plaintiff surrender to them their note. This the plaintiff refused, but tendered a.deed of the property to McClay (one of the vendees), and demanded payment of him of the full amount of the purchase-money, viz., ^$650, but McOlay refused either to accept the deed or pay the money. In November, 1888, the plaintiff brought this action against the defendants to recover from them the amount of the promissory note. The complaint is in the ordinary form of a complaint upon a promissory note. The defendants, in their answer, set up the transaction of which the note was a part, and pleaded a failure of consideration. The court rendered judgment in favor of the defendants, and the plaintiff has appealed therefrom, bringing the case here upon the judgment roll alone.

The action upon the note, being between the original parties thereto, is subject to an inquiry into its consideration, and is also subject to any equities existing between the parties which arise out of the execution of the note, or are connected therewith. The note was given for a portion of the purchase price of a tract of land to be thereafter conveyed by the plaintiff under his agreement with the defendants and their associates; was exe[458]