Still

In 1964 plaintiffs sold to defendant a 9,000-acre parcel of land in Kern County. Part of the down payment was a promissory note in the sum of $326,000, payable on or before October 8, 1968, with interest at the rate of 7 percent per annum. The note contained a provision: “Should suit be commenced to collect this note or any portion thereof, such sum as the Court may deem reasonable shall be added hereto as attorney’s fees.”

In 1966 plaintiffs filed suit on the note and unsuccessfully sought to accelerate the due date because of alleged delinquencies in interest payments. During the trial in Ventura County defendant contended it was entitled to an offset on the note because, prior to the sale to defendant, plaintiffs had sold a portion of the land to another party. However, the court concluded that it should not determine the value of the offset as it had not been alleged and was not an issue in the action and entered judgment for defendant. Plaintiffs accepted the judgment but defendant appealed, contending that the trial court erred in not determining the amount of the set off. On September 3, 1969, the appellate court affirmed the judgment on the ground that the offset…