Jonathan Manor, Inc. v. Artisan, Inc.

Plaintiff appeals from a judgment denying recovery on a promissory note, which was one of four in identical amount executed on January 17, 1963, by defendant corporation (Artisan) and defendants Smith (Smiths) and taken by plaintiff as part-payment for 52 subdivided lots that concurrently were transferred by plaintiff to Artisan.

The four notes were delivered in escrow under written instructions signed by Artisan and the Smiths that in three different places spoke of the notes as 11 unsecured .”

Each of the four notes contained the provision that additionally to monthly installments of $250, there should be made a payment of $500 upon the conveyance of any one of the 52 lots described therein by lot number and subdivision. The notes bore no certificate of acknowledgment that would have permitted them to be recorded, and were not recorded.

Some five months after the notes were executed, plaintiff wished to sell three of them to a buyer who desired security.

Artisan at that time executed a trust deed covering the 52 lots to secure the three notes to be sold by plaintiff. In transmitting the trust deed to plaintiff, Artisan wrote: ‘ ‘ This Deed of Trust shall only be considered…