In Re Esther B. Destro, Unidesco, Inc., Bankrupt. Lucien Pellerin v. Jon R. Stuhley, Trustee

Plaintiff was the holder of two promissory notes in the amount of $25,000.00 each, made by the bankrupts and secured by trust deeds on certain real property of the bankrupts. On May 1, 1976, the bankrupts.and the plaintiff entered into an agreement whereby the bankrupts promised to give the plaintiff $5,000.00 cash, plus a new note for $20,000.00, secured by a new trust deed on the bankrupts’ real property located in Buena Park, California. In consideration of the above the plaintiff promised to reconvey to the bankrupts the original two trust deeds owned by plaintiff. In reliance on the bankrupts’ promise to execute and deliver to plaintiff the new note for $20,000.00 and the new trust deed securing the same, the plaintiff reconveyed the original two trust deeds to the bankrupts. The bankrupts paid $5,000.00 to the plaintiff, but failed to execute the new note as provided for in the said agreement. After the bankrupts declared bankruptcy, the Buena Park proi>erty was sold by the defendant-trustee, pursuant to a stipulation to the effect that the proceeds from the sale be held by the trustee in a separate trust account, pending determination of the claim of plaintiff to said…