Plaintiff real estate purchasers appealed from the order of the Superior Court

 

Plaintiff real estate purchasers appealed from the order of the Superior Court, Sonoma County (California), which sustained defendant real estate sellers' demurrer to the purchaser's action to set aside an extrajudicial sale made under a deed of trust and entered judgment in favor of the sellers.

 

The purchasers agreed to purchase from the sellers certain real property, together with the improvements thereon and certain ranch equipment. The purchasers delivered a promissory note and second deed of trust as security for the unpaid portion of the purchase price. The purchasers failed to make certain payments, and the sellers failed to deliver the personal property that was part of the sale, the value of which exceeded the amount of indebtedness then due under the promissory note. Furthermore, the purchasers repeatedly informed the sellers that they would pay the overdue installments if the sellers would deliver the personal property. The sellers refused to deliver the personal property, and foreclosed on the property under the deed of trust. The sellers and purchasers both contacted lawyers for representation on this matter. The court held that under Cal. Civ. Code § 440, cross-demands were deemed compensated so far as they equaled each other. Moreover, the purchaser's right to set off the value of the undelivered personal property against the unpaid mortgage payments was not effected by the fact that the seller's claim was secured by a mortgage, nor that the seller's claim was brought for the foreclosure of the mortgage.

 

The judgment of the trial court sustaining the real estate sellers' demurrer without leave to amend was reversed.