Edward L. Provost and Vicky L. Provost - Page 6




                                        - 6 -                                         
               The Contract did not contain a reference to the Corbin                 
          properties or to the $200,000 advance.  There were, however, two            
          handwritten notations at the bottom of the Contract: (1) "Richard           
          & Carl Magness shall be responsible for framing and foundation              
          and supervision as per Ed Provost and Richard Magness agreement",           
          and (2) "If Ed Provost does not have the money to fund this                 
          agreement there will no liability on his part."                             
               Mr. Magness and petitioner also executed a "Secured                    
          Promissory Note", dated June 1, 1991, wherein petitioner promised           
          to lend Mr. Magness $200,000 in eight equal installments of                 
          $25,000.  In return, Mr. Magness promised to repay petitioner the           
          principal sum of $200,000, plus interest at a rate of 10.5                  
          percent per annum.  The principal and interest were due on June             
          1, 1992.  The note was secured by deeds of trusts on the Corbin             
          properties.5                                                                
               Mr. Magness was unable to sell the Corbin properties.  On              
          May 10, 1993, Mr. Magness and his wife filed Chapter 7                      
          bankruptcy.  They received their bankruptcy discharge on                    
          September 14, 1993.  Although petitioner filed a proof of claim             
          in the Magness bankruptcy, he did not receive any distribution              
          from the bankruptcy estate.                                                 



               5Although the promissory note referred to second deeds of              
          trust, petitioner received a second deed of trust on one of the             
          Corbin properties and a third deed of trust on the other.                   





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011