Peter owned real estate in New York City worth $100,000. Patrick held an installment promissory note in the amount of $50,000 upon which Peter was the maker. The note was securedpl[ij by a first mortgage on the property.

Peter had paid $40,000 on the note, plus interest and the balance was due in 12 months, on October 1, 2012. On July 1, 2012, Patrick telephoned Peter and said he would be willing to cancel the note and the mortgage if Peter would pay him $8,500 in cash within 7 days. Peter said he was a bit short of cash and would have to think about it. Patrick then said "if you pay me $8,500 cash by 4 PM on July 8, I will cancel the note and release the mortgage." Peter hung up after thanking Patrick and saying he would try to raise the money.

On July 7, Peter was able to sell his valuable coin collection to a dealer for $10,000. On the morning of July 8, Peter agreed in writing to sell his New York property to Priscilla free of any mortgage for $100,000. With the cash in his brief case, Peter began to look for Patrick. He was not in his office and could not be found at his favorite pub. The bartender, however, said that Patrick had gone to his home in the Bronx and that some deal was brewing with Paul about some mortgage. Peter then took a taxi to the Bronx, arriving at Patrick's home about 3:45 PM. As he walked up the driveway, he saw Patrick at the open window, waved his briefcase and yelled: "Good news, I've got the money to pay off the mortgage." Patrick responded, "You are too late, I sold the note and the mortgage to Paul this morning." Patrick then closed the window and refused to open the door.

Crestfallen, Peter consults you for advice. Consider the materials we have studied so far and those to come in the balance of this section. What is the strongest argument for Peter? Will it be successful?

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