Rosenblum v. Corodas

DORAN, J.

This is an appeal from the judgment in an action to quiet title and for the cancellation of a promissory note.

The action is the result of a transaction relating to the purchase of a home by plaintiffs from defendants. As part of the transaction plaintiffs executed a promissory note in the sum of $1,500 secured by a trust deed. It is alleged that the purchase and sale was in violation of the “Serviceman’s Readjustment Act of 1944.” The plaintiff was a veteran of World War II and borrowed $6,800 from the United States government to buy the home. It is alleged “that in order to obtain the real property described herein and the house thereon, plaintiffs at the demand of the defendants agreed to pay to defendants the sum of $14,000.00 for said real property, and that the sale price as specifically set out in the escrow instructions covering said property was $8,500.00, and that the sum of $5,500.00 over and above the sale price set out in escrow was to be kept secret in order for plaintiffs to obtain possession of said property.

“That the Serviceman’s Readjustment Act of 1944, 38 U.S.C.A. Section 694, et seq., provides that an agreement to pay for real property a sum greater than the government appraised value thereof, is illegal and unenforceable.

“That said property was appraised by an agent of the Veterans’ Administration at the sum of $8,500.00, and that plaintiffs borrowed the sum of $6,800.00 from the United States Government under the provisions of law extending such benefits to Veterans.

[804]

‘1 That plaintiffs executed said note in order to obtain housing accommodation and would not have executed said note except for the demands of defendants and would not have kept secret said excess sum of $5,500.00 paid to defendants except under duress of defendants. ’’ (See

Young

v.

Hampton,

36 Cal.2d 799 [288 P.2d 1, 19 A.L.R.2d 830].)

The judgment quited the title for plaintiff, cancelled the note and provided for the payment to plaintiff by defendant of $860.