Howland v. Leonard

JENNINGS, J.

Plaintiff originally instituted this action against the defendants Ida Leonard, John Doe Leonard, her husband, and Charles Leonard, to rescind, on the ground of fraud, a certain contract entered into between him and defendants Ida Leonard and Charles Leonard. The contract whose rescission was sought was one whereby plaintiff had agreed to exchange an interest in a confectionery store which he owned in the city of Los Angeles for the lease, equipment and furnishings of a motion picture theater in the same city owned by said defendants. As consideration for the transfer to him of the theater and its equipment, plaintiff, in addition to turning over to said defendants his interest in the confectionery establishment, also executed his promissory note for $2,700 in favor of defendant Ida Leonard and as security for its payment executed in her favor a mortgage upon certain real property owned by him. In the original complaint for rescission of the agreement of exchange it was alleged that the defendants had not transferred the note and mortgage and as part of the relief

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demanded, return of these instruments was sought. It appears, however, that at some time subsequent to the filing of the original complaint plaintiff discovered that the defendant had transferred the before-mentioned note and mortgage to one Malcolm Harmon. Plaintiff thereupon, by permission of court, amended the complaint by inserting the name of said transferee as a defendant in said action in place of a fictitious defendant. Thereafter, plaintiff filed an amended complaint in which said Malcolm Harmon was named as a defendant. This amended complaint alleged that the before-mentioned note and mortgage had been transferred and assigned by defendants Ida Leonard and Charles Leonard to the defendant Malcolm Harmon and that said transfer and assignment was made without consideration and for the purpose of preventing recovery thereof by plaintiff and as a part of a scheme and plan by all said defendants to consummate a fraud upon plaintiff. The amended complaint also sought rescission and cancellation of the agreement of exchange and return of the note and mortgage. To this amended complaint defendant Malcolm Harmon filed an answer admitting that plaintiff’s note and mortgage had been sold and assigned to him on the date specified in the amended complaint, alleging that he was the owner and holder of said instruments, and denying that the assignment to him was made without consideration or as part of a scheme or plan to defraud plaintiff. The answer also contained denials, on information and belief, Of the various allegations in the amended complaint relative to the agreement between plaintiff and defendants Leonard, for exchange of properties and the fraud alleged to have been perpetrated by said defendants upon plaintiff. The defendant Malcolm Harmon also filed a cross-complaint whereby he sought to foreclose the mortgage given by plaintiff as aforesaid to secure payment of plaintiff’s note. To this cross-complaint plaintiff filed an answer. The defendants. Leonard were served with process by publication and the record contains no showing of any appearance by them in the action. The case was tried on the issues framed by the cross-complaint of defendant Malcolm Harmon and plaintiff’s answer thereto. Upon conclusion of the trial judgment was rendered in favor of said defendant and