Ohanesian v. Galente

CONREY, P. J.

Action to recover money due on a promissory note. Cross-action to recover damages suffered through wrongful acts of the plaintiff, connected with the

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same transaction in which the note was made. The plaintiff appeals from the judgment.

Respondents were the owners of a tract of land, subject to a two thousand dollar mortgage held by the Producers’ Savings Bank. Respondents employed appellant to sell this land for them to one Kalfas, for the sum of five thousand five hundred dollars, of which two thousand dollars was to be used to pay the existing mortgage debt, and the remainder to be payable in several installments secured by mortgage on the land conveyed by defendants to Kalfas. The deed to Kalfas, and the three thousand five hundred dollar mortgage by Kalfas to respondents, were placed in escrow. At or about the same time Kalfas arranged to borrow two thousand dollars from the Visalia Savings Bank and Trust Company, to be secured by first mortgage on the same property. This mortgage also was placed in escrow. The several documents were recorded in the following order: first, the deed to Kalfas; next, the two thousand dollar mortgage to the Savings Bank, and then the mortgage to respondents. Concurrently with these proceedings, the Producers’ Savings Bank note was paid off, and that mortgage released.

By their answer, respondents alleged that there was no consideration for their note to appellant. As a further defense, they alleged that the note was procured from them by appellant by means of fraud and false representations, and as an alleged- commission for the sale of certain real property belonging to respondents; that the fraudulent representations made by appellant to respondents were in negotiating a sale of said property to Kalfas and by representing to respondents' that they were to receive a first mortgage for the unpaid part of the purchase price, whereas the mortgage executed to respondents was, unknown to them, a second mortgage, respondents being unable to read and not understanding the transaction or said papers. That the representations so made were by appellant known to be false and fraudulent and were made by him with intent to deceive and defraud respondents.

For a “further answer and cross-complaint,” respondents set out the fact that the sale to Kalfas was negotiated for them by appellant, and -repeated, in substance, the averments of the answer noted above; alleging that, unknown to