Ebner v. Sheehan

MOORE, P. J. The judgment herein cancels (1) respondents’ promissory note in favor of appellants in the sum of $5,500 and (2) the lien of their deed of trust upon their home as security for such note, and it quiets their title against the lien. Appellants have brought the matter to this court demanding a reversal of the judgment on the grounds of the insufficiency of the evidence and errors of law occurring at the trial.

[862]The controversy originated in the abrupt conduct of one Frank 0. Lewis who having set up as a. builder in the community of Pasadena had agreed to build for respondents a home to cost $8,300 including the cost of the lot. About March 15, 1948, Mr. Sheehan, herein referred to as “Sheehan,” read an advertisement of Lewis for a man to work in the building industry. As a result the two men met. Two weeks later Lewis employed Sheehan to serve as timekeeper on construction work. At the same time he induced Mr. and Mrs. Sheehan to make a building loan to respondents. To effect such transaction, on April 3 Lewis accompanied Sheehan to their home where he met Mrs. Ebner. Lewis explained to the lady that appellants had agreed to put up the $5,500 for their home. On April 5 appellants met Lewis and one Rutledge, the lot owner, at the bank and opened an escrow for the loan. Appellants agreed to loan $5,500 on the note of respondents secured by a trust deed on the home—such loan to be discharged with the funds of a new loan “as soon as the house was finished.” On April 6 appellants withdrew $1,500 from a savings and loan association and deposited the check in the escrow. On April 15 they withdrew $1,500 and deposited $1,300 in the bank to the account of “Frank C. Lewis, building contract account,” and paid $200 thereof directly to Lewis. On May 4 they withdrew another $1,500 and deposited it in the same account. On June 4 they withdrew $2,000 from the same savings account and deposited it in the same building account. Fifty-five hundred dollars of such money were deposited for the note and trust deed.

From the same Frank C. Lewis building account checks were drawn in payment for materials and labor used on the Ebner house in the total sum of $5,912.92. Such checks were drawn by Sheehan as an employee of Lewis. Before the house had been completed, Lewis took his departure; was never served with process in this action and made no appearance. The house was so far from completion as to render its occupancy perilous.

In their brief respondents say that they “under the terms of the building contract were to pay $2800 in cash to Mr. Lewis and $5500 by promissory note secured by deed of trust and were to receive in return a completed house, the house and lot to be delivered for the total price of $8300.”