Diaz

Facts

On November 15, 1974, Edelso Diaz executed a written agreement for the sale of his assets in the La Lechonera Restaurant to Antonio and Bertha Gil. Diaz was a recent immigrant and could not read nor write English and was ignorant of legal formalities. The agreement was prepared by a notary public and provided in part:

In furtherance of the sale an escrow was opened by Antonio Gil at the United California Bank on December 10, 1974. The escrow was handled on behalf of the bank by defendant Dorene A. Gordon and was processed on printed forms of the bank signed by Edelso and Luz H. Diaz as well as by Antonio Gil. Bertha Gil did not sign the escrow instructions or sign the note subsequently prepared by the bank in closing the escrow. In pertinent part the original escrow instructions provided for a “[n]ote for $7000 executed by Antonio Gil, in favor of Edelso Diaz and Luz M. Diaz, husband and wife, Principal payable $200.00 or more per month and continuing until paid.” On December 12, 1974, the escrow was supplemented by an additional instruction, also on a bank form, as follows: “You are hereby instructed to reduce the principal amount of the Note for $7,000.00 being…