Chester

This is an appeal from a judgment for defendants in an action to foreclose a mortgage. It appears from the record on appeal that respondents herein arranged to borrow money from Bond Department, Incorporated, a corporation, whose business was subsequently taken over by the appellant. The money was to be used in financing the" building of a home for respondents and to secure its repayment the note and mortgage here in suit were given. Fifteen hundred dollars was placed in escrow by Bond Department, Incorporated, with the National City Bank of Los Angeles under agreement that it was to be disbursed by the escrow-holder only upon joint written instructions from respondents and Bond Department, Incorporated. The $1500 was paid to the contractor without the instructions or consent, written or otherwise, of respondents, and the contractor failed to construct the building. The court found that Bond Department, Incorporated, through its agent, E. A. Abbott, caused and instructed the National City Bank of Los Angeles to pay this money to the contractor without the instruction of defendants, in violation of the escrow agreement, and without taking any precaution as to the application of the…