Adams

Respondents, owners of an apartment house located at 15470 Moorpark, Sherman Oaks, were desirous of exchanging it for real estate located on Haskell Avenue in Van Nuys. Harry Herman, one of appellants, a licensed real estate broker, was engaged to effect the exchange. It could not be consummated.

The owner of the Haskell property was willing, however, to sell. Herman, to enable respondents to buy the Haskell property suggested to them that they sell the Moorpark property to him and his wife. An agreement, among other things, as part of the consideration from appellants to respondents required delivery of a promissory note in the principal sum of $5,000, without interest, made by appellants to respondents and delivered out of escrow. The due date of said note as written on its face was “Upon resale of . . . Moorpark, . . . after date. ...”

Appellants took and remained in possession of the Moor-park property for approximately 18 months. During said period it was operated at a loss. Appellants defaulted in payments of taxes and installments on the first and second trust deed. To avoid foreclosure, appellants, on June 9, 1964, quit-claimed and delivered possession of the Moorpark…