Bargioni v. Hill

In Bargioni v. Hill (1963) 59 Cal.2d 121, the plaintiff acted as a broker in a real estate transaction and accepted a junior note from the buyer who had agreed to pay the brokers' commissions for the seller. The court determined that, "in accepting defendant's note in payment of the commission, plaintiff extended credit that otherwise would have been extended by the seller." ( Id. at p. 123.) Because the note was necessary to complete the transaction, the court concluded the plaintiff helped to finance the purchase, and consequently he was precluded from recovering on the defaulted note after the property was sold. ( Id. at pp. 123-124.)