Stumpf v. Lawrence

[375]

THOMPSON, J.

A joint and several judgment was rendered against the defendants for fraud alleged to have been exercised in procuring the exchange of properties situated in Los Angeles County. The defendants Lawrence and Myles, only, have appealed.

The plaintiffs owned three tracts of land in Santa Monica and Pasadena, of the total value of approximately $33,000, subject to mortgages aggregating the sum of $14,400. The defendant Lillian B. F'ergie owned the Melba Apartment House in Santa Monica, together with the furniture and equipment thereof, represented by her agents to be worth $35,000. The Melba Apartment House was also subject to a mortgage of $14,400. The defendants Richard C. Lawrence, who is a real estate broker, and Harry S. Myles, his salesman, were the agents of Mrs. Fergie. An exchange of the Melba Apartment House for the plaintiffs’ three pieces of properties was negotiated July 30, 1930, by the brokers. Incident to this trade of properties, the plaintiffs executed and delivered their promissory note for $1450 payable to the defendant Lawrence in payment of their agreed proportion of the commissions for the services of the brokers. The exchange of the properties was consummated subject to the several mortgages which then existed against the various properties. The court found that the exchange of properties was procured by means of fraudulent representations on the part of the defendants consisting, among other false statements, of the positive assertion that during the year immediately prior to the time of exchanging properties the apartment house “produced ... an income from rentals ... of the aggregate sum of forty-eight hundred dollars ($4800.00) per year with an average of four hundred dollars ($400.00) per month throughout the calendar year”, and that the Melba Apartment House and its furnishings were worth $35,000. The court further found that upon the contrary the entire income from the apartment property for the year prior to the time of the exchange of properties did not exceed the amount of $2,700, and that the value of the property was only the sum of $24,000, as the defendants well knew. The court also found that these misrepresentations were made by the defendants to deceive and defraud the plaintiffs who believed them to be true and exchanged their

[376]