Smith v. Brown

California Court of Appeal Jul 26, 1943 No. Civ. 12441Published

Before: Nourse

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Holding. The court held that the judgment for the plaintiffs lacked evidentiary support because the evidence contradicted the trial court's findings regarding fraudulent misrepresentations and the plaintiffs failed to establish the necessary elements of reliance.

Issues

Whether the evidence supported the trial court's findings of fraudulent misrepresentation regarding property encumbrances and occupancy.
Whether the plaintiffs relied upon the defendant's representations as an inducement to the contract.

Disposition. reversed

Quotations verified verbatim against the opinion

“In order that an action may lie, at law or in equity, on account of a fraudulent misrepresentation, such misrepresentation must be relied upon by the party to whom it is made.”

“It is sufficient that the judgment appealed from has no evidentiary support.”

NOURSE, P. J.

The plaintiffs sued for the recission of a contract exchanging real property and for damages on the ground of fraudulent misrepresentations. The plaintiffs had judgment and defendant appeals from the judgment and especially attacks the order denying her motion for a new trial.

Plaintiffs owned real property in Napa County and defendant owned real property in Merced County. On July 5, 1939, they exchanged their properties by deeds executed, delivered and duly recorded. The property belonging to the defendant in Merced County had been encumbered by a mortgage to secure a promissory note executed in June, 1929. The payee of the note deceased in May, 1939, and at the time of the negotiations between the parties hereto the defendant had possession of both the note and mortgage, exhibited them to plaintiffs, and informed them that she had legal advice that the lien of the mortgage had been lost because the statute of limitations had run against the note, and suggested to plaintiffs that they consult the same attorney upon the same subject, which they did.

The plaintiffs also claimed that the transaction was fraudulent because of representations that the land in Merced County was unoccupied and that they could take immediate possession. Further statement of the facts will appear in our discussion of these two issues.

“ In order that an action may lie, at law or in equity, on account of a fraudulent misrepresentation, such misrepresentation must be relied upon by the party to whom it is made. . . .” (12 Cal.Jur. 750.) “Unless an untrue statement is believed and acted upon, it can occasion no legal injury. ’ ’

(Spinks

Clark,

147 Cal. 439 [82 P. 45].) “It is a fundamental principle of the law of fraud, regardless of the form of relief sought, that in order to secure redress, the representee

[838]

must have relied upon the statement or representation as an inducement to his action or injurious change of position.” (23 Am.Jur. 939.) Just as essential as the element of reliance upon the truth of the representations is the representee’s belief that they are true, otherwise there is no deceit.

Smith v. Brown

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NOURSE, P. J.

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