Austin v. Duggan

California Court of Appeal Aug 4, 1958 No. Civ. 22750Published

Before: Patrosso, Shinn

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Holding. The court affirmed the judgment against defendant Figgs for fraud, finding sufficient evidence to support the jury's verdict, but reversed the judgment against defendant Duggan due to a total lack of evidence connecting him to the fraudulent transaction. The court further held that proof of pecuniary loss is not required when a plaintiff elects to rescind a contract based on fraudulent misrepresentation.

Issues

Whether the evidence was sufficient to support the jury's finding of fraud against the defendants.
Whether proof of pecuniary loss is required in an action to rescind a contract based on fraud.
Whether the award of exemplary damages was excessive or improper.

Disposition. Affirmed in part and reversed in part.

Quotations verified verbatim against the opinion

“The representee can rescind where he obtains something substantially different from that which he was led to expect.”

“Plaintiffs, however, elected to rescind and the rule is well settled that in such situation, proof of pecuniary loss is not required.”

“There is not a scintilla of evidence that this defendant had any part in listing the trust deeds for sale or in the sale thereof to the plaintiffs”

PATROSSO, J. pro tem.

Plaintiffs instituted this action to rescind the purchase by them of a promissory note secured by a second deed of trust upon a parcel of real property in the city of Paramount, upon the ground that the same was induced by the fraudulent representations of the defendants. The case was tried to a jury which returned special and

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general verdicts in favor of the plaintiffs and assessed .damages against the defendants in the sum of $740.54 general damages and $1,500 exemplary damages. Defendants appeal, contending that the judgment is not supported by the evidence.

Viewed in the light most favorable to the respondents, the evidence disclosses the following: Defendant Figgs was the payee and owner of two promissory notes executed by the defendant Duggan, each dated December 1, 1954; one in the principal sum of $4,985 with principal and interest payable in monthly installments of $40 or more and the entire balance being due and payable on January 15, I960; and the other in the principal sum of $1,280 with principal and interest payable in monthly installments of $15 per month and the entire balance being payable January 30, 1960. Bach note was secured by a deed of trust upon a single parcel of real property described as 13439 South Dempster, in the city of Paramount, the deed of trust securing the first mentioned note being a first lien.

Sometime prior to December 4, 1954, defendant Figgs listed these promissory notes and the trust deeds securing the same for sale with the Long Beach Trust Deed and Mortgage Exchange which was engaged in the business of selling trust deeds and mortgages at auction. This concern periodically issued a brochure giving notice of forthcoming auctions and describing the various trust deeds and mortgages to be offered for sale upon the date therein specified. The brochure giving notice of the auction to be held on December 4, 1954, listed both of the previously mentioned promissory notes and the trust deeds securing the same, together with a description thereof. The information therein contained with respect to these was furnished to the Exchange by the defendant Figgs. This included the street address of the property, the description of the improvements thereon as consisting of a one bedroom, frame and stucco house, the size of the lot as being 25 feet by 120 feet and the square footage of the building as being approximately 600 square feet. It was also therein set forth that the principal amount of the first trust deed was $3,985 and the principal amount of the second trust deed was $1,280, payable $15 per month including six percent interest “all due 12/1/58.” These statements were untrue in this: The principal amount of the first trust deed was $4,985, not $3,985; the size of the lot was not 25 feet by 120 feet but 25.2 feet by 110 feet and the rear 15 feet thereof was subject to

Austin v. Duggan

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