Bank of America National Trust & Savings Ass'n v. Western United Constructors, Inc.

HANSON, J. pro tem.

The decisive question in this case is whether oral misrepresentations alleged to have been made by the cross-defendants for their own benefit and not that of a third person to induce the loan of money to such third person are or are not actionable in view of a statute of this state which provides that evidence with respect to oral misrepresentations as to the credit of a third person are not admissible in evidence.

The trial court sustained demurrers, general and special, interposed by the cross-defendants, who are respondents here, without leave to amend and entered its judgments accordingly.

The second cross-complaint here involved is a blanket indictment aganst all the cross-defendants named in that it charges each one of them with having made all of the representations alleged notwithstanding it is clear from the language of the cross-complaint taken as a whole that the representations, if in fact made, were made by only one of the cross-defendants. The endeavor, so often made, to charge under oath all persons involved in a group transaction with the selfsame offense in order to bring them all to a trial on the merits is becoming altogether too commonplace. We need not elaborate on the point here as it did not succeed in the trial below and likewise is unsuccessful here.

The cross-complaint, stating its allegations most favorably to the pleader and ignoring the numerous conclusions therein, avers that the respondents with intent to defraud made certain oral misrepresentations to the appellants concerning the financial responsibility of a third person—a construction company—and that in reliance thereupon and the promise of the respondents that any moneys provided by appellants would be used by the company only for certain purposes the cross-

[168]

complainants supplied the moneys and sustained a complete loss thereof. It is further averred that the respondents did not intend that the moneys should be used for the purposes represented by them, but instead that it should be used to liquidate the debts and liabilities of the company directly beneficial to the respondents and that this fact was concealed by them from appellants.

Assuming, without deciding, that the cross-complaint states a cause of action for fraud at common law, we are at once confronted with the provisions of section 1974, Code of Civil Procedure, which reads as follows: “No evidence is admissible to charge a person upon a representation as to the credit of a third person, unless such representation, or some memorandum thereof, lie in writing, and either subscribed by or in the handwriting of the party to be charged.”