Salvati v. Cusolito

California Court of Appeal Jul 25, 1950 No. Civ. 17650Published

Before: Wilson

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Holding. The court held that defendants committed actionable fraud by making intentional misrepresentations regarding the value, utility connections, and income-producing capacity of real property, upon which the plaintiffs reasonably relied.

Issues

Whether defendants' misrepresentations regarding property value, utility access, and crop income constituted actionable fraud.
Whether plaintiffs were entitled to rely on defendants' representations despite a brief inspection of the property.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Misrepresentations numbered 3 and 4, relating to the public utilities and to the value of fruit and crops that had been produced on the property, were unquestionably material statements of fact which the court found to be untrue”

“a positive representation of the value of property may be actionable fraud.”

“Under all the circumstances plaintiffs were entitled to rely on the representations made by defendants and their broker and are not precluded from recovery by reason of the brief examination which they made of the property.”

WILSON, J.

The complaint charges fraud on the part of defendants in the exchange of real property. Defendants failed to offer evidence as to the value of the respective properties. Upon undisputed evidence and the admissions in the pleadings the court found that in the exchange plaintiffs received acreage property valued at $9,864 and that they parted with a promissory note in the sum of $10,500, equity in real property valued at $5,900 and cash $700, making a total of $17,100. Judgment was rendered in favor of plaintiffs for $7,236, the difference between the two amounts, from which judgment defendants have appealed.]

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The court found that plaintiffs were induced to make the exchange of properties through the fraud of defendants in that during the course of negotiations leading to the execution and consummation of the agreement of exchange defendants represented that: (1) the fair market value of their (defendants’) property was approximately $16,500 including eight shares of water stock; (2) the fair market value of the water stock was $4,000; (3) the dwelling house located on the real property was connected with public utilities and had gas available for heating and cooking; (4) the fruit and crops on the property had produced and would produce a return of approximately $2,000 annually; (5) the equity in plaintiffs’ property which they were transferring to defendants was fairly equal in market value to the property being received by plaintiffs.

The court found that the foregoing representations were all untrue and that (1) the fair market value of defendants’ property, including the water stock, was $9,864; (2) the fair market value of the water stock was $120; (3) the dwelling house on

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defendants’ property was not connected with any public utility and that no gas was available for heating or cooking other than that which could be purchased in tanks and attached to pipes located in the dwelling house; (4) the fruit and crops on the property had not produced and would not produce a value in excess of $100 annually; (5) defendants’ property involved in the exchange and conveyed to plaintiffs was not worth the amount of the $10,500 note given by plaintiffs to defendants and while plaintiffs parted with an equity in real property of approximately $5,900 and paid out $700 in cash the equity received by them from defendants amounted to nothing.

Salvati v. Cusolito

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WILSON, J.

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