Nece v. Bennett

California Court of Appeal Jan 29, 1963 No. Civ. 7029Published

Before: Monroe

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Holding. The court held that the judgment must be reversed because the plaintiffs failed to provide substantial evidence of the property's market value, which is required to establish damages under the 'out-of-pocket' rule set forth in Civil Code section 3343.

Issues

Whether the evidence was sufficient to support a finding of fraud based on concealment.
Whether the plaintiffs met their burden of proof regarding damages under the 'out-of-pocket' rule.

Disposition. reversed

Quotations verified verbatim against the opinion

“In an action for damage for fraud the burden rests upon the plaintiff to prove those facts which entitle him to recover damage in accordance with the measure of damages fixed by law.”

“By reason of the fact that there was no substantial evidence to prove the market value of the property at the time of the purchase, the plaintiffs failed to meet the burden of establishing the cause of action”

MONROE, J. pro tem.

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This action arose out of a transaction on about August 1, 1958, by which defendants sold to plaintiffs real property in the City of Anaheim, improved by a motel, and adjoining real property upon which there was located a residence. The sale was for an agreed cost of $85,000. The plaintiffs brought action to recover damages for fraud; a judgment was rendered in their favor in the amount of $1,133.84, from which defendants appeal.

The substance of plaintiffs’ amended complaint was that prior to the sale the defendants had obtained a zone variance approved by the Planning Commission of the City of Anaheim. It is alleged said variance was subject to the following conditions: (a) The deeding of 27 feet along the west side of the property for the improvement of Stinson Street, a private road at the present time; (b) 11 Engineering requirements.”

It was further alleged that although the defendants had fulfilled the first requirement by executing a deed for the right of way as required, they had failed and refused to comply with the “engineering requirements.” The allegation was that the engineering requirements so referred to “pertained to the installation of street improvements, including curb and gutter, sidewalk and paving.”

The alleged fraud relied upon constituted the alleged concealment of the fact that the zone variance was subject to said “engineering requirements” which had not been complied with.

The principal assignments of error upon which defendants and appellants rely are to the effect that the evidence is insufficient to support the findings and judgment in many particulars. In view of the fact that it is necessary to reverse the judgment, it would serve no useful purpose to consider all of these claims in detail. However, some discussion thereof is in order, in case of another trial.

No claim was made of a fraudulent misrepresentation of fact, but the claim of fraud was based solely upon the charge

[496]

of concealment. It is true that ordinarily vendors and purchasers deal at arms’ length and the seller is not required to disclose everything he may know about the property.

Nece v. Bennett

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