Finch v. McKee

THOMPSON, J.

The plaintiffs have appealed in this action for damages for fraud alleged to have been exercised in procuring an exchange of real properties from a judgment of dismissal which was rendered after a demurrer to the complaint had been sustained without leave to amend the pleading. The judgment was entered two days after the service of notice of the order sustaining the demurrer.

The complaint contains four counts. The first cause of action alleges that the plaintiffs owned 160 acres of land in Tulare County, of the value of $30,000, subject to a mortgage of $5,000, and that the defendants, Samuel J. and Nellie McKee, husband and wife, were the owners of certain lots in Long Beach, upon which there was constructed a brick drive-in market and garage, worth not to exceed $25,-000; that by means of fraudulent representations the plaintiffs were persuaded to and did exchange their farm for the Long Beach property December 19, 1929, paying the defendants the additional sum of $25,000, which was represented by a promissory note for that amount, secured by a deed of trust on those lots; that they invested the additional sum of $15,200 in making necessary improvements on the property, and executed several ten-year leases of portions thereof for the aggregate rental of $535 per month; that the building was seriously damaged by the earthquake which occurred in that vicinity March 10, 1933, and it was therefore condemned by the city authorities as dangerous; that the plaintiffs were unable to procure means with which to rebuild or repair the building, and thereby lost their tenants and the entire income from the property; that for the first time after the walls of the building were cracked and shattered by the earthquake they discovered the inferior and defective nature of the structure and the fraudulent representations with respect to the cost and character of the construction of the building, and they thereupon promptly demanded of the defendants the cancellation of their note and trust deed, together with other damages sustained; that

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these demands were refused, and the defendants then foreclosed the trust deed and plaintiffs lost their property.

Among the numerous specifications of fraud and misrepresentations which are alleged to have induced the exchange of properties are the following positive and definite statements : That the building actually cost defendants $22,000; that it was constructed according to the plans and specifications therefor on file in the city engineer’s office, in strict compliance with the ordinance of the city of Long Beach; that it was constructed with high-grade materials in first-class manner; that there was no better building of that type in Long Beach; that it would withstand earthquakes, and that the property was worth $50,000.