Naylor v. Peters

STURTEVANT, J.

The plaintiff commenced an action against the defendants to recover a judgment for damages for alleged fraud perpetrated on her in an exchange for her equity in property located in Oakland for trust deeds on properties located in Los Angeles. Defendants answered and a trial was had in the trial court before the court sitting with a jury. At the end of the plaintiff’s case the court granted a motion for a nonsuit. The plaintiff has appealed and has perfected a record as to D. L. Peters and El Merrie Del Corporation, two of the defendants.

In her complaint the plaintiff alleged that the defendants conspired to defraud her of her property. Continuing she alleged that the conspiracy consisted of an agreement by which the defendants sought to obtain title to the equity of the plaintiff which was of a value of about $51,000, by exchanging therefor second trust deeds on 300 lots owned by the defendant corporation; that in endeavoring to carry out said conspiracy the defendants represented to the plaintiff that they would transfer to the plaintiff second trust deeds securing six promissory notes in the total sum of $90,000; that the notes were of great value and that the defendants could and would convert the said notes into cash at a discount of not to exceed twenty-five per cent; that the transaction was completed and it then transpired that the second trust deeds were of no value.

The Los Angeles real estate consisted of 300 lots and said lots were a part of a larger tract of land which the defendant corporation was in the act of putting on the market. D. L. Peters owned a majority of the stock of the corporation and was its president. The plaintiff owned an equity in an apartment house in Oakland and from time to time had dealt in real estate in Alameda. Her son, Nathan, held her power of attorney. He was a man about thirty years of age, had resided in Oakland, but his employer was about to transfer him to Los Angeles and the plaintiff desired to make the exchange so she could go. The plaintiff’s apartment house had an appraised value of $200,000 subject

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to encumbrances aggregating $149,000, thus leaving an equity of $51,000. She expressed her desire to exchange her equity for properties in Los Angeles. James P. McDonnell had transacted business in Oakland. He called on the plaintiff and obtained from her information regarding her own property and what she wanted in exchange therefor. Later McDonnell went to Los Angeles and engaged in business. Thereafter from time to time he called on the plaintiff in Oakland and sometimes plaintiff’s son called on him in Los Angeles. At one time McDonnell laid before the plaintiff a proposition to exchange the plaintiff’s property for some so-called Mortimer trust deeds. At that time it was stated to the plaintiff that there were brokers in Los Angeles who dealt in second trust deeds and that the Mortimer second trust deeds could be converted into cash. However, the Mortimer transaction fell through. In later conversations the plaintiff frequently stated that she wanted to exchange her equity for trust deeds that could be converted into cash. Negotiations commenced as early as January, 1928, and continued through that month and into February of that year. After McDonnell went to Los Angeles Alvin T. Dickens commenced to act as an associate with him. At times they transacted some business through the office of the defendant Robert Annis who held a license as a real estate broker and maintained an office in Oakland. After the Mortimer transaction fell through the defendants McDonnell and Dickens called on the defendant D. L. Peters and they had a conversation regarding an exchange on behalf of the plaintiff. That conversation resulted in a tentative agreement by which the plaintiff was to convey her equity for the second trust deeds on some of the lots owned by the-defendant corporation. Thereupon February 1, 1929, the defendant McDonnell prepared and thereafter the plaintiff’s son and he executed an agreement to exchange the plaintiff’s equity for the second trust deeds on 300 lots of the properties owned by the defendant corporation. About the same time the defendant Dickens presented to Mr. Peters, and he executed an exchange agreement by which the defendant corporation agreed to deliver in exchange for plaintiff’s property above-mentioned second trust deeds. The plaintiff calls to our attention as evidence of fraud the fact that the agents tied up the defendants by a written contract before they