McGowan v. Burg Bros.

TYLER, P. J.

This action was brought to recover the sum of $2,000 alleged to have been paid to defendant, together with the value of certain real property conveyed to it on account of the purchase price of certain lots. Plaintiff recovered judgment for the sum of $7,000, and defendant appeals.

The case presents the situation of plaintiff being stripped of her possessions, the evidence disclosing the fact that the whole transaction here involved amounted to nothing more than a scheme of actual fraud and deceit, though not so charged, plaintiff contenting herself with merely alleging a failure of consideration for her payment and transfer.

The facts as disclosed by the record show that an unconscionable advantage was taken of plaintiff incompatible

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with the idea of honesty and fair dealing. They are as follows:

Defendant Burg Bros, is a corporation engaged in the real estate business; K J. and C. H. Burg are brothers, and practically control the corporation. In the conduct of such business defendant corporation acquired a tract of land in Richmond, Contra Costa County, for sale and subdivision. The corporation had in its employ for a number of years as a salesman one 0. W. H. Pratt. To further the sale of this particular subdivision it instructed Pratt and its other agents to offer three lots free of charge to any person who would at his or her own expense construct an apartment house thereon at a cost of not less than $18,000. To carry out this scheme defendant secured title from the owner of the tract of three designated lots. A person willing to take advantage of the offer was found, but after installing a foundation he abandoned the project. Thereupon defendant concluded to offer four lots for the same purpose and upon the same terms.

On or about the sixteenth day of November, 1916, Pratt approached Katharine McGowan, the plaintiff herein, and proposed to her that she take such lots, but misrepresented to her the terms upon which the property could be acquired. He failed to disclose to her that defendant was willing to convey the lots to anyone without charge who would make the required improvement, but, on the contrary, informed plaintiff that the corporation wanted the sum of $7,000 for the property. Pratt had, previous to this time, sold for plaintiff a lot owned by her in Berkeley, for the sum of $1,200, and had received the further sum of $450 from her, which, together with the sale price of the Berkeley lot, he reinvested in two lots situated in Richmond. Pratt informed plaintiff that he had sold these Richmond lots for her. and had in his possession the sum of $2,000, the proceeds received therefrom. Plaintiff was advised by Pratt that defendant would accept this sum, together with a conveyance by her of a piece of property she owned in Los Angeles, and which she valued at the sum of $5,000, in exchange for the four lots. In the form given by Pratt plaintiff accepted the offer, and she thereupon, in pursuance thereof, conveyed to one W. P. Paulk