Agee v. Virden Packing Co.

KNIGHT, J. Defendant’s demurrer to the amended complaint was sustained and subsequently the trial court denied leave to amend a second time. Judgment of dismissal followed, from which plaintiffs have taken this appeal. We find no error in the trial court’s rulings.

The action was instituted by 144 persons as plaintiffs to recover from the defendant corporation the sums of money alleged to have been paid by them respectively for defendant’s capital stock, upon the ground that the sales were fraudulent. The allegations of the 144 separate causes of action embodied in the amended complaint are exactly alike except as to names and amounts. It was alleged therein that defendant falsely represented that the stock “was a valuable investment”, that it “would constantly yield and pay yearly large dividends”, and that the corporation would erect and operate stockyards and a packing plant in the vicinity of Sacramento where plaintiffs could market their products; also that defendant violated the condition imposed by the corporation commissioner in that it failed, at any time prior to the consummation of the stock sales, to exhibit or deliver to any of the plaintiffs a copy of the commissioner’s permit authorizing the sale. It was further alleged, however, that all of the stock transactions had with plaintiffs were consummated between the years 1919 and 1923, inclusive; whereas notice of rescission was not served until February 4, 1932. In other words it affirmatively appears that plaintiffs allowed a period of time ranging from nine to thirteen years to elapse before [693]seeking relief in a court of equity. Under such circumstances it was essential, in order to escape the effect of the statute of limitations, to plead facts and circumstances tolling the statute; and plaintiffs made no attempt• whatever so to do. Consequently defendant’s demurrer, which was based upon the grounds, among several others, that the action was barred by the statute of limitations and by plaintiffs’ laches, was properly sustained. (Code Civ. Proc., subd. 4, sec. 338; Lady Washington C. Co. v. Wood, 113 Cal. 482 [45 Pac. 809].) As held in the case just cited, the right of a plaintiff to invoke the aid of a court of equity for relief against fraud after the expiration of three years from the time the fraud was committed is an exception to the general statute on that subject and cannot be asserted unless the plaintiff brings himself within the terms of the exception by pleading facts showing the times and the circumstances under which the facts constituting the fraud were brought to his knowledge so that the court may determine whether the discovery of these facts was within the three-year period next preceding the commencement of the action. And if no such facts are pleaded it will be presumed that the complainant knew whatever with reasonable diligence he might have ascertained concerning the fraud of which he complains. (Lataillade v. Orena, 91 Cal. 565 [27 Pac. 924, 25 Am. St. Rep. 219], To the same effect also, see 16 Cal. Jur., p. 623, sec. 217, and cases cited under note 3, p. 624; also cases cited under same section in vol. 7 Cal. Jur. Ten-year Supp., pp. 649, 650.)