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District Court of Appeal, Second District, Division 2, California.


Civ. 8909.

Decided: November 13, 1935

Young & Young and Wilbur D. Finch, all of Los Angeles, for appellant. Overton, Lyman & Plumb, Irving H. Prince, and Cecil A. Borden, all of Los Angeles, for respondent. Swanwick, Donnelly & Proudfit and Finlayson, Bennett & Morrow, all of Los Angeles, amici curiæ for respondent.

Appellant brought this action to recover the sum of $15,000 paid by her in June, 1929, as the purchase price of a beneficial interest in a real estate trust of which the bank was trustee. The appeal is from a judgment for the defendant after an order sustaining a general demurrer to the complaint without leave to amend. The first cause of action of the complaint alleges that the interest which the bank conveyed to her was void and hence valueless for the reason that the bank had not obtained any permit from the commissioner of corporations authorizing its sale and that such a permit was necessary. A second cause of action sounds in tort and alleges certain facts upon which the plaintiff seeks to recover on the ground of fraud.

So far as the first cause of action is concerned, this case is similar to the case of Fox-Woodson Lumber Co. v. Bank of America (Cal.App.) 51 P. (2d) 1149, which was decided by this court on this date, except that judgment went in the trial court for the defendant instead of the plaintiff. For the reasons stated by us in that case the order sustaining a general demurrer was proper. It was not necessary for the bank to have obtained a permit and the plaintiff's contention in this regard is without merit.

In the second cause of action the plaintiff does not allege any overt act of fraud upon the part of the defendant. The allegations of her complaint may be sufficient to state a cause of action against the parties who with her were engaged in the real estate transaction, to take care of which the trust was created, but under the allegations of the complaint the bank was merely the escrow holder and the trustee of said trust and it was not otherwise interested in the transaction.

In her opening brief the plaintiff confined herself to other matters, abandoning at that time so far as the appeal was concerned her cause of action for fraud. Thereafter the case of Young v. Three For One Oil Royalties, 1 Cal.(2d) 639, 36 P. (2d) 1065, was decided by the Supreme Court adversely (at least inferentially) to the contention of the plaintiff on her cause of action based on the Corporate Securities Act, and thereupon by stipulation of the parties and authorization of the court the plaintiff filed a supplemental and additional opening brief in which she urged for the first time on appeal that her second cause of action sufficiently alleged fraud against the defendant.

As alleged in the complaint and the exhibits thereto, the transaction with the bank was a simple one for the creation of a trust in real property between the several owners thereof by which they vested their respective interests therein in the defendant bank as trustee. It is not alleged that the bank received any benefit whatever from the transaction other than the agreement on the part of the trustors to pay it the usual charge for acting in the capacity as trustee. There is a wealth of allegations alleging fraud against the other parties to the transaction who are not parties to this suit, having been sued in a prior action, but nowhere is there sufficient allegation of fraudulent conduct on the part of the bank or its trust officer in connection with the matter. Whenever fraud constitutes an element of a cause of action the facts must be alleged. 12 Cal. Jur. 800. There must be an allegation among others that the false representations were made with intent to deceive the plaintiff or with intent to induce her to enter into the transaction. 12 Cal.Jur. 808, § 65, and cases cited. There is no allegation in the complaint either of intent upon the part of the defendant to deceive the plaintiff or of an intent to induce plaintiff to act in the matter, and there are no allegations of facts and circumstances from which such intent must necessarily be implied. Indeed, there are no allegations of false representations made by the bank. There are allegations that the plaintiff did not know certain facts connected with the transaction and that the bank did know said facts and failed to inform the plaintiff, but there is no allegation that the bank knew that plaintiff did not know, and there is no allegation directly or indirectly that it was the duty of the bank to inform the plaintiff of matters contained in her own agreements of which she and her confidential agent presumptively had full knowledge. The general demurrer should have been sustained to the second count. Neither is there any merit in the contention of the plaintiff that the contract is void for uncertainty.

Judgment affirmed.

CRAIL, Presiding Justice.

We concur: WOOD, J.; McCOMB, Justice pro tem.

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