JACKSON v. MASTER HOLDING CORPORATION (1939)

From judgments in favor of defendants predicated upon the trial court's sustaining demurrers to plaintiff's second amended complaint without leave to amend in an action to recover damages alleged to have resulted from the fraud of defendants in selling plaintiff stock, plaintiff appeals.

The essential facts are:

In plaintiff's amended complaint it is alleged in substance: (1) On or about July 30, 1930, due to fraudulent representations of defendant plaintiff purchased 100 shares of class A and 100 shares of class B common capital stock of defendant Master Holding Corporation for the sum of $5,000, and (2) that she did not discover the fraud until on or about May 9, 1935.

Defendants demurred to the complaint on the ground, among others, that the cause of action was barred by subsection 4, section 338 of the Code of Civil Procedure in that more than three years had elapsed from the date of the alleged fraud, July 30, 1930, to the date of the filing of the complaint, January 16, 1939.

This is the sole question presented for determination:

Was plaintiff's alleged cause of action barred by the statute of limitations (sec. 338, subsec. 4, Code Civ.Proc.)?

This question must be answered in the affirmative. The law is established in California that, if an action for fraud be not commenced within three years from the date of the alleged fraud, plaintiff is required in order to bring himself within the exception provided for in subsection 4, section 338 of the Code of Civil Procedure to allege when the fraud was discovered setting forth sufficient facts to show justification for not having sooner discovered the fraud and the circumstances under which it was discovered. Lady Washington Consol. Co. v. Wood, 113 Cal. 482, 486, 45 P. 809; Consolidated Reservoir & Power Co. v. Scarborough, 216 Cal. 698, 701, 16 P.2d 268.

In the instant case an examination of the complaint fails to disclose the allegation of any facts justifying plaintiff in not sooner having discovered the fraud. Therefore, her cause of action, if any, is barred by the statute of limitations.

The judgments are affirmed.

McCOMB, Justice.

I concur: WOOD, Acting P.J.