From Casetext: Smarter Legal Research

Camm & Hedges Co. v. Bank of Covelo

District Court of Appeals of California, First District, Second Division
Feb 27, 1929
275 P. 828 (Cal. Ct. App. 1929)


Rehearing Denied March 29, 1929

Hearing Granted by Supreme Court April 25, 1929

Appeal from Superior Court, Mendocino County; H.L. Preston, Judge.

Action by the Camm & Hedges Company against the Bank of Covelo and others. From the judgment, plaintiff appeals. Judgment reversed as to some of the defendants, and affirmed as to remaining defendants.

Sturtevant, J., dissenting.


G.P. Hall and Emmett I. Donohue, both of Petaluma, for appellant.

Hale McCowen, Jr., and Will Van Dyke, both of Ukiah, for respondents.



This action was for damages for alleged fraudulent representations and promises. It was tried before a jury. Motions for nonsuits on behalf of the individual defendants were granted and denied as to the defendant Bank of Covelo, but at the end of the testimony a directed verdict was given for Bank of Covelo. Plaintiff appeals.

A.W. Biggers was performing a contract for the erection and construction of a public school near the town of Covelo for the Round Valley Union school district. He was indebted to the Bank of Covelo for overdrafts and loans in the sum of about $6,100, and assigned to that bank all moneys due and to become due him under the contract. Plaintiff supplied millwork for the school and had an unpaid claim therefor in the sum of $3,220.80. Mr. Owens, a representative of plaintiff, went to Covelo on January 21 or 22, 1924, for the purpose of collecting or making sure of the payment of this claim. While there he met some of the defendants, who are alleged to have made such fraudulent statements and false promises that plaintiff thereafter took no steps to enforce payment of its claim, such as to file a stop notice, and as a result did not receive payment. The money due Biggers was collected by the bank, and after payment of its own claim it put the balance in Biggers’ checking account and it was immediately disbursed by him.

Owens was the main witness for plaintiff. Owens, after arriving in Covelo, first made inquiries of defendant Long, thinking he was the secretary of the board of trustees. Long referred him to defendants Johnson and Rohrbough, who at the time happened to be standing on the sidewalk across the street in front of the Bank of Covelo. A general conversation amongst the four men ensued. Defendants Long, Johnson, and Rohrbough were members of the board of school trustees. Johnson was secretary of the board. Defendant Long was a stockholder and officer of the bank. Defendants Johnson and Rohrbough were each directors and stockholders of the Bank of Covelo, the latter being president and the owner of a majority of the capital stock. Owens testified to the conversation had between these three men and himself: "I told them that I was there to collect the claim of plaintiff and that if the notice of completion had been filed I was to file a stop notice." "Mr. Rohrbough told me that there was $11,000 of money that was yet to be paid on account of the contract for the school building; that there was sufficient money there to pay our bill together with all other bills; and Mr. Rohrbough said that all of the money was being paid through the Bank of Covelo and that the bill of Camm & Hedges would be paid together with all bills, because there was sufficient money with which to pay it." "He positively stated all bills are being paid through the Bank of Covelo. He said there was ‘sufficient money on hand to meet the bills because there was over $11,000 that was still to be paid out on account of that contract.’ I said that I was there for the purpose of filing a stop notice if there was— if the notice of completion had been filed, but they said it hadn’t been filed because the architect had not yet accepted the building owing to some changes made— some extras, and that had been held up." "I asked Mr. Johnson, after I found out he was the secretary of the board of trustees, if he would notify Camm & Hedges whenever the notice of completion was filed and the warrants drawn for the payment— for the last payment, and he promised he would notify Camm & Hedges when that took place." "No notice was ever received." "Having received this assurance that our bill would be paid, I relied upon that assurance and left for Petaluma."

As a part of plaintiff’s case in chief there was also received in evidence the original recorded copy of the said notice of completion. The notice of completion, among other things, stated: "that on the 11th day of January, 1924, the work under said contract was actually completed by said Arthur W. Biggers and accepted by said board of trustees." The notice was signed by defendant Johnson as clerk of the board and sworn to by him before a notary public. It was indorsed: "Recorded at the request of G.R. Redwine, for Board of Trustees of Union School District, January 17, 1924."

H.O. Camm testified to certain admissions made on March 11, 1924, in conversations with several of the bank officers.

The grounds of the motion for nonsuit were not stated except to say upon the ground mentioned in subdivision 5 of the Code of Civil Procedure, § 581, which states: "When upon the trial the plaintiff fails to prove a sufficient case for the jury." The argument upon the motion as shown in the record is upon the sufficiency of the testimony of Owens to establish the fraudulent representations alleged and also upon its sufficiency to support a cause of action as for breach of contract. Sufficiency of either the pleadings or proof on the question of damages was not mentioned nor argued either at that time or on this appeal.

The complaint is based upon both fraudulent promises and fraudulent representations, but it does not attempt to declare upon contract. Nevertheless, on this appeal, as in the court below, argument is addressed to the sufficiency of the testimony to support a cause of action based upon contract as well as upon the sufficiency of the proof to support each of the allegations of fraud contained in the complaint. It will be sufficient for this opinion, however, to confine our remarks to two allegations of fraudulent representations upon which we think there was sufficient testimony to go to the jury.

The testimony of Owens concerning the statements of Rohrbough is in almost the identical words of one of the misrepresentations alleged in the complaint, to wit, that said defendants represented "that all bills for labor and material furnished and consumed in the construction of said school building would be paid by said defendants through said bank and from said fund."

Another representation alleged in the complaint and concerning which sustaining evidence was given is that "said defendants would notify plaintiff when said money was paid over so that there would be no chance of said money going through other channels and thereby in any way deprive said plaintiff of its security." The proof is not only that Johnson said he would notify plaintiff when the notice of completion was filed, but also that he would notify plaintiff when the warrants were drawn for the payment. This appears in the testimony above quoted and also in the redirect testimony of Owens. We emphasize the twofold character of this part of the testimony because it is respondents’ contention that we cannot consider the testimony regarding the representation or promise to notify when the notice of completion was filed, because not alleged as a representation and because it therefore constitutes a fatal variance. It is true that the complaint does not allege that defendants promised to notify plaintiff whenever a stop notice was filed. It does, however, allege that defendants represented "that said defendants would notify said plaintiff when said money was to be paid over, so that there would be no chance of said money going through other channels and thereby in any way deprive said plaintiff of its security." This difference does not constitute a variance under the circumstances of this case. The final payments would naturally follow the notice of completion and the drawing of the warrants. Giving notice of these things would be giving notice of "when said money was to be paid over so that there would be no chance," etc., as alleged in the complaint. This allegation is sustained by the evidence of the two statements or representations made by Johnson, i.e., (1) that he would notify when the notice was filed, and (2) that he would notify when the warrants were drawn.

Were the untrue representations thus alleged and proven to have been made by the defendants Johnson and Rohrbough proven to be fraudulently made with the intent to deceive? Civil Code, § 1709, states the rule of law especially applicable to this case: "One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers." Under the evidence produced in the trial court, it was a question for the jury to decide whether the representations made by Johnson and by Rohrbough were made willfully with the intent to induce plaintiff to alter his position to his injury or risk. Fraudulent intent is seldom capable of direct proof; it is a matter of inference. Holiday v. Tolosano, 39 Cal.App. 151, 178 P. 170; Tench v. McMeekan, 17 Cal.App. 14, 118 P. 476; Williams v. Hasshagen, 166 Cal. 386, 137 P. 9.

When Johnson stated on January 21 or 22 that the notice of completion had not been filed and that he would notify plaintiff when it was filed, the jury could infer that he then knew that it had already been filed because he was secretary of the board which accepted the building January 11, because he had signed and sworn to the notice and because it had been filed and recorded January 17 on behalf of the board. A promise made by one who knows it to be impossible is a fraudulent promise. Langley v. Rodriquez, 122 Cal. 580, 55 P. 406, 68 Am.St.Rep. 70; Newman v. Smith, 77 Cal. 22, 18 P. 791; Brison v. Brison, 75 Cal. 525, 17 P. 689, 7 Am.St.Rep. 189. The fraudulent intent is implied and inferred where untrue statements are made by one who knows them to be untrue for the purpose of injuring another. Hodgkins v. Dunham, 10 Cal.App. 691, 698, 103 P. 351; Whitney v. West Coast Life Ins. Co., 177 Cal. 74, 80, 169 P. 997. Conduct subsequent to the promise may be sufficient to show that at the time of the promise there was no intention of performing it. In Williams v. Hasshagen, supra, it is said: "The effort of the corporation to collect the note instead of returning it according to the promise of Hays is sufficient evidence of that fraud which arose from the making of a promise without intention of performance." See, also, Holiday v. Tolosano, 39 Cal.App. 151, 178 P. 170.

There was evidence of this kind from which the jury could also infer that Johnson had no intention of notifying plaintiff when the warrants were to be drawn. A part of plaintiff’s case in chief were all of the warrants issued by authority of the board of school trustees in payment of the Biggers’ contract. These warrants bear upon their face the written approval of the board of trustees of the school district over the signatures of either all or a majority of the trustees. Among these warrants were the last three paid to the bank. Two of these, for $939.70 and $2,232.25, respectively, were ordered paid over the signatures of Johnson, Long and Rohrbough on January 22, 1924. This was upon the very next day after the representation if the conversation was on the 21st of January, as testified to by Owens, and upon the same day if the conversation was upon the 22d, as testified to by other witnesses.

We may add that Camm’s testimony of his conversation with Bank Director and Bank Officer George Biggers, Cashier Thomas, and President Rohrbough included some admissions on the part of each which could reasonably add considerable to the inference of willful intent to deceive if the jury were so minded. This conversation took place March 11, the day the last warrant was put through. It evidenced on the part of these bank officials a desire to help Biggers keep the funds coming from the school board out of the reach of plaintiff. This conduct was so inconsistent with the promise to notify the plaintiff when the warrants were to be drawn as to show a willful intent to deceive when the promise was made.

It is also an important circumstance that the testimony shows a motive for making the representations. At the time of the conversation the bank held an assignment of all moneys to become due to the contractor, Biggers. This assignment from its very nature was of an uncertain value because its value would naturally be affected by all the uncertainties with which building contractors have to contend. One of these uncertainties is that the amount which may become due the contractor may be reduced or entirely used up by the claims of laborers and materialmen who under the statute are entitled to file stop notices. If the bank officials by their representations induced plaintiff as one of such claimants to refrain from filing its stop notice, the value of said assignment as security to the bank was thereby increased. This was a benefit to the bank.

The plaintiff, of course, was injured or at least induced to alter its position to its injury and risk. Under the statute, Code of Civil Procedure, § 1184, plaintiff had a right to sequester enough of the moneys due the contractor to satisfy its claim. This right is given in lieu of a mechanic’s lien which is not permitted against public property. Plaintiff’s right, however, must be exercised within a certain time limit. If plaintiff was induced to withhold its notice until too late, it was thereby induced to alter its position to its injury or at least to its risk. It is a fair inference that these matters of common knowledge were well known to the defendants. This is a sufficient injury upon which to found an action for damages for fraud, the other elements existing. Alexander v. Church, 53 Conn. 561, 4 A. 103; Guild v. More, 32 N.D. 432, 155 N.W. 44, 48. It is like being induced by fraud to withhold the filing of an action until barred by the statute of limitations. This has been held to be actionable fraud. Desmarais v. People’s Gaslight Co., 79 N.H. 195, 107 A. 491; Cockrill v. Hall, 65 Cal. 326, 4 P. 33.

As to defendant Long, we see nothing in the testimony to warrant the denial of his motion for nonsuit. No declaration is attributed to him by the evidence. There is no proof of such an accord or agreement between Long, Rohrbough, and Johnson as would make each responsible for the declarations of the other. None of them were under any duty to Owens when that gentleman first appeared and conversed with them. Their interest, or at least the interest of their bank, was adverse to the interest of Owens’ firm, the plaintiff. They could have remained silent, or could have told Owens to look out for himself. Rohrbough and Johnson, however, undertook to speak, and they are responsible for their deceit if the jury finds their conduct to be such. Sullivan v. Helbing, 66 Cal.App. 478, 226 P. 803, 26 Cor.Jur. 1074, § 17. Long did not speak and he is not responsible.

The evidence was also sufficient to go to the jury upon the question of whether the defendant Bank of Covelo, a corporation, was also answerable for the fraud of Rohrbough and Johnson. First, the president of the bank is chief executive officer and, as such, has authority to oversee the collection of debts due to the bank, such as the debt of defendant Biggers for which the bank held the assignment of Biggers as security. In Bartlett Estate Co. v. Fraser, 11 Cal.App. 373, 105 P. 130, it is stated that under the uses and customs of modern banking the president of a bank is no longer limited to exercise the powers expressly conferred upon him by the directors. It is also held that the president of other corporations, while acting in the usual manner and within the scope of powers which the president is accustomed to have, is presumed to be vested with power to perform such acts. 14a, Cor.Jur. 358; Grummet v. Fresno Glazed Cement Pipe Co., 181 Cal. 509, 185 P. 388; Southern Pacific Co. v. Los Angeles Milling Co., 177 Cal. 395, 170 P. 829. Second, the jury could properly draw an inference that Rohrbough and Johnson did what they did on behalf of the bank rather than on behalf of themselves individually, because their only rational motive for deceiving plaintiff under the testimony would be their desire to aid the bank. Third, by inducing plaintiff to forbear to file its withhold notice for its claim, the security assignment held by the bank was increased in value to that extent, to wit, $3,220.80. They could also infer that the bank took possession of and handled $3,220.80 more than if plaintiff had filed its withhold notice. Fourth, notice and knowledge of the president of a corporation is notice and knowledge of the corporation itself. Goodwin v. Central Broadway Building Co., 21 Cal.App. 376, 131 P. 896; Balfour v. Fresno Canal, etc., Co., 123 Cal. 397, 55 P. 1062; Williams v. Hasshagen, 166 Cal. 386, 137 P. 9; 14a, Cor.Jur. 493; Swartz v. Burr, 43 Cal.App. 442, 185 P. 411; Jan Wai v. Smith-Riddell Co., 55 Cal.App. 59, 202 P. 952; Montecito Valley Co. v. Santa Barbara, 144 Cal. 597, 77 P. 1113.

Summarizing the foregoing, there is sufficient evidence from which the jury could infer, first, that Rohrbough was acting within the scope of his ordinary duties as president; second, that Rohrbough and Johnson were at least assuming or trying to aid the corporation; third, that the corporation received the benefit from the conduct of its president and director; and, fourth, that the corporation had full notice and knowledge of what was taking place during the 30-odd days that passed before it became too late for plaintiff to file his stop notice. With these elements drawn from the proof by the jury, it could hold the corporation liable for the said acts of its officers, under the rule that a corporation is liable for the fraud and torts of its agents and officers the same as a natural person if committed under its express or implied authority. 7 Thompson on Corporations (3d Ed.) § § 5449, 5450, 5410, and 5411; 14a, Cor.Jur. 765; Maynard v. F.F. Insurance Co., 34 Cal. 48, 91 Am.Dec. 672; People v. Palermo Land & Water Co., 4 Cal.App. 717, 89 P. 723, 725; Chamberlain v. California Edison Co., 167 Cal. 500, 140 P. 25.

Nonsuits were granted to defendants English, Thomas, and George Biggers practically by consent, and there is no evidence to hold them. The judgment in favor of the defendant Bank of Covelo and defendants Rohrbough and Johnson is reversed, and the judgment in favor of each of the remaining defendants is affirmed. Appellant will recover costs on appeal against defendants Bank of Covelo, Rohrbough, and Johnson.

I concur: NOURSE, J.


I dissent. While the plaintiff’s action is multifarious both as to parties and causes of action it is none the weaker— for the same reason it is none the stronger. Its real weight can be ascertained only by considering it in each aspect. I will proceed to do so. I am wholly unable to say that the complaint sounds in tort and not in contract. It contains certain allegations intended to show a cause of action sounding in contract. In the trial court appellant so claimed. However, the proof introduced prior to a motion for a directed verdict wholly failed to support any cause of action sounding in contract. In this behalf the showing of the plaintiff was an attempt to show a contract of guarantee. But viewed as such, as contended by the respondents, the purported contract was not in writing and was wholly unsupported by any consideration whatsoever. Civ.Code, § § 2792-2794.

The main opinion holds that the motion for a nonsuit was properly granted as to the defendant Long. With that conclusion I agree. Moreover, in my opinion the motion was properly granted as to the defendants Johnson and Rohrbough and was erroneously refused as to the bank. They were charged under subdivisions 1, 2, and 4 of section 1710 of the Civil Code. Under the fourth division it was charged that they made "a promise, *** without any intention of performing it." The facts recited show that it was the claim of the plaintiff that Owens made a gratuitous mandate which the mandatory has not executed. As was said by Martin, J., in 3 Hen. VI., 36b, 37a: "If this action shall be maintained on this matter, for each agreement broken in the world, there will be an action of trespass." In the case of Elsee v. Gatward (1793) 101 Eng.Rep. Reprint, 82, Lord Kenyon examined a similar set of facts and held that they would not support an action in assumpsit nor an action as for tort. Under a similar set of facts, in the case of Thorne v. Deas (1809) 4 Johns.(N.Y.) 84, Chancellor Kent made an exhaustive examination of the authorities and reached the same conclusion. When our Civil Code was being prepared the rule of those two cases was adopted as the statutory law of this state: "One who, without consideration, undertakes to do a service for another, is not bound to perform the same. ***" Commissioners’ Civ.Code, § 1975. Viewed as a contract of agency the rule is the same. 2 C.J. "Agency," § § 374, 384; Mechem on Agency, § 1258; 1 Clark & Skyles on Agency, § § 46, 433. And, if viewed as a bailment, the rule is the same. II Kent’s Comm. p. 570; Story on Bailments, § 166 et seq.; IV Elliott’s Contracts, § 3015. When thereafter Johnson and Rohrbough failed to perform the alleged promise they but exercised their legal rights. As they were exercising their legal rights, it is immaterial what motive or intent caused them to do so. Boyson v. Thorn, 98 Cal. 578, 33 P. 492, 21 L.R.A. 233; Parkinson Co. v. Bldg. Trades Council, 154 Cal. 581, 595, 98 P. 1027, 21 L.R.A.(N.S.) 550, 16 Ann.Cas. 1165. This reasoning we submit applies with full force to all promises alleged, whether attributed to Johnson or to Rohrbough.

We pass to alleged false representations. In its complaint the plaintiff alleged that defendants made certain representations. It then alleges that the representations "were untrue and false and that defendants knew them to be untrue and false." This allegation is broader than the statute. Civ.Code, § 1710. Being so, it is broad enough to include subdivisions 1 and 2 of section 1710. As so read plaintiff’s complaint charges, in legal effect, "that with intent to induce this plaintiff to alter its position to its injury and/or risk the defendants did wilfully suggest as a fact that which was not true and which the defendants did not believe to be true; and did wilfully suggest as a fact that which was not true and which the defendants had no reasonable ground for believing it to be true." This theory rests, in part at least, on the fact that according to the testimony of the plaintiff’s witness Owens, one of the defendants, Johnson, stated that the notice of completion had not been filed, whereas it had been filed. Such was the record when plaintiff rested. The statement, if made, was not true. But then what? That showing is not enough. The plaintiff was bound to introduce proof not merely of a falsehood but of falsehood and fraud. The rule is clearly set forth in 2 Pomeroy’s Equity Jurisprudence, § § 884 and 885. The rule had been distinctly announced in Behn v. Kemble, 7 C.B.Rep.(N.S.) 97 Eng.Com.Law Rep. 264; Addington v. Allen, 11 Wend.(N.Y.) 374, 389; Zabriskie v. Smith, 13 N.Y. 322, 330, 64 Am.Dec. 551. When the codes were adopted the rule as announced in those cases was adopted in framing the provisions of sections 1708-1710, inclusive. See Commissioners’ Code, 1872. The decisions of this state are to the same effect. Newman v. Smith, 77 Cal. 22, 26, 18 P. 791; Daley v. Quick, 99 Cal. 179, 185, 33 P. 859; Filipini v. Trobock, 134 Cal. 441, 443, 62 P. 1066, 66 P. 587. The evidence showed that Johnson had made a misstatement. There was not a scintilla of evidence proving or tending to prove any other element of the charge— that the misstatement was made (1) willfully, (2) with intent to deceive, (3) that Johnson did not believe it to be true, or (4) that he had no reasonable ground for believing it to be true. Except the filing or nonfiling of the notice of completion, there is not a particle of evidence in the record that any fact stated by either Rohrbough or Johnson was untrue, nor is there any evidence that Johnson knew that the notice had been filed. Owens testified that Johnson stated to him that the architect for certain reasons had held up the filing of the notice. This statement implied that the notice had been duly executed, but had not been filed. The evidence does not show that if the architect had changed his mind and had filed the notice that Johnson had been so informed at the time he spoke to Owens, or that he willfully or fraudulently misstated the fact as to any matter.

As to the defendant bank, the trial court was clearly correct in directing a verdict. When Owens was talking to Rohrbough and Johnson and Long on the sidewalk, the business of the Bank of Covelo was in no manner involved. So far as the record discloses the bank had an assignment which fully protected it in all its rights. When, thereafter, it collected on its assignment, but so far as the record discloses did not collect an additional cent, it acted within its clear legal rights, and there was neither an authorization nor a ratification of anything done by Rohrbough or by Johnson. Civ.Code, § § 2338, 2339.

I call attention to the numerous instances in which my brothers say that this or that inference may fairly be drawn. I do not for one moment controvert the general proposition that fraud or deceit may seldom be proved by direct evidence, and that sometimes they may be inferred from other facts which have been proved. There is no doubt that in some cases, under certain conditions and circumstances, an inference of fraud may be drawn. But that is not so in each and every case. The line of demarcation is defined for us by statute. Code Civ.Proc. § 1960. The most of the proven facts are stated in the main opinion. It should be added that the proof showed these additional matters. The witness Owens was an entire stranger to the defendants Johnson, Rohrbough, and Long, and his principal and himself had had no confidential relations and not even any former business relations directly or indirectly with the defendants. The witness Owens and all of the defendants are apparently prominent men and each one presumably is a man of good character and honest dealing. The defendant corporation held an assignment of the building contract on the schoolhouse. The limit of its claim was $6,100. The limit of the plaintiff’s claim was $3,300. When these men held their conversation there was due and unpaid to the contractor $11,000. Under no fact in the case did defendant bank stand to make or to lose one single penny as the outgrowth of the conversation held on the sidewalk. Every fact regarding the filing of the notice of completion, and every fact regarding moneys due or unpaid to the contractor, would be shown with full certainty and without possibility of secrecy by the records in the office of the county recorder and the books in the office of the superintendent of schools— all of which were accessible to all persons. There is no evidence of any trick or device. Now, accepting all of the proved facts and on such a deduction from these facts as is warranted by a consideration of the usual propensities and passions of men, and the particular propensities and passions of these particular men, the course of business, and the course of nature (Code Civ.Proc. § 1960), can it be inferred that Johnson, Long and/or Rohrbough did or said anything for the purpose of willfully deceiving the witness Owens? I claim it cannot, and therefore both motions were properly granted. Young v. Covell, 8 Johns. 23, 5 Am.Dec. 316, is directly in point to the effect that the trial court acted properly in granting the nonsuit. That case is one of the cases on which the commissioners framed section 1710 of the Civil Code. (See Commissioners’ Note.) Davis applied to Young to purchase Young’s interest in a boat. Covell, standing by, recommended Davis very highly, saying that if Davis wanted $5,000 he would let him have it in a minute. Within a week it became known that Davis was insolvent. Young sued Covell as for deceit. The trial court granted a motion for a nonsuit. The plaintiff appealed. The court said: "It is well settled that this action cannot be sustained without proving actual fraud in the defendant, or an intention to deceive the plaintiff, by false representations. The simple fact of misrepresentation, unconnected with a fraudulent design, is not sufficient. The evidence produced by the plaintiffs at the trial did not make out the fraud, or show enough to justify the jury in drawing that conclusion. *** Deceit is the gist of the action. If the cause had gone to the jury, the testimony would not have warranted a verdict for the plaintiffs, and the motion to set aside the nonsuit ought therefore to be denied." In Marsh v. Falker, 40 N.Y. 562, the defendant had recommended the credit of a merchant. Later it appeared that he was mistaken. The plaintiff sued him in an action for deceit. At the end of the plaintiff’s case the defendant made a motion for a nonsuit. It was denied. At the end of the defendant’s case he made a motion for a directed verdict. That motion was denied. The jury returned a verdict against him, and he appealed. On page 565 the court said: "But before the plaintiff could lawfully recover that loss from the defendant, it was equally as essential to the right to do so, that he should satisfactorily prove that these representations were fraudulently made. That they were not only false in fact, and caused the loss sustained by him, but beyond this, that they were made with the intent to deceive him. This was the gist of the action, and it has always constituted its distinguishing element; and as such it has been described and maintained by all the authorities. [Citing cases.]" In that case, as in this case, it was claimed that the jury might make certain inferences and thus fill out the plaintiff’s proof. The court examined that contention exhaustively and concluded that no inference of fraud could legally be drawn. Thereupon it affirmed the order of General Term ordering a new trial because of the error denying the nonsuit.

Moreover, it is settled law in this state that the ruling of a trial court when attacked in a court of review will be tested by the question, What is the law? and not by the question, What reason did the trial court assign for its ruling? Conceding that counsel for defendants did not specially call to the trial court’s attention the defect as to proof as to damages, it is impossible for one to examine this record without noticing that that subject-matter stands out prominently. When each motion was made it became necessary for the trial court to scan the evidence to see if a case had been made by the plaintiff. The action sounding in deceit, damages must be alleged, and they must be proved. Denver v. Burton, 28 Cal. 549; Harron, Rickard & McCone v. Wilson, Lyon & Co., 4 Cal.App. 488, 88 P. 512; Munson v. Fishburn, 183 Cal. 206, 190 P. 808. In this case no proof whatever was introduced on that subject. Conceding that it had the right to perfect an inchoate lien and that it has been deprived of its lien, then its damage would be the value of its lien. Alexander v. Church, 53 Conn. 561, 4 A. 103; Kritzer v. Moffat, 136 Wash. 410, 240 P. 355, 44 A.L.R. 681. But what that value may have been the evidence does not show.

A directed verdict is proper whenever, upon the whole evidence, the judge would be compelled to set a contrary verdict aside as unsupported by the evidence. Estate of Baldwin, 162 Cal. 471, 473, 123 P. 267. If, in this case, the order directing the verdict had not been made, would the trial court have been compelled to set the verdict aside? To my mind the failure to do so would have been an abuse of discretion. I find no error in the record, and I think the judgment should be affirmed.

Summaries of

Camm & Hedges Co. v. Bank of Covelo

District Court of Appeals of California, First District, Second Division
Feb 27, 1929
275 P. 828 (Cal. Ct. App. 1929)
Case details for

Camm & Hedges Co. v. Bank of Covelo

Case Details

Full title:CAMM&HEDGES CO. v. BANK OF COVELO et al.

Court:District Court of Appeals of California, First District, Second Division

Date published: Feb 27, 1929


275 P. 828 (Cal. Ct. App. 1929)

Citing Cases

Williams v. Spazier

( Newman v. Smith, 77 Cal. 22, 26 [18 P. 791]; Daly v. Quick, 99 Cal. 179, 185 [33 P. 859]; Filipini v.…