Brady v. Carman

• Decision Date: 21 March 1960
• Citation: 3 Cal.Rptr. 612,179 Cal.App.2d 63
• Court: California Court of Appeals Court of Appeals
• Parties: Joseph BRADY and Rosalie Brady, his wife, Plaintiffs and Appellants, v. R. F. CARMAN, Coldwell, Banker & Company, an association composed of many individuals sued herein under its common name, and Ernest Ingold, II, Defendants and Respondents. Civ. 18916.

Page 612

3 Cal.Rptr. 612

179 Cal.App.2d 63

Joseph BRADY and Rosalie Brady, his wife, Plaintiffs and Appellants, v. R. F. CARMAN, Coldwell, Banker & Company, an association composed of many individuals sued herein under its common name, and Ernest Ingold, II, Defendants and Respondents.

Civ. 18916.

District Court of Appeal, First District, Division 1, California.

March 21, 1960.

E. C. Mahoney, Burlingame, for appellants.

Pillsbury, Madison & Sutro, Sigvald Nielson, G. H. Eckhardt, Jr., Anthony P. Brown, Theodore M. Monell, San Francisco, for respondents.

TAYLOR, Justice pro tem.

Plaintiffs filed an action for damages for fraud alleged to have been committed by the defendants in the sale of a residential lot. The case was tried before the court without a jury. At the close of the plaintiffs' case, the court granted defendants' motion for a nonsuit. Plaintiffs appeal from this order.

The material facts, as viewed most favorably to the plaintiffs are as follows. The plaintiffs bought a lot for $15,500 in an exclusive subdivision in Hillsborough. Defendant Carman handled the sale as an employee of defendant Coldwell, Banker & Company who in turn were the exclusive sales agents for the developer defendant Ernest Ingold. After viewing several properties with Carman, the plaintiffs decided to purchase the lot in question. On February 17, 1957, Carman took them to Coldwell, Banker's San Mateo office where plaintiffs made a $1,500 deposit and signed the purchase agreement. Before executing the agreement, the plaintiffs observed a small subdivision map which showed a 30 foot wide easement in the City and County of San Francisco crossing the frong of their lot. The defendant Carman also handed them a subdivision report which they read and which stated the title was subject to easements of record. Plaintiff Mrs. Brady asked defendant Carman what an easement was. He answered, "Oh, Mrs. Brady, that is nothing for you to worry about. It is these water pipes that you find on the curb of the street." And again he said, "That is all it is." The plaintiffs then signed the purchase agreement. Subsequently but before the closing date, Carman furnished the plaintiffs with a copy of a preliminary title search listing the 30 foot easement as an exception to the title, and a larger subdivision map showing its location. Plaintiffs read the report, and Mrs. Brady testified as follows: 'A. I called him up on the telephone. I wanted to know what the effect of a 30 foot easement was. He says, 'Mrs. Brady, you don't have any easement on your lot.' I says, 'Mr. Carman, do you mean to tell me it is not on my lot?' 'It is not on your lot; it is on the side of your lot.' He reassured me not to worry. I had no easement. Q. You had an easement on the side of your lot and no easement on the front? A. Not to worry is what he told me.'

About three months later, while plaintiffs were constructing their house, the City and County of San Francisco dug a ditch 16 feet deep and installed a large water pipe in the easement. This interference did not add to the cost of construction, but the plaintiffs chose to make a change in the location of their driveway, rather than to rely on a revocable and restrictive permit from the San Francisco Water Department, one of the provisions of which was that plaintiffs must stand the cost of removing and replacing improvements within the easement at any time they interfered with the use by the city.

Scranton, a real estate appraiser, was qualified as an expert witness by the plaintiffs and testified that he had examined the property and the easement deed which was in evidence and that it limited the use of the plaintiffs' property in that they had 'little more than the right to cross it, and then only under somewhat limited * * * circumstances * * *.' It was his opinion that the market value of the property, thus burdened by the easement, was $5,000 on February 17, 1957. The plaintiffs testified that had they known the extent and nature of the easement they would not have purchased the property. The complaint prayed for $10,000 compensatory damages and $10,000 punitive damages.

The issue is whether by the standard of review required on appeal from a nonsuit, the evidence disclosed actionable fraud by the defendant Carman in selling the property to the plaintiffs and if so could not evidence further justify the allowance of either compensatory or punitive damages. Agency was not denied by any of the defendants and fraudulent conduct by defendant Carman would impose liability on the other defendants under the doctrine of respondent superior.

"A motion for nonsuit may properly be granted '* * * when, and only when disregarding conflicting evidence, and giving to plaintiff's evidence all the value to which it is legally entitled, indulging in every legitimate inference which may be drawn from that evidence, the result is a determination that there is no evidence of sufficient substantiality to support a verdict in favor of the plaintiff.' * * * 'Unless it can be said as a matter of law, that * * * no other reasonable conclusion is legally deducible from the evidence, and that any other holding would be so lacking in evidentiary support that a reviewing court would be impelled to reverse it upon appeal, or the trial court to set it aside as a matter of law, the trial court is not justified in taking the case from the jury.' * * *' Seneris v. Haas, 45 Cal.2d 811, 821, 291 P.2d 915, 921, 53 A.L.R.2d 124, quoting other cases.

Having this well established rule in mind, we will first discuss the question of fraud. Fraud is any act fitted to deceive. Civil Code, § 1572. A single material misstatement knowingly made by a vendor and relied upon by the vendee will sustain an action for fraud. Davis v. Butler, 154 Cal. 623, 626, 98 P. 1047. "A purchaser has a right to rely on the representations of the vendor as to the facts not within the purchaser's knowledge, and the vendor cannot escape responsibility by showing that the purchaser might have ascertained upon inquiry that the representations were untrue." Benner v. Hooper, 112 Cal.App. 53, 58, 296 P. 660, 662, quoting other cases. '[A] false statement of opinion fraudulently made may form the basis of an action, as where the party making it possesses superior knowledge or special information regarding the subject-matter of the representation.' Union Flower Market v. Southern Cal. Flower Market, 10 Cal.2d 671, 676, 76 P.2d 503, 506. Reliance on representations is not precluded by an independent investigation where the person making the representations has a superior knowledge or the party relying thereon is not competent to judge the fact without expert assistance. Bagdasarian v. Gragnon, 31 Cal.2d 744, 748, 192 P.2d 935. A representation need not be a direct falsehood to constitute fraud. It may be a deceptive answer or other indirect but misleading language. Benner v. Hooper, supra, 112 Cal.App. 53, 296 P. 660. 'Though one may be under no duty to speak as to a matter, if he undertakes to do so, either voluntarily or in response to inquiries, he is bound not only to state truly what he tells, but also not to express or conceal any facts within his knowledge which materially qualify those stated. If he speaks at all he must make a full and fair disclosure * * *.' Sullivan v. Helbing, 66 Cal.App. 478, 483, 226 P. 803, 805. A professional agent is required to have special knowledge with respect to the agency assumed. 2 Cal.Jur.2d, § 114, p. 790.

Under these principles of law, it is our opinion that the plaintiffs have made our an actionable case of fraud. The inquiries of Mrs. Brady to defendant Carman showed that, although the plaintiffs were aware that there was an easement across the property, they did not understand its significance. The defendant Carman is a real estate agent, and as such is supposed to possess ordinary professional knowledge concerning the title and natural characteristics of the property he is selling. From the questions addressed to the defendant at the time of the signing of the purchase order and later when the title search was delivered, it should have been apparent that the plaintiffs were ignorant concerning the nature of an easement and how it could limit their use of the property. The defendant's answers were evasive, and misleading, and were such as to discourage further investigation by the purchasers. It was not sufficient for the defendant to simply tell the plaintiffs that they 'had nothing * * * to worry about' and '[i]t is these water pipes that you find on the curb of the street.' 'That is all it is.' The inquiry having been made, and the defendant having undertaken to answer, he was obliged as a professional...