Berning v. Colodny & Colodny

The plaintiffs brought this action to recover damages for deceit alleged to have been practiced upon them by the defendants in the matter of an executory contract for the sale of land. The court awarded the plaintiffs the sum of $200 compensatory damages and $500 exemplary damages and judgment was thereupon entered in favor of the plaintiffs in the sum of $700. In due time the defendants made a motion under the provisions of section 663 of the Code of Civil Procedure to vacate said judgment, amend the conclusions of law on the ground that

It is contended by appellants that in deciding a motion made in conformity with section 663, supra, the court’s power is limited to either granting or denying the motion, that is, the court must either grant or deny the motion in toto. No authorities are cited in support of the claim, but, upon principle, it is clear that the court, having acquired jurisdiction to entertain and pass on the motion, may enter such order and judgment within the limits of the code section as may be just, irrespective of the prayer of the moving party.

It is also contended that the amendment of the conclusions of law was in reality an amendment of the findings of fact. The complaint alleges that there was still due the defendants on the contract of purchase the sum of $300. This is not denied by the answer, but notwithstanding this state of the pleadings, the court in its finding number three found the allegation to be true.

We are satisfied that neither of the points thus presented are sound.

The court awarded plaintiffs $500 exemplary damages. Appellants contend that this is an action upon contract and, therefore, will not sustain such an award. Section 3294 of the Civil Code provides: “In an action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, express or implied, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” In 8 California Jurisprudence, section 113, page 872, it is said: “ ‘The rule as to damages in actions upon contract is the same whether the breach be by mistake, pure accident or inability to perform it, or whether it be willful and malicious; the motives of the party breaking the contract are not to be inquired into.’ Where, however, the action is not on the contract, but is based on the fraud by which it was induced, the fact that

In Gorman v. Southern Pac. Co., 97 Cal. 1 [ 33 Am. St. Rep. 157 , 31 Pac. 1112 ], it is held that the wrongful expulsion of a passenger from a railroad train on the theory that the fare had not been paid, if accompanied by undue violence and insult, is an action in tort and exemplary damages may be awarded.

In Lyles v. Perrin, 119 Cal. 264 [ 51 Pac. 332 ], it is held that in an action for damages growing out of a wrongful transfer by the defendant of a water right, after he had sold it to plaintiff, but before the latter had recorded his deed, is not an action upon contract but a tort and in such a case, in addition to compensatory damages, punitive damages are allowable.

In 12 American and English Encyclopedia of Law, page 20, it is said: “Where a breach of contract also amounts to a tort, there may be recovery of exemplary damages upon proper allegations.”

In Jones et ux. v. Kelly, 208 Cal. 251 [ 280 Pac. 942 ], it is held that whether a pleading is intended to state a cause of, action ex contractu or ex delicto it should be construed according to the full scope and effect rather than according to a single sentence or clause contained therein, and special consideration should be given to the prominent and leading allegations. If the cause of action arises from a breach of promise the action is ex contractu, but if it arises from a breach of duty growing out of the contract it is ex delicio, and a tort and trespass is none the less such, because it incidentally involves a breach of contract. The law imposes the obligation that every person is bound without contract to abstain from injuring the person or property of another, or infringing upon any of his rights, and this duty is independent of any contract and attaches over and above the terms thereof.

In the case last cited the defendants leased real property together with a water right, the defendants agreeing to maintain said water right. The plaintiffs entered into the possession thereof and while in possession under said lease, the defendants entered upon said property and wilfully, maliciously and malevolently destroyed the water right. It was held by the court that the acts amounted to a breach

From these decisions we are of the opinion that the rules applicable to this character of actions as follows: If a cause of action arises from a breach of promise the action is ex contractu; if it arises from a breach of duty growing out of the contract it is ex delicto, and a tort or trespass is none the less such because it incidentally involves a breach of contract. In determining whether a pleading is intended to state a cause of action ex contractu or ex delicto, it should be construed according to its full scope and effect rather than according to a single sentence or expression contained therein, and special consideration should be given to the prominent and leading allegations.

In the light of these settled principles of law, it becomes necessary to examine the complaint in the instant case to determine the nature of the action. It alleges that the defendants are copartners; that on January 3, 1925, the said defendants with the intent of deceiving and defrauding the plaintiffs, represented to them that defendants were subdividing a certain tract of land in Los Angeles County known as Independence Acres; that defendants had developed sufficient water on said premises with which to provide all the tenants or all the owners of said tract with sufficient water to irrigate the crops raised by the plaintiffs and sufficient water with which to water all chickens or other livestock which plaintiffs desired to raise or maintain on said premises; that at said time and place with the intention of deceiving plaintiffs, the defendants fraudulently represented to them that said land would be.provided with streets which would be graveled within six months from that date and in addition thereto defendants had made arrangements to supply the said tract of land and plaintiffs with electricity for light and power purposes; that lot 5 of block 9 of said tract was worth $500 and would be worth a much greater sum as soon as the streets were put in and graveled and as soon as the electricity was wired to said property ; that the defendants knew at the time said representations were made that they were false, fraudulent and untrue; that they were made by them with the intention and purpose of deceiving the plaintiffs -into buying said land; that, believing and relying upon said false representations, the plain

The court found against the plaintiffs on some of the allegations of actual damages. One of said findings held that the lot was of the value of $500, but did find that if said false and fraudulent statements had been true, the said real estate and improvements thereon would have been worth not less than $200 more than the purchase price. The court

We are of the opinion that this is the proper measure of the damage. (Spreckels v. Gorrill, 152 Cal. 383 [ 92 Pac. 1011 ]; Hines v. Brode, 168 Cal. 507 [ 143 Pac. 729 ].) We are also of the opinion that the action is based upon the deceit practiced upon the plaintiffs in inducing them to purchase the property upon the false representations as to the character of the improvements that were to be placed upon the tract of land by the defendants, and also the false representations that the land had a water right. The case falls within the rules promulgated in Jones et ux. v. Kelly, supra. Having reached the conclusion that the action is in tort, the findings are in accordance with the pleadings.

The contract contains the following clause: “No representations, inducement of agreements made by anyone not specifically set out herein shall be binding against the seller.”

Counsel for appellants say that they do not find any decisions concerning a clause such as this, but they see no reason why full weight and effect should not be given to it. The contract in the case at bar had its inception in fraud and no doubt the clause quoted was placed there by the perpetrators of the fraud for the very purpose of preventing inquiry; furthermore, the action is not upon the contract, but upon the fraud used to induce the plaintiffs to enter into the contract. The trial court also found that the written agreement did not contain all of the representations, terms, inducements or conditions, existing between the parties when the agreement was made. The evidence is not before us so that the findings must be taken as true. We believe that the point is without merit. (Secs. 1565-1568, 1708-1710, Civ. Code.)

No good cause has been shown for disturbing the judgment and it is, therefore, affirmed.

Koford, P. J., and Nourse, J., concurred.

All the Justices concurred.