Court Opinion

ID: 9726455
Source: CourtListenerOpinion
Date Created: 2023-08-26 12:51:15.200252+00
Date Added: 2024-06-11T18:25:27.505664
License: Public Domain

FLEMING, J.
I concur.
In my view the cause of action presents a relatively straightforward claim for breach of contract, whose nature has been obscured by the multiplicity of parties and the complexity of their relationships with one another during the course of a complicated fraud. Our concern deals solely with the payment of five bills of exchange, specifically five cashier’s checks purchased by Mrs. Jerman (purchaser) from Bank of America (drawer and drawee) payable variously to Malone or Bolton (payees).
The purchaser of a cashier’s check, in return for the money he gives the bank, acquires the promise of the bank to pay a specified sum to a named payee on presentation of the check. In issuing a cashier’s check the bank enters a direct contractual relationship with the purchaser, both in its capacity as drawer and as drawee. In the present case the bank did not fulfill its promises to pay the amount of the checks to the named payees, and it thereby breached its contracts with the purchaser. The bank’s breaches of contract were complete, and the purchaser became entitled to rescind these contracts and secure judgment of restitution for the consideration she had paid the bank. (Civ. Code, §§ 1689, 1692.) Since the right of the purchaser to recover her consideration is based on contract she has no need to rely on tort claims for conversion, either her own or those of the payees. Hence defenses available in conversion and the measure of damages for such claims are immaterial.
Malone and Bolton can scarcely be categorized as fictitious payees. They are real persons with real interests in the Baywood property, and their genuine existence presented a facade of reassurance to Mrs. Jerman which enabled the Cellinis to develop their scheme to defraud. The intention of Mrs. Jerman as to who should get the money is controlling here, not the intention of the Cellinis, because it was she who supplied the names of the payees to the drawer bank. (Union Bank & Trust Co. v. Security-First Nat. Bank, 8 Cal.2d 303 [65 P.2d 355]; United States Nat. Bank v. Bank of *892America, 264 Cal.App.2d 871 [71 Cal.Rptr. 6].) On this point I accept the finding of the trial court that Mrs. Jerman intended the proceeds of these checks to go to Malone and Bolton in order to promote the venture conjured up for her by the Cellinis.