Court Opinion

ID: 9552506
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:12:08.977836+00
Date Added: 2024-06-11T15:27:38.919578
License: Public Domain

ROTH, J., pro tem., Dissenting.
I dissent. In my opinion, the amended complaint shows on its face, and the evidence demonstrates as a matter of law, that the plaintiffs’ claim is barred by the statute of limitations. (Code Civ. Proc., sec. 338, subd. 4; Haley v. Santa Fe Improvement Co., 5 Cal. App. (2d) 415 [42 Pac. (2d) 1078] [hearing denied by Supreme Court]; Lady Washington C. Co. v. Wood, 113 Cal. 482 [45 Pac. 809]; Consolidated r. & P. Co. v. Scarborough, 216 Cal. 698 [16 Pac. (2d) 268]; redpath v. Aagaard, 217 Cal. 63, 66 [16 Pac. (2d) 998]; Wheaton v. Nolan, 3 Cal. App. (2d) 401 [39 PaC. (2d) 457] ; Lopez Canyon Oil Co. v. Lofquist, 136 Cal. App. 115 [28 Pac. (2d) 76]; Security Commercial etc. Bank v. Seitz, 43 Cal. App. 353 [185 PaC. 188].)
In the leading case of Lady Washington C. Co. v. Wood, sxopra, the court says at pages 486, 487:
“ . . . whether there has been a discovery of the facts constituting the fraud’, within the meaning of the statute of limitations, is a question of law to be determined by the court from the facts pleaded . . . and, as the means of knowledge are equivalent to knowledge, if it appears that the plaintiff had notice or information of circumstances which would put him on an inquiry which, if followed, would lead to knowledge, or that the facts were presumptively within his knowledge, he will be deemed to have had actual knowledge of these facts. These principles are so fully recognized that mere reference to some of the eases in which they have been enforced will be sufficient. (Martin v. Smith, Fed. Cas. No. 9164, 1 Dill. 85; Wood v. Carpenter, 101 u. S. 135 [25 L. Ed. 807]; Hecht v. Slaney, 72 Cal. 363 [14 Pac. 88]; Moore v. Boyd, 74 Cal. 167 [15 Pac. 670]; Lataillade v. Orena, 91 Cal. 565 [27 Pac. 924, 25 Am. St. Rep. 219].)” (Italics ours.)
In short, before a party will be allowed to say that he discovered fraud on a date which occurred more than three years after a transaction, “It must appear that it could not have *480been made by the exercise of reasonable diligence; and all that reasonable diligence could have disclosed plaintiff is presumed to have known, means of knowledge in such a case being equivalent of the knowledge which it would have produced.” (Montgomery v. Peterson, 27 Cal. App. 671 [151 Pac. 23].)
From the allegations of the amended complaint excerpted in the majority opinion, it affirmatively appears:
(1) That the company ceased paying dividends within one year after the stock was purchased;
(2) That plaintiffs loaned $7,000 to the company early in the year of 1930;
(3) That assessments were levied upon stock including plaintiffs’ stock before July of 1930, which plaintiffs paid in July of 1930 by allowing a credit to the corporation on account of the $7,000 loaned;
. (4) That assessments were levied on stock periodically after July, 1930;
(5) That after July, 1930, and until January, 1931, plaintiffs “paid several assessments on this stock”;
(6) That some time between July, 1930, and January, 1931 (the exact date not appearing from the pleadings), plaintiffs purchased from the corporation 16,844 shares of stock which were forfeited for nonpayment of assessments.
In addition, the evidence, which made clear the evasive allegations of the complaint, showed (a) that the corporation furnished no security for the $7,000 loan, but that the security which was furnished therefor belonged to H. C. Pressey; (b) that the cessation of dividends occurred some time before October, 1929 (the approximate date of the stock market crash); (c) that the shares of stock purchased by plaintiffs on defaulted assessments were purchased at two cents on the dollar.
Comparing these pleaded and demonstrated facts with the representations made, it is difficult to understand what obligation does devolve upon a reasonably prudent person in matters of this kind, if one were to say that such facts were not sufficient to prod a reasonably prudent person into some sort of inquiry. It would seem to me that, even to the unwary, these facts furnished an actual demonstration as to the falsity of representations 2, 3 and 5. It is an established *481principle in fraud cases that where a plurality of representations has been made, and the falsity of one or more is discovered, the party defrauded is put on notice as to the probable falsity of others. (Gratz v. Schuler, 25 Cal. App. 117 [142 Pac. 899]; Nicolaisen v. Toffelmier, 97 Cal. App. 342 [275 Pac. 823]; ruhl v. Mott, 120 Cal. 668 [53 Pac. 304].)
Further, it is my opinion that the italicized portion of the excerpted allegations from the amended complaint set forth in the majority opinion cannot be considered as statements or continuing promises which lulled the defendants into a sense of security, but that, to the contrary, said statements were of a nature which admitted that the original representations as to the nature of the stock were false, or were of such a character as would have placed a reasonably prudent man on inquiry, and that the effect of such statements was not to lull defendants into a sense of security, but rather to tell them that in spite of the fact that the stock was not all that it was represented to be, if said plaintiffs would continue to cooperate with Pressey that he, because he was taking over the management of the company, would see that they came out whole.
I, therefore, believe that the judgment should be reversed, and that the trial court should be instructed to enter a judgment for the defendants.
A petition by appellants to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on June 25, 1936.
Thompson, J., and Nourse, J., pro tem., voted for a hearing.