14 P.2d 846 | Cal. Ct. App. | 1932
The trial of this case was by jury. While the appellant complains of a nonsuit as to certain counts of the complaint there was a judgment, *428 general in its terms, entered in favor of defendant surety company upon a directed verdict. The notice of appeal is directed exclusively to this judgment. In fact, the clerk's transcript shows no entry of an order or judgment of non-suit. After the appeal was taken the original plaintiff, Luiggia Beffa, died, and the present plaintiff, the executor, was substituted. The word "plaintiff" will refer to the original plaintiff.
The appeal is upon a typewritten transcript. The entire record is 343 pages in length. From the briefs, it appears that the sole question involved is the question of statutory construction hereinafter stated. Therefore, the court has not undertaken a close examination of the record represented by the reporter's transcript and which is 300 pages in length. On a few pages the nature of the case has been stated by the appellant's counsel, and, excepting for a few minor corrections, respondent's counsel has concurred in this statement. The action is one for fraud practiced by defendant Costellenos, a licensed real estate broker. The respondent surety company was joined in the action. It had bonded the broker under the provisions of section 9 (a) of the Real Estate Brokers' Act (Stats. 1923, p. 96). The bond was given to cover the broker's liabilities incurred in the year 1926. The plaintiff prevailed against Costellenos, the principal named in the bond. The act referred to has been repeatedly amended as shown in Smithson v. Sparber,
The first count of the complaint charged that the said Costellenos, while acting as the plaintiff's agent, persuaded her to buy a piece of real property at a price of $2,500, fraudulently concealing the fact that it was held for sale at $1,000, that the agent, through the aid of defendant Preovolos, cheated plaintiff out of the difference of $1500. The second and third counts charge frauds of the same character, except that Preovolos was not a party. In each of these the loss alleged was $300. During the progress of the trial the plaintiff was permitted to add a fourth count to the complaint. This count duplicated the first count and added nothing to the complaint. In view of the conclusions arrived at, consideration of the fourth count becomes immaterial.
The record contains the original complaint. It was filed on July 31, 1929. Appellant's opening brief recites that *429 the transactions sued upon in the complaint occurred between May 7, 1926, and June 4, 1926. Respondent's brief does not challenge this statement nor the statement that evidence was offered tending to show that the plaintiff did not discover the frauds complained of until a point of time in the year 1927, which was less than three years prior to the commencement of the action.
As above indicated, the verdict and judgment went against the broker for $2,100, the amount claimed in the three counts.
[1] Respondent's defense, which was sustained by the trial court and which was the ground for the directed verdict in favor of the respondent surety company, was pleaded by way of amendment made at the trial. The defense was that each of plaintiff's causes of action was barred by subdivision 1 of section 338 of the Code of Civil Procedure; that the liability involved is a liability created by statute; that in such case the cause of action accrues when the fraud is practiced and not when it is discovered. It is argued that the bond was a statutory bond. It is urged: "The statute created both the right of the plaintiff against the surety and the correlative liability of the surety to the plaintiff. Without the statute neither the right nor the correlative liability would have existed." The appellant claims that the action is for fraud, and that under subdivision 4 of section 338 of the Code of Civil Procedure the cause of action accrued only upon discovery of the fraud and that the complaint was filed within three years from discovery; that the surety became liable equally with the principal. [2] It is the settled rule in this state that where a public official fails to perform his official duty, and the wrong complained of is fraudulent in its nature, subdivision 1 of section 338 fixes three years as the limitation for the commencement of an action on account of the resulting damages; that the statute begins to run when the wrongful act is committed and not when discovery occurs. The cases have dealt with the bond of a county recorder (County ofSonoma v. Hall,
Counsel for respondent points to the case of Blumenthal v.Larson,
The cases dealing with the Real Estate Brokers' Act make it obvious that its purpose was to regulate real estate brokerage business and give persons employing real estate agents protection. It has been repeatedly ruled that the bond given by the broker protects the employer against the fraudulent conduct of the broker and his employees. (Dodge v. National SuretyCo.,
For the reasons stated, it is our conclusion that the trial court erred in ruling that the statute of limitations had run against the liability of the defendant insurance company and accordingly directing a verdict in its favor. The judgment in favor of said company based on said verdict is therefore reversed, with directions to re-enter the same in favor of said plaintiff and against said company for the amount of the principal sum specified in the bond.
Knight, Acting P.J., and Cashin, J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on October 28, 1932, and an application by respondents to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on November 21, 1932.