Opinion
1-13-1958
PAO CH'EN LEE and Gwendolyn T. Lee, his wife, jointly and severally, Plaintiffs and Respondents, v. James GREGORIOU and Stamatia Gregorlou, his wife, jointly and severally, Defendants and Appellants. * Civ. 17732.
PAO CH'EN LEE and Gwendolyn T. Lee, his wife, jointly and severally, Plaintiffs and Respondents,
v.
James GREGORIOU and Stamatia Gregorlou, his wife, jointly and severally, Defendants and Appellants. *
Jan. 13, 1958.
Rehearing Denied Feb. 11, 1958.
Hearing Granted March 12, 1958.
DOOLING, Justice.
The plaintiffs, husband and wife, recovered a judgment of $4,900 against the defendants, also husband and wife, from which the defendants have appealed. Appellants owned two residence buildings on adjoining lots in Carmel, in one of which they lived. They sold the other to respondents in August, 1954. When respondents purchased this property there was an unobstructed view of the ocean from its living room windows across the garden of the adjoining property retained by appellants. Appellants signed a document in July, 1954, listing the property later purchased by respondents on the Mutiple Listing Exchange. This listing described the property as having an 'unobstructed view of the ocean.' Newspaper advertisements by a realtor similarly described an 'unobstructed view,' and Mrs. Gregoriou testified that she had seen these advertisements. The two respondents, two of their friends and a realtor, Mrs. Chaffey, who brought about the sale, all testified that before the sale Mrs. Gregoriou had stated positively to the respondents that she and her husband would never build anything on the adjoining lot to obstruct the view. Mrs. Chaffey also testified that before showing the property to respondents both appellants had assured her that they would never build anything to obstruct the view. On October 5, 1955, appellants commenced the construction of a building which, when completed, completely blocked the view of the ocean from respondents' living room windows. Both appellants testified that at the time of the sale of respondents they intended to build an extension to their home such as they afterwards built.
The case was grounded on the fraudulent misrepresentation of intention, sometimes called promissory fraud. Union Flower Market v. Southern Cal. Flower Market, 10 Cal.2d 671 and cased cited at page 676, 76 P.2d 503; Civ.Code, § 1572, subd. 4. The court found that the representation of intention was fraudulently made by appellants and relied upon by respondents in purchasing the property. The purchase price was $25,500, including some furniture. Deducting the value of the furniture the court found the value of the real property at the time of purchase to be $24,900 and its actual value after the view was obstructed to be $20,000 and gave judgment for the out of pocket loss, $4,900. Civ.Code, § 3343.
Appellants' main arguments on appeal are that the promise, being oral, is unenforceable both under the statute of frauds (Civ.Code, § 1624, subds. 1 and 4) and as an attempt to vary the written contract of the parties by parol.
The action is not on the promise (i. e. in contract) but on the false representation of appellants' intention (i. e. in tort, for fraud), and it seems very doubtful if the statute of frauds can have application. That the action is not one for breach of contract is clear from the rule that in order to recover for promissory fraud the intention of the promisor not to carry out the promise must exist at the very time when the promise is made and the mere later violation of the promise is not actionable fraud if it is not also proved that the promise at the time it was made was made in bad faith. Bragg v. Bragg, 219 Cal. 715, 721, 28 P.2d 1046; Bradley v. Duty, 73 Cal.App.2d 522, 525-526, 166 P.2d 914. The distinction is made clear in 3 Restatement of Torts, section 530, Comment b, page 70: 'One who fraudulently misrepresents himself as intending to perform an agreement which he makes with the recipient of the misrepresentation, is subject to liability under the rule stated in this Section whether the agreement is enforceable or unenforceable as a contract. * * * If the agreement is unenforceable because it is not in the required form, as where it is oral and as such made unenforceable by a statute of frauds, the only remedy to the recipient of the misrepresentation is under the rule stated in this Section.'
The cases from California cited by appellants are distinguishable. In Long v. Cramer Meat & Packing Co., 155 Cal. 402, 101 P. 297, the attempt was to enforce an oral promise as to the use of land against the promisor's grantee. Such action obviously could only lie in contract and not in tort for fraud. Compare Blodgett v. Trumbull, 83 Cal.App. 566, 572, 257 P. 199, where a promissory fraud was held to give a cause of action against the grantor himself. Kroger v. Baur, 46 Cal.App.2d 801, 117 P.2d 50, was an attempt to enforce an oral contract for a real estate commission on the ground that the promisor fraudulently misrepresented his intention. The court held that this was an attempt to enforce the oral promise by what amounted under the facts to a mere subterfuge.
In any event the defense of the statute of frauds was waived by appellants by their conduct in the trial court. The appellants permitted the proof of the oral representations to be made by five witnesses without once objecting. 'When the cause came on for trial, she permitted parol proof of the contract to be admitted without objection on her part. This was a waiver of her right to rely upon the statute.' Howard v. Adams, 16 Cal.2d 253, 257, 105 P.2d 971, 974, 130 A.L.R. 1003; Nunez v. Morgan, 77 Cal. 427, 19 P. 753; Durbin v. Hillman, 50 Cal.App. 377, 195 P. 274.
The argument that the proof of the oral promise violates the parol evidence rule is equally untenable. Promissory fraud in the inducement of a written contract can be shown if it is not inconsistent with the terms of the written contract. Simmons v. California Institute of Technology, 34 Cal.2d 264, 274, 209 P.2d 581; Dillon v. Sumner, 153 Cal.App.2d 639, 315 P.2d 84. The promise not to build so as to obstruct the respondents' view is collateral to the contract of purchase and not inconsistent with it since the contract is entirely silent on the subject. To paraphrase the Simmons case, 34 Cal.2d at page 274, 209 P.2d at page 586: 'These promises [not to build so as to obstruct the view] were the fraudulent inducement, or motive, for the contract, but they were not incorporated in or superseded by the terms of the agreement * * *. The two are not inconsistent or 'at variance', inasmuch as they deal with wholly different matters.'
Two witnesses testified that after the view was obstructed the value of respondents' property was $20,000 or $19,800. The court accepted the higher figure. The witnesses were not entirely consistent in then testimony on cross-examination but the evaluation of their testimony as a whole was for the trial court to make. (27 Cal.Jur., Witnesses, §§ 156-157, pp. 182-186.) A son of the appellant, Mrs. Gregoriou, offered in open court to purchase the property for $26,000 and tendered a cashier's check for $10,000 in part payment. The check and offer were admitted in evidence by the court. The offer may well have been evidence of present value (County of Los Angeles v. Faus, 48 Cal.2d 672, 312 P.2d 680) but it was not conclusive on the court (Muller v. Southern Pac. B. Railway Co., 83 Cal. 240, 243, 23 P. 265). The court might well conclude, in view of the offeror's relationship to one of the appellants, that the offer was an attempt to accomplish restitution by indirection, thus avoiding the payment of damages for the fraud, and did not represent the true value of the property. For whatever reason, the court chose to discount the offer as a proof of value and we cannot say that this was error. The respondents are entitled to keep the property and recover damages for its depreciation below 'the actual value of that with which' they 'parted.' Civ.Code, § 3343. The court's finding of this amount is supported by substantial evidence in the record. Cf. Milmoe v. Dixon, 101 Cal.App.2d 257, 261, 225 P.2d 273.
Appellants complain that the amended complaint was filed pursuant to an order made without notice to them. They answered the amended complaint and went to trial without objection. The error, if any, in this respect was waived by their subsequent conduct.
The findings in the transcript are headed 'First Amended Findings of Fact and Conclusions of Law Proposed by Plaintiffs.' Although no other findings appear in the transcript appellants argue that the court amended its findings after they had been signed and filed. Appellants must present a record which shows error on its face. Respondents assert in their brief that these are the only findings signed and filed in the case. Appellants neither contradicted this assertion in their closing brief nor sought an augmentation to prove the contrary. The mere form of the heading does not establish that other findings were signed and filed. It is perfectly consistent, for example, with the fact that other findings were proposed by plaintiffs, which the court refused to sign thus necessitating the presentation of proposed findings in an amended form.
Judgment affirmed.
KAUFMAN, P. J., and DRAPER, J., concur. --------------- * Opinion vacated 326 P.2d 135.