holding that “[exemplary] damages are appropriate in cases . . . where restitution would have little or no deterrent effect, for wrongdoers would run no risk of lia- bility to their victims beyond that of returning what they wrongfully obtained”
How later courts described this case
- holding that “[exemplary] damages are appropriate in cases . . . where restitution would have little or no deterrent effect, for wrongdoers would run no risk of lia- bility to their victims beyond that of returning what they wrongfully obtained”
- holding that plaintiffs could recover profits unjustly realized by a real estate agent who misrepresented the purchase price of real estate, even though the plaintiffs did not pay more than the land was worth when they purchased it
- “In the absence of a fiduciary relationship, recovery in a tort action for fraud is limited to the actual damages suffered by the plaintiff.”
Written by the judges who cited it.
The opinion
SCHAURE., J., Concurring and Dissenting.
I concur in the judgment because it comes as close to affording justice to the wronged plaintiffs as appears possible under the presently established decisional law of this state as it interprets and applies section 3343 of the Civil Code. In fact this decision, by its ingenious innovation and application of a constructive trust-unjust enrichment-quasi-contractual theory to support an award of exemplary damages as against one of the defendants, avoids much of the evil effect of the majority holding in Bagdasarian v. Gragnon (1948), 31 Cal.2d 744, 759-763 [ 192 P.2d 935 ], and is therefore to that extent desirable.
*745 But because the subject section as now interpreted and applied still constitutes more of a shield for, than a sword against, fraud perpetrators, I deem it proper to once more direct attention to it in the hope that the Legislature—if not this court by forthright overruling of Bagdasarian—may provide a remedy.
The judgment of the trial court is amply supported by the evidence and would clearly be supported by the law as against both defendants were it not for the conclusion reached in the Bagdasarian case that the addition in 1935 of section 3343 to the Civil Code (Stats. 1935, ch. 536, p. 1612, § 1) operated to repeal and supplant the previously existing law governing the measure of damages in fraud cases. It was my view then, and still is, that section 3343 was intended by the Legislature to provide an alternative, not the exclusive, measure of damages in such cases.
As pointed out by Professor Williston, under the construction of the statute adopted by the majority in the Bagdasarian case, “a fraudulent person can in no event lose anything by his fraud. He runs the chance of making a profit if he successfully carries out his plan and is not afterward brought to account for it; and if he is brought to account, he at least will lose nothing by his misconduct.” (5 Williston on Contracts (rev. ed.), 3886, § 1392.)
In this connection it is to be noted that the legislation as adopted in California (Stats. 1935, ch. 536, p. 1612, § 1) expressly declares that ‘‘Nothing herein contained shall be deemed to deny to any person having a cause of action for fraud or deceit any legal or equitable remedies to which such person may be entitled.” I would prefer to reconsider the ruling in the Bagdasarian ease and hold that the remedy added by the statute of 1935 is in truth an addition to, rather than a restriction on, the remedies of the person defrauded. So holding, I would affirm the judgment of the trial court, including the award of exemplary damages as against both defendants.
Appellants’ petition for a rehearing was denied April 8, 1959.