Burling v. Newlands

Citations

• 4 Cal. Unrep. 940
• 39 P. 49
• 1895 Cal. LEXIS 1210

Syllabus

<p>Trust—Charging Trust Estate.—For the convenience of certain lenders and borrowers of money, who did their business through a bank, a firm of stock brokers were in the habit of giving their promissory notes, and securing themselves by bank stock and other collaterals delivered to> them by the president of the bank. Subsequently the bank failed, and the president conveyed all his property to a trustee, to be applied by him to “such purposes and uses as he may deem best for our joint and several interests.” By fraudulent representations that the stock and collateral paid by the stock brokers were worthless, the trustee induced them to pay to him $200,000, in consideration of Ms promise to pay all their outstanding notes, which promise he performed. Held, that the fraudulent representations by the trustee gave the stock brokers only a personal right of action against him, and that they could not charge the trust estate in Ms hands for such sum, since they were not creditors of the bank president, who created the trust.</p> <p>Limitation of Actions.—A Cause of Action for Fraud is not Taken Out of the operation of the statute of limitations by the Code of Civil Procedure, section 338, subdivision 4, which provides that the statute does not begin to run until discovery of the fraud, where it appears that the slightest examination of the public records would have put plaintiffs in possession of the facts, and that they acquired their information on which the action was based by inquiry of their friends and acquaintances—a course open to them before the statute had run.</p> <p>Laches—Fraud.—Equity will not Entertain a Cause of Action Seeking relief from an alleged fraud, where complainants could have informed themselves of the facts by the exercise of reasonable diligence, but delayed bringing suit for over ten years, and until after the death of all the participants in the transactions.</p>