Ward v. Lee
Ward v. Lee
Opinion of the Court
OPINION
By the Court,
This suit was brought by respondent Pearl Lee against appellants to enjoin them from proceeding with
In 1945 Edd and Pearl Lee were husband and wife. Edd Lee was engaged in an extensive construction business which was incorporated under the name of Edd Lee, Inc. The Ward Brothers were brick contractors and on many occasions had done business with Lee in that capacity. Lee was about to enter upon construction in connection with certain housing projects and it was necessary for him to post a completion bond. As a condition to execution of such bond the bonding company required the deposit in escrow of the sum of $25,000. Lee approached the’ Wards for a loan of this amount for this purpose. The Wards agreed, provided security was given in the form of a trust deed to apartment property in Reno owned by the Lees.
In July, 1945, Lee and the Wards called on Pearl Lee to secure her consent to such trust deed and her signature on the necessary documents. Lee and the Wards represented to her that the money so borrowed would be deposited in escrow to comply with the requirements of the bonding company; that upon completion of the housing projects and exoneration of the bond the $25,-000 would be repaid to the Wards and the apartment property thus cleared of their trust deed. Upon this assurance Pearl Lee consented to and joined in the transaction with the Wards.
During 1946 and 1947 the housing projects were completed and the escrow ultimately closed. The $25,000 involved, however, was not repaid to the Wards. With their consent it was used to discharge a bank obligation owed by Edd Lee, Inc. During 1947 and 1948, $40,500 was paid by Lee to the Wards upon other obligations, none of which was applied upon the trust deed in question. The Lees are now divorced and the apartment property has become Pearl’s; hence her interest and concern.
The Wards vigorously deny that fraudulent misrepresentations of fact were made. In our view, however, even assuming that the closing of the escrow was in violation of agreement and that the representations of the Wards to Pearl with respect to the $25,000 were fraudulent, no injury was suffered thereby.
During the period within which all of the recited events with respect to the property occurred, the Lees were husband and wife and all property concerned was community property. While the “misapplication” of the escrowed $25,000 may have enriched one portion of the community to the detriment of another portion, the community as a whole was not depleted. Pearl Lee suffered no property loss by such misapplication. The value of her interest in the community as a whole remained precisely the same. The same would be true of the $40,500 subsequently applied by the Wards to community indebtedness other than that covered by the trust deed.
Nor do subsequent developments render the conduct of the Wards injurious to Pearl. On the contrary they conclusively demonstrate that any fraud which might have been committed was compensated in full; that any injury which might have existed or threatened was eliminated. In 1946 Edd Lee commenced suit for divorce
Pearl contends that the elements of breach of contract and fraud redound to the benefit of this particular piece of property and, in effect, run with it as a connected chose in action. If this be so it is at the expense of the remainder of the estate and clearly constitutes a readjustment of the property division contemplated by the divorce court. If such chose in action in fact and in law could be said to exist, Pearl did not so contend before the divorce court. No disclosure thereof was made by her to that court and it can hardly be said that the court’s action constituted a tacit award of such right to her. In this light her contention can hardly be said to provide a basis for the intervention of equity in her behalf in the present proceeding.
It is argued that the Wards have no right to claim
The judgment of the trial court is reversed with costs and the case remanded with instructions that judgment be entered for the defendants.
Reference
- Full Case Name
- JOHN WARD, Individually and as Administrator of the Estate of William Ward, ALFRED WARD, LETTIE WARD, Also Known as Letty Ward, a Widow, WILLIAM WARD, Jr., DOROTHY GINOCCHIO and JOSEPH B. GINOCCHIO v. PEARL M. LEE
- Cited By
- 1 case
- Status
- Published