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Blackburn v. Witter

California District Court of Appeal
19 Cal. Rptr. 842 (1962)


Blackburn (plaintiff), an elderly widow, met Long in 1954 and selected him to serve as her investment advisor. Long was an employee of Walston & Company (defendant) prior to March 1957, and was an employee of Dean Witter & Company (defendant) from March 1957 to March 1958. Blackburn made numerous stock purchases through Long. In early 1957, Long persuaded Blackburn to buy stock in a non-existent company he called American Commercial Investment Company (ACIC). He gave Blackburn invented details about ACIC, which he said would pay ten percent interest on her investment. The receipts for the ACIC stock were different from the usual receipts Blackburn received; they were signed by Long only and were not issued by Walston or Dean Witter. The ACIC stock also did not appear on the monthly statements she received from Walston and Dean Witter. When Blackburn asked about the discrepancies, Long told her that the official receipts were not ready yet, and reassured her that he was acting on behalf of Walston or Dean Witter. He also told her that his employers had research divisions that determined what stocks were good to invest in. Blackburn sued Walston and Dean Witter on the theory that Long was an agent of his employers when he defrauded her. The trial court ruled in favor of Blackburn. The defendants appealed.

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