California Supreme Court
51 Cal. 2d 736 (1959)
William Ward (plaintiff) requested that LeRoy Thomsen, a real-estate broker, look for properties for Ward to purchase. Marshall Taggart (defendant) told Thomsen that Taggart was the exclusive agent for Sunset Oil Company (Sunset) and was selling several acres of a certain property (Property) on Sunset’s behalf. When Thomsen asked Taggart about a sign on the Property from Dawson, another broker, Taggart stated that Sunset had taken the listing away from Dawson. After Thomsen made an offer of $4,000 per acre for the Property, Taggart informed Thomsen that Sunset would not accept less than $5,000 per acre. In fact, Taggart had never been given a listing from Sunset. Taggart purchased the Property from Sunset for himself at $4,000 per acre and then sold the Property to Ward at $5,000 per acre. Ward brought suit for fraud against Taggart and his business associate, H. M. Jordan (defendant). Jordan did not share in Taggart’s profits from the Property. The trial court entered judgment against Taggart and Jordan for compensatory damages and against Taggart for exemplary damages. Taggart and Jordan appealed, arguing that there could be no recovery for fraud because Ward had not suffered out-of-pocket losses, as there was no proof that the Property was worth less than what Ward paid for it. Taggart further argued that exemplary damages were not available for recovery under any theory of unjust enrichment or constructive trust.
Rule of Law
Holding and Reasoning (Traynor, J.)
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