Herzog v. Capital Co., 164 P.2d 8 (Cal. 1945). · Go Syfert
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Herzog v. Capital Co., 164 P.2d 8 (Cal. 1945). Cases Citing This Book View Copy Cite
101 citation events (7 in the last 25 years) across 9 distinct courts.
Strongest positive: Furla v. Jon Douglas Co. (calctapp, 1998-07-29)
Treatment trajectory · 1945 → 2026 · click a year to view as-of
1945 1985 2026
Top citers, strongest first. 23 distinct citers.
discussed Cited as authority (rule) Furla v. Jon Douglas Co.
Cal. Ct. App. · 1998 · signal: cf. · confidence medium
Code, § 2338 [liability of principal for agent’s negligent misrepresentations]; 2 Miller & Starr, supra, § 3:31, p. 182 & fn. 9 [same]; cf. Herzog v. Capital Co. (1945) 27 Cal.2d 349, 353 [ 164 P.2d 8 ] [integration clause may protect innocent seller from tort damages for agent’s negligent misrepresentations, but will not prevent rescission and will not protect seller from liability for seller’s own conduct].) Krasinski may have known that his agent represented the square footage as 5,500 (which is more than 5,334) in the Multiple Listing Service.
discussed Cited as authority (rule) Housley v. City of Poway
Cal. Ct. App. · 1993 · confidence medium
The same measure of damages (i.e., fair market value) applies whether the theory of recovery is inverse condemnation (see pt. 4, ante) or fraud (see, e.g., Herzog v. Capital Co. (1945) 27 Cal.2d 349, 353 [ 164 P.2d 8 ]).
discussed Cited as authority (rule) Prichard v. Reitz
Cal. Ct. App. · 1986 · confidence medium
(Easton v. Strassburger, supra, 152 Cal.App.3d 90 .) Moreover, plaintiffs’ second amended complaint alleged that defendant “Reitz represented to the plaintiffs that the residential structure on the property which he was offering for sale was in sound condition and adequate repair,” and that he “knew the true facts [i.e., that the foundations were entirely defective, and that it was necessary for the health and safety of anyone who would inhabit the property to entirely demolish the structure and rebuild it anew] when he made the aforesaid material misrepresentations of fact to the plai…
discussed Cited as authority (rule) Foster v. Xerox Corp.
Cal. · 1985 · confidence medium
Code, §§ 1709, 1710, subd. 3; 1572, subds. 3, *310 5; Goodman v. Kennedy (1976) 18 Cal.3d 335, 347-348 [ 134 Cal.Rptr. 375 , 556 P.2d 737 ]; Herzog v. Capital Co. (1945) 27 Cal.2d 349, 353 [ 164 P.2d 8 ]; Rest.2d Torts, § 551.) We have no reason to believe that the term “fraudulent concealment” as used in subdivision (b)(2) was intended to have a meaning other than this.
discussed Cited as authority (rule) Goodman v. Kennedy (2×)
Cal. · 1976 · confidence medium
Code, § 1710, subd. 3; Rogers v. Warden (1942) 20 Cal.2d 286, 289 [ 125 P.2d 7 ]) or of any active concealment of the undisclosed matters (see Herzog v. Capital Co. (1945) 27 Cal.2d 349, 353 [ 164 P.2d 8 ]; Williams v. Graham (1948) 83 Cal.App.2d 649, 652 [ 189 P.2d 324 ]).
discussed Cited as authority (rule) Pasadena Medi-Center Associates v. Superior Court
Cal. · 1973 · confidence medium
Co. (1965) 232 Cal.App.2d 500, 506 [ 42 Cal.Rptr. 908 ]; Kyne v. Kyne (1943) 60 Cal.App.2d 326, 334 [ 140 P.2d 886 , 141 P.2d 221 ]), in the case at bar all evidence material to the issue of ostensible authority is uncontroverted, and the only dispute concerns the inferences to be drawn from the undisputed record. 7 Section 2334 does not require proof that the party relying on the ostensible authority incur a new legal, obligation, but only that he show a “change of position or injury resulting from such reliance.” (Dickens v. Bunker (1959) 169 Cal.App.2d 383, 388 [ 337 P.2d 489 ].) 8 See …
cited Cited as authority (rule) Davis v. LOCAL UNION NO. 11, INTERNAT.
Cal. Ct. App. · 1971 · confidence medium
(Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ].) The Union next asserts that there was no substantial evidence supporting the award of damages, either compensatory or exemplary.
discussed Cited as authority (rule) Warner Construction Corp. v. City of Los Angeles
Cal. · 1970 · confidence medium
McClung (1949) 93 Cal.App.2d 692, 697 [ 209 P.2d 808 ], 7 Herzog v. Capital Co. (1945) 27 Cal.2d 349, 353 [ 164 P.2d 8 ]; Sime v. Malouf, supra, 95 Cal.App.2d 82, 99 ; Williams v. Graham (1948) 83 Cal.App.2d 649, 652 [ 189 P.2d 324 ]. 8 The general disclaimer in Standard Specification No. 158 does not affect plaintiff’s action for fraudulent concealment.
discussed Cited as authority (rule) Trane Co. v. Gilbert
Cal. Ct. App. · 1968 · confidence medium
Code, § 2332; Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ] ; 3 Am.Jur.2d, Agency, § 152, p. 543; Rest. 2d Agency, § 283.) Thus, it is a well established rule in California that the principal is chargeable with, and is bound by the knowledge of, or notice to, his agent, received while the agent is acting within the scope of his authority, and which is in reference to a matter over which his authority extends.
discussed Cited as authority (rule) Capron v. State of California
Cal. Ct. App. · 1966 · confidence medium
(Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ]; Sanders v. Magill, 9 Cal.2d 145, 153-154 [ 70 P.2d 159 ].) By the evidence there was a sufficient lapse of time for this knowledge to have been communicated to the Caprons, Kelley v. British Coml.
discussed Cited as authority (rule) Kett v. Graeser
Cal. Ct. App. · 1966 · confidence medium
The principles, as stated in Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ], are these: (1) The merger, or exculpatory, clause does not preclude the defrauded purchaser from rescinding and recovering the consideration from even an innocent seller. (2) But the clause will relieve an honest seller from liability for damages from fraudulent representations of his agent. (3) But the immunity in principle No. (2) does not exempt the principal from liability for his own conduct.
discussed Cited as authority (rule) Lingsch v. Savage
Cal. Ct. App. · 1963 · confidence medium
(Herzog v. Capital Co. (1945) 27 Cal.2d 349, 353 [ 164 P.2d 8 ]; Clauser v. Taylor (1941) 44 Cal.App.2d 453, 454 [ 112 P.2d 661 ] ; Rothstein v. Janss Investment Corp. (1941) 45 Cal.App.2d 64, 68-71 [ 113 P.2d 465 ] ; Dyke v. Zaiser (1947) 80 Cal.App.2d 639, 652-653 [ 182 P.2d 344 ] ; Barder v. McClung, supra, 93 Cal.App.2d 692, 697 ; Kuhn v. Gottfried (1951) 103 Cal.App.2d 80, 86 [ 229 P.2d 137 ] ; Curran v. Heslop (1953) 115 Cal.App.2d 476, 480-481 [ 252 P.2d 378 ] ; Kallgren v. Steele (1955) 131 Cal.App.2d 43, 46 [ 279 P.2d 1027 ] ; Burkett v. J.
discussed Cited as authority (rule) Crawford v. Nastos
Cal. Ct. App. · 1960 · confidence medium
Finally, the present contention is devoid of merit since an exculpatory provision, such as the one in question, is given sanction under proper circumstances to relieve an honest vendor from liability for damages arising from the fraudulent representations of his negotiating agent (Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ]) and not the vendor’s agent who, as the trial court here found, has misrepresented material facts during the course of his dealings with the vendee.
discussed Cited as authority (rule) Buist v. C. Dudley DeVelbiss Corp. (2×)
Cal. Ct. App. · 1960 · confidence medium
(H erzog v. Capital Co., 27 Cal.2d 349, 354 [ 164 P. 2d 8 ].) Appellant also argues that the misrepresentation was not material, but this likewise was a matter for the trial court.
discussed Cited as authority (rule) Curran v. Heslop
Cal. Ct. App. · 1953 · confidence medium
(Dyke v. Zaiser, 80 Cal.App.2d 639, 653 [ 182 P.2d 344 ]; Kuhn v. Gottfried, 103 Cal.App.2d 80, 86 [ 229 P.2d 137 ].) In Clauser v. Taylor, 44 Cal.App.2d 453 [ 112 P.2d 661 ], it is said (p. 454): “It is the law that, where material facts are accessible to the vendor only and he knows them not to be within the reach of the diligent attention and observation of the vendee, the vendor is bound to disclose such facts to the vendee, and upon his failure to do so, the vendee may rescind the transaction upon discovering the true state of facts.” (See, also, Herzog v. Capital Co., 27 Cal.2d 349, …
discussed Cited as authority (rule) Eamoe v. Big Bear Land & Water Co.
Cal. Ct. App. · 1950 · confidence medium
(Rest., Agency, §§ 259, 260; Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ], and authorities there cited.) A seller cannot, however, by such a provision, relieve himself of the consequences of his own breach of duty (Herzog v. Capital Co., supra; Rothstein v. Janss Investment Corp., 45 Cal.App.2d 64 [ 113 P.2d 465 ]).
discussed Cited as authority (rule) Partanian v. Flodine
Cal. App. Dep’t Super. Ct. · 1950 · confidence medium
(Speck v. Wylie (1934), 1 Cal.2d 625 [ 36 P.2d 618 ); Herzog v. Capital Co. (1945), 27 Cal.2d 349, 353 [ 164 P.2d 8 ].) The fraud may not, however, consist of promises contrary to those contained in the written contracts.
discussed Cited as authority (rule) Partanian v. Flodine
Cal. Ct. App. · 1950 · confidence medium
(Speck v. Wylie (1934), 1 Cal.2d 625 [ 36 P.2d 618 ]; Herzog v. Capital Co. (1945), 27 Cal.2d 349, 353 [ 164 P.2d 8 ].) The fraud may not, however, consist of promises contrary to those contained in the written contracts.
discussed Cited as authority (rule) Sime v. Malouf
Cal. Ct. App. · 1949 · confidence medium
(See Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ], and authorities there cited; 37 C.J.S. § 16, pp. 245, 246; 23 Am.Jur. § 80, p. 857.) This was not a mere attempt, as a matter of good business, to prevent Sime from inflating his price above a reasonable figure through nondisclosure of prospects and plans for future promotion of the venture by the purchasers.
examined Cited as authority (rule) Bagdasarian v. Gragnon (4×)
Cal. · 1948 · confidence medium
(Herzog v. Capital Co., 27 Cal.2d 349, 354 [ 164 P.2d 8 ].) A number of decisions have construed section 1249 of the Code of Civil Procedure which prescribes that “actual value” is the measure of compensation for property condemned for a public use.
cited Cited as authority (rule) Sands v. Eagle Oil & Refining Co.
Cal. Ct. App. · 1948 · confidence medium
Agency, § 275; Herzog v. Capital Co., 27 Cal.2d 349, 353 [ 164 P.2d 8 ]; Civ.
discussed Cited "see" Kim v. Lee CA2/7
Cal. Ct. App. · 2021 · signal: accord · confidence high
Code, § 2295.)11 Section 2332 provides, “As against a principal, both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other.” “So long as the agent was under a duty to disclose certain information, the principal is bound by the agent’s knowledge of that information whether or not the agent communicated it to the principal. [Citations.] For this purpose, there is no difference between constructive and actual notice.” (Santillan v. Roman Catholic Bishop of Fr…
cited Cited "see" Epperson v. Roloff
Nev. · 1986 · signal: see · confidence high
See Herzog v. Capital Co., 164 P.2d 8 (Cal. 1945); Kett v. Graeser, 50 Cal. Rptr. 727 (Cal.Ct.
ARTHUR L. HERZOG, Respondent,
v.
CAPITAL COMPANY (A Corporation) Et Al., Appellants
L. A. 19172.
California Supreme Court.
Dec 11, 1945.
164 P.2d 8
Louis Ferrari, Edmund Nelson, G. L. Berrey and Hugo A. Steinmeyer for Appellants., Monroe & Melnnis and C. Rupert Linley for Respondent.
Gibson.
Cited by 45 opinions  |  Published
GIBSON, C. J.

In June, 1938, defendants, acting through their local agent, Yakel, sold plaintiff a house in San Diego for $9,500, representing that it was in “sound condition” and “perfectly intact.” The house began to leak badly during a heavy rain in January, 1940, and a subsequent inspection disclosed that the leakage was due to the use of defective materials and improper bracing. This action for damages for alleged fraud in the sale of the house resulted in a judgment in favor of plaintiff in the sum of $3,500.

Defendants list several grounds which they contend require a reversal of the judgment. First, they claim that the action is barred by the statute of limitations because it was not commenced within three years after the date of the sale and that the pleading and proof as to the discovery of the fraud within the statutory period is insufficient. The sale was made in June, 1938, and the fraud is alleged to have been discovered in January, 1940. The action was filed within three years thereafter. The complaint alleged that when plaintiff inspected the house, it had been freshly painted thereby concealing from him, or anyone else making a reasonable inspection of the premises, the defective condition which caused the leaks, and that since there were no heavy rains until January, 1940, he did not sooner discover that the house leaked. It was further alleged that during the heavy rains[*352] in 1940, the house commenced to leak and that plaintiff thereupon made an investigation and discovered that the house was not in sound condition as represented. The facts pleaded relative to the time and circumstances of the discovery of the fraud are clearly sufficient. The allegations were amply supported by the evidence, and the court was justified in finding that the statute of limitations had not run. (Hobart v. Hobart Estate Co., 26 Cal.2d 412, 436-444 [159 P.2d 958]; Victor Oil Co. v. Drum, 184 Cal. 226 [193 P. 243]; Lady Washington C. Co. v. Wood, 113 Cal. 482 [45 P. 809].)

It is also argued that the representations which were made by Yakel, local agent for defendants, were not fraudulent as there is no evidence to support the finding that he had knowledge of the defective condition of the house. The house was built in 1926 and sold by I. M. Schulman to defendants in 1937. Schulman testified that during the ten years he occupied the premises he constantly had trouble with water coming into the house during rainstorms and that although he had spent several thousand dollars to prevent the leaks he had been unable to do so. At the time the sale was made to defendants, Schulman informed Yakel that the house leaked and the sale was made “ as is ” with the express understanding that there should be no “come back” on Schulman by reason of the defective condition of the house. After defendants obtained possession, Yakel employed a contractor to make certain repairs. While the work was in progress, there was a heavy rain and the house leaked badly. It thus appears that Yakel had knowledge of the prior history of the house and knew of its defective condition. When Yakel conducted plaintiff through the house in June, 1938, it had been newly painted inside and outside. Plaintiff noticed marks of plaster patches and on inquiry was informed by Yakel that there had been some leaks but that the house had been repaired and was “in perfect condition in all respects.” Yakel made these positive representations either with actual knowledge of their falsity or in a manner not warranted by the information he possessed.

Defendants ’ assertion that the representations were mere “sales talk,” and therefore not actionable, is obviously without merit.

It is claimed, however, that the trial court erred in holding defendants liable because the agreement of sale ex[*353] pressly provided that there were no promises, representations, verbal understandings or agreements except those contained therein.

A defrauded purchaser is not precluded by a provision of this kind from rescinding and pursuing the innocent seller far enough to secure a return of the consideration paid. (Speck v. Wylie, 1 Cal.2d 625 [36 P.2d 618]; Lozier v. Janss Investment Co., 1 Cal.2d 666, 669 [36 P.2d 620]; Greenberg v. DuBain Realty Corp., 2 Cal.2d 628, 629 [42 P.2d 628]; Graham v. Los Angeles First N. T. & S. Bank, 3 Cal.2d 37, 43 [43 P.2d 543]; Weiner v. Roof, 10 Cal.2d 450, 452-453 [74 P.2d 736]; Rest., Agency, §§ 259, 260.) Such a provision, however, will relieve an honest seller from liability for damages arising from the fraudulent representations of his negotiating agent. (Harnischfeger Sales Corp. v. Coats, 4 Cal. 2d 319, 320, 321 [48 P.2d 662]; Schroeder v. Dickinson & Gillespie Corp., 6 Cal.App.2d 175, 179 [44 P.2d 425]; see Speck v. Wylie, 1 Cal.2d 625, 627-628 [36 P.2d 618]; Gridley v. Tilson, 202 Cal. 748 [262 P. 322]; Rest., Agency, § 260.) This rule, of course, applies only to recovery of damages based upon the misrepresentations of the agent, and it does not exempt the principal from liability for his own conduct.

Although plaintiff was notified by the contract provision that Yakel. had no authority to make representations or enter into verbal understandings in connection with the sale of the property, it is clear that Yakel knew of the defective condition of the house and that he was acting within the scope of his authority when he caused it to be refinished and newly painted, thereby effectually concealing the structural defects. The knowledge of an agent, which he is under a duty to disclose to his principal, is to be imputed to the principal (Rest., Agency, §275), and, accordingly, defendants are charged with Yakel’s knowledge. Under these circumstances they had a duty to reveal the hidden and material facts concealed by their agent and of which they had knowledge, and their failure to disclose them constituted fraud. (Civ. Code, § 1572, subd. 3; Rothstein v. Janss Investment Co., 45 Cal.App.2d 64 [113 P.2d 465]; Clauser v. Taylor, 44 Cal.App.2d 453, 454 [112 P.2d 661]; Kretszchmar v. Janss Investment Co., 126 Cal.App. 698, 702 [14 P.2d 1069]; see Rest., Torts, § 550; Rest., Contracts, § 472, subd. (b) and comment b. ) With respect to this positive duty of disclosure plaintiff could rely on Yakel’s actual as well as os[*354] tensible authority, for the provision in the contract related only to the exclusion of liability for representations and verbal understandings. A principal under a positive duty to make a disclosure cannot escape liability for failure to do so by relying on a contract provision to the effect that there are no other representations except those contained in the written agreement. (Rothstein v. Janss Investment Co., 45 Cal.App. 2d 64 [113 P.2d 465].)

Finally, defendants claim that there was no proof of the actual value of the property and that therefore there was no evidence to support the findings on damages. Plaintiff was entitled to recover the difference between what he paid for the property and its actual value, together with any additional damages arising from the particular transaction. (Civ. Code, § 3343.) There was testimony that the reasonable market value of the property was $4,500. While reasonable market value is not necessarily actual value, it is not improper for the court to consider the former in determining the latter. The court found the property was worth less than $6,000 and fixed the damages in accordance with the measure set forth in the statute.

The judgment is affirmed.

Shenk, J., Edmonds, J., Carter, J., Traynor, J., Schauer, J., and Spence, J., concurred.