Jerman

Appellant Charlotte Jerman (Jerman) and Mary Lee Cellini (Mary) had been friends for approximately 15 years. Sometime prior to October 5, 1965, Mary, in consideration of a loan to be made by Jerman, invited Jerman to participate to the extent of 10 percent of the profits which would result from the acquisition and subsequent sale by Mary and her husband Cesare Cellini of the fee title to a large parcel of property known as the Baywood Property in Morro Bay subject to an encumbrance of $2,500,000.

On October 5, 1965, Jerman contracted in writing (Agreement) to lend to Cellinis the sum of $200,000 without interest, for a period of one year. The Agreement recites that Cellinis and their associate Harry P. Yerros, a trustee presumably for Cellinis, held a 90 percent equitable interest in Baywood, subject to a trust deed of $2,500,000. The evidence vaguely *884 indicates that the legal title to the 90 percent interest was held by American Commonwealth Co., Ltd., of which Clement A. Malone was the manager.

Although there is no evidence other than that stated in paragraph 3 of the Agreement (quoted infra), it seems implicit that Cellinis represented, and Jerman expected, that…

I concur in the conclusion that the judgment herein must be reversed for the reason that said judgment is based entirely upon the erroneous conception of law that the liability of a drawee bank to its customer arising from its payment of negotiable instruments on forged endorsements is dependent upon the proof of damages required in a conventional action for breach of contract. However, I dissent from the conclusion that the record establishes respondent’s liability as a matter of law and that the trial court should be directed to enter judgment in favor of appellant. In my opinion, the judgment should be reversed and the cause remanded for a new trial.

In order to justify reversal with directions, the prevailing opinion adopts selected portions of the trial court’s findings of fact and conclusions of law which are favorable to appellant and some of which I regard as either erroneous or highly questionable. Especially in a case such as this which has been decided upon a completely erroneous theory or conception of the law, I submit that the reversal should operate not only to vacate the judgment but also to set at large the determination of all the legal and factual issues…

No appearance for Cross-defendant and Respondent.

OPINION

ROTH, P.J.

Appellant Charlotte Jerman (Jerman) and Mary Lee Cellini (Mary) had been friends for approximately 15 years. Sometime prior to October 5, 1965, Mary, in consideration of a loan to be made by Jerman, invited Jerman to participate to the extent of 10 percent of the profits which would result from the acquisition and subsequent sale by Mary and her husband Cesare Cellini of the fee title to a large parcel of property known as the Baywood Property in Morro Bay subject to an encumbrance of $2,500,000.

On October 5, 1965, Jerman contracted in writing (Agreement) to lend to Cellinis the sum of $200,000 without interest, for a period of one year. The Agreement recites that Cellinis and their associate Harry P. Verros, a trustee presumably for Cellinis, held a 90 percent equitable interest in Baywood, subject to a trust deed of $2,500,000. The evidence vaguely indicates that the legal title to the 90 percent interest was held by American Commonwealth Co., Ltd., of which Clement A. Malone was the manager.

Although there is no evidence other than that stated in paragraph 3 of the Agreement (quoted infra ), it seems…

I concur.

In my view the cause of action presents a relatively straightforward claim for breach of contract, whose nature has been obscured by the multiplicity of parties and the complexity of their relationships with one another during the course of a complicated fraud. Our concern deals solely with the payment of five bills of exchange, specifically five cashier’s checks purchased by Mrs. Jerman (purchaser) from Bank of America (drawer and drawee) payable variously to Malone or Bolton (payees).

The purchaser of a cashier’s check, in return for the money he gives the bank, acquires the promise of the bank to pay a specified sum to a named payee on presentation of the check. In issuing a cashier’s check the bank enters a direct contractual relationship with the purchaser, both in its capacity as drawer and as drawee. In the present case the bank did not fulfill its promises to pay the amount of the checks to the named payees, and it thereby breached its contracts with the purchaser. The bank’s breaches of contract were complete, and the purchaser became entitled to rescind these contracts and secure judgment of restitution for the consideration she had paid the bank. (Civ. Code,…