How have courts dealt with claims of conspiracy and fraud in a series of causes of action?

Adams v. Albany, 124 Cal.App.2d 639, 269 P.2d 142, was an action by 78 plaintiffs for damages based on conspiracy and fraud of defendants in the sale of houses to plaintiffs (war veterans and wives). A demurrer to the second cause of action on the ground of misjoinder of parties was sustained without leave to amend. It was alleged in said second cause of action that defendants fraudulently conspired to and did obtain priorities (under the provisions of the Veterans' Emergency Housing Act of 1946) for materials, and that the houses they built were not in conformity with specifications submitted with the applications for priorities; the plaintiffs relied upon representations of defendants that the houses were built according to the specifications. Those allegations were followed by special allegations relating to the house purchased by each of the 40 separate sets of plaintiffs. The court therein held that a community interest in the questions of law and fact sufficiently appeared to meet the statutory requirement and to permit plaintiffs to join in the action. It was stated therein, 124 Cal.App. at page 647, 269 P.2d at page 147: 'One scheme is alleged, based on conspiracy and fraud, depending upon the same basic misrepresentations, and leading to a series of transactions exactly similar in kind and manner of operation which have affected all of the plaintiffs.' It was also said therein, Id., 269 P.2d at page 147: 'The controlling questions of law, relating to liability, are the same with respect to each of the plaintiffs. A very large part of the evidence as to one of the series of incidents would be equally applicable to the others. While some of the evidence, as to details and amounts, would vary with respect to the different plaintiffs, no good reason appears in law or in reason to compel the filing of 40 separate actions, [131 Cal.App.2d 795] with a resulting duplication, that many times, of all of the evidence.'

Akely v. Kinnicutt, 238 N.Y. 466, 144 N.E. 682, was an action commenced by 193 plaintiffs, each claiming a separate and independent cause of action for damages caused by alleged fraud of defendants. Each cause of action therein was in substance that defendants conspired to organize

Page 367

Appellants argue further to the effect that since the sales were made at different times and places, the sales did not arise out of the same transaction or series of transactions within the meaning of said section 378. In Akely v. Kinnicutt, supra, it was said further, 144 N.E. 684: 'Then it is urged by appellants that there is lacking that feature, essential to the collection in one complaint of all of these causes of action, that they should be 'in respect of or arising out of the same transaction or series of transactions.' We do not find any basis for this claim. Each cause of action is based upon a purchase of stock at a fictitious value in reliance upon representations, as alleged, of defendants in respect of the value of that stock, which were untrue and fraudulent, and made for the purpose of inducing the public including plaintiff to make such purchases. The transaction in respect of or out of which the cause of action arises is the purchase by plaintiff of his stock under such circumstances, and such purchases conducted by one plaintiff after another respectively plainly constitute a series of transactions within the meaning of the statute * * * and the many purchases by plaintiffs respectively do not lose their character as a series of transactions because they occurred at different places and times extending through many [131 Cal.App.2d 796] months.' In the present case the sales constituted a series of transactions within the meaning of said section 378.

There was not a misjoinder of parties plaintiff herein.

As above stated, 57 of the groups of causes of action were for amounts that were within the jurisdiction of the municipal court, and 3 of the groups were for amounts within the jurisdiction of the superior court. It is conceded that if there is a proper joinder of plaintiffs the superior court has jurisdiction of the causes of action that are for amounts within the jurisdiction of the municipal court. In Kane v. Mendenhall, 5 Cal.2d 749, at page 756, 56 P.2d 498, at page 501, it was said: 'Thus it appears that the former constitutional provisions and the present statutory provisions conferring jurisdiction on the inferior courts of demands below certain amounts have not been interpreted as forbidding determination of said demands in the superior court where they are connected with larger claims or with a type of demand solely within the jurisdiction of the superior court.'