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p. 254[No. 19259. Department Two.—February 6, 1894] DANIEL FREEMAN, Appellant, v. ALLIE KIEFFER, Respondent, and ALLIE KIEFFER, Cross-Complainant and Respondent, v. DANIEL FREEMAN, and THE CENTINELA-INGLEWOOD LAND COMPANY, Appellants.
Headnote
Vendor and Purchaser — Contract of Sale — Rescission By Pur- ‘ chaser—Fraud—Breach of Promise by Vendor—Reasonable Debay.—A delay on the part of a purchaser of land under a contract of sale to rescind the contract for fraudulent representations by the vendor as to the location and value of the land, and for breach of promises by the vendor to make certain improvements and to furnish water for the land, occurring under circumstances which do not render the delay unreasonable, will not deprive the purchaser of the right to rescind the contract.Id.—Efforts of Purchaser to Settle Controversy—Waiver.—Efforts or willingness on the part of the purchaser to settle the controversy with the vendor growing out of the contract cannot be considered as a waiver of the purchaser’s right to insist upon its rescission after such efforts have proved unavailing.
Id.—Fraud by Agent—Responsibility of Principal—Assignment— Rescission.—Where a land company was simply the agent of the plaintiff in making the contract with the defendant for the sale of the land, and the plaintiff accepted the benefit of the contract, as well as an assignment thereof from his agent, the plaintiff is equally responsible with the land company for any fraudulent representations on its part, which induced the contract, and is liable to refund the money paid under the contract which came to the hands of the plaintiff, and is bound to accept a reconveyance of the interest of the defendant in the land purchased.
Id.—Parties — Corporation Acting as Agent-—Cross-Complaint— Costs.—A corporation acting as agent of the plaintiff in the contract of sale to the defendant, is a proper, although not a necessary, party to a cross-complaint by the defendant to secure a rescission of the contract, and judgment may properly be rendered against it for costs.
Appeal from a judgment of the Superior Court of Los Angeles County, and from an order denying a new trial.
The action was brought originally by Daniel Freeman, as assignee of the Centinela-Inglewood Land Company, against Mrs. Allie Kieffer, to enforce a contract made by said company as vendor with Mrs. Kieffer as vendee, on the seventh day of December, 1887. The complaint was filed May 21, 1891. The contract was for the purchase
p. 255
of about ten acres of land from the land company for two thousand five hundred dollars, payable six hundred and twenty-five dollars in cash, and the remainder in equal annual installments of the same amount in one, two, and three years from the date of the contract, for which notes were given to the land company. Mrs. Kieffer paid the cash payment of six hundred and twenty-five dollars to the land company, and paid her note for the installment falling due in 1888 to the plaintiff Freeman as assignee of the land company. She refused to pay the note for the installments falling due in December, 1889, on the ground that she had been deceived in the purchase by false representations, and that because of such representations and the nonperformance of certain promises made to her she was not liable on the contract.
The defendant, Mrs. Kieffer, filed an answer setting up the alleged fraud in her defense, and also filed a cross-complaint on the twenty-fifth day of June 1891, making the land company a party to the cross-complaint, praying for a judgment of rescission of the contract of purchase and for cancellation of the note, and repayment of the money, interest, and taxes paid by her on account of the purchase, amounting to about fifteen hundred dollars. The cause was tried before a jury, to whom special issues were submitted, and the court made findings in accordance with the special verdict, adjudging that the plaintiff was entitled to no relief, and that the defendant as cross-complainant was entitled to the relief sought. The appeal is taken by Daniel Freeman and the Centinela-Inglewood Land Company. The court finds substantially as grounds to support the rescission that the land company, through its agent, induced Mrs. Kieffer to make the contract by false representations that the land purchased was within three-fourths of a mile from the corner of Orchard and Grevillea avenues in Inglewood, when, in fact, it was two miles therefrom, and that it was of the value of two hundred and fifty dollars per acre, when in fact it was worth only
p. 256The laches and conduct of the cross-complainant dis-entitle her to relief by rescission. (Hollbrook v. Burt, 22 Pick. 546 ; Green v. Wingley, 24 Me. 131 ; Benjamin on Sales, sec. 547, and the cases cited in note 3; Kokomo Straw Board Co. v. Inman, 58 Hun, 603 ; Lawrence v. Dale, 3 Johns. Ch. 23 , 43; Masson v. Bovet, 1 Denio, 69 ; 43 Am. Dec. 651 ; Dennis v. Jones, 44 N. J. Eq. 513 ; 6
fifty dollars per acre, and by false assurances that water would be piped to the land, that any kind of fruit could be raised upon it, and that a university was to be built there, and that other improvements would be made, and that the land company was an agency employed by Freeman in making the sale of the lands which originally belonged to him. When Mrs. Kieffer paid the second note, she knew that the college had not been built and that the water had not been carried to the land, but she was then assured that both these things would be done, and that all other improvements promised would be completed. When the third installment fell due in December, 1889, it was tendered on condition that the promises should be fulfilled, to carry water onto her land, and build the college and make the other improvements promised, shortly after which she received an intimation from plaintiff’s attorney that the company and Mr. Freeman did not intend to make the improvements promised. She did not learn the actual distance of her land from Inglewood until May or June, 1890, when she informed plaintiff’s attorney of her discovery. Mr. Freeman was personally absent from the state in 1889 and the first part of 1890, and she was unable to see him personally until October, 1890, when she requested him to rescind the contract and return her money, or to make the improvements promised; but he finally refused to comply with either alternative, after repeated attempts on the part of Mrs. Kieffer to secure a settlement.
George I. Cochran, and Henry Bleecher,-for Appellant Freeman.
p. 257Am. St. Eep. 899; Baird v. New York, 96 N. Y. 567 ; Farlon v. Ellis, 15 Gray, 229 ; Johnson v. Evans, 8 Gill, 155 ; 50 Am. Dec. 672 ,.and notes; Hoadley v. House, 32 Vt. 179 ; 76 Am. Dec. 167 ; Saratoga R. R. v. Row, 24 Wend. 74 ; 35 Am. Dec. 598 ; Selway v. Fogg, 5 Mees. & W. 83; Blen v. Water Co., 20 Cal. 602 ; 81 Am. Dec. 132 ; Baker v. Lever, 67 N. Y. 304 ; 23 Am. Rep. 117 ; Norfolk etc. Hosiery Co. v. Arnold, 49 N. J. Ch. 390; McLean v. Clapp, 141 U. S. 429 ; Taylor v. Short, 107 Mo. 384 ; Hennessy v. Bacon, 137 U. S. 78 ; Perry v. Pearson, 135 Ill. 218 ; Conlan v. Roemer, 52 N. J. L. 53 ; Davis v. -Read, 37 Fed. Rep. 418 ; Bell v. Keepers, 39 Kan. 105 ; Paine v. Harrison, 38 Minn. 346 ; McDowell’s Appeal, 123 Pa. St. 381 ; Fratt v. Fiske, 17 Cal. 384 ; Gifford v. Carvill, 29 Cal. 593 ; Williams v. Mitchell, 87 Cal. 532 ; Bailey v. Fox, 78 Cal. 396 ; Hammond v. Wallace, 85 Cal. 530 ; Collins v. Townsend, 58 Cal. 608 ; .12 Am. & Eng. Ency. of Law, p. 603, and cases cited.) The cross-complainant waived her right to rescind by failing to offer to return the land and demand back the money at the time of her discovery of the so-called fraud, or until after she failed to make a compromise with the plaintiff. (Evans v. Montgomery, 50 Iowa, 325 ; Rawson v. Harger, 48 Iowa, 269 ; Grymes v. Sanders, 93 U. S. 55 ; Parsons on Contracts, 278; Thompson v. Lee, 31 Ala. 292 ; Kimball v. Cunningham, 4 Mass. 502 ; 3 Am. Dec. 230 ; Weeks v. Robie, 42 N. H. 316 ; Learning v. Wise, 73 Pa. St. 173 .) The cross-complainant having made, as she alleges, her contract with the Centinela-Inglewood Land Company, cannot say that the company was merely the agent of the plaintiff Freeman. (Ferguson v. McBeam,, 91 Cal. 63 ; Chandler v. Coe, 54 N. H. 561 ; Gillig v. Lake etc. R. R. Co., 2 Nev. 216 ; Mecham on Agency, sec. 771; Winchester v. Howard, 97 Mass. 303 ; 93 Am. Dec. 93 ; Henderson v. Mayhew, 2 Gill, 393 ; 41 Am. Dec. 434 ; Baker-Boyer Nat. Bank v. Hughson, 5 Wash. St. 100 .) The mere failure to perform an oral promise is not evidence of fraud unless it was intended, at the time the promise was made, not to perform it. (Bigelow on Fraud, pp. 473,
p. 258483; Brison v. Brison, 75 Cal. 527 ; 7 Am. St. Rep. 189 ; Lawrence v. Gayetty, 78 Cal. 131 ; 12 Am. St. Rep. 29 ; Nounnan v. Sutter County Land Co., 81 Cal. 6 .) The representation as to distance did not so deceive the cross-complainant as to entitle her to a rescission. (Slaughter v. Gerson, 13 Wall. 379 ; Gifford v. Garvill, 29 Cal. 589 ; Rendell v. Scott, 70 Cal. 514 .) The representations as to value did not constitute fraud. (See Bigelow on Frauds, pp. 490, 491.) This company is not hound by the attempted rescission, as the offer to rescind was made by the cross-complainant to the plaintiff, while the contract was made with this company. (Civ. Code, sec. 1691.) Cross-complainant could hold either principal or agent, but not both, and having elected to hold the principal, Freeman, by obtaining a judgment against him for a return of the purchase money, she is bound to pursue him only. (Mecham on Agency, sec. 698; Tuthill v. Wilson, 90 N. Y. 423 .) The judgment for costs against the Centinela-lnglewood Company is erroneous. The plaintiff is allowed costs in an action for the recovery of money or damages when he recovers three hundred dollars or over, and in this case no judgment has been recovered against this company. (Code Civ. Proc., sec. 1022.) The rescission in this case was full and complete. (Suber v. Pullin, 1 S. C. 273 ; Morrow v. Rees, 69 Pa. St. 368 ; Moral School v. Harrison, 74 Ind. 93 ; Hooper v. Taylor, 4 E. D. Smith, 486.) The action itself was a sufficient rescission. (Reese River etc. Mining Co. v. Smith, L. R. 4 E. & I. App. 73; Graham v. Halloway, 44 Ill. 385 ; Herrington v. Hubbard, 33 Am. Dec. 426 .) The delay in making the rescission resulting from negotiations for a compromise cannot be held to constitute
Albert M. Stephens, for Appellant Centinela-lnglewood Land Company.
J. L. Murphy, for Respondent.
p. 259such laches as will bar the action. (Hoghton v. Hoghton, 15 Beav. 278, 314; Thompson v. Marshall, 36 Ala. 504 ; 12 Am. & Eng. Ency. of Law, 560, 561; Nudd v. Powers, 136 Mass. 273 ; Daggers v. Van Dyck, 37 N. J. Eq. 130 ; Platt v. Platt, 58 N. Y. 646 .) The representations having been false the appellants should not be heard to say that this cross-complainant should not have believed them. (3 Sutherland on Damages, 586; Fishback v. Miller, 15 Nev. 428 ; Harvey v. Hadley, 87 Cal. 557 .) The company was a proper party defendant. (Andrews v. Pratt, 44 Cal. 309 ; Raynor v. Mintzer, 67 Cal. 159 ; Wickersham v. Crittenden, 93 Cal. 133 .) The defendant was a necessary and proper defendant to the cross-complaint. (Winter v. McMillan, 87 Cal. 256 .) The costs were in the discretion of the court. (Code Civ. Proc.. sec. 1025; Dupuy v. Leavenworth, 17 Cal. 263 .)
The pleadings and findings in this case are voluminous, and we do not deem it necessary to make any particular statement of the matters alleged- and found. In our opinion the findings are sufficient to sustain the judgment. While there was some delay on the part of the defendant in rescinding the contract made by her with the Centinela-Inglewood Land Company, we cannot say the delay was unreasonable and such as to deprive her of the right of rescission under the circumstances shown by the findings; nor can the effort or willingness on her part to effect a settlement of the controversy between her and the plaintiff growing out of the contract be considered as a waiver of her right to now insist upon its rescission. The CentinelaInglewood Land Company was simply the agent of the plaintiff in making the contract with defendant for the sale of the land, and the plaintiff having accepted the benefit of the contract as well as an assignment thereof from his, agent, is equally responsible with the agent for any fraudulent representations which induced it, and is liable to refund to defendant the money which she has paid under the contract, and which has come
p. 260
into the hands of the plaintiff. The plaintiff being the legal holder of the contract made by defendant with the Centinela-Inglewood Land Company, as well as the party for whose benefit it was made, the defendant properly offered to convey to him all her right, title, and interest in the land described, and vesting in her by that contract.
The Centinela-Inglewood Land Company was a proper, although not a necessary, party to this action, and the court did not err in giving judgment against it for costs.
Judgment and order affirmed.
Hearing in Bank denied.
Cases cited
- Lawrence v. Dale 3 Johns. Ch. 23 at 43 p. 256
- Baird v. Mayor 96 N. Y. 567 p. 257
- Blen v. Bear River & Auburn Water & Mining Co. 20 Cal. 602 p. 257
- Baker v. Lever 67 N. Y. 304 p. 257
- McLean v. Clapp 141 U. S. 429 p. 257
- Hennessy v. Bacon 137 U. S. 78 p. 257
- Williams v. Mitchell 87 Cal. 532 p. 257
- Collins v. Townsend 58 Cal. 608 p. 257
- Grymes v. Sanders 93 U. S. 55 p. 257
- Ferguson v. McBean 91 Cal. 63 p. 257
- Slaughter's Administrator v. Gerson 13 Wall. 379 p. 258
- Gifford v. Carvill 29 Cal. 589 p. 258
- Rendell v. Scott 70 Cal. 514 p. 258
- Tuthill v. Wilson 90 N. Y. 423 p. 258
- Platt v. Platt 58 N. Y. 646 p. 259
- Harvey v. Hadley 87 Cal. 557 p. 259
- Andrews v. Pratt 44 Cal. 309 p. 259
- Raynor v. Mintzer 67 Cal. 159 p. 259
- Bradbury v. McClure 93 Cal. 133 p. 259
- Winter v. McMillan 87 Cal. 256 p. 259