Opinion
Appeal from Superior Court, Los Angeles County; George H. Hutton, Judge.
Action by Mrs. S.M. Hayt against George R. Bentel. From a judgment for plaintiff, defendant appeals. Reversed. COUNSEL
H.C. Millsap and Millsap & Sparks, for appellant.
Smith, Miller & Phelps, for respondent.
OPINION
SHAW, J.
This action was brought to recover from defendant certain installments of money, with interest thereon, paid by plaintiff pursuant to the terms of a contract for the purchase and sale of certain real estate. Judgment went for plaintiff. Defendant appeals from the judgment upon a bill of exceptions.
Among other things, the contract provided that upon plaintiff paying $275 cash upon the making of the agreement, $275 on June 29, 1906, and a like payment of $275 on June 29, 1907, together with interest on deferred payments, it being provided that time should be made the essence of the contract, defendant would by good and sufficient deed convey the property free and clear of incumbrance to plaintiff, who, as provided by the terms of the contract, was given immediate possession of the premises. The contract further provided that, in case plaintiff made default in the payments, defendant at his option might declare the whole sum remaining unpaid due and payable, or cancel the contract, re-enter and take possession of the land, and retain all moneys paid by plaintiff as rent for the use and occupation thereof. The complaint alleges that plaintiff made default in the last payment due June 29, 1907, but that on October 29, 1908, plaintiff made a payment of $50 on account of the principal sum of $275, and paid the interest on the balance of the principal up to December 29, 1908, at which time it was agreed by the parties "that as soon as the deed was executed and delivered to plaintiff she would pay him the balance due under the contract"; that in October, 1909, plaintiff offered to pay defendant the balance of the purchase money and demanded a deed for the property, which defendant refused to execute, alleging as a reason therefor that he could not deliver a conveyance of title in accordance with the said contract owing to the fact that the same was clouded by an incumbrance. Thereafter, on January 14, 1910, plaintiff again made tender of the full amount due and demanded a deed in accordance with the terms of the contract, but defendant refused to comply with the demand. On February 4, 1910, plaintiff declared the contract rescinded, notified defendant of such rescission, and demanded repayment of all moneys which she had theretofore paid pursuant to the terms of the contract, together with interest thereon, which defendant refused to pay. It was further alleged that at the time of the execution of the contract, and from thence up to the commencement of the action, the property was incumbered and the title thereto clouded so that it was impossible at any time for defendant on his part to comply with the terms of the contract by conveying to plaintiff title to the property free and clear of incumbrance.
A general demurrer interposed by defendant to the complaint was overruled. In thus ruling we think the court erred. It appears from the contract, made a part of the complaint, that plaintiff was at the time of the execution thereof given immediate possession of the premises. She could not, upon the ground of the vendor’s inability to convey a title free and clear of incumbrance, rescind the contract and insist upon the return of her money, with interest thereon from the date of payment, while retaining that which she had received under the terms of the contract, viz., the possession of the premises. "Where the contract provides for the vendee taking possession, the remedy of the purchaser, where the *** vendor *** is unable to make conveyance as stipulated in the contract, is to rescind the contract, or offer to, and to restore the possession, in which case he may recover the purchase money advanced and the interest, together with the value of his improvements, deducting therefrom such sum as the use of the premises may reasonably have been worth. If, on the other hand, the purchaser chooses not to rescind, but to retain possession under the contract, he can do so only on the condition that he pays the purchase money and interest according to the contract." Gates v. McLean, 70 Cal. 50, 11 P. 492. This language was quoted with approval and applied In the case of Worley v. Nethercott, 91 Cal. 512, 27 P. 767, 25 Am.St.Rep. 209, where it was held that the purchaser of land in possession thereof under a contract of sale providing for the conveyance of a good and perfect title thereto could not, upon the vendor’s inability to convey such title, retain both the land and the purchase money, but, if he chooses to retain the possession of the land, he must pay the price according to the contract, and receive such title as the vendor is able to give. Otherwise, if he elects to recover the purchase money paid, he must restore the possession of the property to the vendor and rescind the contract. In Rhorer v. Bila, 83 Cal. 54, 23 P. 275, it is said: "A purchaser cannot remain in possession of lands under a contract and at the same time refuse to pay the purchase price. If the title fails, or the vendor refuses to convey, an action on the covenants of his deed or contract will give him all the relief to which he is entitled." For the purpose of our decision, it may be conceded that the complaint shows facts sufficient to excuse plaintiff’s default in making the payments, and that by reason thereof and the tender made by plaintiff she might, without surrendering possession of the property, have maintained an action on the contract for specific performance thereof. Such, however, is not the character of this case. She declared the contract rescinded.
The effect of a valid rescission is to extinguish the contract. Civ.Code, § 1688. "The effect of the rescission of a contract is to place the parties in the same position as if it had never been made; and all rights which are transferred, released or created by the agreement are revested, restored or discharged by the avoidance." 24 Am. & Eng.Ency. of Law, p. 626.
Hence, where one party without the assent of the other rescinds and sues to recover that which he has paid under the terms of the contract, his complaint, unless facts are stated excusing him from so doing, must show that he has restored or tendered restoration, upon condition that the other shall do likewise, of that which he is shown to have received pursuant to the terms thereof. Section 1691, Civ.Code. Plaintiff was in no position to insist upon the return of the amount paid and interest thereon from date of payment, and continue in the use, occupation, and enjoyment of the property, thus compelling defendant to resort to an action of eviction.
The judgment is reversed.
We concur: ALLEN, P.J; JAMES, J.
On Petition for Rehearing.
PER CURIAM.
The action herein may be assumed as under section 3406, Civil Code; that the court under section 3408, Civil Code, possessed the power to impose all proper conditions. Had this appeal been upon the judgment roll, the assumption necessary in support of the judgment would follow. Chicago Clock Co. v. Tobin, 123 Cal. 378, 55 P. 1007. The appeal, however, is upon a bill of exceptions purporting to disclose all matters and proceedings affecting the case, and it does not appear therefrom that any showing was made with reference to possession, the right to which is admitted by the pleadings to be in plaintiff. Willis v. Wozencraft, 22 Cal. 608. The fact that plaintiff was in default destroys any effect which would otherwise be considered in connection with the terms of the contract, as fixing the rights of the parties upon the happening of such event. We are prepared to concede that the judgment would destroy the bare right of possession, disassociated from actual possession, but we are still of opinion that, under the authorities cited in the original opinion, actual possession is presumed from the terms of a contract conferring such right. Hence, in the absence of an order making the relief granted subject to the condition that plaintiff restore possession, our conclusion must have been the same as that reached by considering the appeal upon the sufficiency of the complaint under the general demurrer interposed thereto. This being true, plaintiff could derive no benefit from a rehearing.
Rehearing denied.