Opinion
Department One
Appeal from a judgment of the Superior Court of Butte County. J. C. Gray, Judge.
COUNSEL:
The mere failure of consideration will not entitle the vendor to rescind the contract and recover back the land. (Lawrence v. Gayetty , 78 Cal. 134; 12 Am. St. Rep. 29.) The facts alleged are not sufficient to entitle the plaintiff to the relief demanded, because of inadequacy of consideration. (Nicholson v. Tarpey , 70 Cal. 609.) The facts stated do not entitle the plaintiff to relief upon the ground of mistake. Such a mistake must not be caused by the neglect of a legal duty on the part of the person making it. ( Civ. Code, sec. 1577; 1 Story's Equity Jurisprudence, sec. 195.) Having readily accessible means of acquiring knowledge of a fact, which might be ascertained by inquiry, is equivalent to notice and knowledge of it. (Montgomery v. Keppel , 75 Cal. 131; 7 Am. St. Rep. 125; Board of Commrs. v. Younger , 29 Cal. 176; Champion v. Woods , 79 Cal. 20; 12 Am. St. Rep. 126.) In order to entitle a party to rescind for fraud, he must show that some damage has resulted to him therefrom. (Bailey v. Fox , 78 Cal. 398.) One who rescinds must place the other party in statu quo. (Collins v. Townsend , 58 Cal. 608.)
Rearden & White, for Appellants.
John M. McGee, and John Gale, for Respondent.
The making of a promise without any intention at the time of performing it is of itself a fraud. (Lawrence v. Gayetty , 78 Cal. 126; 12 Am. St. Rep. 29; Civ. Code, sec. 1572; Bigelow on Fraud, 485, et seq.) If a man conceals a fact that is material to the transaction, knowing that the other party acts on the presumption that no such fact exists, it is as much a fraud as if the existence of such fact were expressly denied, or the reverse of it is expressly stated. (Kerr on Fraud and Mistake, 94.) Plaintiff was entitled to a rescission on the ground of mistake of fact. ( Civ. Code, sec. 1577.) Equity follows the law as to title to improvements. (Billings v. Hall , 7 Cal. 8, 9; Ferris v. Coover , 10 Cal. 632.)
OPINION
THE COURT This is an action of rescission. The findings of the court were in accord with the allegations of the complaint, and judgment went for plaintiff. The appeal is from the judgment, and the merits of the case will be determined by a consideration of the sufficiency of the complaint in stating a cause of action.
It appears substantially from the complaint that plaintiff owned a lot worth $ 700. By reason of a mistake of fact, he fully believed that it was mortgaged for $ 500, when it was another and different lot that was so mortgaged. He offered to sell the lot to appellants for $ 700, $ 200 to be paid in cash, the balance, $ 500, to be paid on the mortgage. The appellants, through their attorney, telephoned to the recorder and learned that respondent was mistaken, and that the lot was not encumbered at all. Then they agreed to buy the lot and pay therefor $ 700, to be paid as above stated. They did not intend to keep this agreement, but did intend to take advantage of respondent's mistake, and to obtain the property for $ 200, and to defraud him of the balance of the purchase price, $ 500. The $ 200 was paid, and the transfer made. Subsequently the plaintiff ascertained his mistake, [42 P. 1082] and demanded that the $ 500 be paid to him, or his mortgagee, in satisfaction of the mortgage upon the other lot. Defendants refused so to do. Plaintiff thereupon tendered the $ 200 received, with interest, and demanded a reconveyance, which tender and demand were also refused. We think the foregoing statement of facts sufficient to justify relief by a court of equity, and that the contract should be set aside.
The court made a finding to the effect that defendants had expended $ 282 upon the property, but made no finding as to the increased value of the property by reason of this expenditure of money. The mere expenditure of money upon the property by defendants is not sufficient to justify a reimbursement of the amount expended. Perchance such expenditure did not add a dollar to the actual value of the realty. In addition, there is no allegation that such expenditures had increased to any degree the value of the realty.
For the foregoing reasons the judgment is affirmed.