Opinion
Rehearing Denied May 31, 1930
Hearing Granted by Supreme Court June 30, 1930
Appeal from Superior Court, Orange County; James L. Allen, Judge.
Action by John S. Hull against Carl Ray to rescind contract for purchase of cattle and for return of purchase price. Judgment for plaintiff, and defendant appeals.
Reversed.
COUNSEL
Scarborough, Forgy & Reinhaus, of Santa Ana, for appellant.
Sloane & Sloane, of San Diego, and M.B. Wellington, of Santa Ana, for respondent.
OPINION
R.L. THOMPSON, J.
This is an appeal from a judgment of rescission of a contract to buy cattle and for return of the purchase price therefor.
The appellant contends that the judgment is erroneous on account of a fatal defect in the notice of rescission, and because he was precluded from showing that plaintiff’s sale of the cattle to satisfy an agister’s lien was illegal and that he had failed to account for the entire proceeds of such sale.
November 13, 1922, the parties to this action executed a written contract by the terms of which the plaintiff agreed to purchase fourteen head of registered cattle for the sum of $3,500. This sum was fully paid and the plaintiff took possession of the stock. The contract provided that upon payment of the purchase price the defendant would "execute and deliver to the *** (plaintiff) a good and sufficient bill of sale of the said property, together with warranty of title." This bill of sale and warranty of title was not executed. After the plaintiff had fully performed all the covenants of the agreement on his part, he orally demanded of the defendant the delivery of the stipulated instruments, which was refused. At the same time the plaintiff also offered to restore the cattle to the defendant and attempted to rescind the contract. Pursuant to his effort to cancel the contract, the plaintiff served upon the defendant a written notice of rescission containing the following language: "You will please be advised that John S. Hull does hereby rescind that certain contract of sale *** (describing the agreement heretofore referred to). This rescission is made by reason of the failure of said Carl Ray to deliver to the said John S. Hull a certificate of The American Jersey Cattle Club, showing transfer of the said cattle, and by reason of the said Carl Ray’s failure to correctly certify to the date of service to certain of said cattle." It will be observed this notice of rescission omits to mention the defendant’s failure to execute or deliver the bill of sale. This failure to deliver the bill of sale, and not the cause complained of in the notice of rescission, was the sole ground of cancellation relied upon by the plaintiff at the trial. The notice of rescission was admitted in evidence over the objection of the defendant. This variance in proof from the notice of rescission was fatal to the plaintiff’s cause.
The court found that on May 5, 1923, the plaintiff did "rescind said contract of November 13, 1922, and notified the defendant in due form of such rescission." A decree was thereupon rendered in favor of the plaintiff canceling the contract and awarding him a judgment for the purchase price of the cattle in the sum of $3,500. From this judgment the defendant has appealed.
We are of the opinion the notice of rescission was fatally defective. It was insufficient upon which to maintain an action to cancel a contract for the purchase of cattle based solely upon an omission to execute and deliver a bill of sale. The court found that a notice of rescission in due form had been given. A notice of rescission which specifies only an erroneous ground of cancellation is misleading and would tend to deceive the adverse party and prevent him from defending the action on its merits. The fact that a "certificate of The American Jersey Cattle Club, showing transfer of the said cattle" on the records of said club had not been supplied the purchaser of the stock, in the absence of a covenant to that effect, furnishes no ground for cancellation of the contract. Upon a former appeal in this same case (Hull v. Ray, 80 Cal.App. 284, 251 P. 810), this court held the foregoing ground which was specified in the notice was not cause for cancellation of the contract. That decision becomes the law of this case. It was, however, held upon the former appeal that the failure of the vendor to execute and deliver a good and sufficient bill of sale was cause for a rescission of the contract for the reason that the agreement specifically provided for the delivery of a bill of sale which is tangible evidence of ownership and title and is therefore a valuable part of the consideration for the purchase.
It therefore follows that, since the notice of rescission was invalid, the effort to cancel the contract was ineffectual and the sale of the cattle to satisfy the agister’s lien was void. It is ordinarily a prerequisite to maintaining an action for rescission that a notice of intention to cancel the contract be given to the adverse party. Zeller v. Milligan, 71 Cal.App. 617, 625, 236 P. 349; 2 Black on Rescission (2d Ed.) p. 1399, § 569. This notice, however, is not required to be couched in any particular form. It is ordinarily sufficient if it clearly expresses the intention to terminate the contract for a breach thereof. McNeese v. McNeese, 190 Cal. 402, 405, 213 P. 36; Simmons v. Briggs, 69 Cal.App. 447, 463, 231 P. 604; Guscetti v. Dugan, 60 Cal.App. 187, 212 P. 397; 2 Black on Rescission (2d Ed.) p. 1410, § 573. Assuming that a notice of rescission is adequate in form, which identifies the instrument and asserts an intention to cancel it, without specifying the particular ground of rescission, yet when a single specific ground of rescission is assigned, it will preclude one from abandoning the ground which is stated and resorting to an entirely different cause. This principle appears to be sound and just. Because one may not ordinarily be required to specify the ground of cancellation in the notice of rescission, it does not follow that a false ground which is assigned may be treated as surplusage and harmless. The danger of such a construction is evident from the facts of the present case. The contract required the vendor of the cattle to furnish the buyer with a good and sufficient bill of sale. It did not require a certificate of the transfer of registration of the stock on the records of the cattle club. The cattle had been delivered to the purchaser. The vendee might waive his right to a bill of sale assuming that his possession of the cattle was satisfactory evidence of his title. His notice of rescission on the sole ground of failure on the part of the defendant to furnish him with a certificate of transfer of registration of the stock clearly inferred that he was waiving his right to a bill of sale and that he relied solely upon the ground mentioned in the notice for cancelling the contract. The right of the plaintiff to an agister’s lien and compensation for feeding the stock depended upon the validity of his cancellation of the contract. Knowing that the agreement did not require the delivery of a certificate transferring the registration of the stock upon the records of the cattle club, the defendant was warranted in assuming that the contract was not subject to rescission on that ground and that he was therefore not liable to the plaintiff for compensation for feeding the stock. For this reason he was justified in refusing to accept a return of the cattle. To permit the plaintiff, under such circumstances, to sell the stock for the satisfaction of an agister’s lien and then seek to justify the sale on a false notice of rescission would encourage fraud and deceit. The result of such a misstatement as was contained in the notice in the present case led the defendant to assume that the contract was valid; that the plaintiff therefore held no lien; was entitled to no compensation for feeding the stock and was therefore deceived into permitting cattle of the value of $3,500 to be sold to the wife of the plaintiff for the nominal sum of $154. Certainly the law will not countenance so radical a departure from justice.
The plaintiff was entitled to an agister’s lien to secure his expense incurred in feeding and caring for the cattle, dependent entirely upon the validity of his rescission proceedings. While the purchaser held possession of the stock under the provisions of an existing contract to buy them, obviously he would not be entitled to compensation for feeding the cattle. After the contract had been canceled and restoration of the cattle had been refused, the owner would become liable for the cost of feeding and caring for them. Under such circumstances it was the duty of the holder of the cattle to exercise due diligence to preserve the property. After a rescission of the contract had been accomplished, however, a statutory lien would be created to secure the payment of the necessary expense incurred in feeding and caring for the stock. Section 3051 of the Civil Code provides in part: "Persons pasturing horses or stock, have a lien, dependent on possession, for their compensation in caring for, boarding, feeding, or pasturing such horses or stock."
As provided by section 3052 of the Civil Code, after notice to the owner, this lien may be satisfied by sale of the cattle at public auction. When the lien and the costs of sale have been satisfied, the balance of the proceeds of sale belongs to the owner. This was the process sought to be enforced by the plaintiff in the present case.
Incident to the chief issue in this case was the plaintiff’s claim of an agister’s lien upon the cattle to compensate him for feeding and caring for them after his alleged cancellation of the contract. The complaint clearly asserted this claim and alleged that the cattle had been sold at public auction pursuant to law, but that the proceeds of sale were insufficient with which to satisfy the lien. The validity of this claim, the existence of the lien, the regularity of the proceedings, and the alleged insufficiency of the proceeds of sale were all controverted by the answer. No deficiency judgment on account of the cost of feeding the stock was prayed for or allowed. The defendant asserts that he was erroneously precluded from introducing evidence to refute this claim incident to the lien. Since, assuming that the contract had been canceled, the agister’s lien was a proper issue incident to the chief cause for rescission, obviously evidence was competent to show what expense had been necessarily incurred to care for the stock, what proceedings were pursued to secure the lien and foreclose the same, and the amount of proceeds which was acquired from the sale. Likewise the defendant was entitled to any reasonable opportunity to cross-examine witnesses or adduce evidence to refute the plaintiff’s showing in this regard. In spite of the court’s erroneous assumption that this evidence regarding the agister’s lien and the sale of the cattle was competent only to account for plaintiff’s failure to restore the property to the owner upon cancellation of the contract, the defendant appears to have been granted every opportunity to present all favorable evidence upon this subject which he possessed. If it be true that the application of this evidence was limited by the court to the sole question of inability of the plaintiff to restore the cattle to the owner as a prerequisite to maintaining an action for rescission, still the defendant is not injured by such limitation, since it becomes necessary to reverse this judgment for failure to prove the serving of an adequate notice of rescission. The legal authority to sell the cattle to satisfy an agister’s lien depends entirely upon the validity of the rescission proceedings. If the contract was still in force the plaintiff acquired no lien and had no authority to sell the stock. Since it is necessary to serve a notice of cancellation as a prerequisite to the maintenance of an action of rescission, and the notice thereof was fatally defective, it follows that the sale of the cattle was invalid, and the decree of rescission was erroneous.
The judgment is reversed.
We concur: FINCH, P.J.; PLUMMER, J.