Opinion
7-26-1951
PANZICH et al. v. GAYLORD. Civ. 18079.
J. M. Sinclair, Los Angeles, for appellants. Fleming, Robbins & Tinsman and C. S. Tinsman, all of Los Angeles, for respondent.
PANZICH et al.
v.
GAYLORD.
Rehearing Denied Aug. 22, 1951.
Hearing Granted Sept. 20, 1951. *
J. M. Sinclair, Los Angeles, for appellants.
Fleming, Robbins & Tinsman and C. S. Tinsman, all of Los Angeles, for respondent.
WHITE, Presiding Justice.
This litigation arose out of a transaction in which plaintiffs acquired certain real property from defendant in the city of Arcadia, county of Los Angeles, on or about November 15, 1948. In their complaint, they alleged representations that the property was income property and that a house on the rear of said premises had a past and present rental value of $35.00 per month. That such statements were untrue. That defendant well knew that said rear house was illegally constructed and no building permit had ever been obtained for its construction. That the defendant concealed these facts. That relying upon the aforesaid representations plaintiffs purchased the property for $11,500.00; that had they known the falsity of said statements concerning the rear building upon the property they would not have purchased the same. That the reasonable value of the property as represented was $11,500.00, but that the reasonable value of the property 'as it actually existed' was the sum of $8,000.00. Judgment was sought for $3,500.00 damages as the difference between the value of the property as represented and its true and actual value by reason of the claimed representations.
By his answer defendant admitted the sale and that at the time thereof the rear house was rented for $35.00 a month. Denied that the rear building had been constructed illegally and without a permit. Affirmatively alleged that the property was zoned as income property. That the building in the rear was occupied by defendants' sister for $35.00 per month and that before the said sale was completed 'plaintiffs were informed that they should investigate as to whether or not said building could be occupied by others than the relatives of the owner'. Defendant generally denied making any misstatement or fraudulent representation or that he concealed any facts from plaintiffs.
Following trial before the court judgment was entered for the defendants and plaintiffs prosecute this appeal therefrom.
The trial court found 'that prior to completion of said purchase plaintiffs were informed that the sister and brother-in-law of defendant were only temporarily occupying the garage in the rear and were paying $35.00 rent to Henry C. Gaylord until they could find a home of their own and that before renting the garage as housing accommodations plaintiffs should obtain the approval of the Planning Commission of the City of Arcadia and were informed that it was the plan of defendant Gaylord to attach the garage building to the main house by a covered breezeway so as to make it part of the house; that thereafter plaintiffs did request the city of Arcadia planning commission for permission to rent said garage as a dwelling unit and that said planning commission found on March 17, 1949, there was no violation and that it had no jurisdiction in the matter.
'The Court further finds that the garage building was not illegally constructed and that building permits were obtained for its construction and that such construction was inspected, passed and approved by the building inspector of the City of Arcadia.'
Appellants' first contention is that the evidence is insufficient to support the findings and that the latter do not, therefore, support the judgment.
That the property was represented to plaintiffs as having an income of $35.00 a month from the building in the rear and that defendant's sister and her family were occupying the same and paying that amount is without question. The listing or sales agreement with the real estate agent, signed by defendant Gaylord and introduced into evidence specifically set forth that the property was producing an income as aforesaid. That plaintiffs did not read the document is unimportant because defendant's agent informed them of the statements therein contained as to income from the structure in the rear.
That portion of the court's findings aforesaid that 'the garage building was not illegally constructed and that building permits were obtained for its construction and that such construction was inspected, passed and approved by the building inspector of the city of Arcadia' is totally unsupported by the evidence insofar as construction of said building for human habitation is concerned. True, a permit was obtained and inspection made, but the permit and inspection related only to the construction of a garage. The building permit issued by the city of Arcadia and introduced into evidence, issued August 13, 1947, reads in part as follows: 'Permission is hereby granted to H. C. Gaylord to erect garage at 626 West Camino Real Street * * * value $1,000.00'. The building in the rear however, was not used as a garage but was a 'dwelling' within the meaning of the State Housing Act. Health and Safety Code, sec. 15014. It was occupied by a family. Health and Safety Code, sec. 15016. At no time was a permit obtained for a dwelling in conformity with sections 15351 and 15353 of the Health and Safety Code, and at no time was the building in question inspected or approved as a dwelling. Furthermore, the building department of the city of Arcadia notified appellant Mrs. Panzich on January 18, 1949, after the close of escrow on November 16, 1948, that the rear building could not be legally rented as a dwelling.
That defendant had knowledge of the fact that the rear structure was being occupied as a dwelling in violation of law and that no permit had been issued for the erection of such structure as a dwelling, is evidenced by his testimony that on one occasion he heard his mother warn plaintiff John Panzich 'that he had better check the legality of renting that garage to anyone except to one of his own family.'. With reference to any such warning being given plaintiffs prior to the consummation of the deal and closing of the escrow, defendant Gaylord testified as follows:
'Q. Well, now, during these two conversations, you did not tell them that you knew that the occupancy of the garage, we will call it, was illegal, did you? A. Mr. Holes, my agent at that time, the man who brought them over, was doing the talking. He was selling my property. I explained the breezeway because he asked me to.
'Q. Well, Mr. Holes didn't tell them that, did he, that you knew that this occupancy was illegal? A. I don't remember whether he did or not. I don't think he did, but they were told later.'
The misrepresentation, either positively or by concealment, concerning inspection, approval and permit by the municipal authorities, constitutes a misrepresentation of fact and is actionable, Mullin v. Rousseau, 112 Cal.App. 719, 725, 297 P. 944.
One party to a contract is under no obligation to investigate and verify the statements, as to the truth of which the other party to the contract, having full means of knowledge, has deliberately given his word, Jarvis v. Singleton, 129 Cal.App. 250, 254, 255, 18 P.2d 382. A purchaser has the right to rely on the representations of the vendor as to facts not within the former's knowledge, and this responsibility of the vendor cannot be evaded by showing that the buyer might have ascertained by inquiry that the representations were untrue, Sullivan v. Helbing, 66 Cal.App. 478, 483, 484, 226 P. 803.
With reference to the court's finding that 'plaintiffs were informed that the sister and brother-in-law of defendant were only temporarily occupying the garage in the rear and were paying $35.00 rent to Henry C. Gaylord (respondent) until they could find a home of their own * * *', the record reflects that such information was given to appellant John Panzich only, that appellant Mrs. Panzich was given no such information, that the date of imparting such information to appellant John Panzich was on the Saturday or Sunday prior to November 15, 1948 and while the deal was in escrow (escrow was closed November 16, 1948). Coming as it did, on the eve of the closing of the escrow and when appellants had performed their part of the contract in full, they were not required to rescind the contract. Two courses were open to them: they could restore whatever they had received and proceed in equity to rescind the contract and recover what they had parted with; or they could, as they have done in this case, proceed in affirmance of the sale and recover for deceit, fraud or misrepresentation. And this is also true if before the completion of the contract the purchaser learns of the fraud of the vendor. If the vendee elects to affirm the sale and sue for damages, the measure of such damages will ordinarily be what appellants seek to recover in the instant action--the difference between the value of the property as it is and what its value would have been if its condition had been as represented, Sullivan v. Helbing, supra, 66 Cal.App. at page 484, 226 P. 803; Williamson v. Clapper, 88 Cal.App.2d 645, 653, 199 P.2d 337. By affirming the contract the vendee does not affirm the fraud. He consents to be bound by the provisions of the agreement, but in so doing, he does not thereby release or waive his claim for damages arising from a fraud collateral to the agreement, Williamson v. Clapper, supra, 88 Cal.App. at page 654, 199 P.2d 337.
Respondent urges and the court found that following consummation of the transaction, appellant Mrs. Panzich requested permission from the Planning Commission of the City of Arcadia to rent the rear building as a dwelling and that the commission found that there was no violation of the zoning ordinance. The minutes of said planning commission were introduced into evidence and show that at a meeting held March 3, 1949, the following occurred: 'In the matter of the request of Mrs. Martha Panzick, 626 W. Camino Real, for permission to rent out a garage which had been converted into a house, Mr. Ingstad and Mr. Stoner (two members of the commission to whom the matter had theretofore been referred for investigation) reported that in their opinion that there is no violation of zoning, and that the Planning Commission has no jurisdiction. Motion by Mr. Ingstad, seconded by Mr. Sullivan and carried that the letter be filed and the applicant be advised'.
Respondent is not aided by the foregoing which simply means that the planning commission found no violation of the zoning ordinance insofar as the construction of a second building under the permit for a garage was concerned and therefore, the planning commission was without jurisdiction in the matter. This is manifest from a reading of section 12 of Zoning Ordinance No. 439 of the City of Arcadia which was introduced into evidence. As heretofore pointed out, appellants were advised by the inspector of the building department of the city of Arcadia that the rear building could not be used as a dwelling because it was not constructed in accordance with the provisions of the State Housing Act contained in the Health and Safety Code of California as heretofore pointed out.
Respondent complains that appellants failed to object to the findings in the lower court. Where, as here, appellants do not contend that the court failed to make findings upon all material issues, but assert that the evidence fails to support the findings, and are not attacking the sufficiency of the same, they were not required to present such matters to the trial judge.
Neither were appellants obligated to move for a new trial as a prerequisite to an appeal to this court from the judgment. Huber v. Walters, 114 Cal.App. 323, 325, 299 P. 803; Hoyt v. Thomas, 50 Cal.App. 329, 335, 195 P. 260; Smith v. Lightston, 182 Cal. 41, 43, 186 P. 769.
We are not unmindful of the rule which inhibits an appellate tribunal from interfering with the conclusion arrived at by the duly constituted trier of facts upon a conflict of evidence and where the record contains substantial evidence to support the judgment rendered. In the instant case the record clearly and without contradiction shows that representations were made that the building in the rear was lawfully constructed and occupied as a dwelling, and was producing an income of $35.00 per month. That it had been inspected and approved by the municipal building authorities as such, when in truth and in fact respondent knew, as he subsequently advised appellants, such structure could not be occupied as a dwelling. The documentary evidence consisting of the building permit, viewed in the light of the hereinbefore mentioned provisions of the State Housing Act, clearly demonstrate that the construction of the rear building was authorized as a garage and not as a dwelling.
The evidence of misrepresentation or concealment by respondent Gaylord to appellants as to matters of fact is abundant, and when reviewed in the light of the documentary evidence and the provisions of the above-mentioned State Housing Act, of which the court takes judicial notice, presents no substantial conflict. It therefore follows that the findings and judgment are bereft of substantial evidence to support them.
The question now arises whether the case should be remanded on all issues or the issue of damages alone. The appellate courts have power to order a retrial on a limited issue, if that issue can be separately tried without such confusion or uncertainty as would amount to a denial of a fair trial, Gasoline Prods. Co. v. Champlin Refining Co., 283 U.S. 494, 499, 51 S.Ct. 513, 75 L.Ed. 1188; Robinson v. Muir, 151 Cal. 118, 125, 90 P. 521; Wilke v. Crofton, 34 Cal.2d 304, 310, 209 P.2d 790. Whether it can or not depends upon the circumstances of each case. In the instant action, all parties stipulated at the trial to present all their evidence affecting the issue of liability, deferring the question of damages until determination of the issue of liability. This court having determined that the trial court was in error in its decision upon the issue of liability, and that the judgment should have been in favor of plaintiffs on that issue, there remains only the question of damages to be determined. Since this does not affect the other issue, a retrial of the entire case is not required, Collins v. Ramish, 182 Cal. 360, 368, 369, 188 P. 550; Gray v. Cotton, 166 Cal. 130, 139, 134 P. 1145; Pearsall v. Henry, 153 Cal. 314, 330, 95 P. 154, 159; Paul v. Williams, 64 Cal.App.2d 696, 703, 149 P.2d 284.
The judgment is reversed and the cause is remanded for a new trial solely upon the issue of the amount of damages, with directions to the trial court to make findings on liability in accordance with the views here expressed and the evidence already taken, and on the amount of damages in accordance with the evidence to be taken, and enter judgment for plaintiffs in that amount.
DORAN and DRAPEAU, JJ., concur. --------------- * Subsequent opinion 244 P.2d 3.