Worthen v. Jackson

VALLÉE, J.

Appeal by defendants from a judgment re scinding a contract of sale of real property on the ground of

[617]

fraud. The property was improved with a one-family residence.

The elements of fraud were proven and found. The misrepresentations were that the property was not filled earth. Contrary to defendants’ contention, it was determined the property was filled earth. A soil engineer testified the earth was filled; the fill varied in depth from about 4 feet to about 12 feet and at some spots it was zero; the house was built on filled ground, except a small part which was on natural ground. The court found the property was filled earth and not suitable to provide a solid foundation for the building thereon.

The misrepresentations were made by defendants’ agent, a real estate salesman. It is argued that defendants are not responsible for the representations of their agent. Rescission of a contract may be had as against even an innocent principal because of unauthorized misrepresentations by his agent.

(Simmons

v.

California Institute of Technology,

34 Cal.2d 264, 273 [209 P.2d 581].) An innocent principal so contracting will not be permitted to enrich himself by reason of his agent’s fraud, and any property received by the principal is held by him as a constructive trustee for the person defrauded.

(Greenberg

v.

Du Bain Realty Corp.,

2 Cal.2d 628, 629 [42 P.2d 628] ;

Weiner

v.

Roof,

10 Cal.2d 450, 452 [74 P.2d 736].) Defendants are responsible for the misrepresentations of their agent. Furthermore, there was evidence from which the court could infer that defendants knew the house was built on filled earth and that they intentionally concealed the fact from plaintiffs.