Soderling v. Tomlin

California Court of Appeal May 5, 1959 No. Civ. 9557Published

Before: Peek

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Holding. The court affirmed the rescission of a land purchase option agreement, holding that the defendants made material misrepresentations regarding property boundaries and encumbrances, and that the plaintiffs did not waive their right to rescind by remaining in possession or accepting limited benefits.

Issues

Whether the evidence supported the trial court's finding of material misrepresentation by the defendants.
Whether the plaintiffs waived their right to rescind the agreement by their conduct following the notice of rescission.
Whether the plaintiffs were entitled to retain possession of the property and secure a lien for expenditures after rescission.

Disposition. affirmed

Quotations verified verbatim against the opinion

“As above stated, the facts support the finding that there were material misrepresentations which were known by defendants to be false at the time they- were made, and that the plaintiffs justifiably relied upon such representations to their detriment.”

“The question of waiver or nonwaiver was one of fact for the trial court to pass upon, and the acts or conduct which defendant claims constituted said waiver were the evidence to be considered in determining the ultimate fact of waiver or nonwaiver.”

“It has been held that a defrauded vendee is entitled to retain possession of property following rescission.”

PEEK, J.

This is an appeal by the defendants from a judgment cancelling and rescinding a land purchase option agreement entered into between plaintiffs as the purchaser-optionees and defendants as the owner-optioners. The judgment ordered plaintiffs to deliver up possession of the premises; ordered that defendants return the consideration paid for the option, plus the value of certain improvements and tax payments made by the plaintiffs, less the reasonable rental value of the property for the period of their occupancy; and declared the amount due plaintiffs to be a lien upon the property.

The option agreement which was entered into on June 23, 1956, provided that in consideration of the sum of $10,000 the plaintiffs were to have physical possession of the ranch, farm equipment and furnishings during the period of the option beginning July 15, 1956, and continuing for a period of one year; and that at any time during said period, plaintiffs had the option of purchasing said property for the sum of $95,000.

When viewed in the light most favorable to the plaintiffs-respondents, the record shows that defendants were the owners of a ranch located in Potter Valley, Mendocino County. Prior to the execution of the option, plaintiff Harold Soderling inspected the ranch in the company of defendant Charles H. Tomlin. Tomlin pointed out the boundary line of the property as running along a certain fence line on the west side of a creek and represented that a certain gravel bar was entirely

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included within the boundary. It was further represented by Tomlin that the gravel bar was the only source of gravel in the Potter Valley area and the revenue therefrom was approximately $1,500 to $2,500 a year. He further represented that the only encumbrance on the property was a $35,000-mortgage. But contrary to defendant’s representations, the description of the property by metes and bounds did not include all of the gravel bar, and the boundary did not run along the fence on the west side of the creek. The evidence further shows that there were some three other sources of gravel in the Potter Valley area, and that there was a Farm Home Administration chattel mortgage of $8,000 as an encumbrance upon the ranch equipment in addition to the $35,000-mortgage.

Both Mr. and Mrs. Soderling testified that they would not have signed the option agreement had they known the true facts.

Soderling v. Tomlin

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PEEK, J.

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