Wood v. Metzenbaum

California Court of Appeal Nov 29, 1951 No. Civ. 7993Published

Before: Adams

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Holding. The court held that the cross-complaint failed to state a cause of action for rescission because it did not allege an actual mutual mistake, but rather a hypothetical one contingent upon the truth of the plaintiffs' claims.

Issues

Whether the cross-complaint sufficiently alleged a cause of action for rescission based on mutual mistake.
Whether the pleading should be treated as a cross-complaint or a counterclaim.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It is true that a rescission can be had on the mutual mistake of the parties, or of one of the parties; but in the instant cross-complaint cross-complainants neither allege a mutual mistake, nor a mistake on their own part.”

“A “mutual” mistake is one made by both parties as to the same proposition. Because one or the other may have been mistaken does not constitute mutuality of mistake; and does not constitute ground for rescission for mutual mistake.”

ADAMS, P. J.

Appellants, defendants and cross-complainants in the trial court, have appealed from “the order and judgment . . . dismissing the Cross-Complaint” of defendants. That judgment of the court was entered against them

[728]

after they failed to amend their cross-complaint to which a demurrer had been sustained with leave to amend.

Plaintiffs instituted the action, and defendants filed their cross-complaint, alleging therein that plaintiffs, in August, 1943, agreed to purchase from them certain lands described in the complaint for $125,000, a down payment of $50,000 having been paid, the balance to be paid during a period of five years, same secured by a deed of trust on the land in favor of defendants. It was further alleged that the land sold was leased to Standard Oil Company of California, the lease reserving to the lessors a royalty of one eighth, of which royalty one third was reserved to defendants; that plaintiffs took possession of the land, farmed it with great profit and received their two thirds of the royalty; that in May, 1945, plaintiffs began this suit against them, charging that in the transaction of sale defendants acted as plaintiffs’ agents, and that the royalty reserved to defendants was their compensation for acting as such agents. They then alleged:

“That thereupon it was manifested that the minds of the said defendants and the plaintiff had never met and that,

the claim of the plaintiffs that said defendants acted as agents of plaintiffs to purchase the said land for them, was well founded and true, that a

mutual mistake

had taken place and had been made by plaintiffs and said defendants as to facts material to the contract of sale and purchase and that no actual contract had been made between plaintiffs and said defendants.

“That defendants were induced to convey the lands to plaintiffs because they believed that they were making, as they intended to make, an outright sale of the land to plaintiffs together with two thirds of said one eighth royalty and defendants never did accept and never would have accepted employment from, plaintiffs as agents to purchase the land for plaintiffs as plaintiffs contend and allege in this law suit against defendants. A

Wood v. Metzenbaum

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ADAMS, P. J.

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