Levy v. Wolff

McCOMB, J.

Defendant appeals from a money judgment for plaintiffs based on findings to the following effect: Plaintiffs paid to defendant $16,500 cash for certain unimproved real property in Contra Costa County together with a lease thereof. Both parties honestly believed the lease to be in existence, but in proceedings instituted by a third party in which the plaintiffs were defendants it was found that said lease had never been binding or in force. In that action, these plaintiffs were, however, held entitled to recover from the tenants the sum of approximately $4,400, being the reasonable rental value for the period of the tenants’ occupancy. Plaintiffs incurred expenses in connection with that action in the sum of approximately $1,100, including costs and counsel fees.

The judgment appealed from here awarded plaintiffs as damages the diminution in the value of the property because of the nonexistence of the lease in the sum of approximately $5,800, less the net amount recovered in the other action, being the difference between the rent recovered by plaintiffs from the tenants and the expense incurred by plaintiffs in making that recovery.

Defendant contends:

First,

that if the decision was based on honest mutual mistakes he could not be liable for damages and that if there was partial failure of consideration, plaintiffs had, in accordance with section 1728, subdivision 2, of the Civil Code (relating to the destruction of goods, contracted to be sold) the election, either to rescind the contract, or to uphold it and to pay the full price, the contract being indivisible.

This contention is erroneous. A person who has paid money to another as full performance of a contract voidable by the payor for mistake and who has received a part of the agreed exchange is entitled, at his election, to keep what he has received and to have restitution of so much of his payment as has not been compensated for by the other’s part performance. (Rest., Restitution (1937), § 25, p. 113;

Butte Creek Consol. Dredging Co.

v.

Olney,

173 Cal. 697, 705 et seq. [161 P. 260];

cf. Quarg

v.

Scher,

136 Cal. 406, 411;

Anderson