Thomas v. Krug

PATROSSO, J.

Plaintiff instituted this action to rescind, upon the ground of mistake, a contract for the purchase of a parcel of real property, and to recover the amount paid by him on account of the purchase price thereof. From a judgment in favor of defendants, the plaintiff appeals.

The agreement in question which consisted in part of a receipt evidencing a deposit of $500 and an escrow agreement provides for the purchase of the property by plaintiff for the total sum of $11,000 payable $2,200 in cash and the balance to be evidenced by a promissory note secured by a trust deed upon the subject property, payable in monthly installments, but expressly “subject to buyers being able to operate a ready mix plant on this property subject to the approval of the San Fernando City Planning Commission.” Following the opening of the escrow, application was made to the planning commission for authority to operate a ready-mix plant upon the property which, after a hearing, was granted and plaintiff notified thereof, whereupon plaintiff delivered a written notice to the escrow agent, reading as follows: “This is to notify you that we are able to operate a ready mix plant on subject property and that we have the approval of the San Fernando City Planning Commission,” whereupon the escrow agent closed the escrow and delivered to defendants the $1,700 deposited by plaintiff, as well as the promissory note and trust deed executed by him in accordance with the agreement. However, thereafter within the time

[943]

and in accordance with the provisions of the zoning ordinance of the city of San Fernando, copy of which has been filed with us pursuant to stipulation of the parties, certain property owners opposing the granting of the variance appealed to the city council, which after a hearing reversed the action of the planning commission and refused to grant the variance. It is conceded that as a result plaintiff was not able to operate a ready-mix plant upon the property. Plaintiff thereupon gave written notice of rescission and demanded return of the money paid by him, and upon refusal of defendants to do so instituted this action. Subsequent thereto and prior to trial, defendants foreclosed the trust deed given by plaintiff and became purchasers of the property.

The court found the facts as hereinbefore recited, but further found to be untrue the allegation in plaintiff’s complaint that plaintiff and defendants at all times prior to the action of the city council in reversing the order of the planning commission “mistakenly believed that authority from the San Fernando Planning Commission was the only permission required by plaintiff for the operation of a ready mix plant on the above described property.” The court further found that plaintiff by authorizing the escrow agent to make payment and deliver the note and trust deed to defendants upon being advised of the action of the planning commission thereby accepted the same “as satisfaction of the condition of the escrow agreement.” From these findings the court drew the following conclusions of law: “Said escrow agreement was fully executed and performed. Plaintiff did not execute and perform the escrow agreement under any mistake of law or fact and plaintiff did not suffer any damage. The possibility of said permit being revoked was readily foreseeable and was reasonably foreseeable by plaintiff.”