Golem v. Fahey

STONE, J. pro tem.

*

Appellant leased from respondent about 11 acres of land in the city of Milpitas, Santa Clara County, located at the corner of Trimble Road and Oakland Highway. It was being used for agricultural purposes at the time but its location near the Ford assembly plant project made it suitable for commercial uses. The term of the lease was for 99 years and appellant agreed to pay $500 per month rent; to pay all taxes assessed against the

land;

to make certain improvements of a commercial nature, and to save the lessor harmless from all claims by reason of his use and occupation of the property. The lease clearly contemplated a commercial use of the property.

[475]

Respondent was represented by two real estate brokers who handled all of the preliminary negotiations with appellant. After the lease, which had been prepared by appellant, an attorney, had been executed, one of the brokers discovered that the property was zoned for agricultural use. Thus, appellant could not use the property for the purposes specified in the lease unless it was rezoned. This was attempted but never completed. Appellant did nothing, simply refusing to recognize the lease. Respondent consulted her attorney who wrote appellant and getting no satisfaction, filed suit for rent due, unpaid taxes and a penalty for failure to construct improvements, all as required by the lease. Appellant answered the complaint and affirmatively pleaded mistake and fraud which he alleged made the lease void. He gave no notice of rescission and pleaded none. The trial court, sitting without a jury, found against appellant’s contentions, specifically finding that there was no mutual mistake and that there had been no fraud or misrepresentation on the part of respondent. Judgment was entered in favor of respondent for the amounts due under the terms of the lease. This appeal followed, appellant contending that the lease was void by reason of both mistake and fraud.

The evidence sustains the finding of the trial court that respondent was not guilty of misrepresentation and that her agents, the real estate brokers, perpetrated no fraud on appellant. We cannot agree with the finding that the lease was not the result of mistake. Not only does the testimony reveal that all persons concerned with the transaction were under the impression that the property leased could be used for commercial purposes, but even more persuasive is the lease itself which requires a commercial use. The appellant was bound to ‘ ‘ expend the sum of at least $10,000 in improvements on the premises within one year.” The lease also provided: