Lund v. Cooper

[350]

WARNE, J. pro tem.

*

From a judgment in favor of plaintiffs in an action to rescind and recover the down payment made on a contract for the purchase of certain real property, defendants appeal.

On January 15, 1954, the parties to this action entered into a written contract which provided that defendants would sell, and plaintiffs would buy, certain real property upon which was situated an incomplete dwelling house. The purchase price was $14,500, of which $1,500 was paid concurrently with the signing of the contract. Under the terms of the contract, plaintiffs were to apply to the Bank of America at Gridley, California, for a secured loan of not less than $7,000, which was to be applied on the purchase price, and in addition thereto were to give the defendants a promissory note, secured by a second deed of trust, for the balance then remaining due. It appears that the parties discussed with the bank manager the obtaining of a loan, but plaintiffs did not make any formal application for such and it was not procured, probably because the bank was not interested in making a loan for $7,000. Title to the property was at all times vested in the defendants. The defendants, who were unlicensed contractors, agreed to and did complete the building according to the plans and specifications. On or about June 1, 1954, the building was substantially completed and plaintiffs then took possession and rented the premises to a tenant for three months and received $240 in rentals. Thereafter, on September 9, 1954, according to the court’s finding, plaintiffs gave notice of rescission and on October 27, 1955, filed this suit to recover the $1,500 down payment. Defendants answered and by way of counterclaim alleged that they had been damaged in the sum of $1,500 by reason of the breach of the contract by the plaintiffs. Plaintiffs then amended their complaint by adding a cause of action wherein they alleged that the defendant W. H. Cooper acted in the capacity of a contractor, within the meaning of the Business and Professions Code, in constructing said house and purporting to sell it to the plaintiffs. They prayed that said contract be declared void and against public policy; that the defendants’ counterclaim be denied and that the $1,500 be restored to them. .The trial court found that the parties had entered into the agreement on January 15, 1954; that plaintiffs had paid, pursuant to the contract, $1,500 as part payment on the purchase price; that the defendant W. H. Cooper