Lozier v. Janss Investment Co.

PRESTON, J.

As to defendant Janss Investment Company this is an action for the return of the consideration paid by plaintiffs on contracts to purchase certain real property in Los Angeles County, following a unilateral rescission accomplished prior to commencement of the action, upon a written notice and offer of restoration. As to defendants Ellis and Germann, it is an action for damages for fraud and deceit, as these defendants did not receive the consideration paid but did make the fraudulent representations complained of.

The facts are that plaintiffs executed five contracts of purchase with defendant investment company, each covering a separate lot in Westwood, Los Angeles County, the interest therein contracted for being 68.5 per cent. One Saidee Benson, at the instance of defendants, was a purchaser with plaintiffs to the extent of the remaining 31.5 per cent interest in said properties; however, having refused to join with plaintiffs in this action, she became a defendant herein by order of court.

The court made findings in accord with the allegations of the complaint and judgment was entered accordingly against the three above-mentioned defendants, investment company, Ellis and Germann, for the amount of the consideration paid with lawful interest thereon from the date of payment. Each of said three defendants has appealed.

The complaint, proof- and findings are substantially to the same effect. The contracts were executed on September 23, 1927. The combined purchase price of the several lots was to be $27,000. The aggregate of the initial payments made was $6,506.40 by plaintiffs and $3,000 by said Saidee Benson. Future payments were to begin on March 23, 1929. How

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ever, no other payments were ever made. The negotiations were conducted by two salesmen of defendant investment company, to wit: Said defendants Ellis and Germana. These salesmen represented to plaintiffs that they were acquainted with the values of property in the

vicinity;

that the value of the property here involved was in excess of $27,000; that during the period of eighteen months elapsing between the initial payments and the next payments to be made on the contracts, they would guarantee to resell the property at a profit to be divided between plaintiffs and said Saidee Benson, according to their respective interests, and they further represented to plaintiffs that they would never be required to make any further payments on said contracts; also that they knew then of some persons who would buy two of the lots. These promises were renewed from time to time by said salesmen, both before and after the expiration of said eighteen months’ period. While plaintiffs knew that the promises of the agents were at variance with the contracts, nevertheless the evidence shows that said agents, by their repeated assurances, prevented plaintiffs from taking the matter up directly with the investment company; that the agents actually requested plaintiffs not to take it up with their principal.