Fabian v. Alphonzo E. Bell Corp.

McCOMB, J.

From a judgment in favor of defendants after trial before the court without a jury in an action to rescind a contract for the purchase of real property and to recover the value of improvements placed thereon, for the reason that the contract had been induced through (1) fraud, (2) misrepresentation, (3) nondisclosure of material facts, (4) mistake, and (5) failure of consideration, plaintiffs appeal.

For the purpose of this appeal we may assume the following facts:

On or about July 9, 1935, plaintiffs purchased from defendants a parcel of real property located in the county of Los Angeles. At such time two major geological faults crossed through said parcel of property, which faults were unknown to plaintiffs or either of them and known to defendants. Defendants failed to disclose to plaintiffs or either of them the existence of these faults and represented that the ground materials comprising the parcel of land were suitable and safe for the erection and maintenance of a residence. Thereafter plaintiffs erected a dwelling house with adjacent buildings upon the property. February 6, 1937, a slide occurred which resulted in injury to the buildings plaintiffs had erected. April 19, 1938, plaintiffs first orally notified defendants of their election to rescind their contract on the ground of misrepresentation.

As a third separate affirmative defense defendants alleged that plaintiffs’ causes of action were barred by laches.

This is the sole question necessary for us to determine:

Were plaintiffs barred from rescinding their contract because of lachesf

This question must be answered in the affirmative. The trial court in response to the issues raised by defendants’ third affirmative defense of laches, made the following finding.

“As to the third separate defense, the Court finds that by reason of the slide that occurred in February, 1937, in the westerly portion of the bank, plaintiffs then knew that the westerly portion of the bank, including the overburden, was unstable and unsafe and the knowledge that they had reasonably gave notice to them that further slides were likely

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to occur in the westerly portion of said hank, and they were thereby put on inquiry, and ordinary prudence and judgment would have required them to take adequate means to ascertain whether the bank as it then remained was so unstable and incompetent as to be unsafe without the installation of a retaining wall or without other measures taken to prevent further slides; but plaintiffs did not make such further inquiry nor did they make any effort to ascertain whether, or to what extent, the representations theretofore made to them by said defendant Bell Corporation were untrue. ’ ’