Sprague v. Hart

TAGGART, J.

This is an action to recover the- sum of $1,000 alleged to be due on a contract to reimburse, and repay plaintiff payments made by her upon the purchase of certain real estate; and for a decree to sell the real estate and apply the proceeds of such sale to the payment of the amount due.

Plaintiff had judgment on the pleadings according to the prayer of the complaint and defendants appeal.

It is alleged in the complaint that plaintiff agreed to purchase from the defendant Merchants’ Trust Company certain lots in Ocean Beach, San Luis Obispo county, and for that purpose on March 28, 1906, entered into seven contracts with that company and made certain payments thereon, amounting in the aggregate to $1,000; that the title to the lots at the time they were so purchased was held by said-trust company as trustee for the defendant Hart and other persons unknown to plaintiff, -that the contracts were executed by the trust company as such trustee, and that thereafter the trust company held, and still holds, the title thereto, in trust for plaintiff and the other defendants named. That on December 15, 1906, the defendant Hart- acquired all the equitable rights of all other persons, except plaintiff, in the lots mentioned, the legal title thereto remaining in the Merchants’ Trust Company, and on the last-mentioned date plaintiff and Hart entered into an agreement in writing, wherein it was recited that the plaintiff had demanded a rescission of the contracts of sale on the ground that she had been induced to purchase the lots by representations which were not true, whereby Hart agreed that, while not admit

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ting that any misrepresentations had been made, yet in order to avoid litigation, he would procure the cancellation of the contracts of sale, release plaintiff from all obligation to make further payments thereunder, and restore to her the payments which she had made thereon. By this agreement plaintiff was to be reimbursed for such payments, by accepting conveyances to her, free of encumbrances, of such of the lots us she might select, equal in value to the total amount paid by her, together with interest thereon to date of payment.

Owing to the inability of the parties to agree upon a valuation of the lots to be taken by plaintiff under this contract, a new agreement was made on March 23, 1907, wherein the defendants Williams and Brownstone are named as parties of the first part, Hart the party of the second part, .and the plaintiff of the third part. The inability of the parties to agree under the contract of December 15th is recited, that instrument is made a part of the new agreement and the purpose of the latter is stated as follows: “Now, therefore, for the purpose of adjusting said disagreement as to valuation, and to avoid further controversy,” the parties mutually agree, etc. By this instrument it is provided that the Merchants’ Trust Company is to continue to hold the title to the lots; Williams and Brownstone agree to sell the lots or as many of them as may be necessary to reimburse the plaintiff the original payments made by her with interest, ■such sales to be made as soon as practicable, but in any event before the-day of September, 1907, and at such prices us would provide sufficient means to so reimburse plaintiff after paying all expenses and commissions. The Merchants’ Trust Company is to make conveyances of the lots as sold, receive the purchase money, less expenses and commissions, which are not to exceed forty per cent, and pay over the same to plaintiff’s attorney for her. This instrument hears the signatures of the parties thereto, and written assent of the trust company to act as trustee thereunder.