Johnson v. Withers

TAGGART, J.

Action for return of a $1,000 cash deposit made on a contract to purchase an interest in mining property, and for the rescission of the contract. Judgment for plaintiffs. Appeals from judgment and from order denying defendants’ motion for a new trial.

The rescission of contract was made and the judgment of the court based upon the ground of a mutual mistake of facts relating to the subject matter. The complaint states two causes of action: The first alleges the purchase by plaintiffs from defendant Withers of a two-thirds interest in a half section of land in Riverside county for $20,000; $1,000 cash, balance in two deferred payments, and the placing of the deed of the property and the cash payment or deposit in escrow with the defendant corporation to be held until the purchase price should be fully paid up. As an inducement to plaintiffs to purchase 'the property defendant Withers represented it to be a peculiar value by reason of the presence of “magnesite”; that at a particular point on the property there was a large deposit of said mineral; that said deposit had been uncovered and disclosed by means of certain discovery shafts, and that defendant Withers had caused said property to be carefully examined and inspected by a competent engineer and mineralogist, and the quantity of magnesite so discovered and in place in said portion of the property amounted to fifty

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thousand tons. That plaintiffs were ignorant of mines and minerals and the methods of measuring and estimating the quantity of mineral in place, and relied wholly and entirely upon the representations made by Withers and the estimates of the expert as represented to them by Withers, and were induced thereby to enter into the contract of purchase. Subsequent to the making of the contract and the deposit of the $1,000 in the bank, plaintiffs procured a copy of the report of the expert from which they discovered that the expert had •made a mathematical error in his computation, and that instead of there being fifty thousand tons of magnesite in the portion of the property experted there were only five thousand tons. Plaintiffs immediately served notice of rescission, released the deed in escrow, and demanded the return of the cash payment, which return was refused.

The second cause of action is for money had and received.