Groppengiesser v. Lake

California Supreme Court Jun 12, 1894 No. No. 15338Published

Before: Temple

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Holding. A purchaser may rescind a land contract based on material misrepresentations, even if the vendor did not know the statements were false or believed them to be true, provided the purchaser relied on those statements without other means of knowledge.

Issues

Whether a vendor's material misrepresentations justify rescission of a land contract when the vendor lacked personal knowledge of the property.
Whether a vendor commits actual fraud by asserting as true facts they do not know to be true, intending for the purchaser to rely upon them.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It does not matter that defendant did not know that what he stated was untrue, or that he believed it to be true.”

“It is actual fraud all the same if he stated as true that which he did not know to be so, intending that plaintiff should act upon it, and then entered into the contract, knowing that plaintiff did so in reliance upon his statements”

Synopsis

Vendor and Purchaser—Sale op Land—Fraudulent Representations • —Rescission.—Upon a contract for the sale of land, where the statements of the vendor constituted all the knowledge possessed by the purchaser as to the subject matter of the sale, and such representations are false in material respects, the purchaser, acting promptly, may rescind the contract of purchase.

Id.—Misrepresentations as to Character op Land—Conflicting Evidence—Review Upon Appeal.—Where the evidence is conflicting as to whether the misrepresentations of the vendor as to the character of the land purchased were material, or were mere matters of opinion, but there is testimony tending to show that there were positive assertions as to the character of the land, and its suitableness for cultivation, and for a fruit ranch, which were not mere matters of opinion, a finding in favor of the plaintiff, in an action to rescind the contract, cannot be disturbed upon appeal.

Id.—Knowledge of Vendor When Immaterial.—Where the statements of the vendor constitute all the knowledge possessed by the purchaser as to the subject matter of the sale, it is immaterial that the vendor had not personally seen the land, or did not know that what he stated was untrue, or that he believed it to be true.

Id.—Actual Fraud—False Statements Not Known To Be True.—It is actual fraud for a vendor to state as true that which he does not know to be true, intending that the purchaser should act upon it, and to enter into the contract knowing that the purchaser did so in reliance upon his statements, he not having other means of knowledge.

Motion for New Trial—Discretion—Appeal.—A motion for a new trial is addressed to the sound discretion of the trial court, and that discretion will not be interfered with unless the appellate court can see that there has been an abuse of it.

Temple, C. This action was brought to rescind a contract for the purchase of land because of alleged fraudulent representations on the part of the vendor, relying upon which plaintiff made the contract; and to recover money paid under the contract.

The court found all the allegations of the complaint true and all the statements in the answer and cross-complaint untrue.

Defendant's motion for a new trial having been denied, he appeals from the judgment and order. He contends that a misrepresentation to justify rescission must relate to matter which induced the party to contract, and concerning which the purchaser had not equal means of information. That the parties here were entire strangers, and plaintiff was told that defendant had no personal knowledge in regard to the property, and, furthermore, defendant submitted to him all the information he himself had.

The evidence is, however, conflicting upon this question. Plaintiff, according to his testimony, was a cook at San Jose. He saw the advertisement of defendant, who is a real estate agent, and called upon him to inquire. Defendant showed him a book describing different tracts which he had to sell. From these descriptions he selected a tract of eighty acres in El Dorado which in the book was marked six dollars per acre. Defendant then said that was his best piece of land, and, although it was marked six dollars per acre, he could not sell it for less than ten. He said the land was mostly level, slightly rolling, and about two and one-half acres in it possibly could not be used because it was ravines—was bad. Defendant handed him some photographs of portions of the land, and said the wood was all over the land like that shown in the picture. Also that there was a ditch on the section from which [40]water could be easily brought to it. The photographs were in evidence, but are not produced here.

He also handed plaintiff a report made to defendant by an employee in which the tract is particularly described. Of course, the defendant is responsible for the statements in this report. It says that the land can be easily irrigated, that it slopes gradually south and southwest. That the natural vegetation is oak, and some small pine, and elder, and light brush that is easily cleared or that it furnishes good browse for stock. Some snow falls, but, as in all places where the fall of snow is light, it does more benefit than harm. Excellent fruit is raised throughout the locality. Every thing grows to perfection. This ought to be as attractive a residence as Auburn or Placerville. The soil is a deep red color and very similar to the soil in the best orchard and vineyards in these foothills.

Groppengiesser v. Lake

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