Harrington v. Paterson
Before: Dyke
Synopsis
Vendor and Purchaser—Rescission of Purchase — Discovery of Fraud—Diligence.—A purchaser desiring to rescind the contract of purchase for alleged fraudulent representations of the vendor in inducing the purchase must do so promptly, upon discovery of the facts constituting the fraud, and as soon as reasonably possible thereafter should commence the proceedings for relief.
Id.—Imputed Knowledge—Means of Knowledge—Putting upon Inquiry.—The purchaser must be held to have knowledge of the facts constituting the alleged fraud whenever the means of knowledge thereof existed, and the circumstances were such as to put him on inquiry.
Id.—Acquiescence—Waiver of Relief.—Acquiescence by unnecessary delay after actual or imputed knowledge of the facts constituting the fraud, will defeat the equitable relief; and if, after discovery of the falsity of the representations, the purchaser conducts himself in reference to the transaction of purchase, as though it were still subsisting and binding, he thereby waives all relief for rescission thereof.
Id.—Assumption of Mortgage—Mortgage to Vendor—Payments after Discovery of Fraud-—Waiver of Rescission.—Where the purchaser assumed a mortgage made by the vendor to a hank, and gave the vendor a mortgage for the unpaid residue of the purchase money, and after admitted discovery of the falsity of the alleged misrepresentations continued for many months to make payments to the bank and to the vendor, and took no steps for rescission otherwise than by cross-complaint in an action in which both mortgages were sought to be foreclosed, and which was brought more than sixteen months after the alleged discovery of fraud, he is chargeable with laches, acquiescence, and waiver of the right of rescission.
VAN DYKE, J. October 7, 1891, appellant purchased from the plaintiff certain premises in the city of Oakland, with a [543]dwelling-house thereon, for the sum of nine thousand dollars. A thousand dollars was paid in cash, and the purchaser assumed and agreed to pay and discharge the mortgage on said premises, previously executed by the plaintiff and her husband to the defendant bank, in the sum of three thousand five hundred dollars; and also executed a note and mortgage to the plaintiff in the sum of four thousand five hundred dollars, the balance of the purchase price.
The action is for the foreclosure of the mortgage executed to the plaintiff, and was commenced April 26, 1895. The defendant bank, by way of cross-complaint based upon its own and prior mortgage, also asked for foreclosure. The defendant Paterson filed his' amended answer and cross-complaint as against the plaintiff. The plaintiff demurred “to the cross-complaint and affirmative matter set forth in the amended answer and cross-complaint of the defendant, Edward M. Paterson,” on the ground, among others, that it did not state facts sufficient to constitute a cross-complaint or cause of action, nor entitle the defendant, Paterson, to any affirmative or other relief.” The court sustained “the demurrer of plaintiff to defendant Paterson’s amended cross-complaint” without leave to amend.
The matters averred in the cross-complaint necessary to be considered are that, while the negotiations for the purchase were pending, the husband of the plaintiff, as her agent, represented to the defendant that the dwelling-house on the premises was in every respect a first-class building; that it was constructed throughout with first-class material; that it had been built for plaintiff and her family; and that, in order to insure the most thorough construction and equipment of said building and the use of the best- material therein, the plaintiff had caused the same to be build by day’s labor and not by contract; that said building was constructed at a much greater cost and in much more substantial manner, and of much better materials than it would have been if built by contract; and that it cost five thousand two hundred dollars, and was worth the sum of five thousand two hundred and fifty dollars; and that the land on which it was built, being the premises conveyed, was worth three thousand two hundred and fifty dollars; that these representations were false; that the dwelling-house was built by con[544]
More from California Supreme Court
- People v. Wende (1979)
- People v. Watson (1956)
- People v. Superior Court (Romero) (1996)
- People v. Kelly (2006)
- Auto Equity Sales, Inc. v. Superior Court (1962)
- Aguilar v. Atlantic Richfield Co. (2001)
- People v. Lewis (2021)
- In Re Estrada (1965)
- Denham v. Superior Court (1970)
- People v. Marsden (1970)