Lawrence v. Doty

SHINN, P. J. This is an action of Robert H. Lawrence and wife against George R. Doty and wife for the rescission of a purchase by plaintiffs of a citrus grove for the sum of $80,000, of which $23,000 was paid down, and the balance secured by a note and trust deed. Plaintiffs had paid an additional $17,000 and interest at the time they brought their action. It was alleged in the complaint that plaintiffs were inexperienced in the operation of citrus groves and ignorant as to their value; that defendants represented that the grove contained 11 acres planted to oranges and 8 acres planted to lemons; that the soil was good; the property had an abundant supply of water from a well on the premises; that the grove was of top grade; that the trees were all of good root stock; that the fruit was not damaged by frost or cold; that the lemon trees were highly productive; that all trees were in a healthy condition; that the grove had a total of 800 lemon trees; that the crop then growing was worth $15,000; that the grove was worth $80,000 and would produce a net profit sufficient for the support of a family. It was alleged that the representations were made with intent to deceive plaintiffs, that they were untrue and that the property was worth not more than $40,000, which the defendants well knew. Plaintiffs made their purchase in January, 1946. The complaint alleged that they became suspicious as to the quality and value of the grove in the spring of 1948, that they caused the soil and water to be analyzed and the trees and location to be examined by experts, and that on or about July 7, 1948, the falsity of the representations was established and could not have been established at an earlier date. Plaintiffs gave notice of rescission July 21, 1948, demanded the return of their money and offered to account for any sums due from them to the defendants. Defendants denied the charges of fraud and alleged that prior to their purchase plaintiffs conducted a complete investigation of the property and its income, and purchased the same in reliance upon their own judgment and the advice of third persons. It was also alleged that in January, 1948, when the sum of $2,500 fell due on the note, plaintiffs applied for and were granted an extension to and including July 15, 1948, in which to make said payment, and that plaintiffs thereby confirmed and ratified their said purchase. After an extended trial the court made findings that defendants did not make any false or fraudulent representations, that all of defendants’ representations were made honestly and with the reasonable belief on their part that the same were true, and [939]that on the date o£ plaintiffs’ purchase the property had a reasonable market value of $80,000. It was found that prior to January 1, 1947, plaintiffs conducted a complete investigation of the property, including the soil, water, trees and crops growing thereon, and the income that had been produced therefrom prior to their purchase; that plaintiffs, after their suspicions were aroused, offered the property for sale at prices ranging from $65,000 to $95,000; that in January, 1948, they applied for a six months’ extension of time for the payment of a $2,500 installment on the note, which was granted, and that plaintiffs by their operations of the property and other acts did confirm and ratify their purchase. Plaintiffs appeal from a judgment in favor of defendants.