262 P. 61 | Cal. Ct. App. | 1927
Judgment of nonsuit was entered in favor of the defendant in the above-entitled action begun and prosecuted by the plaintiffs for rescission of a certain deed of conveyance made and executed by the plaintiffs and delivered to the defendant, granting and conveying certain lands and premises set forth in the complaint. From this judgment the plaintiffs appeal.
The amended complaint, among other things, alleges that the plaintiffs were the owners of the land described in the complaint. That the defendant, with the intent to obtain the ownership in fee of plaintiffs' real property as described in the complaint, represented to the plaintiffs that the said W.L. Bessolo was the owner of patents covering the manufacture and sale of thirty-eight different kinds of tools, including valuable big rotary tongs; that if the said plaintiffs would deed their real property to the defendant, the defendant would use the real property in question as a factory site for the manufacture of all of said tools, including the manufacture of said valuable big rotary tongs, and that the plaintiffs would participate in a partnership with the said defendant in such manufacture and receive equities in all of said defendant's patents covering said thirty-eight tools, including the patent covering the said valuable big rotary tongs; that the plaintiffs, believing said representations to be true, and being induced thereby, did, on the thirteenth day of June, 1922, grant and convey to said defendant the property described in the complaint; that said defendant, at the time of making said representations, had no intention of carrying out the same; that the defendant has not, since the thirteenth day of June, 1922, assigned, sold, or transferred to the plaintiffs, or either one of them, any interest whatsoever in any partnership in said valuable big rotary tongs, or the patent therefor; that the plaintiffs have received no consideration whatever on account of the transfer of their said real estate to the defendant; that plaintiffs have offered to deliver to defendant everything of value received by the defendant, and, further, demanded a reconveyance and possession of the property covered by said deed; that the defendant has refused to reconvey said property to the plaintiffs; that the real estate involved is now, and was at the times mentioned, of the value of $10,000. The prayer of the complaint is for cancellation of the *264 deed, and for such other and further relief as the court may deem just and equitable.
At the conclusion of the plaintiffs' case defendant interposed a motion for nonsuit on the following grounds: "Mr. Greer (counsel for defendant): At this time I should like to make a motion for a nonsuit based on two grounds, first, that no offer has been shown, and, second, that lack of consideration is not a sufficient ground for the cancellation or rescission of a deed of conveyance of real property" (citing a leading case decided in bank in the supreme court of the state of California in 1889, the case of Lawrence v. Gayetty,
The testimony set forth in the transcript shows that at the time of the transactions herein referred to, the plaintiffs were the owners of the premises described in the complaint; that the defendant promised and agreed to assign and deliver to the plaintiffs three equities in the thirty-eight patents owned by him, including the patent of big rotary tongs; that the patent covering the rotary tongs was the one of value; that the value of the equities in said patent was discussed by the defendant and the plaintiffs. The testimony of the defendant as to the value of the patents is as follows: "I told them that the patent was valued at six million dollars." The testimony further shows that each equity therein agreed to be transferred by the defendant to the plaintiffs was of the value of $3,000. The testimony of the plaintiffs is to the effect that the defendant told them that the transfer of the equities to be made by them to the defendant would give them an interest in the partnership and entitle them to a participation therein; that they were to have half the profits of making the tongs. The testimony of the defendant in this particular, by question and answer, is as follows: "Q. What did you say about participation in the partnership? A. Participation in the partnership, it is in the contract that they had made, that they would have half of the profits on making the tongs. Q. You were very careful to state then at that time that *265 they only were to participate as a partner with you in the profits, and not in the patent, is that true? A. The equity and the filing of the patent office, it was read very carefully and it was so understood, yes, sir. Q. Did you say that to them? We talked to them — we talked about it, yes, sir." The testimony of the plaintiffs, as stated, was to the effect that they were to participate in the partnership as well as in the profits of the making of the tongs. We take the following also from the defendant's testimony: "Q. Didn't you say to them, before they signed this contract, that you were the owner of a patent covering the rotary tongs, and that they could manufacture and sell 100 of them as per your blue-print? A. Yes, sir, I told them that rotary tong." That the defendant did not render to the plaintiffs, or any of them, the consideration agreed upon, is established by the defendants' own testimony, to wit: "Q. Mr. Bessolo, did you actually transfer, at any time, to Joe H. Masero and Lina Masero, his wife, any bills of conveyance in your patents at the Clearwater factory? A. I can't answer that question. Q. Mr. Bessolo, did you actually and personally give any equity to Frank Zamboni or Carmellina Zamboni, his wife, as a consideration for the transfer of this ten acres to you? A. No. Q. Did you see anyone give Frank Zamboni and Carmellina Zamboni, his wife, this one equity that you mention? A. No." The testimony of other witnesses established the fact that no equities, as testified to, were ever transferred by the defendant to the plaintiffs. The equities referred to in the testimony are definite interests in the patents belonging to the defendant, evidenced by declaration filed in the patent office, and are and were transferable only by assignment made and filed in that office. The testimony of the plaintiffs was further to the effect that they had received no consideration whatever for the transfer to the defendant of the ten acres of land mentioned in the complaint, and that the defendant had not retransferred said lands to the plaintiffs, or to any one of them.
[1] Upon this appeal the respondent relies simply upon the two grounds upon which the motion for nonsuit was granted, to wit: That no fraud had been shown; and that failure of consideration was not sufficient to support a judgment for cancellation of rescission of a deed of conveyance to *266
real property. The fact that the complaint sets forth sufficient allegations, and the testimony in the record amply justifies a judgment awarding damages to the plaintiffs is unmentioned. This being an equity case, the plaintiffs were entitled to the relief made by their pleadings and the testimony, irrespective of whether they were correct or incorrect in their views as to the relief to which they were entitled. The relief to which parties may be entitled in an action for rescission is set forth in 4 California Jurisprudence, page 797, section 29: "In an action for cancellation, the court is not limited as to its decree by the mere offers and demands of the parties, but it may do exact justice between them all. It may decree cancellation on the basis simply of a general prayer for relief, though not on a prayer for a money judgment alone. Where the instrument is evidence of different rights or obligations, the cancellation may be as to only a part thereof, allowing the residue to stand. And where it is necessary and appropriate, the decree may take the form of a personal monetary judgment." Other forms of the decree are set forth in the section of California Jurisprudence cited, but are not material here. The forms of relief which we have set forth are supported by numerous authorities. In the case of Lawrence
v. Gayetty, supra, the proposition of law which we have here stated is fully set forth. That action had for its purpose the setting aside of two deeds of conveyance affecting property alleged to be of the value of $10,000, at the time of the conveyance, and which had since increased to the value of $40,000. The action was based upon failure of consideration, and that the defendant had not complied with the agreements made by him. The court, after holding that failure of consideration furnished no ground for the cancellation of the deed before delivered, where the consideration related to some act to be performed in the future, said "Leaving out of sight the question of fraud which, as we have seen, was found against the respondent by the court below, the case cited and the one before us are identical in principle. Such a rule may work hardship in individual cases, and this may be one of the cases; but to hold that a vendee of real estate could, for a failure to pay the purchase money, repudiate his deed and recover the land, would render real estate titles dangerously uncertain, *267
and result in the most serious consequences. The judgment is not sustained by the findings. The complaint in this case, and the prayer for relief were such as to entitle the plaintiff to a judgment for damages, and as his right to such recovery was not based upon, the judgment and order appealed from are reversed, with instructions to the court below to grant a new trial and allow the parties to amend their pleadings if they so desire." The prayer in the case at bar, attached to the complaint which we have set forth, asked for any relief that might be just and equitable, but irrespective of the prayer, the defendant having answered the complaint and gone to trial, the plaintiffs were entitled to any relief shown by their testimony and supported by the pleadings. The same doctrine as set forth in Lawrence v.Gayetty, supra, is upheld in the case of Schott v. Schott,
In the case of James v. James,
The trial court in the case of Lawrence v. Gayetty, supra,
having before it pleadings very similar to the ones in the case at bar, took into consideration only the two grounds upon which rescission was sought, and overlooked entirely the fact that if rescission could not be had, redress might be granted by a court of equity as the justice of the case might require. The opinion from that case which we have quoted shows that the subject of damages was not considered, and in sending the cause back for a new trial, leave was granted to amend the pleadings so as to fully present the question of damages to the trial court. In the case at bar the judgment of the trial court leaves in the possession of the defendant title to $10,000 worth of property, *268
without having paid any consideration therefor whatever. The real thing of value, which, according to the testimony it was agreed that the defendant should pay to the plaintiffs was the transfer by the defendant to the plaintiffs of three equities covering an interest in the business, the profits of the business and interest in the patent to the big rotary tongs and participation in the profits of its manufacture. Section
In the case of Zellner v. Wassman,
[2] In overlooking the question of damages the trial court, in granting a judgment of nonsuit, virtually placed the plaintiffs in a position where they are left absolutely remediless for all the wrongs suffered by them through the failure of the defendant to comply with his agreement. That wrong consists in there being transferred from the plaintiffs to the defendant, real property of the value of $10,000, or thereabouts, without consideration. In considering the evidence in this case, all of which is along the line of excerpts which we have set forth in this opinion, it was the duty of the trial court, upon a motion for nonsuit, to view it in the light of every favorable presumption fairly arising therefrom or inference that might arise therefrom to support the plaintiffs' right to relief. Thus, the testimony showing that property worth $10,000 had been transferred by the plaintiffs to the defendant without consideration being paid therefor, the inference, if not necessarily, at least very fairly, and we may say strongly arises that the plaintiffs have suffered damages in just that sum. The rules in relation to inferences and as to how testimony should be viewed upon a motion for nonsuit is set forth in *270
the following excerpts which we take from the case of Berger v.Lane,
[3] Our attention is also called to the fact that the nonsuit in this case was granted partly upon grounds not stated in the motion, and the ruling of the court in this particular is presented to us as an additional reason for ordering a new trial herein. The order granting the nonsuit was based upon two grounds, as we have stated, to wit: first, that no fraudulent representations were shown; second, that cancellation of a deed could not be had for subsequent failure of consideration. The first ground herein stated was not included in the motion and should not have been considered by the court. In Moore v.Moffatt,
[4] While agreeing with the trial court that the case ofLawrence v. Gayetty, supra, and the subsequent cases following the same rule, establish the law in this state that rescission of a deed to real estate cannot be had on account of the subsequent failure of the grantee to comply with his agreements, we are nevertheless of the opinion that upon the case-made, as presented by the transcript, the trial court should have followed all of the holding had in the Lawrence-Gayetty case, and directed an amendment of the complaint, and then proceeded to award the plaintiffs the relief to which the evidence showed them to be entitled.
The judgment is reversed, and the trial court is hereby directed to allow the plaintiffs to amend their complaint, if so advised, so as to present all the issues which may be *272 properly tendered and tried in this case to the intent that the plaintiffs may be awarded such relief as may be consonant with equity and justice.
Hart, J., and Finch, P.J., concurred.