McCrea v. Hinkson

131 P. 1025 | Or. | 1913

Mr. Justice Bean

delivered the opinion of the court.

The contention of the defendants is that at the time the option was given and the payments were made the land had been actually surveyed and the lines marked, and plaintiff by the exercise of reasonable diligence could have ascertained the area; that plaintiff and defendants were familiar with the method of securing surveyed and unsurveyed land with scrip, and were aware that sections 4 and 5 would either be in excess of 640 acres to each section, or that there would be a deficiency in the area; that plaintiff purchased at his hazard as to quantity. The contract of the Northern Pacific Railway Company provided that, in case of failure to obtain title to any portion of the land embraced in its contract, the sum of $10 per acre should be refunded, and that in the event of an excess in the acreage such amount per acre should be paid for the excess.

1. In the negotiations plaintiff first offered $22 per acre, and afterward $30 per acre, making in the aggregate $12,000 for 400 acres. It therefore appears that six of the 10 40-acre tracts, or legal subdivisions, which were the subject matter of the option contract and supposed to be in the north tier of the 40’s, were found, except as to a small fraction thereof, not to exist. In so far as the contract is concerned, it does not affect these subdivisions any more than if they had been swallowed up by an earthquake. On account of the townships on two sides of the one in which the land described was expected to be, when surveyed, both parties seem to have anticipated that this one would be about the normal size, and that the land embraced in the option agreement would approximate 400 acres. There was a mutual mistake as to the area of land that could be obtained by virtue of the selections. Under the influence of the error common to both parties, the agreement was entered into. Its prejudicial consequences to the plaintiff are the same as if the defendants had designedly agreed to sell plaintiff 224.41 acres of land to which they had no right whatever. No laches can be imputed to plaintiff in the transaction. It was a gross mistake, as to the existence of the larger part of the subject matter of the contract, and entitles the plaintiff to a rescission: Firebaugh v. Bentley, post, p. 170, (130 Pac. 1129); Babcock v. Day, 104 Pa. 4, 8; Newton v. Tolles, 66 N. H. 136 (19 Atl. 1092, 9 L. R. A. 50, 49 Am. St. Rep. 593); Kares v. Covell, 180 Mass. 206 (62 N. E. 244, 91 Am. St. Rep. 271); 1 Story, Equity Juris. (13 ed.), §142; 2 Warvelle, Vendors (2 ed.), § 906; Floeting v. Horowitz, 120 App. Div. 492 (104 N. Y. Supp. 1037); Copeland v. Tweedle, 61 Or. 303 (122 Pac. 302). The purchaser may rescind in case of a material deficiency in the quantity of land contracted for in the absence of acts on his part which amount to an estoppel; and it is not material that there was no fraud on the part of the vendor. Where, however, the deficiency is not material, and is not such as to affect the enjoyment of the land contracted for, the purchaser cannot rescind on that account, at least where there is no fraud on the part of the vendor: 39 Cyc., pp. 1415, 1416.

2. Relief will be granted when a mistake is so material that, if the truth had been known to the parties, the agreement would not have been made. And if quantity entered into consideration in fixing the price, and the price was fixed upon an estimate of quantity that proves grossly incorrect, relief will be granted. It is not necessary that fraud be shown in order to obtain relief. Innocent and mutual mistakes alone are sufficient grounds for rescission and other relief: Bigham v. Madison, 103 Tenn. 358 (52 S. W. 1074, 47 L. R. A. 267, 269). The defendants could not maintain a suit for the specific performance of the contract because it would be inequitable: Pickering v. Pickering, 38 N. H. 400, 407, 408; Eastman v. Plummer, 46 N. H. 464, 479.

3. A party against whom a contract, made under a mutual mistake of material facts, will not be specifically enforced, is generally entitled to rescind: Pomeroy, Contracts, § 250. There may be exceptions to the rule, but this case does not fall within them. When the parties have agreed upon the sale by one and the purchase by the other of about 400 acres of land for $12,000, it would be inequitable and unconscionable to compel plaintiff to accept 175.61 acres at that price, especially under an executory contract (2 Warvelle, Vendors (2 ed.), § 905), where the price was arrived at by computing it at $30 per acre. There was really no contract to that effect: 39 Cyc. 1583; 1 Story, Equity Juris. (13 ed.), § 144; O’Connell v. Duke, 29 Tex. 299 (94 Am. DeC. 282); 2 Warvelle, Vendors (2 ed.), § 909; Castleman v. Castleman, 184 Mo. 432 (83 S. W. 757).

It is- unnecessary to consider wbat would have been the effect if there bad been a small deficiency in the amount of the land, or the other question referred to iu the case. It is clear that the land was what plaintiff desired to obtain, aud what the defendants intended to sell a certain right to. It was not the mere scrip or applications made for land which did not exist, as described in the option contract.

The decree of the lower court should therefore be affirmed; and it is so ordered. Affirmed.