Wood v. Jotham Bixby Co. (29 Cal. App. 2d 294, 1938)

McCOMB, J.

From a judgment in favor of plaintiffs after trial before the court without a jury in an action to rescind a contract of purchase of real property defendants appeal.

Viewing the evidence most favorable to plaintiffs (respondents), the essential facts are:

Defendant Jotham Bixby Company was the owner of a subdivision known as Bixby Terrace. Defendant Deeble was a sales agent for such subdivision and defendant Smith was a duly authorized salesman under the direction of defendant Deeble. Plaintiff J. W. Wood accompanied by defendant Smith visited the Bixby Terrace subdivision and viewed certain lots which were for sale. Mr. Smith stated to Mr. Wood that the property was not subject to any assessments or liens of any nature whatsoever excepting county taxes. Thereafter Mr. Wood agreed to purchase four lots in the tract and a deed was delivered to him September 15, 1937. Early in November plaintiffs received from the Cerritos Park Association a notice of a $60 assessment levied against the lots which they had purchased. November 8, 1937, plaintiffs served on defendants a notice of rescission of their contract.

Defendants rely for reversal of the judgment on these propositions:

First: There is no substantial evidence to sustain the following finding of facts of the trial court:

“It is true that plaintiffs were induced to purchase said, property by the representations made by the Deeble-Chapman Company through its agent, Percy E. Smith, and by the written representations of the defendants, Deeble-Chapman Company and the Jotham Bixby Company. It is true that said representations that there would be no assessments, liens or charges against said property, save and except the Los Angeles County taxes, induced the plaintiffs to purchase said property and to pay to the defendants the sum of five thousand seven hundred ($5,700.00) dollars. It is true that said representations that there would be no assessments, liens or charges against said property, save and except the County taxes ivere false and untrue and known by the defendants and each of them to be false and untrue. It is true that said. representations that there would be no assessments, liens or charges against said property, save rnd except the County taxes, were made with the intent to deceive the plaintiffs and induce the plaintiffs to purchase said property. That the Cerritos Park Association was formed undet the provisions of a tract restriction which is known as declaration No. 1. That said declaration No. 1 empowered a committee to levy and collect assessments against the property hereinabove described. Said declaration No. 1 was recorded on the 18th day of March, 1937; that prior to the 23rd day of March, 1937, the defendants and each of them knew of the existence of declaration No. 1. It is true that said defendants purposely withheld advising the plaintiffs of the existence of declaration No. 1, or of the Cerritos Park Association and of its right to levy assessments on the above-described property. It is true that during the month of October, 1937, an assessment was levied against the hereinafter described property purchased by the plaintiffs to the damage of the plaintiffs herein.”

Second: The trial judge committed prejudicial error in refusing to permit defendants to introduce evidence that the assessments levied against the property actually increased the value of said property.

Third: A pur chase and sale contract may not be rescinded in the absence of proof that plaintiffs were actually damaged by the misrepresentations which form the basis of the action for rescission.

Fourth: The acceptance by plaintiffs of a deed and certificate of title showing that the property was subject to an assessment constituted a waiver of plaintiffs’ right to rescind the contract on the ground that defendants had represented that the property was not subject to