Williams v. Marshall

¶1I dissent.

¶2Section 1691 of the Civil Code provides that “Rescission, when not effected by consent, can be accomplished only by the use, on the part of the party rescinding, of reasonable diligence to comply with the following rules:

¶3“1. He must rescind promptly, upon discovering the facts which entitled him to rescind, if he is free from duress, [etc.] . . ., and is aware of his right to rescind ...” (Italics added.)

¶4This rule is sound and the code section which declares it should not be, in effect, repealed by decisions such as that of the majority of this court in the present case.

¶5Although the relief granted is said to be “a money judgment in an action based upon asserted false representations,” it is in reality a decree permissible only in an equity suit1; *458it enforces a rescission and restores to the plaintiffs the sums paid to and for the benefit of the defendants. As appears from the majority opinion, the sale of the land in controversy was completed in July, 1946; the purchasers “suspected” a shortage of acreage in December, 1946, or January, 1947, and wrote to the vendors complaining of it on January 19, 1947; the purchasers knew of and spent $10,000 endeavoring to correct the water shortage in the summer of 1947; notice of rescission was not given until March, 1948.

¶6The right to rescind is lost by delay. Diligence is “a condition of the right to rescind,” and “There have been many cases in which delays for much shorter periods than a year have been held to be fatal to the right to rescind. [Citations.]” (Clanton v. Clanton (1942), 52 Cal.App.2d 550, 556 [126 P.2d 639]; see also Campbell v. Title Guarantee & Trust Co. (1932), 121 Cal.App. 374, 377 [9 P.2d 264], where it is said, quoting from Schneider v. Henley (1923), 61 Cal.App. 758, 763 [215 P. 1036], “it would appear that thirty days is about the utmost length of time which the courts are disposed to allow to the purchaser for rescission unless there are unusual circumstances in the ease excusing longer delay”; King v. Los Angeles County Fair Assn. (1945), 70 Cal.App.2d 592, 596 [161 P.2d 468].)

¶7No such unusual circumstances appear here. On the contrary, as stated in the majority opinion, vendor Marshall replied in January, 1947, to purchaser Williams’ letter regarding a “suspected” shortage of acreage, that he could do no more “than has been done.” Instead of exercising their right to rescind, the purchasers delayed for more than two months before communicating again with the vendors. Williams then again wrote to Marshall with reference to the shortage of acreage. It was only after the property in question had been seriously damaged that Steele, representing the Williamses, commenced negotiations with the Marshalls to determine whether litigation could be avoided. Certainly it cannot be said that Marshall “lulled [the Williamses] into inaction” by telling them, as soon as they reported to him their suspicion of fraud, that he could do no more “than has been done.”

¶8*459The judgment, resting as it does upon the theory of rescission and restitution, is as a matter of law contrary to the requirements of diligence and promptness set forth in section 1691 of the Civil Code, and is irreconcilably inconsistent with the many cases which have heretofore upheld the requirements of the statute. While a cause of action for damages might be made out, both the quoted statute and the cited cases demonstrate that the majority opinion enforcing restitution on rescission is untenable. Conformity to law requires a reversal of the judgment and a new trial.

¶9Spence, J., concurred.

¶10Reporter’s Note: Upon written request, appellants’ petition for a rehearing by the Supreme Court was withdrawn July 19, 1951.