French v. C. D. & E. Investment Co.

195 P. 521, 114 Wash. 416, 1921 Wash. LEXIS 639
CourtWashington Supreme Court
DecidedJanuary 31, 1921
DocketNo. 16073
StatusPublished
Cited by6 cases

This text of 195 P. 521 (French v. C. D. & E. Investment Co.) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
French v. C. D. & E. Investment Co., 195 P. 521, 114 Wash. 416, 1921 Wash. LEXIS 639 (Wash. 1921).

Opinion

Bridges, J.

— In April, 1910, the appellant, Calhoun, Denny & Ewing, a corporation, and Lee French, of Everett, Washington (for the benefit of himself and his wife), entered into a written agreement whereby the corporation undertook to sell, and the individual to purchase, a certain tract of land and certain water [418]*418rights, which lands are located in Benton county, Washington, and are within the Government Sunny-side Canal district.

The property contracted to be sold is described in the agreement as follows:

“Tract twenty-three (23) of Crown Point Orchards, according to the recorded plat thereof on file in the office of Calhoun, Denny & Ewing, together with a perpetual water right appurtenant to said lands, in the Sunnyside canal, for the use of water for irrigation of said land and for domestic use incidental thereto, as hereinbefore provided.”

The contract then recites that the purchase price of the land is to be $1,4.86.80, a portion of which is paid down in cash, and the balance to be paid in equal annual installments, with interest. The purchase price of the water right is fixed in the contract at $529.20, a part of which is paid in cash, the remainder to be paid in equal annual installments. The contract further provided that, in addition to the payments for water rights, the purchasers should pay to the vendor $9.60 per annum, “the same being a maintenance fee or charge for the use of water on said land.” The last mentioned annual payments were required to be made until the purchase price of the land and water right had been fully paid. In other respects the contract was the usual one for the sale of lands.

The purchasers regularly paid the annual sums required by the contract, and ultimately all payments as therein provided were made. Thereafter the vendors made, executed and delivered to the vendees a deed conveying the title to the lands, but this deed did not make any mention of the water rights. Based upon these general facts, the vendees, as plaintiffs, brought this suit against the vendor and others, as defendants, to recover the money paid under the contract.

[419]*419The complaint is exceedingly long and we can do nothing more than give a brief summary of its contents. It alleges in a general way all of the facts which we have heretofore recited. It further alleges that the plaintiffs, at the time of making the contract, were residents of the city of Everett, which was more than one hundred and fifty miles distant from the land described in the contract; that, after having made all of these payments, they discovered for the first time that the vendor was not the owner, at the time of the making of the contract, of the water rights therein mentioned, and had never since become the owner thereof, and that under the rules and regulations of the government, it could never become the owner of such water rights, and that the plaintiffs could never become the owner thereof and were not entitled to make application therefor, unless they gave up their residence in the city of Everett and resided on the land, or within fifty miles thereof, and that they were not willing to make these sacrifices; that the-vendor had been guilty of fraud in the making of such contract in that it knew it did not have, and would be wholly unable to obtain, the water rights mentioned in the contract, and would never be able to comply with the contract in that regard; and that, in making the contract with this knowledge, it had been guilty of misrepresentation and fraud and that, had the plaintiffs known that the vendor did not have, and could not obtain, these water rights, they would never have entered into the contract.

The complaint further alleged that the land was practically valueless without the water for irrigation purposes, and that prior to the bringing of the suit, the vendor had delivered to the plaintiffs a deed to the title to the land described in the contract, and that they had made and executed a deed from themselves to the ven[420]*420■dor, reconvening to it any and all interest which they may have obtained by virtue of such deed, and tendered ■the same to the vendor who refused to accept it. They ■sought relief against the defendants in the sum of two thousand nine hundred dollars, being the amount they had paid for the land and the water right, together with interest'thereupon and for a rescission of the contract.

In brief, the plaintiffs charge that the vendor agreed to sell them certain land and also certain water rights, and that the whole purchase price has been paid and the land has been deeded to them, but that the vendor has not conveyed and cannot convey to .them the -water right because it does not own it and cannot acquire it, and that the vendor has been guilty of fraud, and they ■ seek to recover the money paid by them.

It will not be necessary here to give the substance of ■the answers of the various defendants because, in the further discussion of the case, their defenses will clearly appear.

The suit was tried to the court as an equity case. Judgment went in favor of the plaintiffs and against the defendants O. D. & E. Investment Company, a corporation, and Calhoun, Denny & Ewing, a; corporation, in the sum of three thousand and sixteen dollars, and dismissed the other defendants out of the case. The defendants against whom the judgment ran have appealed.

At the outset there seems to be a great deal of discussion and confusion concerning the character of action the respondents were entitled to bring, if any, and the character of the case they have brought and the manner of its trial.

A recurrence to some fundamental principles will, -we think, tend to lead us in the right direction. The [421]*421appellants contend that, inasmuch as they had given a deed to the respondents conveying to them the title to the land, they cannot maintain a suit in equity to rescind the contract and recover the purchase money paid, hut that their entire right of action, if any, is for damages based upon the covenants in the deed. The authorities seem to lay down the following rules: Where a contract for the sale of land has been executed by the delivery of instruments of conveyance, as provided in the contract, then the purchaser’s right of action must always he by a suit at law for damages, based upon a breach of the covenants of the deed. There is, however, one well defined exception to this rule, and that is that an executed contract may be rescinded and the amount of the purchase price recovered by a suit in equity where it is alleged and proven that fraud entered into the making of the contract. It is very generally held that executory contracts for the sale and purchase of real estate may be rescinded by a suit in equity, either on account of fraud or misrepresentation entering into the execution of the contract, or where it becomes apparent that the vendor is and will continue to be unable, or has failed, to comply with his contract. We deem it unnecessary to extensively cite authorities upon these fundamental principles. We do nothing more in that regard than cite 27 R. C. L. pp. 623, 626, 650.

We gather from the record that the respondents had one theory concerning the manner of the trial, the appellants had another, and the trial court had still a third.

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Bluebook (online)
195 P. 521, 114 Wash. 416, 1921 Wash. LEXIS 639, Counsel Stack Legal Research, https://law.counselstack.com/opinion/french-v-c-d-e-investment-co-wash-1921.