LONGWAY v. NEWBERY

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District Court of Appeal, Third District, California.

LONGWAY v. NEWBERY et al.†

Civ. 6005.

Decided: June 17, 1938

J. K. Wilson, of Los Angeles, for appellant. Anderson & Anderson and Arch Vernon, all of Los Angeles, for respondents.

This action is for rescission and money had and received. The cause went to trial on an amended complaint for rescission, a demurrer having been sustained without leave to amend as to the action for money had and received.

Longway was a resident of Michigan, and while on a visit to California in November, 1926, agreed to purchase two lots in a tract near San Fernando in Los Angeles county, belonging to C. W. Newbery, and for whom Title Insurance & Trust Company was acting as trustee. Plaintiff paid to the trust company $4,270, being the full purchase price of two lots described in an unrecorded map as lots 11A and 11B, and received therefor a receipt stating, “Trust No. S–7334 of the Title Insurance & Trust Co. provides for the installation of the following improvements: sidewalks, curbs, streets, electricity, gas and water at no cost to purchaser.” Thereafter the trust company sent to Longway in Detroit, two deeds dated November 26, 1926, and on the outside of one of the deeds was endorsed “lot 11A”, but in the body of the deed described the property as the northeasterly twenty–five feet of lot 11, tract 9179, sheets 1 and 2 as per map recorded, etc., and on the outside of the other deed “lot 11B”, in the body of which the property was described as all of lot 11 in tract No. 9179 except the northeasterly twenty–five feet thereof, etc. Some few months after plaintiff returned to Detroit he heard the improvements were not being made. He made inquiry of Mr. Newbery and the trust company and various letters were exchanged to which we will make reference hereafter. This correspondence continued until shortly before suit was filed July 16, 1934.

The cause proceeded to trial where the court found the Title Insurance & Trust Company was the trustee in an agreement wherein C. W. Newbery (who has since died) was beneficiary. Cad M. Newbery, his widow and executrix of his estate, succeeded to all of the estate of C. W. Newbery, but prior to his death, C. W. Newbery had assigned all of his interest in and to the tract to defendant Title Insurance & Trust Company.

The court found that plaintiff entered into an agreement to purchase two tracts described upon an unrecorded map as lots 11A and 11B, and paid therefor the full purchase price, and that the agreement provided for the installation of sidewalks, curbs, streets, electricity, gas and water at no cost to the purchaser. The court found these improvements had not been made, and also found that the unrecorded map upon which the lots were designated as 11A and 11B was substantially a copy of a later recorded map of tract 9179, wherein the lots were described as lot 11, and that the property was identical. The court also found certain improvements had not been made, but held the failure was not due to any fraudulent intent on the part of the defendants or either of them. The court found it was not true that plaintiff in 1934 discovered for the first time that the improvements had not been made, but that in 1927 plaintiff was informed that all of said improvements had not been made, and found the action was barred by various statutes of limitations, and based upon these findings, judgment was entered against plaintiff.

Respondent relied strongly upon the statute of limitations. Examining this contention we find that plaintiff was a resident of Michigan, and was in California from November, 1926, to January, 1927, and after leaving California in January, 1927, has never returned to California. In October, 1927, plaintiff wrote to the trust company that he had been told no improvements were being made on the tract. Under date of October 13, 1927, the trust company replied: “It is our understanding Mr. Newbery caused certain provisions to be made with reference to the installation of improvements in the tract which improvements have not yet been installed. We notified Mr. Newbery several days ago that the Company would expect him to take immediate action to make the said improvements, and it is hoped he will commence work within the very near future.”

In a letter from the trust company to Longway in April, 1928, the trust company said: “Our reports indicate that most of these improvements have been fully installed and the beneficiaries in both Trusts are bonded to fully complete the improvements according to their promises. * * *”

Also in April, 1928, Newbery wrote to plaintiff: “We have been very busy installing our improvements, and I regret very much that you cannot come to California at this time, since the tract now presents a very pleasant appearance, and I am sure that you would be pleased with the present situation, and our prospects for the future. * * * the only lots you own in my tract are 11A and 11B Tract 9179.”

It is in evidence that plaintiff had faith and confidence in defendants, and living as he was, several thousand miles from California, relied upon the information forwarded by them. Notice of rescission was given by plaintiff to defendants in July, 1934.

In regard to the installation of the water system, it appears that about February 6, 1929, Mr. Schafter, an assistant trust officer of the trust company, for the first time notified Mr. Longway that the city of Los Angeles had created a municipal improvement district, embracing this land, and had assessed the entire tract for the cost thereof, payable in annual instalments over a period of 38 years, and that it could not be paid in a lump sum. The letter stated the trust company had attempted to compute a fair and equitable figure and proposed that it rebate to plaintiff the sum of $69.02 as the estimated proportion of the cost chargeable to Mr. Longway. Plaintiff objected to this amount. Negotiations were carried on for some time, and in 1931 the trust company suggested to Mr. Newbery that he attempt to settle with Mr. Longway. After considerable investigation it developed that the total payment at the end of the 38–year period would, according to the estimate by the district, amount to $591.28. In addition to failure to furnish water to the tract at no cost to the purchaser, Sayer avenue was not paved, nor were curbs, gas and electricity installed.

Among other findings, the court found that defendants never advised plaintiff that the specified improvements could not and would not be installed by them.

In Link v. Jarvis, 5 Cal.Unrep. 750, 33 P. 206, plaintiff alleged he gave defendant $600 under an agreement that defendant would do for plaintiff certain specified things which defendant later refused to do. Plaintiff sued for this damage in the sum of $600. Plaintiff pleaded in bar the statute of limitations. The court held the statute did not begin to run against the claim until there was a refusal to perform.

In Ocean Shore R. Co. v. Spring Valley, etc., Co., 60 Cal.App. 43, 212 P. 215, the Ocean Shore Company paid to Spring Valley some $50,000 for a right of way to be designated by the engineer of defendant. No steps were taken by the water company to locate the right of way. Upon demand of the railroad company to deliver the deed, the water company refused, claiming the railroad company had forfeited its right to such deed. To the action brought by the railroad company to recover the money paid, the water company set up the statute of limitations. On appeal, however, the court held under the circumstances the cause of action was not barred.

While it was held in Meherin v. San Francisco Produce Exchange, 117 Cal. 215, 48 P. 1074, 1075, that “what is to be considered a reasonable time for this purpose does not appear to be settled by a precise rule. It must depend on circumstances. If no cause for delay be shown, it would seem reasonable to require the demand to be made within the time limited by the statute for bringing the action,” it would appear in the instant case circumstances justify the time taken by plaintiff. He was a nonresident and had to depend upon others for his information. He was assured by the seller that the installation of the improvements was being prosecuted. Later the trust company, upon whom he surely should have had the right to rely, told him the improvements were all completed.

However, if these circumstances do not justify the delay by plaintiff, for another reason defendants should not be permitted to evade liability and refuse to perform the terms of their contract, and retain the money plaintiff had paid them to perform the work, and that is by reason of estoppel. Section 1962, subdivision 3, of the Code of Civil Procedure provides:

“Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsify it.”

In Perry v. Magneson, 207 Cal. 617, 279 P. 650, it was held a surety company could not hold out hope of an adjustment of claims and then delay action and then set up the delay as a defense. In 16 California Jurisprudence, page 576, the statement is made: “If one by fraudulent acts or misrepresentations induces another to delay in bringing suit upon his cause of action until after the expiration of the statutory period, he is estopped to take advantage of the defense that the cause of action is barred.” In the instant case the facts necessary to constitute an estoppel were pleaded and by the court found to be true.

In Wilson v. Rigali & Veselich, 138 Cal.App. 760, 33 P.2d 455, an action was brought to rescind two contracts for the purchase of real property on the ground of fraud, the defendants having represented they would resell the property in a short time at a profit and that certain improvements would be commenced and completed. There also, as here, defendants reiterated their promise to plaintiff and advised plaintiff to wait until the improvements were installed, which plaintiff did. Later, in an action to rescind, defendants set up the delay but the court held they were estopped from raising that defense.

Under section 458 of the Code of Civil Procedure the burden rests upon the party pleading the statute of limitations to establish the same, which in this case defendants failed to do. Furthermore under the facts here we doubt if a claim for money deposited with a trust company is barred by limitations, the money here being held by the company as trustee for a specified purpose.

The next question has to do with the identity of lots 11A and 11B of the unrecorded map and lot 11 of the recorded map. The finding of the trial court is that the two descriptions are identical. Plaintiff contends that the entire transaction is void, being prohibited by section 8 of the Statutes of 1907, page 290, 292, which requires that before a lot is sold by reference to a map or plat such map must be filed with the county recorder, and section 9 declares any person who violates the act is guilty of a misdemeanor. We find nothing that would compel the court to hold such sale void; the penalty for such an act is fixed as fine or imprisonment.

We are in accord with the next contention, however, which is that the evidence does not support the finding of the court that the exterior boundaries of the recorded and the unrecorded maps are identical. An examination of the two maps in evidence do not support that finding. Also, the court in admitting the evidence of a surveyor over objection of plaintiff said: “The objection will be overruled. I cannot tell from these maps whether or not it is the same land and require some assistance.”

There are no surveyor's monuments indicated on the unrecorded map; the exterior boundaries of the tract are not indicated, and in fact the unrecorded map seems to indicate Sayer avenue as being a part of the tract, while the recorded map shows the center line of Sayer avenue as a boundary line. One of the matters in dispute between the parties here had to do with the cost of improvement of this avenue. It is quite evident that the two maps are not identical, nor from the information on the unrecorded map can the tract itself be determined unless some investigation is made outside the map itself.

Many other points are urged by plaintiff but we believe enough has been said to indicate that the judgment should be reversed and the trial court directed to enter judgment for plaintiff and against the defendants herein, as their respective interests may appear, in the sum of $4,733.64, with interest thereon from July 11, 1934, upon tender by plaintiff of a deed conveying to defendants whatever right or title he may have acquired in the property herein.

It is so ordered.

Mr. Presiding Justice PULLEN delivered the opinion of the court.

We concur: THOMPSON, J.; PLUMMER, J.