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District Court of Appeal, Second District, Division 1, California.

BAILARD et al. v. MARDEN et al.*

Civ. 17259.

Decided: June 28, 1950

Hiram T. Kellogg, Los Angeles, for appellants. McGinley & Hanson and Howard D. Hanson, Los Angeles, for respondents.

Plaintiffs purchased 434 acres of land in the Rancho Malibu in Los Angeles county. This famous old rancho runs along Pacific Coast highway for miles westerly from Santa Monica, and overlooks the Pacific ocean. The deed to plaintiffs contained restrictions providing that the major portion of the 434 acres could be used only for private, single-family dwelling houses. These restrictions were modified as to a strip 3,000 feet long and 1,300 feet deep, fronting on Pacific Coast highway.

Within that area residential income property and one motel could be maintained. And the motel could have a store and restaurant, including the sale of liquor. This part of the 434 acres will be referred to as the ‘business area.’

Plaintiffs decided to subdivide and sell part of the tract which they had purchased. Surveyors were employed to prepare and record a subdivision map, to be used by reference for descriptions in deeds of lots within the subdivided land. The surveyors were instructed not to include any of the business area within the subdivision map. But, unfortunately, the instructions were overlooked or disregarded, and, unbeknownst to plaintiffs, portion of the business area was included within the map. As one of the witness said: ‘Somebody pulled a boner.’

Lot 21 as shown on the map was within the business area, and was purchased by defendants. This lot contained about 9/10910 of an acre, faced 100 feet on the state highway, and was 430 feet in depth.

Neither plaintiffs nor defendants had any direct dealings with one another. Plaintiffs instructed their selling agents to sell residential lots only. However, the description in the contract of sale which was first entered into, and in the deed which followed, was by reference to the map. Plaintiffs executed the contract and the deed, still with the idea that no part of the business area was being conveyed.

Plaintiffs would not have executed either the contract or the deed had they known that any part of the business area was conveyed by either instrument. It was always their intention to themselves build, maintain, and operate the one motel permitted on the property. When they learned that defendants were preparing to put a motel on lot 21 they promptly moved to correct the mistake.

Defendants are a mother, one son, and two daughters. They purchased the lot as a family enterprise, ‘for a home and income.’ Defendant mother first saw the lot while motoring to San Francisco. She was attracted by its appearance and location. Considering its possibilities for business and for a home, defendants made inquiry of plaintiffs' selling agents. They did not ask as to restrictions.

The defendant son was technically qualified as an architect, to search title records, and to read maps. He and his mother went to the official county records and found the deed from plaintiffs' grantor. They read the description and the restrictions in that deed, and they also looked at maps which they were shown in the County Surveyor's office. These they compared with plaintiffs' subdivision map, and determined that lot 21 was within the business area.

Defendants then offered plaintiffs' agents $850 for the lot. The offer was presented to plaintiffs and accepted, contract of purchase and sale was entered into, and the deed followed later.

Defendants understood that only one motel would be permitted on the 434 acres. Their testimony is that shile lot 21 was but a small portion of the business area, and a smaller portion of the whole tract, they hoped to get started first and thus acquire the right to maintain the one motel. They prepared plans for a motel, which were submitted to and approved by plaintiffs' grantor. They were about to build according to the plans when plaintiffs commenced this action, and defendants' financial backers withdrew.

The trial court found mistake on the part of plaintiffs in making the contract of purchase, and in making the deed, and rendered judgment enjoining defendants from using the lot for other than private residential purposes. From the judgment defendants appeal.

Civil Code section 3399 provides that a contract may be revised for mutual mistake, or when a mistake is made by one party which the other at the time knew or suspected. The evidence supports the court's finding of mutual and unilateral mistake, as defined in this section.

The inference of unilateral mistake that defendants suspected plaintiffs would make a mistake in conveying lot 21 by reference to the map may be drawn from their knowledge and conduct. When they offered $850 for the lot they knew of the basic deed and maps; they knew that only one motel would be permitted on the whole tract; and they knew that lot 21 was but a small part of the whole property, and that the offered purchase price was but a small fraction of its real value for a motel. Auerbach v. Healy, 174 Cal. 60, 161 P. 1157; Baines v. Zuieback, 84 Cal.App.2d 483, 191 P.2d 67; Carpenter v. Froloff, 30 Cal.App.2d 400, 86 P.2d 691.

The inference may also be drawn of mutual mistake—that plaintiffs intended to sell and defendants intended to buy the lot for residential purposes only. The size, Price, and location of the lot bear upon this issue. Such ‘for sale’ signs as were on the property were all for residential sales. After defendants purchased the lot they did nothing about a motel until they made further inquiries of plaintiffs' grantor and were advised that lot 21 was in the business area, and possibly a motel could be built upon it. And such improvements as they built upon the lot, while called a tool shed, in fact constitute a family dwelling house, in which some of defendants have lived for a long time.

Of course, inferences to the contrary of those stated could have been drawn from the testimony. In our law, to draw inferences and determine the truth of legal controversies upon conflicting evidence is the province of the trial court. When findings are supported by substantial evidence they will not be disturbed by a reviewing court.

Errors claimed in the admission of evidence, and in that specific findings are not supported by evidence, do not affect the pertinent findings upon which the judgment rests. No laches of plaintiffs are apparent.

It is to be noted that the judgment enjoins defendants from using the lot except for residential purposes. As stated, there is substantial evidence to support the findings and judgment as to mistake. However, having appealed to equity, plaintiffs must do equity.

Therefore, the judgment is modified and the cause remanded with directions to the trial court to restore defendants to the position they occupied at the time of the purchase of the lot, either (a) by permitting defendants to retain title to said lot as residential property with all the improvements thereon should they so elect; or (6) to ascertain and require plaintiffs to pay to defendants the purchase price of said lot, together with interest to date, and together with the costs of all improvements thereon and interest from the date of construction thereof, and together with all costs in connection with the transaction including costs of the litigation and taxes, all with interest and reasonable attorneys fees to be fixed by the court, whereupon title to revest in plaintiffs.

As so modified, the judgment is affirmed. Defendants to recover costs on appeal.

DRAPEAU, Justice.

WHITE, P. J., and DORAN, J., concur.

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