Procedural Posture

Plaintiff buyers brought an action against defendant seller in the Superior Court of San Bernardino County (California) seeking rescission of a contract for sale of land and for damages for improvements made upon the land. The seller filed a cross-complaint alleging default of the buyers as to the payments due on the contract. The trial court found for the seller and the buyers appealed.

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Overview

The buyers claimed they had kept and performed the terms and conditions of the contract except in so far as performance was rendered impossible by the failure of the seller to pipe water for irrigating and that because of the seller’s breach, they were entitled to rescission of the contract and repayment for the costs of improvements made. The seller claimed the buyers defaulted when they stopped making payments due on the contract. The court held that there was no occasion for the interposition of a court of equity in the action as pleaded and reversed the judgment with leave for the parties to amend their pleadings. The court found that it was necessary to determine if the breach complained of by the buyers was one that would justify rescission. The mere fact that the buyers served a notice for rescission would not prevent them from filing an action for damages and had the cause been tried as an action for damages, it was possible the judgment could have been maintained. Whether the breach was so material as to justify the buyers abandonment of performance was a question of fact as was what the seller’s responsibilities were under the contract.

Outcome

The judgment of the trial court finding for the seller was reversed.