Paularena v. Superior Court of San Diego County

• Decision Date: 28 January 1965
• Court: California Court of Appeals Court of Appeals
• Parties: Charles PAULARENA et al., Petitioners, v. SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent, BOLLENBACHER & KELTON, INC., and Ben F. Smith, Inc., Real Parties in Interest. Civ. 7930.

Page 366

42 Cal.Rptr. 366

231 Cal.App.2d 906

Charles PAULARENA et al., Petitioners, v. SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent BOLLENBACHER & KELTON, INC., and Ben F. Smith, Inc., Real Parties in Interest.

Civ. 7930.

District Court of Appeal, Fourth District, California.

Jan. 28, 1965.

Smith, Prante & Biggins and Stafford W. Prante, San Diego, for petitioners.

Fredman, Karpinski, Silverberg & Shenas and Charles Elwyn Karpinski, San Diego, for real parties in interest.

COUGHLIN, Justice.

The petitioners were the purchasers of homes under land sales contracts. In July, 1962 they filed a complaint in the respondent court alleging causes of action for damages sustained in connection with such purchases on account of the violation of statutory duties, negligence, breach of warranty, fraud and rescission. In the cause of action based on rescission petitioners alleged that, pursuant to the terms of their contracts, they had conferred benefits upon the defendants in the action and offered 'to restore on their part all consideration heretofore received from defendants, pursuant to Sections 1691 through 1693 of the California Civil Code, on condition that defendants restore to plaintiffs the value of the benefits conferred upon defendants by plaintiffs, * * *.' ¹ In response to these allegations the defendants caused a letter to be written to the plaintiffs in which, among other things, they declared:

'Therefore, we hereby accept your notice and offer of rescission and restoration of the benefits received under the contract, which notice and offer was contained in your complaint, to wit: that you shall restore, on your part, all consideration heretofore received from defendants, pursuant to Sections 1691 through 1693 of the California Civil Code, and we shall, and hereby agree to restore to you the value of the benefits conferred upon us by you * * *.

'It is our intent and understanding that this letter rescinds the land purchase contract for the purchase of the home which is the subject of the lawsuit. Kindly let us know when we can meet to effect the mutual restoration of consideration.'

Apparently, restoration was not effected. In due course the defendants filed an answer wherein they also accepted the offer of rescission set forth in the complaint. In June, 1964, following a pretrial hearing, the court made a pretrial order declaring, among other things:

'Since the case has been assigned to this department for both pretrial and trial, the Court has heretofore announced, with the agreement of counsel, that the pretrial order will, to a greater degree than is ordinarily so, resolve certain conflicting legal contentions of the parties and limit the issues upon which evidence will be received at the time of trial. While counsel have agreed, pursuant to the pretrial rules, to submit these legal questions to the Court for its determination at the pretrial level, it is not to be inferred that they have agreed the Court's determination of them as contained in this order is correct, and they have not waived right to contend otherwise by all appropriate means.

'With respect to these legal contentions hearings have been held, arguments have been made, and points and authorities with respect thereto have been filed. The determination of these legal contentions and issues as set forth in this order is final, and no modification thereof will be made at the time of trial.

'* * *

'With respect to these contentions, the Court has determined that a bona fide contract of rescission has been entered into between each set of plaintiffs and the defendant, whereby both parties agreed to do whatever was necessary, equitable and reasonable to restore the other party to the status quo ante, and further that neither party intended to be bound nor were they bound by the monetary figures set forth in the complaint defendant's corresponding pleading thereto, or defendant's letter of acceptance dated October 18, 1962. (While the suit has been pending, plaintiffs in most instances have continued to occupy the premises and have continued to make payments upon the contracts. It would thus be neither equitable nor fair to either party to adhere to the original figures set forth in the complaint.)

'The effect of this contract of rescission is to limit the issue to be tried to a determination and offsetting of the value of the respective benefits conferred in each instance. * * *

'* * *

'The issues to be determined at the trial are as follows:

'1. The consideration paid by the plaintiffs in each instance to the defendant.

'2. To what sum, if any, are the plaintiffs in each instance entitled by reason of improvements made by them upon the property.

'3. Whether plaintiffs or any of them suffered any consequential damage and, if so, the amount thereof.

'4. To what offset is the defendant entitled in each instance by reason of the reasonable value of the use of the property, or the value of any benefits conferred upon the plaintiffs by the defendant.'

The court ruled that 'a determination of the monetary value of the respective benefits conferred is a legal question' and the plaintiffs 'are entitled to a jury determination.'

When the matter came on for trial in August, 1964, in response to a motion by the defendants, the court found that the action was one in equity and ordered that the issues be tried by the court without a jury.

Thereupon, the plaintiffs applied for a writ of prohibition or, in the alternative, for a writ of mandate, to require the trial of the case by jury.

A party to a civil case, as a matter of right, is entitled to a jury trial of the issues raised by a cause of action at law (Code Civ.Proc. § 592; Davis v. Security-First Nat. Bank of Los Angeles, 1 Cal.2d 541, 542, 36 P.2d 649; Connell v. Bowes, 19 Cal.2d 870, 871, 123 P.2d 456), but not as to issues raised by a cause of action in equity. (Mesenburg v. Dunn, 125 Cal. 222, 223, 57 P. 887; Bank of America Nat. Trust & Savings Ass'n v. Greenbach, 98 Cal.App.2d 220, 227, 219 P.2 814.) Whether a cause of action is in law or equity is determinable from a consideration of the common law as it existed at the time of its adoption by this state, and 'in the light of such modifications thereof as have taken place under our own system' (Philpott v. Superior Court, 1 Cal.2d 512, 516, 36 P.2d 635, 637, 95 A.L.R. 990; Lenard v. Edmonds, 151 Cal.App.2d 764, 772, 312 P.2d 308); depends in large measure upon the mode of relief to be afforded (Philpott v. Superior Court, supra, 1 Cal.2d 512, 516, 36 P.2d 635, 95 A.L.R. 990; McCall v. Superior Court, 1 Cal.2d 527, 537, 36 P.2d 642, 95 A.L.R. 1019); is ascertained from the gist of the action as framed by the pleadings and the facts in the case (Ripling v. Superior Court, 112 Cal.App.2d 399, 402, 247 P.2d 117; Grossblatt v. Wright, 108 Cal.App.2d 475, 483-484, 239 P.2d 19; Bank of America Nat. Trust & Savings Ass'n v. Greenbach, supra, 98 Cal.App.2d 220, 228, 219 P.2d 814; Hutchason v. Marks, 54 Cal.App.2d 113, 114, 128 P.2d 573); but is not fixed by the prayer or the title. (Philpott v. Superior Court, supra, 1 Cal.2d 512, 515, 36 P.2d 635, 95 A.L.R. 990; Ripling v. Superior Court, supra, 112 Cal.App.2d 399, 402, 247 P.2d 117; Lenard v. Edmonds, supra, 151 Cal.App.2d 764, 772, 312 P.2d 308; Hutchason v. Marks, supra, 54 Cal.App.2d 113, 114, 128 P.2d 573.)

Where an action at law is adequate, relief in equity is not available (Philpott v. Superior Court, supra, 1 Cal.2d 512, 515, 517, 36 P.2d 635, 95 A.L.R. 990; DeWitt v. Hays, 2 Cal. 463, 469); and a request for equitable relief therein will not convert it to an action in equity. (Johnstone v. Morris, 210 Cal. 580, 586, 292 P. 970; Austin v. Wilcoxson, 149 Cal. 24, 26, 84 P. 417; Mortimer v. Loynes, 74 Cal.App.2d 160, 168, 168 P.2d 481; Fearey v. Gough, 61 Cal.App.2d 778, 779, 143 P.2d 711.) The fact that equitable principles are applied in the action does not necessarily identify the resultant relief as equitable. (Philpott v. Superior Court, supra, 1 Cal.2d 512, 523, 36 P.2d 635, 95 A.L.R. 990; McCall v. Superior Court, supra, 1 Cal.2d 527, 537, 36 P.2d 642, 95 A.L.R. 1019.) Equitable principles are a guide to courts of law as well as of equity. (Ripling v. Superior Court, supra, 112 Cal.App.2d 399, 402, 247 P.2d 117; Mortimer v. Loynes, supra, 74 Cal.App.2d 160, 168, 168 P.2d 481; Fearey v. Gough, supra, 61 Cal.App.2d 778, 779, 143 P.2d 711.) Furthermore, the incidental adoption of equitable sounding measures to effect the application of equitable principles in an action at law, such as for damages, does not change the character of that action. (Johnstone v. Morris, supra, 210 Cal. 580, 586, 292 P. 970; Lenard v. Edmonds, supra, 151 Cal.App.2d 764, 768-769, 312 P.2d 308.)

Prior to 1961, in California, the rescission of a contract could be effected by court decree pursuant to the provisions of §§ 3406-3408 of the Civil Code, or by a party to the contract pursuant to the provisions of §§ 1689-1691 of that code. (Philpott v. Superior Court, supra, 1 Cal.2d 512, 523-524, 36 P.2d 635, 95 A.L.R. 990; McCall v. Superior Court, supra, 1 Cal.2d 527, 536, 36 P.2d 642, 95 A.L.R. 1019; McNeese v. McNeese, 190 Cal. 402, 404, 213 P. 36.) An action to obtain a court rescission was in equity. (McCall v. Superior Court, supra, 1 Cal.2d 527, 536-537, 36 P.2d 642, 95 A.L.R. 1019; Bank of America Nat. Trust & Savings Ass'n v. Greenbach, supra, 98 Cal.App.2d 220, 227, 219 P.2d 814.) On the other hand, an action to obtain relief following rescission by a party, ordinarily, was at law. (Philpott v. Superior Court, supra, 1 Cal.2d 512, 524, 36 P.2d 635, 95 A.L.R. 990; McCall v. Superior Court, supra, 1 Cal.2d 527, 536-537, 36 P.2d 642, 95 A.L.R. 1019; Davis v. Security-First Nat. Bank, supra, 1 Cal.2d 541, 36 P.2d 649.) In 1961, following a recommendation by the California Law Revision Commission, the Legislature repealed §§ 3406-3408 (Stats.1961, ch. 589, p. 1735, § 5); amended §§ 1689-1691...