Blum v. Smith

• Decision Date: 06 December 1911
• Citation: 119 P. 183,66 Wash. 192
• Court: Washington Supreme Court
• Parties: BLUM et ux. v. SMITH et ux.

119 P. 183

66 Wash. 192

BLUM et ux. v. SMITH et ux.

Supreme Court of Washington

December 6, 1911

Department 2. Appeal from Superior Court, King County; King Dykeman Judge.

Action by M. P. Blum and his wife against William J. Smith and his wife. From a judgment for plaintiffs, defendants appeal. Affirmed.

Emereson H. Carrico, for appellants.

J. W Brown, for respondents.

ELLIS J.

The respondents brought this action to rescind a contract for an exchange of real estate for a lease and the furniture of an apartment house in the city of Seattle, and to set aside a deed of certain real estate made by them to the appellants on the ground of fraud and deceit claimed to have been practiced by the appellants to induce the exchange, and also on the ground of alleged failure of the appellants to perform the contract on their part. The cause was tried to the court without a jury. From a decree rescinding the contract and setting aside the deed, the defendants have appealed.

The agreement for the exchange was verbal, and the evidence as to what the agreement actually was is extremely conflicting. The court found, and we think the finding was supported by a preponderance of the evidence, that it was agreed that the defendants, appellants here, should transfer by bill of sale to the plaintiffs, respondents here, an apartment house known as the 'Metropolitan Hotel,' consisting of the furnishings, good will of the business, all advanced rents the books of the business, a lease of the premises with a written consent from the landlord consenting to the transfer and extending the lease for two years, and reducing the rental from $450 per month to $375 per month; that in exchange for these things the plaintiffs were to convey by deed to the defendants the lots and acreage described in the complaint. It is admitted that on May 10, 1910, the respondents delivered a deed of the real estate to the appellants, and the appellant Loretta Smith delivered to the respondents a bill of sale of the furniture and furnishings in the apartment house on its face purporting to be her separate instrument. It was not signed by her husband, nor was he referred to therein. The respondent Blum testified that he accepted this bill of sale upon the assurance of Mrs Smith and the agents who negotiated the exchange that her husband's signature was not necessary. There was, however, no evidence tending to show that this property was the separate property of Mrs. Smith. She claimed that the failure of her husband to join in the bill of sale was a mere oversight. Upon receiving the bill of sale, respondents assumed possession of the premises. It appears that on the same day Mr. Blum, Mrs. Smith, and her agent, a Mr. Wilson, called upon West & Wheeler, agents for the owner of the hotel building, and sought to secure their consent to the transfer and an extension of the lease; but these agents refused to accept the respondents as tenants without further investigation. The respondent Blum gave them certain references and went away. A day or two later Mrs. Smith delivered to the respondent Blum the lease with an assignment executed by herself and husband. The lease by its terms could not be assigned without the written consent of the owner of the premises. Mrs. Smith claims that she then suggested that they go again to the property agents and secure their consent to the transfer; that Blum then stated that he could not go at that time, but that he would see to the matter himself; that he said he cared nothing about the lease and expressed dissatisfaction with the number of vacant rooms in the house, but at that time he gave her a written agreement to furnish abstracts of title to the real estate which he had conveyed to the appellants. Mrs. Smith then paid to the respondents about $32, which she claimed was the amount of advanced rents collected by her. Blum testified that he again called upon the property agents, and they again refused to consent to the transfer of the lease and never at any time recognized him as a tenant. It appears that at about this time the respondents determined to bring suit for a rescission and made no further effort to secure recognition as tenants. The evidence shows that the lease had been formerly assigned by the Smiths to one Jarnigan, but that they still retained possession of it, and, so far as the evidence shows, Jarnigan made no claim upon the property.

Both respondents testified in effect that, during the negotiations leading up to the exchange, Mrs. Smith represented that the rooms of the hotel were nearly all occupied by desirable tenants, and that the business was producing a monthly income of over $700, and represented the monthly operating expenses at about $400; that, when she exhibited the rooms for their inspection, all but 13 of the 80 rooms showed evidence of tenancy, such as clothing, valises, and the remains of food and drink upon the tables; that she told them 63 of the rooms were occupied by desirable and good paying tenants and that she was receiving for each of the rented rooms and apartments much more than she was actually receiving; that soon after they took possession the fact developed that only about 25 of the rooms were occupied, and these for the most part by immoral people given to fighting and other disorderly conduct. All of the foregoing testimony of the respondents was vehemently contradicted by Mrs. Smith who testified to the effect that respondents were accorded every opportunity to investigate for themselves; that she told them that a great many of the rooms were vacant and that she made no representations as to what the monthly income and expense would be, but did...