Daugherty v. Young, 39248
| Citation | 47 Or.App. 585,615 P.2d 341 |
| Decision Date | 04 August 1980 |
| Docket Number | No. 39248,39248 |
| Parties | Mary E. DAUGHERTY, Respondent, v. Donald L. YOUNG, Sr., Appellant. ; CA 15732. |
| Court | Court of Appeals of Oregon |
James M. Gillis, Newport, argued the cause for appellant. With him on the briefs was Litchfield, MacPherson, Carstens & Gillis, Newport.
Mark R. Malco, Newport, argued the cause and filed the brief for respondent.
Before RICHARDSON, P. J., and THORNTON and BUTTLER, JJ.
Defendant appeals from the decree rescinding a residential land sale contract between him as seller and plaintiff as buyer. The issue on appeal is whether the decree of rescission restored the parties, as nearly as possible, to their situation prior to the transaction. See Bodenhamer v. Patterson, 278 Or. 367, 376, 563 P.2d 1212 (1977); LeTrace v. Elms, 40 Or.App. 561, 563, 595 P.2d 1281 (1979).
Buyer sued to rescind her contract for purchase of a home, alleging that seller knew that bees periodically swarm inside the dwelling but failed to disclose this fact. The parties stipulated: (1) that the contract be rescinded, (2) that seller return all monies to buyer including interest at 6% per annum from the date paid, and (3) that costs and disbursements be allowed to neither party. The sole issue tried to the court was the reasonable rent to be allowed to seller for buyer's use and occupation of the premises. 1
The trial court awarded seller $200 monthly rent for the 18-month period ending December 15, 1978, and $250 thereafter until buyer surrendered possession.
The evidence regarding the monthly rental value of the property was: (1) $0. Testimony of buyer's expert that with the bee infestation the property would be unrentable. (2) $200. Letter of rescission from buyer's attorney to seller, stating that seller may retain reasonable rental value on rescission, which "I believe * * * would be calculated generously at $200 per month." (3) $400- 550. Combined testimony of buyer's and seller's experts, assuming no bee infestation.
On appeal, seller contends that: (1) the court's determination of the reasonable rental value of the premises is too low, and (2) the court erred by failing to award him interest on the rental payments due him, computed from the date each payment theoretically was due.
On June 15, 1977, buyer took possession of the property, a three-bedroom house in the Cascade Head area overlooking the ocean and the Salmon River estuary. When buyer moved in the following day, an estimated 700 bees swarmed in the interior of the house. On one other occasion about a year later bees again swarmed by the hundreds inside the home. Buyer testified that although she was beset by swarming bees only twice, a few bees entered the house every day.
Approximately six months after moving in, buyer notified seller that she sought to rescind the contract. Seller offered at that time "to take care of the (bee) problem" for buyer by fumigating the house. Buyer declined this offer, explaining that both she and her mother, who lived with her at the time, were extremely sensitive to insecticide sprays because of respiratory problems.
Seller contends that his offer "to take care of the problem" included providing substitute lodging for buyer if necessary when the house was fumigated, but this aspect of the offer apparently was never communicated to buyer because, in seller's words, buyer immediately "took a negative attitude toward it (fumigation)." Buyer also refused to use cans of insecticide spray provided by seller, choosing instead to kill the bees by hand, using kleenex or gloves.
Seller argues that buyer's actions prevent him from curing the bee problem, and therefore that buyer should be required to pay full rental value of the premises as if it had not been infested with bees. However, buyer testified that seller told her he In addition, seller testified that the house had been fumigated for bees approximately two years earlier, yet the bees obviously had returned. This evidence indicates that it is uncertain whether the problem could have been cured by fumigation, or if so, whether the cure would have been effective for an extended period of time.
Even assuming that seller could have solved the bee problem had he not sold to buyer, a proposition not supported by the evidence, the fact remains that he did sell. The goal of rescission is to return the parties as nearly as possible to the status quo ante. LeTrace v. Elms, supra. As between an innocent purchaser seeking rescission and a non-disclosing seller, equity tends to favor the innocent purchaser. See Bodenhamer v. Patterson, supra, 278 Or. at 378, 563 P.2d 1212.
On review, we conclude that the rental decreed by the trial court is reasonable, and adopt it. Buyer had the use of the premises, but the value of that use was substantially reduced by the bee infestation. Seller contends that buyer's refusal to allow him to fumigate constituted a failure to "do equity"; however, the trial court concluded that buyer's refusal was neither unreasonable nor a mere artifice, and we defer to the court's assessment of buyer's credibility in this matter.
Seller's second contention is that the court erred by not awarding him interest on the rental payments computed from the date each payment theoretically would have been due. Seller argues that because buyer was awarded interest on all moneys from the date paid, that he, too, should be awarded interest. An alternate way of expressing seller's contention is that the monthly rental value should first be offset against the buyer's monthly contract payment. Interest would then be awarded on the net monthly difference, computed from the date the differential accrued.
Oregon authority is split regarding the time from which interest runs in restitution accompanying rescission. Although it is well established that in rescission of a land sale contract the seller may recover the reasonable rental value of the premises, 2 we have been able to find only one case discussing the question of prejudgment interest on such rental...
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