Larsen v. Chapin

• Citation: 265 P. 441,125 Or. 7
• Parties: LARSEN v. CHAPIN ET AL.
• Decision Date: 27 March 1928
• Court: Supreme Court of Oregon

265 P. 441

125 Or. 7

LARSEN v. CHAPIN ET AL.

Supreme Court of Oregon

March 27, 1928

Department 1.

Appeal from Circuit Court, Douglas County; J. W. Hamilton, Judge.

Suit by Mary Larsen against Stanley D. Chapin and others. Decree for plaintiff, and defendants appeal. Affirmed.

This suit was instituted by plaintiff to foreclose a mortgage. In 1919 she sold a tract of land consisting of 520 acres to defendant Staples and his then partner in the real estate business, defendant Chapin. Prior to consummating the sale said Staples and one Johnson had been in partnership in the same business and had listed the tract of land in question for sale for plaintiff. The land was listed by the husband of plaintiff who made all the representations regarding the land to the said Johnson and defendant Staples. The land was listed at $10,000. Defendant Staples, having become interested in the purchase of the land himself, secured a reduction in price to $9,000, and was paid a commission of $450 for making the sale. The note is for the sum of $4,500 being one-half of the purchase price, and is secured by a mortgage on the premises sold. $4,050 in cash was paid which, together with the commission of $450, made one-half of the contract price. The other defendants are part owners of the land and are all business acquaintances and friends of the defendant Staples.

Defendants admit the execution of the note and mortgage, but allege that plaintiff, through her husband, fraudulently misrepresented the quantity of timber on the land; that he represented that there were 8,000,000 feet of timber, both orally and in the writing in which the land was listed for sale through said Johnson and defendant Staples. Defendants seek to have the contract of purchase canceled, the amount paid on account of the purchase price returned to defendants, the note against defendants canceled, or, in case rescission cannot be had to recover judgment for damages and costs and disbursements.

The reply puts in issue the affirmative defense. Plaintiff denies in her reply that she made any fraudulent representations admits that she stated there were from seven to eight million feet of timber on the premises, but alleges that said statement was made in connection with representations that had been made to her by the Smith Timber Company, a good many years prior thereto; that she made no positive representations other than to repeat to said Johnson and defendant Staples, and later to defendant Chapin, the representations of said Smith and his agents about the quantity of timber.

After a trial the circuit court found the equities with plaintiff and foreclosed the mortgage. Defendants appeal from that decree.

B. L Eddy, of Roseburg (Joseph, Haney & Littlefield, of Portland, on the brief), for appellants.

Charles A. Hardy, of Eugene, for respondent.

COSHOW, J. (after stating the facts as above).

A person who believes himself to have been swindled by fraudulent representations in the purchase of real property, upon the discovery of the fraud, has two remedies open to him; namely, he may affirm the contract and sue for damages, or he may disaffirm the contract and seek to have it rescinded. These remedies are not concurrent, but are inconsistent. Scott v. Walton, 32 Or. 460, 52 P. 180; Crouch v. Butler, 119 Or. 344, 248 P. 849; Fairbanks v. Johnson, 117 Or. 362, 243 P. 1114.

If one would rescind a contract of the nature involved in this suit, he must act promptly.

"He cannot retain the fruits of the contract awaiting future developments to determine whether it will be more profitable for him to affirm or disaffirm it. Any delay on his part, and especially his remaining in possession of the property received by him under the contract, and dealing with it as his own, will be evidence of his intention to abide by the contract." Scott v. Walton, above.

Defendants remained continuously in the possession of the property for more than five years. During all that time they exercised ownership of and dominion over it. It is now too late for them to rescind.

There is no evidence that plaintiff in any way attempted to prevent the parties purchasing the property, and under whom all of the defendants now claim, from making a complete and thorough examination of the tract of land. Messrs. Johnson and Staples had every opportunity to inspect the land and to cruise the timber if it was their pleasure so to do. Said Johnson, the then partner of defendant Staples, went to the premises with plaintiff's husband and was afforded every opportunity to thoroughly examine and inspect the land. Plaintiff's husband testified that he told both said Johnson and defendant Staples, as well...