Yount v. Indianola Beach Estates, Inc.

Decision Date02 January 1964
Docket NumberNo. 36703,36703
Citation387 P.2d 975,63 Wn.2d 519
CourtWashington Supreme Court
PartiesLewis C. YOUNT and Grace V. Yount, his wife, Floyd Kreigel and Edith Kreigel, his wife, Appellants, v. INDIANOLA BEACH ESTATES, INC., a Washington corporation, and American Discount Corporation, a corporation, Respondents.

Lycette, Diamond & Sylvester, Seattle, for appellants.

Howe, Davis, Riese & Jones, Seattle, for respondent.

HALE, Judge.

There are times when an attempt by the courts to rescind a contract is like trying to unring a bell. What's done is done and cannot be undone. A problem in rescission faced the learned trial judge here.

Plaintiff Yount, an experienced trader in real-estate equities, along with one Dale Brady, had been buying and selling realestate interests and participating in highly complicated real-estate deals since 1955. He understood the complexities of these trades and had grown accustomed to the use of complicated real-estate paper.

On July 25, 1960, plaintiff Yount and his coplaintiff Kreigel contracted to purchase from the defendant corporation, Indianola Beach Estates, a parcel of land which we shall call Block 60, Kitsap County, 1 for $17,500. Dale Brady, Yount's former associate and confidant, had become president of Indianola. Plaintiffs Yount and Kreigel paid Indianola $5,000 cash, and made a transfer of their interest in a land contract for an additional $5,000. This transfer consisted of execution by plaintiff Yount of what is called a purchaser's deed and assignment of real property to land we now refer to as Government Lot 6, Jefferson County. 2 At the time of his assignment of his purchaser's rights to Government Lot 6, Jefferson County, Yount owed a balance thereon in the sum of $4,295.96 to one Gordon Messenger, payable in regular monthly installments. Indianola promised to make these Installment payments to Messenger as they fell due.

Thus, plaintiffs had paid to Indianola $10,000 of the $17,500 purchase price for Block 60, Kitsap County, and, on August 24, 1960, signed a formal agreement with Indianola to pay off the balance at the rate of $200 per month.

About 5 weeks later, on October 1, 1960, plaintiff Yount alone agreed to buy from Indianola another piece of real estate in Kitsap County, which we shall identify as Section 11, Kitsap County, 3 for the price of $10,500. At the time Yount was in process of buying a mortgaged fourplex in Seattle, which we call Fourplex, King County. 4 The National Bank of Commerce held this mortgage on which Yount owed a balance of $10,512.48; and, in this purchase of Section 11, Kitsap County, Indianola gave him a credit of $4,225 for his entire interest in Fourplex, King County. Indianola agreed to pay the mortgage payments to the National Bank of Commerce as they bacame due. Yount's contract of October 1, 1960, with Indianola for his purchase of Section 11, Kitsap County, declared this $4,225 to be a down payment on the $10,500 purchase price and prescribed that the balance of $5,975 be paid at the rate of $100 per month.

All of the moneys and written instruments relating to these transactions were placed in escrow with Pacific Northwest Escrow Corporation, Lynnwood, Washington. Then, things got complicated. Enter: American Discount Corporation. With the knowledge and consent of plaintiffs Yount and Kreigel, and pursuant to their release of the contract from escrow, American Discount purchased all of Indianola's interest in Block 60, Kitsap County, for $6,163.25, and, with the knowledge, consent and release from escrow of plaintiff Yount, bought all of Indianola's interest in Section 11, Kitsap County, for $4,600.

Indianola became insolvent, and failed to pay the monthly payments to Gordon Messenger on plaintiff's purchase agreement for Government Lot 6, Jefferson County. Plaintiff Yount, to protect his interest, paid Messenger the sum of $1,800; he likewise made payments on the National Bank of Commerce mortgage on Fourplex, King County, in the amount of $749.54, which Indianola had allowed to become delinquent.

Plaintiffs Yount and Kreigel joined in this suit to rescind the various agreements with Indianola and to be restored to status quo ante. Rescission against American Discount was denied plaintiffs on two grounds of estoppel: (1) Yount's acquiescence in and consent to American Discount's purchase before it had been made, and (2) failure of Yount and Kreigel to require inclusion of Indianola's promises to pay the balance on the real-estate contracts purchased by American Discount Corporation. The trial court did hold, though, that Indianola's failure to make the mortgage payments to National Bank of Commerce and the contract payments to Gordon Messenger constituted sufficient grounds for rescission as to it.

The trial court found that (1) neither Brady, appellant Yount's former associate and confidant, nor Indianola occupied a fiduciary relationhip to either of the appellants; (2) the sales or transfer from Indianola to appellants were neither fraudulent nor fraudulently induced; and (3) rescission of the contracts as to American Discount Corporation should be denied because appellants ought to be and were estopped by their own conduct to assert the remedy of rescission against American Discount.

Thereupon, a decree in equity based upon two alternatives was entered as a judgment. It provided that, if within 60 days plaintiffs paid to American Discount Corporation $10,800.45, less any amounts plaintiff's had applied on the two contracts for the purchase of Section 11, Kitsap County, and Block 60, Kitsap County, plus interest at 7 per cent and an attorney's fee of $400, or a total net sum of $11,563.21, American Discount, count, upon receipt of this sum, should then convey to plaintiffs Yount and Kreigel all of its rights and interest in and to Block 60, Kitsap County, and should then convey to plaintiff Yount all of its rights in and interest in and to Section 11, Kitsap County, and any claims of Indianola thereby would be quieted in plaintiffs. By exercising this alternative, all of the funds paid and contracts transferred by plaintiffs would receive full credit toward the transaction originally contemplated.

The other alternative of the decree provided that, if plaintiffs did not exercise the first alternative provision, the real-estate agreements of August 20, 1960, covering Block 60, Kitsap County, and October 12, 1960, referring to Section 11, Kitsap County, would be confirmed and plaintiffs would then have judgment of $749.54 against Indianola for mortgage payments advanced by plaintiffs to National Bank of Commerce on the Fourplex, King County; and would receive judgment against Indianola in the sum of $1,800 to cover payments made by plaintiffs to Messenger on their contract for purchase of Government Lot 6, Jefferson County. In such latter choice, American Discount would be granted judgment against plaintiffs on its counterclaim in amount of $3,000, plus $200 for an attorney's fee on the Block 60, Kitsap County, purchase, and $1,400, plus $100 for attorney's...

To continue reading

Request your trial
23 cases
  • Columbia State Bank v. Lnvicta Law Grp. PLLC
    • United States
    • Washington Court of Appeals
    • June 26, 2017
    ...and equity. GMB Enterprises, Inc. v. B-3 Enterprises, Inc., 39 Wash.App. 678, 687, 695 P.2d 145 (1985) ; Yount v. Indianola Beach Estates, Inc., 63 Wash.2d 519, 525, 387 P.2d 975 (1964). The general rule is that courts will not exercise equity jurisdiction when there is a clear, adequate, c......
  • Chemical Bank v. Washington Public Power Supply System
    • United States
    • Washington Supreme Court
    • November 6, 1984
    ...position as possible or practical. J.I. Case Credit Corp. v. Stark, 64 Wn.2d 470, 392 P.2d 215 (1964); Yount v. Indianola Beach Estates, Inc., 63 Wn.2d 519, 387 P.2d 975 (1964). Here, however, it would be impossible to return the parties to their positions prior to the contract given the la......
  • Golob v. George S. May Intern. Co.
    • United States
    • Washington Court of Appeals
    • April 27, 1970
    ...283 (1947). Hence the necessity in practical terms of restoration to status quo ante as near as may be. Yount v. Indianola Beach Estates, Inc., 63 Wash.2d 519, 387 P.2d 975 (1964). When there is no literal rescission, restitution approximates equitable relief. Restatement of Contracts § 349......
  • GMB Enterprises, Inc. v. B-3 Enterprises, Inc.
    • United States
    • Washington Court of Appeals
    • January 29, 1985
    ...rather than leaving the parties where it found them. A court may grant relief in both law and equity, Yount v. Indianola Beach Estates, Inc., 63 Wash.2d 519, 525, 387 P.2d 975 (1964). Generally, rescission contemplates restoration of the parties to as near their former position as possible ......
  • Request a trial to view additional results
3 books & journal articles
  • §2.7 Significant Authorities
    • United States
    • Washington State Bar Association Washington Civil Procedure Deskbook (WSBA) Chapter 2 Rule 2.One Form of Action
    • Invalid date
    ...action, courts continue to recognize the distinction between remedies available in law and equity. Yount v. Indianola Beach Estates, Inc., 63 Wn.2d 519, 524-25, 387 P.2d 975 (1964) (prior to adoption of CR When an action is "primarily equitable in nature," there is no right to a jury trial,......
  • §2.6 Analysis
    • United States
    • Washington State Bar Association Washington Civil Procedure Deskbook (WSBA) Chapter 2 Rule 2.One Form of Action
    • Invalid date
    ...equitable issues). Additionally, characterization of an action may affect the remedies available. SeeYountv.IndianolaBeachEstates, Inc., 63 Wn.2d 519, 524, 387 P.2d 975 (1964) (distinguishing between equitable and legal remedies of rescission and damages for a breach of contract); Peterson ......
  • §2.8 Strategic and Practical Considerations
    • United States
    • Washington State Bar Association Washington Civil Procedure Deskbook (WSBA) Chapter 2 Rule 2.One Form of Action
    • Invalid date
    ...are now able to grant either legal or equitable remedies in any appropriate civil action, see,e.g., Yountv.IndianolaBeach Estates,Inc., 63 Wn.2d 519, 524-25, 387 P.2d 975 (1964), the characterization of the claim may nevertheless limit a court's power to adjudicate the claim and grant the r......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT