Chase v. Wolgamot ( 1908 )

Sherwin, J.

In December, 1903, these parties exchanged real estates, the plaintiff deeding to the defendant ten vacant lots for an equity in a brick store building. The store building was incumbered by two mortgages, one for $2,000 and the other for $1,000. The building was at the time occupied by the defendant’s father, A. E. Wolgamot, .as we understand the record, and had been so occupied for some years prior to the trade. Tie represented the defendant in the transaction in question, and by his‘acts she is bound. This action was brought to rescind the exchange on the ground of fraudulent representations as to the condition of the property, and for false representations as to the maturity of the larger of the two mortgages thereon.

The evidence conclusively shows that at the time of the exchange the building was in an unsafe condition and practically worthless except for the material that might be saved therefrom when it was razed. It was in fact afterwards torn down by order of the city council of Webster City, because of its dangerous condition. While the record shows that the condition .of the building was fairly apparent, the cause of such condition was a very material matter, and, as to such cause, the plaintiff was not informed and could not be by a mere inspection of the building. He was not bound to have it examined by experts to ascertain the cause of its shape, but might rely, as he did, upon the statements of the defendant’s agent, who thoroughly knew the building by reason of his long occupancy, and the cause of its then condition. This he fraudulently misrepresented to the plaintiff, and thereby induced the exchange of properties.

It is said, however, that the .plaintiff treated the property as his own after he knew its • unsafe condition, and, because thereof, is not entitled to rescission. There is testimony tending to show that he knew something of the condition of the building before he ceased treating it as his own, but the record fails to show that he was fully advised on the subject, or that he knew the full extent of the loss that he must suffer if he retained the same. Soon after making full discovery he tendered the defendant a deed for the property, but the exchange back was refused. • Under these circumstances we think the right to rescind was not lost. Clapp v. Greenlee, 100 Iowa, 586. Upon the trial he offered to return all rent received for the property while the title stood in his name, and this was sufficient in a court of equity. Clapp v. Greenlee, supra. It may be there was no offer to return the” insurance policy, but the paper itself had no value, and such failure should not defeat recovery. For the reasons stated, there should be an affirmance of the case, and we need not discuss other propositions relied upon by the appellee.

The judgment is affirmed.