Court Opinion

ID: 7174223
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:37:04.93908+00
Date Added: 2024-06-11T16:15:50.091459
License: Public Domain

On Rehearing
McCALEB, Justice.
This matter comes to us from a judgment dismissing plaintiff’s suit on exceptions of no cause or right of action. The suit is for a rescission of the sale of an apartment house in the city of New Orleans because of error or fraud, it being alleged that the vendors, Mr. and Mrs. Albert J. Babin, represented to plaintiff, and caused her to believe, thai the legally collectible rentals that they were receiving from the apartments comprising the realty investment were $375 per month, whereas, -the ceiling rent charges under fixings by the Office of Price Administration could not exceed $277.
In affirming the judgment of the trial court on first hearing, it was held that plaintiff was without a cause of action because the misstatement or misrepresenta*100tion of the vendors was merely a false assertion respecting the value of the object of the contract which could not • serve as a cause for rescission of the sale inasmuch as plaintiff could have detected its falsity by inquiry at the office of the OPA where she would have undoubtedly been given the correct information.
A reconsideration of the matter has convinced us that our former view was erroneous and that- paragraph 3 of Article 1847 of. the Civil Code, which was cited as ■authority supporting the conclusion, is without application to the factual allegations presented by the petition. That paragraph provides, in substance, that a false assertion “as to the value of that which is the object of the contract, is not such an artifice as will invalidate the agreement” in cases where the object is such that he who claims to have been induced to contract might have “with ordinary attention” detected the falsehood.
In the case at bar, the misrepresentation was not as ter the value of the object of the contract but rather a misstatement concerning a quality of the object. It was not an assertion as to how much the apartment house was worth or how much rent it should or would produce; it was the misrepresentation of a fact respecting the legal amount of rent the apartments were actually bringing at the time the agreement was confected. And, according to plaintiff’s allegations, it was because of this representation that she was induced to purchase the property. These averments, which must be accepted as true for the purpose of considering the exception, amply state a cause for rescission attributable to error of fact under Articles 1821, 1823, 1826, 1845 and 2529 of the Civil Code.
Further than this, in view of plaintiff’s alternative charge that the Babins “deliberately misrepresented the legally collectible rentals to the petitioner with the intent and purpose to defraud * * * ”, the petition discloses a case of nullity resulting from fraud under Article 1847 of the Civil Code, as the false assertion forming the ground of complaint was not one as to the value of the object of the contract which is given special consideration under paragraph 3 of the Article.
It is also contended by the Babins that plaintiff’s petition does not state a cause for rescission because there is no mention of collectible rental of the apartments, or warranty thereof, in either the act of sale by which they transferred the property to the French Market Homestead Association or in the transfer by the latter to plaintiff. This point is based on the premise that, since the alleged misrepresentation is not contained in the formal act of transfer, plaintiff will be unable to prove the charges in her petition, as parol evidence is inadmissible to contradict or vary the recitals of the act. Articles 2236. and 2276, Civil Code.
*102We find no merit in this argument. It is settled that the parol evidence rule is incognizable where fraud or error is alleged. Templet v. Babbitt, 198 La. 810, 5 So.2d 13, Baker v. Baker, 209 La. 1041, 26 So.2d 132 and Sylvester v. Town of Ville Platte, 218 La. 419, 49 So.2d 746.
It is further argued that plaintiff is without a cause of action against the Babins because she did not purchase the property from them but from the other defendant, French Market Homestead Association.
This proposition is unrealistic. The fact is that plaintiff negotiated with the Babins with whom she entered into a written contract of sale and purchase of the real estate in question, subject to a homestead loan and other conditions. The sale by the Babins to the homestead and the resale on the same day by the homestead to plaintiff was solely for the purpose of securing to the homestead a vendor’s lien in accordance with law. Section 50 of Act 140 of 1932, LSA-R.S. 6:766. There is nothing in our recent decision in Hausler v. Nuccio, 214 La. 1069, 39 So.2d 734, relied on by defense counsel, which militates against this view.
On the other hand, we are of the opinion that the trial judge correctly sustained the exception of no cause of action as to the defendant, French Market Homestead Association. Plaintiff, recognizing that the homestead acted in good faith and that it is entitled to full payment of its vendor’s lien and mortgage upon the property, alleges merely that, in view of the indebtedness, the homestead is a necessary party to the suit in order that a full accounting can be had between the parties in the event the prayer for rescission is granted. But, as a matter of fact, the homestead is neither an. indispensable nor is it a proper party to the action. In its role as holder of a vendor’s lien and mortgage note on the property, it is interested only in the repayment of its loan in full. Plaintiff, and not the Babins, incurred the obligation and placed the encumbrance upon the property. Hence, in the event of judgment ordering a rescission, the decree must necessarily be conditioned upon the removal by plaintiff of the mortgage in favor of the homestead as it is her duty, in conformity with the nature of her action, to restore the status quo in order to obtain relief.
The judgment appealed from, insofar as it dismisses plaintiff’s suit against French Market Homestead Association, is affirmed.. In all other respects the judgment is reversed, the exceptions of Mr. and Mrs. Albert John Babin are overruled and the case remanded for further proceedings according to law and consistent with the views herein expressed. The costs of appeal incurred by plaintiff are to be paid by Mr. and Mrs. Babin and award of all other costs are to await further proceedings. The right to apply for a rehearing is reserved *104to those parties adversely affected by.this decree.
HAMITER, J., concurs in part and dissents in part for the reasons assigned on the original opinion.