Court Opinion

ID: 9633812
Source: CourtListenerOpinion
Date Created: 2023-08-22 12:01:01.957493+00
Date Added: 2024-06-11T18:08:42.572734
License: Public Domain

CARTER, J.,
Dissenting. Briefly stated, there is presented in this case the following situation: plaintiff Butler granted an option to plaintiff Maynard to purchase certain mining property, in which the latter was given the right of possession. Plaintiff Maynard then agreed to sell the property to defendant, and in a transaction with which plaintiff Butler has no connection, falsely represents that he (Maynard) was the owner of the property; defendant is given the right to possession and does go into possession under the agreement with Maynard. Thereafter, and before defendant has paid the purchase price of the property, the condition precedent to his right to a conveyance thereof from Maynard, he discovers that plaintiff Butler, not Maynard, is the true owner of the property and that Frank Butler owns an outstanding one-eighth interest therein. In spite of that knowledge he makes no attempt to rescind the contract or give up possession of the property. On the contrary, he maintains that his contract with Maynard is still in full force and effect, and that he is entitled to remain in possession of the property and extract the .minerals therefrom. He continues to hold under plaintiff Butler’s title because obviously he has no other basis for a claim to any right or interest in the property. Under these circumstances, that is, knowing that plaintiff Butler is the owner of the property, and that any right he asserts therein must be by virtue of and pursuant to Butler’s title, he acquires the outstanding one-eighth interest owned by Frank Butler. These facts certainly justify the application of the rule that defendant is estopped to deny plaintiff Butler’s title and that any outstanding interest he acquires while holding possession under that title inures to the benefit of plaintiff Butler. (Garvey v. Lashells, 151 Cal. *427526 [91 Pac. 498].) The reason for that rule is that a vendee of real property shall not be permitted to have the benefits arising from the possession of the real property which are enjoyed by reason of the rights acquired under another’s title, and at the same time refuse to pay the purchase price and take a position adverse to the holder of the title by acquiring an outstanding interest in the property adverse to him. The vendee is not entitled to a clear title to the property until he has paid the full purchase price thereof and in the interim may not object to a defect in the vendor’s title. The situation is not altered by the fact that his contract of purchase was with Maynard rather than Butler. He continued to enjoy and insist on his right to possession after he knew Butler, not Maynard, was the owner of the property. That enjoyment or advantage was therefore necessarily predicated upon Butler’s title; it could not be derived from any other source. His conduct constituted a recognition in effect of Butler as the true owner and vendor of the property. The situation is no different in reality than if Maynard had assigned his option from plaintiff Butler to defendant, rather than having made a separate contract with him.
The majority opinion states that the equities are in favor of the defendant; that when one of two innocent persons must suffer, (Butler and defendant) by reason of another’s conduct, the one who put the third person in a position to cause the injury must bear the burden. But here, as far as appears, defendant has not been and will not be injured nor will he suffer in any manner. It does not appear that any royalties have been paid, thus defendant has paid nothing on the purchase price except the original down payment. In return for that he has had possession of the property for several years. It may be true that he and his associates have expended a considerable sum in mining activities on the property, but whether those expenditures improved or made the property more valuable is not shown. He is in no worse or different position than he would have been if Maynard rather than Butler held title to the property. He still has his rights under his contract with Maynard and may proceed to cause those rights to mature into the right to receive a conveyance of the property. If he can prove that he has suffered any damages by reason of Maynard’s false representation as to ownership, he may recover the same from May*428nard or have the amount of such damage credited against the purchase price payable to Maynard. He is not injured by being estopped to question Butler’s title, inasmuch as he is entitled to receive from Butler as a condition upon which Butler’s recovery of the one-eighth interest is predicated, the $100 he paid for that one-eighth plus interest thereon.
In my opinion, the majority opinion is based upon a very tenuous and highly technical ground, and overlooks the basic equitable principle involved in the case. To my mind, it is obvious that plaintiff Butler is the only one who can be injured in this case. As he has not been guilty of any fraud or come into court with unclean hands, he should be entitled to invoke the rule contended for by him, and the judgment should be reversed.
Appellants’ petition for a rehearing was denied March 6, 1942. Carter, J., voted for a rehearing.