Court Opinion

ID: 9564289
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:57:15.355824+00
Date Added: 2024-06-11T09:18:19.863125
License: Public Domain

ANDREWS, Judge (dissenting in part and concurring in part). The district court was correct. Rescission is not a proper remedy in this case. To warrant rescission of contract, there must be a substantial failure of consideration. Samples v. Robinson, 58 N.M. 701, 275 P.2d 185 (1954). Rescission is not warranted by mere breach of contract not so substantial and fundamental as to defeat the object of the parties; before partial failure of performance by one party gives the other the right to rescission, the act failed to be performed must go to the root of the contract, or the failure to perform must be in respect of matters which would render performance of the remainder a thing different in substance from that contracted for. Yucca Mining & Petroleum Co. v. Howard C. Phillips Oil Co., 69 N.M. 281, 365 P.2d 925 (1961). Here, although the court concluded that the “misrepresentations and nondisclosures by Robison to Katz were material,” and that “Katz justifiably relied upon them to her detriment, loss, and damages,” the court did not find a substantial failure of consideration and the evidence would not support such a finding. Katz made all payments on the underlying mortgages and real estate contracts existing on the park as those payments came due from July, 1976, until August, 1977, when she herself allowed the contract with Campbell to go into default. However, much of the confusion in the case might have been avoided if the court had used the proper measure of damages— the difference between the “before” and “after” fair market values of the trailer court business. Duke City Lumber Company, Inc. v. Terrel, 88 N.M. 299, 540 P.2d 229 (1975). The court’s mistake was that it undertook to measure damages by balancing the profits and expenses incurred by each party, thereby miring itself in. the problem of understanding Ms. Katz’ incomplete records of her transactions concerning the trailer park. The market value, or fair market value of a business enterprise, or of any other property, is not dependent upon the owner’s financial capacity to operate or improve the enterprise or property. It is what a willing buyer would pay and a willing seller would accept for it in its condition at the time and place in question. Duke City Lumber Company, Inc. v. Terrel, supra. I concur in other portions of the opinion.