fense she alleged that the plaintiff paid, as part of the purchase price of the lot mortgaged, the sum of $1,350 of his own funds, but asserted that, by reason of further allegations in the answer, the entire transaction culminating in the giving of the mortgage was a fraud upon her, perpetrated by the plaintiff and the other defendants, Holway and Benedict, and that the mortgage was. therefore, void. Upon the trial, and here, as we understand her position, it is claimed that $1,150 of her money went into the purchase price of the lot, together with $400 she borrowed from plaintiff; that the deed from Claybrooke should have been made directly to her, as per agreement; that the deed to Benedict was without any consideration, was unauthorized, and that the mortgage, for all purposes for which it was given, was equally unauthorized by her, and fraudulent and invalid; or, at least, the entire scheme of plaintiff, Holway, and Benedict was a conspiracy to obtain her money, after the mortgage was executed and given priority, and to put it into the lot. either towards the purchase price, or to be expended in the construction of the building, and at the same time including it in the mortgage.

We have examined the record carefully and perceive no reason why the findings should be disturbed. The evidence upon all the main issues in the case was, as usual. conflicting. It was for the trial court to determine from the conflict what facts it deemed satisfactorily proven, and an examination of the record shows that sufficient evidence was presented to justify the findings upon which the judgment was based, and to warrant the trial court in further concluding that the affirmative defense alleged was not sustained by it. There was evidence, which was accepted by the court as true, to the effect that plaintiff was in no respect the agent of defendant in the purchase of this property: that he was engaged in selling real estate, and had been requested by defendant to look out for the purchase of a lot for her in Los Angeles; that Holway, one of the defendants, was her agent, and had her money under his control; that Holway had given plaintiff $50 of the money of defendant long prior to the purchase of this lot, not as a commission. but as a deposit to be used by him in the event of securing a lot which defendant might wish to buy; that he (plaintiff) had listed with him by Claybrooke the lot described in the mortgage which he was authorized to sell for $1,550, and asked defendant if she would purchase it, but she declined to do so. He then tried to dispose of it to several parties without success, until Benedict and Holway agreed to purchase it on the following terms: Holway to pay $250, the plaintiff to advance $1,300 to complete the purchase, and plaintiff to take a mortgage upon the lot for $3.250 at 11 per cent. per annum interest. This mortgage

was to secure $1,300 of the purchase price advanced by plaintiff, and to further secure an advance of $1,950 to be paid to Holway and Benedict for the purpose of building a small two-story house on the premises according to plans acceptable to plaintiff; the money to be paid out on the construction of the house as it progressed. Holway and Benedict were also to pay plaintiff $100 commission. These terms for the purchase of the lot by Holway and Benedict were accepted by plaintiff, who paid $1,300 and Holway $250 of the purchase price, and, under an arrangement between Holway and Benedict themselves as to who should take the conveyance, it was agreed that Benedict should do so. Accordingly the deed was made from Claybrooke directly to Benedict, and the mortgage in question for $3,250, as agreed for, was immediately made by the latter in favor of plaintiff. The evidence warranted the court in finding that up to this time defendant Stull had no interest in the transaction, nor was in any manner connected with it, or, if so, it was by some arrangement with Holway of which plaintiff knew nothing. It does appear that Holway was at the time the agent of defendant and had the control of her money on deposit with the Title Insurance & Trust Company, and it is no doubt the fact that the sum put up by him towards the purchase price was a portion of it; but the evidence warranted the court in concluding that plaintiff did not know this fact, and did not know that defendant had any interest in the property until he ascertained, subsequent to the execution of the mortgage that Benedict had deeded the lot to her. It is true that an escrow order to the Title Insurance & Trust Company was signed by Koyer and Holway, directing payment of the money (it is to be presumed to Claybrooke; the order does not recite) to be made by the company when it could issue a certificate of title which would show "that the title of said property is vested in Gertrude Stull free from all incumbrances * * * except a mortgage executed by Charles E. Benedict and wife in favor of A. S. Koyer. The plaintiff testified that instructions as to the contents of this order were given in the office of the company by Holway, that plaintiff signed it after it was prepared, without reading it closely, and did not notice any reference in it to the defendant nor knew at that time that she was concerned in the matter. The court accepted this explanation as reasonable, and it had a right to do so. It is true, also, that, when plaintiff and Holway got together to arrange for the payment of the purchase price of the lot, Holway, though he had agreed to pay plaintiff $250, was only ready to pay $200. Plaintiff insisted that he should put up the additional $50, and Holway said-so plaintiff testified-There is $50 more in your hands I let you have," to which plaintiff replied, "That belongs to

Mrs. Stull," and continuing, he testified: "After some more conversation, I turned that money into the Title Insurance & Trust Company." This is the $50 which has heretofore been referred to as paid to plaintiff by Holway as a deposit to be used in the contemplated purchase of some lot for defendant. While these circumstances might raise a suspicion that plaintiff had some knowledge that defendant was connected with the transactions with reference to the purchase of this lot, still it could hardly be sufficient to warrant the court in disregarding the positive statement of plaintiff and Holway that at this time plaintiff knew nothing of her connection with it. This $50 was not included in the mortgage nor involved in the suit to foreclose it.

Added to all this evidence is this further fact that several agreements were drawn up between Benedict, Holway and the defendant relative to this lot. Some of them while they were unsatisfactory to defendant in some particulars and rejected by her for that reason, all practically contained the same recitals, and all of them contained reference to this mortgage as a recognized subsisting lien on the property. The agreement which was finally executed recited that Benedict hao conveyed this lot to defendant; that his purpose in doing so was to secure defendant the payment of $1,150 and interest thereon at the rate of 10 per cent. per annum, payable monthly, said sum to be payable only on the sale of the land so conveyed to her; that Benedict as owner, and Holway as builder, agreed to erect a two-story frame house of a certain description; that upon the sale of the premises defendant would be entitled to one-half of the net profits of the transaction, based on the sum the property might be sold for "over and above the existing mortgage of $3,250 made by Charles E. Benedict to A. S. Koyer, and over and above the $1,150 advanced by Gertrude Stull, and interest on such sums." This agreement states that she took the conveyance to the lot subject to and with the knowledge of the existence of this mortgage from Benedict to the plaintiff, and no doubt, from the discussion had between herself and Holway and Benedict as to the various agreements which were prepared between them and in which this mortgage was referred to, the defendant was fully aware of the circumstances under which it was given. The agreement as executed was acted upon, and it appears that the defendant received payments of interest on the $1.150 mentioned in it, according to its terms. This $1,150, aside from the $250 of it which undoubtedly was used by Holway as his advance of the purchase price of the lot, would appear from the evidence to have gone with the amount plaintiff was to advance, and did advance, towards payment for the construction of the house, which cost at least $3,000. We might pursue this matter further, but think these facts which the evi

dence presents, and which the trial court obviously accepted as true, justify the findings as made by it in every particular.

It is claimed, however, that, conceding that the mortgage was a valid lien upon the property, still the evidence is insufficient to support the finding of the court as to the amount due under it. In this regard it is insisted that, as the mortgage was given, not only to secure the purchase price advanced by plaintiff, but also to secure the additional advance to be used for the specific purpose of erecting a house upon the lot, and as the plaintiff, after the execution of the mortgage and before any sums were advanced for that purpose, had notice that the agreement in that respect was for the benefit of defendant, he was only entitled to enforce his mortgage to the extent that he had actually made payments for that purpose alone. And it is claimed the evidence does not show that he advanced all the moneys for that purpose which the court found to be due under the terms of the mortgage. But the evidence is uncontradicted that the full amount of money specified in the note and mortgage was paid out by plaintiff for the benefit of defendant, that $1,300 of it went into the purchase price, and the rest into the construction of the house on the lot. Defendant does not contend that there was in fact no evidence to show this. Her point is that the evidence upon the subject was too general to be accepted as satisfactory. It is true the statement was a general one. Plaintiff testified that he had paid out the full amount mentioned in the mortgage, less the $1,300, all for the construction of the house. He did not go into details-did not particularize as to amounts paid, to whom paid, or the character of the work or materials for which payment was made. But, in connection with his general statement, he further testified that he had all the checks with him showing such payments, and they were in fact handed to defendant for examination. She looked over some of them and cross-examined him as to them, and then practically the inquiry on the subject ended. If defendant questioned the general statement of plaintiff in regard to such payments, she could have pursued the matter in detail and had his vouchers at hand from which to determine how far his general statement was supported by them. Not having done so, she is not in a position to claim that sufficient proof of payment was not made by his general statement.

These are the only points made on this appeal of sufficient merit to require consideration.

The order denying the motion of defendant for a new trial was properly made, and is affirmed.

We concur: SHAW, J.; SLOSS, J.; ANGELLOTTI, J.; MCFARLAND, J.; HENSHAW, J.

(151 Cal. 732)

CALIFORNIA FARM & FRUIT CO., Limited, et al. v. SCHIAPPA-PIETRA et al. (L. A. 1,687.) (Supreme Court of California. Aug. 19, 1907.) 1. VENDOR AND PURCHASER-ACTION TO RESCIND CONTRACT OFFER TO RESTORE PROPERTY.

An offer to restore the property received before suit by the purchasers to rescind for fraud a contract of sale of lands is unnecessary; plaintiffs, in case their claim is well founded, being entitled, on delivery to defendant of the lands, to receive, not only the money and obligations they gave therefor, but also the amounts they had properly expended in the management of the property according to their contract with defendant, who had received all the income of the property, and the facts being complicated and a judicial accounting necessary, and defendant being unable to restore some of the obligations received by him.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 48, Vendor and Purchaser, § 209.]

2. SAME-NOTICE OF RESCISSION.

Even if notice of rescission is a condition, precedent to an action to rescind a contract of sale, a prior action in the federal court, dismissed on defendant's plea to the jurisdiction, is sufficient notice.

[Ed. Note. For cases in point, see Cent. Dig. vol. 48, Vendor and Purchaser, §§ 216, 217.] 3. SAME-DELAY IN COMMENCING ACTION.

A delay of three months after knowledge of the facts before bringing an action to rescind, for fraud, a contract of purchase, does not constitute undue delay; plaintiffs in that time haying commenced a suit for the same purpose in the federal court, which was dismissed on defendant's plea to the jurisdiction.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 48, Vendor and Purchaser, § 213.] 4. PLEADING COMPLAINT AND SUPPLEMENTAL COMPLAINT.

Though a complaint and supplemental complaint are incorporated in one document, styled an "amended and supplemental complaint," the supplemental complaint being distinguished only by being contained in separately, but consecutively, numbered paragraphs, they are to be considered as separate pleadings.

[Ed. Note. For cases in point, see Cent. Dig. vol. 39, Pleading, §§ 636-640.]

5. SAME-ELIMINATION OF PARTIES-DEMURRER.

action to rescind the contract of purchase for fraud, with complicity in which they are charged, though they have divested themselves of title to and possession of the property by sale under the power in the deed of trust.

9.

PARTIES-MISJOINDER OF PLAINTIFFS.

It is not a fatal misjoinder to make plaintiff, in an action to rescind a contract of purchase of land, with the corporation which bought the land, one who owns stock of the corporation and bonds thereof, which are a lien on the property, and who might have been made a defendant; it being a part of the relief asked that the stock and bonds of the corporation be produced and canceled, or transferred to the vendor.

10. PLEADING-STRIKING OUT ALLEGATIONS OF COMPLAINT.

Matters material to the accounting to which plaintiff, under the facts alleged in the complaint, is entitled, and proper, though not necessary, subjects of averment to lay the foundation for that part of the relief, should not be stricken from the complaint.

11. COSTS TAKING OF DEPOSITIONS.

Under Code Civ. Proc. §§ 2021, 2031, authorizing either party to have a deposition taken any time after service of the summons, it is not ground of objection to the taxing of costs for a deposition that defendant had it taken before answer, and while a demurrer that the complaint did not state a cause of action was pending.

In Bank. Appeal from Superior Court, Ventura County; Felix W. Ewing, Judge.

Action by the California Farm & Fruit Company, Limited, and another, against Leopoldo Schiappa-Pietra and others. From an adverse judgment, plaintiffs appeal. Reversed and remanded for further proceedings.

John S. Chapman and J. H. Shankland, for appellants. Lynn Helm, Barnes & Selby, and Edward M. Selby, for respondents.

PER CURIAM. In this action demurrers interposed by defendants to plaintiffs' amended complaint were sustained, with leave to plaintiffs to amend. Plaintiffs failed to amend, and judgment was thereupon given for defendants. Plaintiffs appeal from such judgment.

The amended complaint, as we read it,

6. PARTIES-MISJOINDER-MODE OF OBJEC

TION.

Where the presence of certain defendants becomes unnecessary because of facts occurring after commencement of the action, the proper practice to eliminate them is by motion to dismiss the action as to them.

7. SAME-MISJOINDER OF DEFENDANTS-PERSONS WHO MAY OBJECT.

} The presence in an action of a defendant entitled to have the action dismissed as to him is not ground of objection by other defendants, protected from additional costs because thereof. [Ed. Note.-For cases in point, see Cent. Dig. vol. 37, Parties, § 149.]

8. CANCELLATION OF 'NSTRUMENTS-PARTIES. Where plaintiffs bought land and gave a deed of trust to secure the unpaid purchase money, the trustees are proper parties to an 91 P.-38

fendant Schiappa-Pietra (hereafter referred to as Pietra) was the owner of a tract of land in Ventura county, consisting of 6,962.31 acres, part of the Rancho Santa Clara del Norte, and 5,375 shares of the capital stock of the Santa Clara Water & Irrigating Company. On March 20, 1902, through the medium of defendant Temple, he sold all of said property to plaintiff corporation; the terms agreed on being as follows: The total purchase price was $1,113,880, of which $125,000 was to be paid in cash, $925,000 was to be evidenced by promissory notes payable at various times between that date and January 1, 1912, and $63,880 was to be evidenced by a promissory note, which was to be replaced, and which was in fact replaced, on July 5, 1902, by 64 interest-bearing bonds of the corporation, 63 for $1,000 each and 1 for $880, issued to Pietra. The transaction was had as of the date of January 2, 1902. Pie

tra executed to Temple a conveyance of the property, and an assignment of all the leases and rents reserved thereon; such leases covering all but about 800 acres of the land. Temple executed and delivered to Pietra the promissory notes. As security for the payment of the indebtedness he executed to defendants Power and Foster deeds of trust, covering all of said property and conferring power on them to collect all rents and apply them to the indebtedness. He caused the shares of stock of the water company to be transferred on the books of the company to said trustees as security. He further agreed to cultivate the portion not covered by leases, and executed to Pietra a crop mortgage covering the crops to be raised. He then transferred all the property, subject to the incumbrances thus created, to the corporation. It was stipulated in the trust deeds that a sale of the property by the trustees under the terms of the deed should be a full satisfaction of the indebtedness other than that evidenced by the bonds; no personal liability thereon surviving. The corporation was thereupon placed in possession of the property, and, so far as appears, continued in such possession until March 2, 1904. a few weeks subsequent to the commencement of this action, when Pietra, under a deed executed in pursuance of a sale made by the trustees, entered into possession of all thereof. During the whole period of the possession by the corporation, all of the proceeds, income, revenue, and every other receipt of money or property accruing from the possession and farming operations of the land, amounting to $109,928.73. were delivered to and received by Pietra. The transaction thus had was induced, so far as plaintiffs were concerned, by the solicitations and representations of Temple. He had gone from California to Manchester, England, where plaintiff Scott resided, holding a purported option for the purchase of the property at a specified sum, and in the guise of one seeking financial help in a matter in which he himself desired to participate as an investor had there sought to interest Scott. He made certain representations in regard to the value of the property and its income capacity, and the adaptation of portions thereof for town site purposes, which need not be recited here, as it clearly appears from the complaint that Scott, through agents of his own, examined the property and the merits of the proposed enterprise, and, further, that he was satisfied, as a result of those investigations, that the property was not worth exceeding $900,000. Temple did, however, represent himself as a man of means, desirous of joining in this purchase, and able to respond to any call made upon him for funds in the matter. He persuaded Scott to join him, and they caused the plaintiff corporation to be organized under the laws of the kingdom of Great Britain for the purpose of carrying out their plans and purposes, in the event that

the purchase should be made. It was agreed that they would at all times subscribe for an equal number of shares in the corporation. It was further agreed, as an inducement to the purchase, that Temple would personally pay, from his share of the profits or otherwise, the excess over $1,000,000 paid to Pietra, with interest thereon. Temple agreed to subscribe and pay for 15,000 shares of £1 each, and it was further agreed between Scott and Temple that they would provide such further sums as might be necessary fom time to time.

It was the understanding of plaintiffs, induced by the representations of defendants, that Temple paid to Pietra $75,000 of the $125,000 cash payment for the property, Scott advancing the remaining $50,000, and stock of the corporation for that amount was subsequently issued him upon that theory. As a matter of fact, Temple was at all times acting as agent of Pietra for the sale of this property. The purported option was given him by Pietra solely for the purpose of. enabling him to appear in the capacity in which he represented himself. He had not the financial ability to pay any of the amounts that he agreed to pay, or to keep his part of the agreement with Scott and the corporation. His $75,000 portion of the $125,000 cash payment was not required by Pietra to be paid at all, and such payment was never intended to be required; the representations in regard thereto being made solely for the purpose of inducing the payment by Scott of the $50,000 portion and the entering by him and the corporation into the transaction. Scott personally advanced the $50,000 so paid, and subsequently received from the corporation stock thereof for that amount. The promissory note for $63.880, to be replaced and which was replaced by the bonds of the corporation, was executed not as a part of the purchase price, but solely for the purpose of requiring the plaintiffs to pay this amount to Temple for his services rendered to Pietra in the matter of such sale; it being the intent of Pietra and Temple that said bonds should subsequently be transferred to Temple. The actual purchase price to be received by Pietra was thus only $975,000. Temple never paid to the corporation any portion of the money he had agreed to pay. Upon the claim made by him that he had paid for the corporation the $75,000 at the time of the transaction, and various other sums, aggre| gating $19,213, 19,213 shares were issued him by the corporation, 5.000 of which he subsequently sold to Scott. Temple subsequently became indebted to defendant Newhall, and transferred to him as security his remaining 14.213 shares, and also 20 of the $1.000 bonds issued by the corporation to Pietra, and which had been transferred to Temple. Pietra still holds 33 of said $1,000 bonds, Scott 5. and Temple 1. As to the whereabouts of the remaining 5 bonds, plaintiffs have no knowledge. Scott holds all the stock of said

corporation, except the 14,213 shares now held by Newhall as security for Temple's indebtedness, and some 150 shares which are subject to his control. Plaintiffs never discovered that any of Temple's representations, all of which are alleged to have been the result of a conspiracy between Pietra and the other defendants, except Newhall, were false, until in November, 1903. On December 26, 1903, they commenced an action against the defendants here in the United States Circuit Court in and for the Southern District of California for a rescission of the transaction and an accounting, and in their bill asked "that said trustees be directed to reconvey the said property to the said Schiappa-Pietra, and did offer to surrender up the same, and everything obtained by, through, or under the said transaction, and offered to surrender up to be canceled all the stock * ** upon such terms and conditions as to the said court might seem just." This suit was so brought under the belief that all the defendants were citizens of the state of California; but, it subsequently appearing upon a plea made by the defendants therein that Pietra was a subject of the kingdom of Italy, the court dismissed the suit upon the ground of want of jurisdiction.

In February, 1904, this action was commenced by plaintiffs in the superior court of Ventura county, against Pietra, Temple, George C. Power, and Eugene P. Foster, trustees under said deed of trust, and W. S. Newhall. In the supplemental and amended complaint filed April 15, 1904, is contained the allegation of the sale by the trustees under the trust deed on March 2, 1904, and the delivery of the property thereunder to Pietra. Except for the allegation as to the offer made in the bill filed in the United States Circuit Court, this is the only allegation as to any restoration of the property or offer to restore or notice of rescission. The action is primarily for a rescission of the transaction on account of the fraudulent representations, and the restoration of the parties, so far as possible, to the position they occupied at the time of entering into the same. To this end the setting aside of the deed of the property, the cancellation of the notes and bonds given upon the purchase, and an accounting to determine the amounts due plaintiffs are asked. As to the defendant Newhall, it was alleged that he took the stock and bonds from Temple with notice of the frauds, and it is asked that, if it be found that he took in good faith, the amount due thereon be decreed a lien on the property of Pietra, conveyed by the trust deed. Subject to this claim of Newhall, it is also sought to have the stock of the corporation issued to Temple canceled. The demurrers interposed were based on various grounds, among which was the general ground that the complaint did not state facts sufficient to constitute a cause of action. Under this, the principal question discussed is as to

whether the complaint failed to state a cause of action for failure to allege a rescission, and restoration or offer to restore what plaintiffs had received under the contract, before bringing this suit.

Section 1691 of the Civil Code states the general rule applicable to one desiring to rescind. He must rescind promptly upon discovering the facts which entitle him to rescind, and he must restore to the other party everything of value which he has received from him under the contract, or must offer to restore the same, upon condition that such party shall do likewise, unless the latter is unable or positively refuses to do so. It will be assumed, in accord with the views expressed by this court in several cases, that one invoking the aid of equity to obtain a decree of rescission must comply with this rule as a condition precedent to action, except in exceptional cases, where, by reason of the circumstances, restoration or offer to restore is not essential, and that, in this regard, there is no distinction between an action on the equitable side of the court to obtain a decree of rescission and an action maintained on the theory that a rescission has been fully accomplished by the acts of the party. Kelley v. Owens, 120 Cal. 502, 47 Pac. 369, 52 Pac. 797; Westerfeld v. N. Y. Life Ins. Co., 129 Cal. 68. 84, 58 Pac. 92, 61 Pac. 667; Toby v. Oregon Pac. R. R. Co., 98 Cal. 490, 499, 33 Pac. 550. These rules are based on the equitable doctrine that he who seeks equity must do equity, and are applicable in every case where compliance therewith can be had without injury to the rights of the rescinding party, and is essential to the protection of the other party. There are, however, exceptions to the rule as to restoration, also founded on equitable considerations. In Kelley v. Owens, supra, this court recognized the existence of such exceptions in the following language: "There are exceptional cases where restoration or an offer to restore before suit brought is not necessary-as, for instance. where the thing received by the plaintiff is of no value whatever to either of the parties, or where the plaintiff has merely received the individual promissory note of the defendant, or where the contract is absolutely void, or where it clearly appears that the defendant could not possibly have been injuriously affected by a failure to restore, or where, without any fault of plaintiff, there have been peculiar complications which make it impossible for plaintiff to offer full restoration, although the circumstances are such that a court of chancery may by a final decree fully adjust the equities between the parties -and it will be found that such instances, or others similar to them in principle, are those to which the authorities cited by appellants generally relate." Some of the cases thus instanced are excepted by the terms of the statute, as in the case where the thing received by the plaintiff is of no value whatever to either party, but others are not. It is