45 Wn.2d 513, RUSSELL J. BARIEL, Appellant, v. GERRIT TUINSTRA, Respondent
[No. 32933. Department Two. Supreme Court November 12, 1954.]
RUSSELL J. BARIEL, Appellant, v. GERRIT TUINSTRA,
Respondent.«1»

It is undisputed that, on the second occasion when respondent and appellant met, respondent asked him what he had decided to do, and he answered, "I want my money back." Respondent immediately replied: "I'm not going to give it to you."

There were some negotiations between the parties, and both testified that respondent did offer to "make good" for two of the four "reactor" cows, but appellant rejected the offer. However, appellant did not make a specific offer to return the cattle and all of the farm machinery and equipment included in the personal-property sale contract after respondent's refusal to give appellant his money back.

After respondent refused to allow appellant to rescind the personal property sale, appellant went to the Golden Rule dairy and endeavored to have payments under the assignment stopped as to the personal-property contract. The dairy manager refused to stop payments, and the payments continued to be made to respondent until this suit was instituted and a restraining order was obtained, after which the payments were made into the registry of the court.

When the dairy manager refused to stop making these payments to respondent, appellant turned the matter over to his attorney, apparently about the middle of August, 1953. This suit was filed November 12, 1953. Appellant continued to care for the dairy herd and to send the milk to the dairy until the date of the trial, which was February 10, 1954.

In January, 1954, appellant had the herd tested again by the state department of agriculture, and the test showed that the herd contained ten cows infected with Bang's disease and twenty-three "suspects."

520 BARIEL v. TUINSTRA. [45 wn. (2d)

Before the action was commenced, appellant, with respondent's permission, sold five barren cows and six steers for a total of $1,100. Without respondent's permission, appellant turned in the milking machine purchased from respondent on the purchase of a new milking machine and received a credit of $160 (the fair market value of the old milking machine) on the price thereof.

During the time appellant operated the dairy farm, he made no profit whatsoever, over and above payments he made to respondent on the land and cattle contracts, because the total expense of operating the herd (feed, wages, electricity, etc.) exceeded the amount he received from the sale of the milk after payments to respondent were deducted.

After both appellant and respondent had rested their cases, the trial court asked counsel for appellant: ". is the sale of this personalty a transaction that can be rescinded while keeping the benefits and fruits of the sale of the land?" The attorney for appellant pointed out that respondent's answer raised no issue that the land and personalty contracts were one indivisible contract. Appellant's attorney asked to reopen the case in view of the question asked by the court, and the motion was granted. Appellant put in evidence the land contract and then rested.

The following colloquy between court and counsel then occurred:

"THE COURT: I notice that the answer doesn't tender the defense that I just mentioned [that the land and personal property contracts were indivisible]. I don't know. They may not be making any point of it. Are you or are you not, Mr. Simmons? MR. SIMMONS: What? THE COURT: I say I notice your answer does not tender such a defense. Are you making any point of it, or not? MR. SIMMONS: The answer is yes. . . . THE COURT: Is it your position then that if the Court finds that plaintiff is entitled to rescission, it would rescind the whole transaction? MR. SIMMONS: Yes. MR. WELTS: Do you want the land back? THE COURT: Do you want the land back? MR. SIMMONS: We better ask the parties about that. MR. WELTS: Do you want the land back? If so, we offer it. MR. SIMMONS: That is our position. MR. WELTS: We tender to the parties a conveyance of the land and the conveyance of the cattle, to

Nov. 1954] BARIEL v. TUINSTRA. 521

satisfy the position counsel now takes. Heretofore, it hasn't been in the lawsuit, but we are perfectly willing, if the Court rescinds, to let rescission be complete, though our position is that it hasn't anything to do with this lawsuit at all."

In his oral opinion rendered after the argument of counsel, the court ruled that the land and personal-property contracts were one indivisible contract, and that appellant's offer to return the land (if respondent wanted it back) came too late.

Appellant urges on the appeal that the trial court erred in ruling that the two contracts were one indivisible contract and that appellant's offer to return the land came too late. Appellant contends (1) that the contracts were separate and divisible contracts, and (2) that the trial court should not have considered the defense that the two contracts were one indivisible contract because respondent did not plead such a defense and consequently waived it, even if it were available to him on the facts in this case.

[1] It will not be necessary to pass upon appellant's second contention on this phase of the case, because we are convinced that the trial court erred in concluding that the land and personal - property contracts constituted one indivisible contract.

In Darst v. Meduna, 15 Wn. (2d) 293, 130 P. (2d) 361, we set out the law relative to severable or entire contracts in this language:

"It is, of course, well settled that, when the subject of a contract of sale consists of several different articles, and there is an apportionment of the purchase price to each, the contract is severable. [Citing cases.] But when two or more articles are sold together for a gross sum, or the purchase price is not apportioned to the different articles, the contract 15 entire. [Citing cases.]"

[2] In the preliminary agreement drawn up and signed by the parties, the consideration for the land and the consideration for the personal property were each separately stated. When the formal documents were executed to consummate the sale of the realty and the sale of the personalty,

522 BARIEL v. TUINSTRA. [45 wn. (2d)

each sale was treated as a separate contract, with the same separate consideration staged for each transaction. A different method of conveying title was used in the two contracts, and a different rate of interest was agreed upon for the unpaid balance due on each contract.

The trial court seems to have felt compelled to hold that the two contracts were one indivisible contract because of the assignment made by appellant and accepted by the Golden Rule Dairy. The assignment provided that payments on the real-estate contract and on the personal-property contract would be made from the proceeds of the sale of the milk by appellant to the dairy. However, the assignment did not change the nature of the contracts in any way. Rather, the assignment merely provided for a method of collaterally securing the payments called for in each of the two contracts. If the cows had suddenly been destroyed by some calamity, making it impossible for appellant to comply with the agreement to ship milk to the Golden Rule Dairy, appellant would still have been bound by the terms of each contract to make the payments called for therein.

Since the trial court found that respondent fraudulently represented the cows to be free of Bang's disease when they were infected with the disease, and that he failed to disclose to appellant that the herd was quarantined at the time of the sale, and the evidence does not preponderate against the trial court's findings on this issue, appellant was entitled to rescind the personal property sale unless: (1) he had no right to rely on the fraudulent representation, or (2) he did not seek to rescind promptly enough, or (3) he did not make a sufficient tender of all of the personal property to respondent to support an action for rescission.

[3] The trial court held, in effect, that appellant had no right to rely on the fraudulent representation because he could have traveled to the state capitol prior to the sale and checked the records of the department of agriculture, which would have disclosed that the herd was quarantined as a result of the presence of animals infected with Bang's disease.

Nov. 1954] BARIEL v. TUINSTRA. 523

Chapter 249, Laws of 1909, § 288, p. 978 [cf. RCW 9.08.020] provides:

"Every owner or person having charge thereof, who shall . . . keep . . . any animal having any contagious or infectious disease; or who shall sell, let or dispose of any such animal knowing it to be so diseased, without first apprising the purchaser or person taking it of the existence of such disease, shall be guilty of a misdemeanor."

That statute imposes a duty upon the seller of a diseased animal to inform the purchaser of the condition of the animal, whether the purchaser asks any questions or not. A seller under positive statutory duty to speak the truth will not be heard to come into a court of law and contend that if his victim had been less gullible he could have found out the true state of facts from the public records.

Furthermore, in Cloakey v. Bouslog, 39 Wn. (2d) 66, 234 P. (2d) 880, a case which was quite similar to the instant case, we reached the same result without reference to the foregoing statute, saying:

"We do not doubt that a statement that a herd is free from Bang's disease, though false, might be made in good faith (of course, if the statement constitutes a warranty, the question of good faith would be immaterial); but here the appellants [sellers] had every reason to suspect, if not to know, that the herd was infected. It was under quarantine, and six reactors and one suspect had been permitted to remain in the herd after the last test prior to the sale to respondent, although there was evidence that the reactors and the suspect were disposed of prior to the sale. . . . We are convinced that the trial court was correct in holding that appellants' statement that the herd was free from Bang's disease was a fraudulent misrepresentation, and that the respondent [buyer] justifiably relied thereon."

Consequently, we hold that appellant had a right, both as a matter of fact and as a matter of law, to rely on respondent's representation that the cows were free from Bang's disease and was not required to search the records at the state capitol.

On the issue of whether appellant was too dilatory in seeking to rescind, respondent relies on the fact that

524 BARIEL v. TUINSTRA. [45 Wn. (2d)

appellant discovered on July 18, 1953, that he had been defrauded, and did not file suit to rescind the sale until November 12, 1953. During that time, respondent argues, appellant continued to "make payments on the contract" and to "retain the benefits of the contract for himself." The first argument ignores the fact that the payments were made involuntarily through the Golden Rule milk assignment, upon which appellant unsuccessfully tried to stop payment. The second argument overlooks the undisputed testimony that appellant's operating expenses during this period exceeded the payments he received from the sale of the milk, leaving him no "benefits" to retain.

When respondent refused to take back the cows at the time that appellant sought to rescind the sale, appellant became an involuntary bailee of the milk cows and had no alternative but to continue operating the dairy farm and selling the milk pending the outcome of this litigation. Consequently, respondent is in no position to complain because appellant continued to operate the dairy farm in order to preserve the fruits of the litigation for the prevailing party when he had no choice but to do just that.

[4] In the recent case of Eliason v. Walker, 42 Wn. (2d)473, 256 P. (2d) 298, we said:

"Diligence in rescission is a relative question, and whether or not there has been an unreasonable delay in a given case depends upon the particular circumstances of that case."

[5] In the case at bar, according to the trial court's findings, appellant learned of the fraud practiced on him by respondent on July 18, 1953, and attempted to rescind the personal property sale either in the latter part of July or in the early part of August, 1953. Prior to the demand by appellant for rescission, there had been some negotiations between the parties which terminated when respondent refused to "make good" for more than two of the diseased cows. There was absolutely no showing by respondent that he had altered his position to his prejudice in any way, either prior to the oral demand for rescission or prior to the filing of this suit. The trial court felt that respondent had been prejudiced by

Nov. 1954] BARIEL v. TUINSTRA. 525

the fact that more cows in the herd might have contracted Bang's disease before the demand for rescission. Since respondent, not appellant, was responsible for the diseased cows being in the herd at the time of the sale, and since the testimony plainly indicated that the diseased cows could have infected the whole herd in the two months between the date when appellant took possession of the herd and the date when he discovered the fraud, respondent and not appellant is responsible for any prejudice from that source.

We hold that, under the facts of this case, there was no unreasonable delay before appellant attempted to orally rescind the sale nor before appellant filed this suit. By his fraudulent conduct in misinforming appellant about the condition of the cows, respondent caused any damage which he might have suffered by the lapse of time before the action was commenced.

[6] Respondent's final contention, accepted as a valid one by the trial court, is that appellant cannot recover because he did not specifically tender back to respondent the farm machinery and equipment which was included with the cattle in the personal property sale at the time that appellant orally demanded a rescission of the sale.

In Lucas v. Andros, 185 Wash. 383, 55 P. (2d) 330, we quoted with approval this rule from 13 C. J. 621, § 680: