Lunden v. Smith

THORNTON, J.,

specially concurring.

I agree that the Smiths were entitled to restitution of the real estate broker’s commission, but do not agree with some of the majority’s reasons in arriving at this result.

The evidence established that Mrs. Smith furnished the inaccurate income and expenses information to Wilson and participated equally with Wilson in preparing and furnishing the faulty financial statements to plaintiffs. In view of this both the Smiths and Wilson were equally responsible for misleading plaintiffs. Under these circumstances the equitable solution would be to put all parties, including Wilson and the Smiths, back in status quo ante. Olson v. Pixler et ux, 138 Or 250, 6 P2d 23 (1931), overruled on other grounds, Grider v. Turnbow, 162 Or 622, 94 P2d 285 (1939); Miles v. Hemenway, 59 Or 318, 111 P 696; 117 P 273 (1911). Restoration of the status quo is an essential element of rescission. Johnston v. Gilbert, 234 Or 350, 353, 382 P2d 87 (1963); Howard v. Jackson, 213 Or *784447, 324 P2d 757 (1958). That should be the proper rationale on which to rest our decision.

I disagree with both the majority and the trial court in suggesting, if not resting the decision in this case on, an alleged breach of a standard of professional skill and competence applicable to real estate brokers.

The trial judge found that Wilson should have known that the faulty profit and loss statement did not accurately reflect the income of the business and that he should have informed both the sellers and buyers of this.

First, it is unnecessary for this court to reach this issue. Second, if we do take this step, I believe that both the majority and the trial court err in formulating and applying an improper standard of professional competence and conduct to Wilson’s actions in the transaction. See Prall v. Gooden et ux, 226 Or 554, 360 P2d 759 (1961).

In my view, the proper standard is this: Would a reasonably prudent real estate broker in Hood River have understood the difference between a cash-flow statement and an income and expense statement? Contrary to the majority, the record does not in my opinion support the trial judge’s finding that a reasonably prudent real estate broker in Hood River would have understood the difference between a cash-flow statement and an income statement.