In his petition for a rehearing respondent insists that although he may have had no right to rescind by reason of the delay in perfecting the title to the land, he did have a clear right to rescind on account of the failure of the water supply — and he claims that he had this right under subdivision 4 of section 1689 of the Civil Code, notwithstanding the absence of any bad faith or fault on the part of the defendant.
It is true that under that provision of the code a party to a contract may rescind if the consideration before it is rendered to him fails in a material respect, from any cause. But does that provision apply to the kind of recission decreed in this case? The respondent never offered to rescind except upon condition that he should be paid for his improvements, and such was the decree. The offer and the decree were, as we understand, alike based upon some imputation of actual or constructive fraud on the part of the defendant in contracting to convey land to which it had no title. *Page 547
Eliminate this feature of the case and how does it stand? The plaintiff was to have, along with the land, certain shares of stock in an irrigation company representing two and thirty-two thousandths inches of water. He knew what the company was, what its supply of water was, and what was the source of supply. When he commenced his improvements he knew as well as the defendant could have known whether the supply would be permanent. There was no guaranty that it should be permanent, and no such representation, or, if there was, it was a mere expression of opinion. The plaintiff then made permanent improvements, because of his own belief that the water supply would not fail. If there had been no difficulty about the title and the payments had been completed, and the conveyance made in January, 1894, as the contract provided, the defendant would have got all he contracted for on his own construction of the agreement as to the water stock, but when the water failed in 1896 he would have had no right to rescind with or without compensation for his improvement, and we see no reason why in the case as it is he should be allowed to throw upon the defendant the unfortunate consequences of his own mistaken judgment in a matter as to which he was uninfluenced by any fraud, actual or constructive, of the defendant.
Rehearing denied.
Henshaw, J., Van Dyke, J., McFarland, J., and Garoutte, J., concurred.