Kuhn v. Gottfried

WHITE, P. J.—

Plaintiffs herein sought the cancellation of a $5,000 promissory note secured by a chattel mortgage given as payment for the purchase price of defendant’s medical practice. Defendant cross-complained for collection of the note, foreclosure of the chattel mortgage and for reimbursement for expenditures allegedly made on plaintiffs’ behalf. Because Mrs. Kuhn participated in only a minor way in the transaction, reference hereafter to “plaintiff” or “respondent” should be understood to mean plaintiff and respondent Dr. Orta E. Kuhn. The case was tried before the court without a jury, and all material findings were in favor of plaintiff. Defendant has appealed from the ensuing judgment.

Defendant, a practicing physician in Long Beach, advertised his practice for sale in the American Medical Association Journal. As a result of the advertisement, he entered into a written agreement with a Dr. Jaworski in July, 1948, for the purchase of the practice, good will and equipment for $15,000. After Dr. Jaworski had spent a few days in the office, he abandoned the transaction because he wished to return to Baltimore on account of his father’s illness. At that time Dr. Jaworski had paid defendant $2,000 on account of the purchase price. On August 20,1948, defendant filed suit against Dr. Jaworski in the Superior Court of Los Angeles County to recover the balance allegedly due of $13,000. •

[83]

Defendant again advertised in the American Medical Association Journal, and on November 18, 1948, plaintiff and defendant had their first conference at defendant’s office concerning the proposed sale. On November 23, 1948, a second conference was held. No written agreement was entered into, but a few days later plaintiff commenced practicing in defendant’s office, having in the meantime signed a note and chattel mortgage on the furniture and fixtures for $5,000.

The findings of the trial court may be summarized as follows: That defendant advertised that he would sell a “completely equipped medical office and case records, best remunerative, strictly cash, practice established 18 years; should gross $2,000.00 monthly; will introduce; 3 approved hospitals, certification not necessary, 208 Heartwell Building, Long Beach 2.”

That the defendant represented that he had a completely equipped medical office, with complete case records; that the practice should gross the buyer $2,000 monthly; that his practice was chiefly in the field of pelvic disorders; and that the equipment and furniture in his office were worth at least $5,000. That the defendant fraudulently concealed from plaintiff the fact that he was engaged in litigation with Dr. Jaworski over the sale of the practice; that immediately following his execution of the note and chattel mortgage, plaintiff began an investigation of the representations of defendant.