Crow v. Kenworthy

California Court of Appeal Jan 10, 1939 No. Civ. 5966Published

Before: Tuttle

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Holding. The court held that the defendants had substantially performed their contractual obligations, as the plaintiff's refusal to allow the installation of compliant materials constituted a prevention of performance, rendering the defendants' representations of compliance legally accurate.

Issues

Whether the defendants made fraudulent representations justifying rescission of the contract.
Whether the plaintiff's refusal to permit the installation of compliant materials excused the defendants' performance.

Disposition. reversed

Quotations verified verbatim against the opinion

“We are of the opinion that an action for rescission would not lie under the circumstances of this case, where the fraudulent representations were made concerning matters which had nothing to do with the inception of the contract”

“The offer to install the larger irons, and the unwarranted refusal of plaintiff to permit them to do so is, in law, the equivalent of full performance on the part of defendants in respect to this, the only disputed term.”

TUTTLE, J.

This is an action brought to rescind a contract for the sale of a neon sign, and for the recovery of the purchase price. The court was also asked to remove the sign from the building of the plaintiff.

The complaint in the action is based upon fraudulent representations which are alleged to have been made by defendants to the effect that the contract had been fully performed by them. The answer sets up several defenses, including those

[314]

of waiver and the prevention of performance by plaintiff and a substantial performance by defendants.

The facts of the case are practically without conflict. They disclose that plaintiff was the owner of an hotel in the city of Modesto; that the defendants conducted a sign advertising business in the same city; that on or about January 6, 1936, the parties entered into a written contract for the construction and erection of an electric sign on said hotel. Some five weeks after the sign had been erected upon the premises of plaintiff, and after it had been operated by plaintiff during that length of time, plaintiff notified the defendants, in writing, to remove said sign from said building, but defendants failed to do so. On May 9, 1936, plaintiff, in writing, notified the defendants that plaintiff rescinded the contract for the construction and installation of said sign, and demanded that the defendants remove the sign from said building, and return the consideration therefor.

Upon the failure of the defendants to comply with these demands, this action was commenced, a trial was had before the court, and judgment was thereafter rendered rescinding the contract, and for the recovery of the purchase price from defendants in the sum of $650; and it was further ordered in said judgment that defendants remove said sign from said building within five days after entry of said judgment.

One of the terms of said contract, and the only one pertinent to this appeal, provided that the defendants construct and erect said sign in such a manner that it would comply with the regulations and pass the inspection of the city of Modesto.

The sole ground for the rescission is that the defendants, at the time payment was made for said sign under said contract, in effect, fraudulently represented that said sign had been passed and accepted under the regulations of the city of Modesto. The entire testimony bearing upon the question of the representations was given by the plaintiff as follows:

Crow v. Kenworthy

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TUTTLE, J.

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