Newmark v. H & H Products Manufacturing Co.

[36]

McCOMB, J.

From a judgment in favor of plaintiffs, on defendants’ cross-eomplaint for fraud and conversion, defendants appeal.

Facts:

On March 17, 1951, Artistic Beauty Products Company, hereinafter referred to as “Seller,” entered into a written agreement with defendants, hereinafter referred to as “Buyer,” whereby the Buyer agreed to purchase from the Seller certain machinery, fixtures, equipment and' tools for the sum of $90,000. The Buyer also agreed to pay the Seller for certain leasehold improvements the sum of $25,000. A complete itemized inventory of all the personal property purchased by the Buyer from the Seller was attached to the agreement of sale at the time of the execution thereof. Defendant E. F. Henkle had examined and inspected the inventory and all the property described therein prior to his initialing each page of the inventory. The buyer was represented by an attorney in the ngotiations and execution of the agreement of sale and had read the agreement before it was signed.

On March 19, 1951, Seller, as lessor, entered into a lease with the Buyer, as lessee, for a portion of the building located at 300-312 North Avenue 21, Los Angeles, for a term commencing April 16, 1951, and ending May 31, 1953, at a rental of $950 per month. Prior to August 5, 1952, the Seller had assigned the aforementioned lease to plaintiffs in the present action.

On August 5, 1952, plaintiffs instituted the present action against the defendants for rént and other charges due under the lease. In this action defendants filed a cross-complaint against the Seller and plaintiffs herein asserting fraud by the Seller and its agents.

The agreement between the Buyer and Seller contained these material provisions:

“1. The Seller does hereby sell to the Buyer, and the Buyer does hereby purchase from the Seller, free and clear of all liabilities and encumbrances, except as specifically herein provided, the following:

“(a) Machinery, fixtures, equipment and small tools, as more particularly described in schedule to be attached hereto, marked ‘Exhibit A,’ and by reference made a part hereof. Each of the parties hereto shall initial each page of said inventory, indicating approval thereof;