Petrikis v. Hanges

BRAY, J.

Defendant appeals from a judgment in favor of plaintiffs and from an order denying his motion to vacate that judgment.

Questions Presented

1. Sufficiency of the evidence to support the findings.

2. Could Petrikis bind his partner Ellis?

3. What was the effect of defendant’s taking possession?

4. Damages incurred during possession.

Facts

Plaintiffs, as partners, owned and operated the “Chariot Bar and Cocktail Lounge.” On April 30, 1948, all signed this document: “We the undersigned hereby" agree to sell our interests in the Chariot Bar and Cocktail Lounge located at 1132 Market Street San Francisco, California. If and when the sale takes place and after all bills are accounted for the remainder of the money is to de [sic] divided according to the share each partner now attains in the the [sic] said business.” Thereafter Petrikis negotiated with defendant for the sale of the business to defendant. On January 5, 1949, at the office of Attorney Rubenstein, who was the attorney for defendant and became the escrow holder in the transaction, the following instrument was drawn. It apparently was dictated to Rubenstein’s secretary by defendant with Petrikis putting “some words in it.” It reads: “I have today received from Louis Paul Hanges $17,500.00 in the form of Cashier’s Check on Bank of America N. T. & S. A., Powell-Post Branch, to be held in escrow by me, in the matter of the purchase of the restaurant and a bar known as the Chariot, located at 1132 Market Street, San Francisco, with the understanding that Mr. Hanges is to take possession within 24 hours of this date and take an inventory as of the 5th day of January, 1949. All open stock behind the bar is included in the purchase price of $17,500.00, and all stock not opened shall be paid for by Mr. Hanges at the present market price thereof. All pro rations of insurance

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and rent are to be assumed by Mr. Hanges from the date of possession. Any deposits on gas and water utilities and on Sales Tax Permit shall be refunded to the Sellers.” It was then signed “David Eubenstein by Ingrid Josephson Secretary” and “Agreed and Accepted: Theo Petrikis Louis Paul Hanges.” Defendant then delivered to the secretary a cashier’s check for $17,500. Eubenstein drew a formal “Agreement to Purchase” the business, good will, etc. It also provided that the sellers were to deposit not later than January 13 with the escrow holder a bill of sale and a five-year lease to defendant of the premises. The transfer of the money and documents was to take place upon completion of the statutory notice of intended sale. There was a provision for refund of the purchase price in case the lease or a transfer of the liquor license could not be obtained. The agreement also provided that the bill of sale should contain a covenant that plaintiffs would not directly or indirectly “enter into the restaurant or bar business within a radius of five (5) blocks” of the premises for a period of five years. On January 6, in-Eubenstein’s office, all plaintiffs, except Ellis, signed the agreement, as "did defendant. The agreement provided that defendant was to have possession as of commencement of business that very day. The evening before (January 5) an inventory of the stock was taken by Petrikis, Ellis and defendant. Defendant then took possession and had the locks changed. On the 6th, after the agreement to purchase had been signed by defendant and all plaintiffs except Ellis, Petrikis took one of the originals to Ellis to sign. Ellis did not like the restriction against engaging in a similar business. The next day (the 7th) Ellis went to see Eubenstein. Ellis testified that he told Eubenstein he wanted to think the restriction over and that Eubenstein advised him to see. another attorney about it, as he represented defendant and might have to prosecute Ellis if he violated the restriction. Ellis denied that he told Eubenstein he would not sign the agreement. Eubenstein testified similarly to Ellis as to advising Ellis to see another attorney, but testified that Ellis flatly stated that he would not sign the agreement with that provision in it, “even if it killed the deal.” He asked Eubenstein to find out if defendant would consent to change the radius mentioned to two blocks. Ellis left the office and Eubenstein notified defendant of his conversation with Ellis and of the fact that Ellis had not signed the agreement. Defendant then called the deal off. Eubenstein immediately