Lawrence v. Ducommun

California Court of Appeal Jun 2, 1936 No. Civ. 9969Published

Before: Roth

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Holding. The court affirmed a judgment for the defendant, holding that the evidence supported findings of fraud and failure of consideration, and that the defendant was entitled to rescission despite the lack of a formal pre-suit notice.

Issues

Whether the evidence supported the jury's findings of fraud and failure of consideration.
Whether a formal notice of rescission is required before asserting a rescission defense in an action brought by the other party.
Whether the trial court erred in retaining a jury for an equitable defense.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The facts, however, are ample support for the implied finding of the jury that there was fraud, a failure of consideration, and that a rescission ought to be had.”

“The case of Zeller v. Milligan, (supra) is direct authority to the effect that the service of a notice under such circumstances would have been an idle act.”

ROTH, J.,

pro tem.

Appellant is the administrator of the estate of George A. V. Smith, deceased. Appellant was substituted in this action as plaintiff, the case having been originally filed by Smith, who died thereafter. For purposes of convenience, however, plaintiff and appellant will be sometimes referred to as Smith. As a result of a contract executed on May 29, 1931, Smith obtained from the defendant, in addition to other consideration, four several promissory notes of $12,500 each, in return for the exclusive rights in the United States (except the state of Oregon) to an invention of a particular type of turntable which was covered by certain letters patent.

There were a number of transactions between Smith, one A. T. Lawrence, and defendant, prior to the execution of said contract. The facts pertaining to each, while pertinent to the instant inquiry, are so extended and ramified in nature that it would require several pages of concise

résumé

to set them forth with any sort of clarity. It is sufficient to say that Smith and Lawrence, aided and abetted by Reverend A. B. Gardner, a psychic divine, known as “Mother Gardner”, who conducted and operated “The Church of the Open Door of Truth”, and who held herself out as being able to give business and financial advice obtained from “divine” psychic sources, practiced with success a series of impositions upon defendant to their mutual profit, although the lion’s share went to Smith. With the constant help of Lawrence and the continuous “divine” assistance of “Mother Gardner”, Smith managed to administer the final

cotop de grace

to defendant in the form of the contract referred to. Before the blow was dealt, however, there were a variety of representations made, all of which the evidence in a superabundance reveals to have been without a basis in fact. Some of these representations were as follows:

(1) That this turntable was perfected excepting for a few minor improvements.

(2) That Smith had spent $40,000 in perfecting this device.

(3) That Smith had five

tona fide

orders for this turntable.

[399]

Lawrence v. Ducommun

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ROTH, J.,

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