Chalas v. Andersen

[454]

SHOEMAKER, J.

This is an appeal by plaintiffs William G. Chalas and Joan Chalas, husband and wife, from a judgment refusing to rescind a contract of sale of a retail poultry business, and awarding defendants and cross-complainants Pedrazzi, assignees of said contract, the balance due thereon.

Respondents Louis E. Andersen and Maxine Andersen were the owners of a retail poultry business known as The Poultry Center, and a wholesale poultry business known as Andersen’s Poultry Farm. On June 3, 1959, they entered into a contract of sale of The Poultry Center with appellants, who took over the business on or about June 15, 1959. At the time the sale was being negotiated, appellants were told by the Andersens that they had realized a net profit from the retail store during the period from October 1, 1958 to April 18,1959, of $2,955.72, and that there should be added to this the sum of $1,932.80, which was represented by a premium charge to The Poultry Center of 4 cents per pound on chicken purchased from the Poultry Farm, as this amount had been collected from the retail establishment for the purpose of absorbing a portion of the store’s profits into the farm operation. Within a week after taking over the store, appellants regretted their purchase and asked the Andersens to take back the store, which request was parried by Mr. Andersen. Thereafter appellants found on the premises of the store a carton of sales tags and business records of The Poultry Center which had been left behind by the Andersens, and on examination thereof they became convinced that the profit margin had been falsely represented to them, inasmuch as their computation developed a differential of 6 mills per pound, instead of the represented 4 cents.

Notices of rescission were served upon the Andersens and Pedrazzis, and this action for rescission followed, based upon the ground of misrepresentation and fraud in the respect above mentioned. The Andersens’ answer admitted making the representation as to the premium charge of 4 cents per pound, and averred they had explained to appellants that it was an average of the premium charge made during the period October 1, 1958, to April 18, 1959, and that at the time they believed, and still do, that the representation is true. The Pedrazzis answered and cross-complained for the balance due on the contract of sale.