Hahn v. Food Service Equipment Co.

SALSMAN, J.

This is an appeal from a judgment based on a jury’s verdict in favor of respondents on respondents’ claim of fraudulent representations alleged to have been made by appellants in the sale of certain restaurant fixtures. Appellants also appeal from the trial court’s denial of their motions for judgment notwithstanding the verdict and for a new trial. Since the order denying appellants’ motion for a new trial is not appealable

(Rodriguez

v.

Barnett,

52 Cal.2d 154 [338 P.2d 907]) that portion of the appeal will be dismissed.

Appellants first attack the judgment on the ground that the evidence is insufficient to support it. Here appellants bear a heavy burden for we must resolve all conflicts in favor of the respondents and indulge in every reasonable inference to uphold the judgment if possible.

(Crawford

v.

Southern Pacific Co.,

3 Cal.2d 427, 429 [45 P.2d 183].) We have reviewed the record and find the evidence entirely sufficient to sustain the verdict and judgment. There was evidence that

[415]

appellants, the owners of certain restaurant fixtures used in a place called Sih's Broiler in the City of Hayward, advertised them for sale under the heading of a “business opportunity.” Respondents answered this advertisement. In discussion between the parties it developed that Sib’s Broiler had been operated by at least five prior owners in the past six years, and that appellants had sold the fixtures to each prior owner, and had assisted the buyer in the lease of the premises from the owner. Appellants foreclosed on each prior owner and reposssessed the fixtures. There was testimony that, in the negotiations which led to respondents’ purchase, appellants had represented that Sib’s Broiler was “a good paying business and has always been a good paying business, and would continue to be a good paying business”; that former owners had done “fabulously well, as far as money-wise”; that former owners “couldn’t manage their private affairs and so got fouled up that way. But as far as the earning capacity and the making a good living, they all did fabulously well.” After these representations, respondents purchased the fixtures and paid $5,000 down; they negotiated a lease with the owner of the premises and in due time opened the restaurant and entered upon its operation. Respondents were unable to make any money from their operations, and after about a month their losses had mounted to $1,000, plus $242 additional paid on the equipment. There was also evidence that appellants had entered into a profit sharing arrangement with one of the prior owners, whose operations lasted for only a few months, and that as to about half of that time there had been no profits from the restaurant operations. There was further evidence that another former owner had become bankrupt, and that appellants were creditors of his at time of bankruptcy. There was testimony from some prior owners as to their profits while engaged in the operation of Sib’s Broiler, but the character of this testimony was such as to indicate to the jury that such owners did not understand the difference between gross receipts and net profit, and that their drawings, which they called profits, actually came from gross receipts and were in fact invasions of their capital.