Moore v. Giffen

California Court of Appeal Dec 26, 1930 No. Docket No. 7714.Published

Before: Nourse

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Holding. The court reversed the judgment for the plaintiff, holding that the plaintiff failed to prove the alleged fraud, failed to offer restoration of consideration upon rescission, and was barred by laches for failing to rescind promptly after discovering the facts.

Issues

Whether the plaintiff met the burden of proof regarding the falsity of the defendants' representations.
Whether the notice of rescission was effective despite the plaintiff's failure to offer restoration of the consideration received.
Whether the plaintiff's delay in seeking rescission after learning of the alleged misrepresentations constituted laches.

Disposition. reversed

Quotations verified verbatim against the opinion

“The failure of proof of the falsity of the representations relied on.”

“The notice of rescission was defective because the respondent did not offer to restore the consideration he had received.”

[660]

NOURSE, P. J.

Plaintiff sued for the rescission of a contract to purchase a sublease on an oil and gasoline service station together with all equipment and stock in trade. The cause was tried without a jury and the court •gave judgment for plaintiff, from which the defendants appeal on a bill of exceptions.

The defendants had been operating the station under lease and during the year 1924 had averaged a sale of 1242 . gallons of gasoline a day. The Sierra Refining Company was the lessee of the real property and held a contract with defendants for the sale to them at wholesale of all the gasoline dispensed upon the premises. Under the agreement with the refining company the defendants were obligated to pay a monthly rental of $150 plus one cent a gallon per month for each gallon of gasoline sold on the premises.

In the latter part of January, 1925, negotiations were had between plaintiff and defendants for the sale of the station and plaintiff insisted that this lease be changed to a flat rental. Thereupon a new lease was executed by the refining company to the defendants for an extended period at a monthly rental of #400, all of which was done with the written consent and agreement of plaintiff. On February 2, 1925, plaintiff and defendants executed a written contract for the sale of the sublease and all the equipment and accessories and the plaintiff soon thereafter entered into possession and continued to operate the station until July 8, 1925.

On the 4th of June, 1925, plaintiff gave written notice of his election to rescind this contract, giving as his sole ground the falsity of defendants’ representations that the station had enjoyed an average sale of over 1000 gallons of gas per day. When confronted with proof that the average daily sales for the entire year preceding the transfer had been 1242 gallons, plaintiff, on June 29, 1925, gave a new notice of rescission, specifying as his ground that the representations as to daily sales went to the month of January, 1925, alone, and that the “net profit” for that month had been $690.

The appellants have assigned numerous errors, hut as we are satisfied that the judgment must be reversed, we

[661]

Moore v. Giffen

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NOURSE, P. J.

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