Owen v. McDonald

MUSSELL, J. Action for reeision of contract for purchase of personal property and for damages. Plaintiffs and defendants entered into a written agreement contained in escrow instructions wherein plaintiffs agreed to buy and defendants to sell the furnishings, fixtures, equipment, stock in trade and good will of the business known as “McDonald’s Cottage Shops’’ in the city of Anaheim. The purchase price of $9,000 was deposited in escrow, together with the sum of $500 to cover two months’ rent on the premises and one-half of the escrow fee and other items. The agreement was dated April 13,1948, and provided, among other things, for the publication of a notice of intention to sell as required by the provisions of section 3440 of the Civil Code. This notice contained a recital that the purchase price would be paid at 10 o’clock a. m., on the 21st day of April, 1948. Possession of the premises was given to plaintiffs on April 16th and all adjustments and “prorations” in the escrow were to be made as of that date. The instructions further provided that in the event •the conditions thereof had not been fulfilled at the time provided, the escrow company was instructed to complete the escrow, unless written demand was made upon it for the return of money and instruments deposited by the parties. Time was not made the essence of the agreement and it contained no definite closing date. The escrow instructions also contained a provision that the sellers should obtain for the purchasers a copy of the lease covering the premises, together with an assignment thereof, assigning it to the plaintiffs, husband and wife as joint tenants.

On April 21st, 1948, the plaintiffs gave notice in writing to the escrow company, cancelling all previous instructions and [67]demanding the return of the funds deposited by them in the escrow and on June 3, 1948, filed the instant action for recision of the contract to purchase and for damages, alleging, among other things, that upon taking possession of the premises, the following items were missing: one automatic toaster, two ladles, one exhaust fan, one sugar scoop and several glass pie plates, which were listed in the inventory previously furnished; that the assignment of the lease had not been made as agreed and that the defendants had falsely and fraudulently represented to the plaintiffs that the average daily gross income of the business was $131.11, the average daily expense $90.55 and the daily net income of the profit was running $40.56; that the average daily gross business for the year 1947 was between $100 and $130, with a net income of approximately $40 per day and that the plaintiffs were induced to enter into the contract to purchase by reason of these representations.