Chomistek v. Arak

SCOTT (Robert H.), J. pro tem. Plaintiff appeals from an adverse judgment following an order granting motion for nonsuit.

In his complaint plaintiff alleges that on July 27, 1951, he purchased a bakery business from defendant for a price of $3,500, that in the written agreement defendant “warranted and guaranteed that the sales of such business would reach a gross volume of approximately $700 per week by the 15th day of October, 1951”; that relying on said warranty and guarantee, plaintiff signed the agreement, made the required payments and executed an instrument covering the unpaid balance; that the sales volume of the business was substantially less than $700 per week; in December plaintiff served on defendant a written notice of breach of warranty and by this action seeks rescission of the contract and return of all money paid by him. A supplemental complaint was filed asking further damages for loss by plaintiff of his time which he put into the business.

The evidence is brought before this court by a settled statement on appeal.

Plaintiff had contacted a business broker, in response to an advertisement in a newspaper, and was told by the broker that the bakery was doing $700 a week. Plaintiff was then referred to defendant. The latter said “the business was doing approximately $500.00 at the time.” The books were shown to plaintiff and they reflected that the business was not doing $700 a week. Plaintiff noticed that in the previous winter months, the figures were over $700 and defendant told him “the business in his opinion would reach $700 by October.” Before he purchased the business, plaintiff was there at the place of business and observed its method of operation for two weeks. Plaintiff testified further as follows: “Looking at the books, I saw the business was doing $500 a week. I asked Mr. Arak why the business was not doing $700 a week, and Mr. Arak’s reply was, it was summertime, the bakery is not as good in summer as in the wintertime. ‘According to your books,’ I said, ‘it was much better last August than it was this August, and that was summertime; do you have an explanation for that?’ ‘No,’ Mr. Arak said, ‘No, I have no explanation.’ I said, ‘I can hardly buy a business that is doing $500.00 a week when I was told it would do $700.00.’ Mr. Arak said he would guarantee it to do $700.00 per week. Mr. Arak said, ‘I will guarantee.’ ” ,

[764]Plaintiff explained that from 1944 to 1951 he was employed “in an office capacity,” the last two years as office manager. His testimony shows some familiarity with business methods and practices. When he examined defendant’s books it must have been obvious to him that sales had fallen below $700 a week for several months and during June and July often were falling below $500 a week. The last two weeks of June, 1950, showed sales in excess of $1,400 each week while the same two weeks in June, 1951, showed sales of $495 and $571, respectively. Other comparisons must have put plaintiff on notice that the business he was buying, if operated as defendant had been operating it, could not be expected to produce weekly gross sales of $700 per week.