Teipel v. Southern Nevada Vending Co.

VALLÉE, J. Appeal by plaintiffs from an adverse judgment in a suit for rescission of a contract to purchase a slot machine, pinball game, and phonograph recording route business in Las Vegas, Nevada, on the ground of fraud.

The court found that plaintiffs had purchased only after a full and complete investigation and that there had been no fraud. The only question is whether the findings are supported by the evidence.

The evidence and the reasonable inferences therefrom will be stated in the light most favorable to defendants-respondents, disregarding conflicting evidence and inferences.

On October 14, 1951, plaintiffs read an advertisement in the Los Angeles Examiner offering for sale a slot machine route located in Las Vegas, which stated, “Income $1,000. Week. Price $28,500.” The next day they contacted defendants’ agent, one Powers. Powers described the route to them. The following day he showed them a memorandum signed by defendant Wherrit which stated that the gross was $850 to $1,250 a week. He told them the net was around $300 a week. Plaintiffs then deposited $1,500 with Powers with the written understanding the money was to be returned if the route was not satisfactory. Plaintiff Wayne H. Teipel testified he knew the $1,500 would be returned to him if, after he investigated the transaction, he did not like it. Arrangements were then made to meet Wherrit in Las Vegas.

On October 22, plaintiffs, Powers, and Wherrit met at defendants’ place of business in Las Vegas. After introductions, plaintiffs asked to see evidence of defendants’ income; they asked Wherrit what he had to show to prove the income 1 ‘ on the route.” Wherrit told plaintiffs he had been doing well; he had the records and all the receipts; they could look at them for themselves. Wherrit then showed plaintiffs books containing all of defendants' collections from every location sin cp. they had been in business. Plaintiffs examined them. They were also shown what are called “route books” in which were recorded collections and taxes due from all locations over a period of time preceding the meeting. Plaintiffs made “mathematical compilations” from them.

Plaintiffs, Wherrit, and Powers then drove around Las Vegas and visited locations where slot machines and phonographs were located. They returned to Wherrit’s place of business and “he put out everything”—all the records in-[673]eluding the bank books—“on the desk.” Wayne H. Teipel went through the “collection books and the bank books and the deposits, and he seemed to like very much what he had seen.”