McCarthy v. Barton

AGEE, J. pro tem.* This is an appeal by defendants and cross-complainants, husband and wife, from that portion of a judgment which denied a recovery upon their cross-complaint against plaintiffs and respondents, also husband and wife.

Appellants operated a business under the name of Consolidated Plastics. Respondents owned a parcel of land im[224]proved by a building. The parties agreed to exchange an 80 per cent interest in the business for the real estate.

A written contract of sale was prepared by appellants’ attorney. It contained the following express warranty: “The net worth of the business as of the date of sale according to good general accounting practices will not be less than the net worth of said business as shown on the attached Balance Sheet of February 28, 1953, of Consolidated Plastics.” (Said balance sheet showed a net worth of $70,372.13; 80 per cent of $70,372.00 is $56,297.60.) The contract contained no representation as to the cost or value of the real property being conveyed by respondents.

The respective transfers took place on or about May 5, 1953. In the action thereafter commenced by respondents against appellants, the trial court found that there had been a breach of said warranty and rendered judgment in favor of respondents for $9,718.05, that being the difference, as found by the court, between the true net worth of the interest in the business received by respondents and the warranted net worth thereof, to wit, $56,297.60. This judgment has been paid and appellants have abandoned their appeal therefrom.

Appellants’ cross-complaint is based upon the allegations that respondents falsely represented the net cost to them of the land and building as $59,297.60 and that they were induced to enter into the contract in reliance thereon. Judgment for the difference between the alleged cost and the actual cost was prayed.

The trial court found that no such representation had been made and that appellants were not so induced. Appellants contend that there is not sufficient evidence to support such a finding. We do not agree. The record shows that the parties were primarily concerned with valuation and that cost came into the transaction only incidentally. The finding that appellants had not been induced to enter into the contract by any representation as to cost is likewise supported by the record. We need refer only to a portion thereof. Appellant Barton himself testified as follows: