Chan v. Anderson

DOOLING, J. Plaintiffs appeal from a judgment in favor of defendants in an action for declaratory relief. Plaintiffs on May 4, 1954, pursuant to a written agreement executed by the parties purchased from defendants a bait and tackle business together with the stock in trade, for $25,000. The agreement recited that the seller “has an inventory of stock in trade on hand in his place of business at the present time of approximately Twenty-four thousand Seven hundred seven and 15/100 Dollars ...”

The contract also contains the following provision: “In the meantime and until the sale herein provided for is consummated, the said Anderson shall keep up the stock in trade and shall replace in the inventory any articles which shall be sold in the regular course of business or otherwise and shall keep proper accounts of any and all stock in trade sold from and after execution of this Agreement and of all stock in trade purchased, and in the event that the cost of articles purchased shall be less in amount than the value of articles sold, then the amount of cash to be paid on closing of this transaction shall be correspondingly reduced by the difference between such sales and purchases.”

The contract also contained a covenant by the sellers not to- engage in a competing business.

The complaint alleged that the inventory figure of $24,-707.15 was excessive in the amount of $1,496.94 by reason of mathematical errors in computing the figures and the answer did not deny this but admitted that there had been a mathematical error in such computation. It was proved without contradiction that this error was not discovered by plaintiffs until some time after the sale was completed. Plaintiffs also claimed an additional shortage in inventory of over $10,000. Claims of other breaches have been abandoned on appeal.

Under the terms of the contract plaintiffs paid $15,000 down and executed promissory notes for the balance of the purchase price. Installments aggregating $2,500 which fell due prior to the trial of this action were paid under protest.

The trial court found that under the contract the defendants sold to the plaintiffs “no particular amount of inventory or stock in trade, as expressed in dollar value, and that . . . defendants sold, and the plaintiffs bought, for a single lump sum, to wit, $25,000, all of [the business] including, but without specific values set thereon” the good will, the trade name and the agreement to refrain from competition “together with [704]