Mahoney v. Felkins

FOURT, J. This is an appeal from a judgment'in favor of the purchasers for money paid toward the purchase price of a coin-operated vending machine route in the Victorville-Apple Valley area. Judgment was rendered without segregation as to • amount, against Lee Felkins, A. T. Felkins and William Leerskov individually and doing business as Felton Music Company (hereinafter referred to as “Sellers”), and the business opportunities broker Badger Sales Company, Inc. (hereinafter referred to as “Agent”), which broker acted as Agent for the ■ Sellers. The Agent alone has perfected its appeal.

The action for rescission is based upon certain misrepresentations of fact made by Sellers and Agent that the route was grossing the Sellers a weekly profit of $1,450, whereas it was found to be grossing less than $1,000 per week. In the coin-operated machine business the term “profit” is defined to mean the route operator’s share of the gross money paid into the machine after the location owner has been paid his proportionate share, but before deducting route operating expenses.

. On appeal, appellant has argued the following:

1. That the recovery as against the Agent should be limited to "$750, representing a partial payment on the promissory note for $2,000, which was given as payment of the broker’s commission on a deferred basis;

2. That damages were not shown to have been sustained because there was no positive showing that the business actually took in less than represented;,

3. That there was no evidence of Agent’s intent to defraud purchasers; and

4. That in the absence of evidence of an assignment by Delmar L. Mahoney, General Partner, to Merrill K. Lyon and Audrey Lyon, Limited Partners, the total judgment should be reduced by deducting $1,500 contributed by Ma-honey.

The promissory note for $2,000 executed in favor of appellant Agent after appellant Agent had. agreed to accept the payment of its commission on a deferred basis was the only contract entered into by and between appellant Agent and purchasers, and the sum of $750 representing two payments thereon is the entire consideration actually received by appellant Agent.

The complaint sued on is for rescission and cancellation of [116]certain written contracts, including said promissory note, and is based upon the fact that certain fraudulent misrepresentations were made to purchasers. The pleadings significantly contain no separate cause of action alleging fraud or deceit as a basis for damages against appellant as agent or representative of the nonappealing defendants, or otherwise. In this important respect, the instant case is clearly distinguishable from Stirnus v. Adams, 50 Cal.App. 730 [195 P. 955], upon which respondent has relied.