Pitts v. Fletcher

SHEPARD, J. This is an action for rescission of a contract of sale, cancellation of a promissory note given for the purchase price, and for damages for breach of contract. From the record before us it appears that the defendants herein, at some time prior to the events which are here the subject of litigation became lessees of the premises on which was established a business known as Fletcher’s Frosty Freeze, located in the town of Ridgecrest; that defendants herein, after the establishment of the business, contracted to sell said business to other parties not litigants in this action; that those parties conducted negotiations of sale with plaintiff herein and plaintiff took possession of the premises and business on June 2, 1956, paying the ground rent of $30 a month to the landlord on a lease dated June 11, 1949, which will expire May 31, 1959. Defendants reacquired their original ownership on or about October 8, 1956, and because of plaintiff’s serious financial involvement with his predecessors in interest a new contract was negotiated directly between plaintiff and defendants under date of November 30, 1956, and certain written documents were executed evidencing said agreement.

On sufficient evidence the court found that by the sale agreement defendants included tenancy rights under a 15-year ground lease dated in 1952 on said premises where the business is located, the rental thereunder being $30 per month; that said 15-year ground lease was never executed and never came into existence; that the consideration for the sale agreement of November 30, 1956, had therefore failed; and that plaintiff had been in possession of the business under the new agreement of November 30, 1956, from December 3, 1956, to August 15, 1957.

After the trial and submission of the cause, defendants moved for permission to file an amendment to their cross-complaint to conform to proof, in which amendment to the [860]cross-complaint defendants alleged an indebtedness from plaintiff to defendants for the rental value of $3,000 for the use and occupation of the premises, equipment and fixtures sold under said business; that $906.84 had been paid thereon, leaving a balance unpaid of $2,093.16.

Thereupon the court rendered judgment for rescission of the sale of November 30, 1956, including cancellation of the $12,500 note given by plaintiff to defendants as evidence of the purchase price. The court further found that plaintiff had paid to defendants on the purchase price the sum of $1,406.84; that plaintiff owed to defendants as reasonable rental of the business the sum of $250 per month for eight and a half months (from December 3, 1956, to August 15, 1957), plus $150 paid by defendants for plaintiff on basic ground rental, making a total of $2,275. The court then subtracted the amount owed by defendants to plaintiff and adjudged a net recovery for defendants from plaintiff of the sum of $868.16.