Chalas v. Andersen

192 Cal. App. 2d 452, 13 Cal. Rptr. 257, 1961 Cal. App. LEXIS 1960
CourtCalifornia Court of Appeal
DecidedMay 24, 1961
DocketCiv. 19644
StatusPublished
Cited by2 cases

This text of 192 Cal. App. 2d 452 (Chalas v. Andersen) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chalas v. Andersen, 192 Cal. App. 2d 452, 13 Cal. Rptr. 257, 1961 Cal. App. LEXIS 1960 (Cal. Ct. App. 1961).

Opinion

*454 SHOEMAKER, J.

This is an appeal by plaintiffs William G. Chalas and Joan Chalas, husband and wife, from a judgment refusing to rescind a contract of sale of a retail poultry business, and awarding defendants and cross-complainants Pedrazzi, assignees of said contract, the balance due thereon.

Respondents Louis E. Andersen and Maxine Andersen were the owners of a retail poultry business known as The Poultry Center, and a wholesale poultry business known as Andersen’s Poultry Farm. On June 3, 1959, they entered into a contract of sale of The Poultry Center with appellants, who took over the business on or about June 15, 1959. At the time the sale was being negotiated, appellants were told by the Andersens that they had realized a net profit from the retail store during the period from October 1, 1958 to April 18,1959, of $2,955.72, and that there should be added to this the sum of $1,932.80, which was represented by a premium charge to The Poultry Center of 4 cents per pound on chicken purchased from the Poultry Farm, as this amount had been collected from the retail establishment for the purpose of absorbing a portion of the store’s profits into the farm operation. Within a week after taking over the store, appellants regretted their purchase and asked the Andersens to take back the store, which request was parried by Mr. Andersen. Thereafter appellants found on the premises of the store a carton of sales tags and business records of The Poultry Center which had been left behind by the Andersens, and on examination thereof they became convinced that the profit margin had been falsely represented to them, inasmuch as their computation developed a differential of 6 mills per pound, instead of the represented 4 cents.

Notices of rescission were served upon the Andersens and Pedrazzis, and this action for rescission followed, based upon the ground of misrepresentation and fraud in the respect above mentioned. The Andersens’ answer admitted making the representation as to the premium charge of 4 cents per pound, and averred they had explained to appellants that it was an average of the premium charge made during the period October 1, 1958, to April 18, 1959, and that at the time they believed, and still do, that the representation is true. The Pedrazzis answered and cross-complained for the balance due on the contract of sale.

The case was tried by the court without a jury, and the court made its findings that the premium charged to The Poultry Center from the Poultry Farm was more than 3 cents *455 per pound; that the representation as to the premium charge and its effect upon the profits was not false to any material degree; that the representation was not made fraudulently or with an intent to deceive; that said representation was true to the best knowledge of the person making it and was warranted by the information then possessed by said person; and judgment was entered denying rescission and awarding the sum asked by the cross-complaint.

Upon this appeal it is appellants’ contention that the evidence was insufficient to support the findings and judgment of the trial court. Appellants assert that the evidence is all one way, namely, that the respondents made a material misrepresentation as to the 4 cents premium charged The Poultry Center, and that they intended to defraud appellants by means thereof. The evidence on the issue whether or not respondents made a material misrepresentation to appellants was in decided conflict. Both parties rely upon the business records and sales tags of The Poultry Center, which were introduced into evidence. In support of their interpretation of these documents, appellants produced the testimony of a certified public accountant who offered several schedules which he had prepared from selected portions of said records, and purported to show that the differential was only 6 mills per pound, rather than 4 cents per pound. On the other hand, the respondent Mrs. Andersen, from the same records, showed that the average premium charge was in excess of 3.4 cents per pound. The certified public accountant’s testimony fell far short of establishing the contentions to a certainty for admittedly he failed to consider certain factors and did not check all the sales tags. Mrs. Andersen testified that her figures were computed from all the tags and by a method which she outlined to the court. It is true her testimony was objected to upon the ground that she was not an expert witness, and the objection upon this ground was sustained. However, the court then permitted Mrs. Andersen to testify that she had been employed as a bookkeeper, that she was familiar with invoices, and that she knew arithmetic, whereupon the court accepted her as an expert and reversed its ruling. The evidence produced by her was not objectionable on the ground that she was not qualified as an expert, for that was a matter for the trial court and the question is not one of admissibility, it is as to what weight shall be given the evidence, and this again was a matter for the trial court.

*456 Whether the difference between the 4 cents represented to appellants and the 3.4 cents actually charged would constitute a material misrepresentation under the facts of this ease was a question of fact for the trial court. In Adkins v. Wyckoff (1957), 152 Cal.App.2d 684, 689 [313 P.2d 592], this court stated:

“To make out a case of actionable fraud it must appear that the alleged false representation was of a material fact; and to be material it must be such that the contract would not have been entered into without it.” To the same effect, Crow v. Kenworthy (1939), 30 Cal.App.2d 313, 315 [86 P.2d 154].

Although appellant Joan Chalas testified that she bought the store in reliance on the representation that the premium charge was 4 cents per pound, and that she at one point testified she would not have bought the business had she thought it was only 3 cents per pound, and at another time 3.8 cents per pound, her husband indicated that he did not know at what point he would have considered the difference to be material enough to have prevented him from making the purchase. In view of the evidence that the actual difference between the representation and the actual charge was only 6 mills per pound, the trial court had sufficient evidence on which to base its finding that the misrepresentation was not material and was justified in concluding that appellants would still have purchased the store even had they known the true differential.

The assertion that the evidence conclusively showed the Andersens intended to defraud appellants when they misrepresented the amount of the premium charged The Poultry Center is disposed of by the finding of the trial court that the misrepresentation was not material. However, the trial court also made the finding, supported by sufficient evidence, that respondents did not have the requisite intent to defraud, for Mr. Andersen testified that he prepared the paper containing the estimated 4-cent premium at the request of his broker, who had told him to prepare something right away because appellants were in a hurry to purchase the business.

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Bluebook (online)
192 Cal. App. 2d 452, 13 Cal. Rptr. 257, 1961 Cal. App. LEXIS 1960, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chalas-v-andersen-calctapp-1961.