Chamberlain v. Wakefield

213 P.2d 62, 95 Cal. App. 2d 280, 1949 Cal. App. LEXIS 1109
CourtCalifornia Court of Appeal
DecidedDecember 22, 1949
DocketCiv. 16916
StatusPublished
Cited by18 cases

This text of 213 P.2d 62 (Chamberlain v. Wakefield) 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
Chamberlain v. Wakefield, 213 P.2d 62, 95 Cal. App. 2d 280, 1949 Cal. App. LEXIS 1109 (Cal. Ct. App. 1949).

Opinion

WOOD, J.

Plaintiffs, who are husband and wife, were lessees of the Oxford Hotel in San Pedro, and were owners of the furniture therein. The defendants Wakefield,' who are brother and sister, purchased the lease and furniture from plaintiffs for $28,500; and at the time of the transaction, and in payment of said sum, they paid $5,000 in cash, transferred a $7,500 equity in a ranch in Oregon, and executed a promissory note for $16,000. Defendants Landers, who are husband and wife, were the owners of the hotel, and they consented in writing to the assignment of the lease by plaintiffs to the Wakefields.

Plaintiffs commenced this action against the Wakefields upon the promissory note; and later they amended the complaint to include an alleged cause of action for damages for alleged conspiracy, on the part of the Wakefields and the Landers, to defraud plaintiffs. Defendants Wakefield filed a cross-complaint for rescission or, in the alternative, for *283 damages, and alleged that they were induced to enter into the agreement by reason of the false and fraudulent representations of plaintiffs.

The court found that the Wakefields were induced to enter into said contract of sale, and to pay the $5,000 and transfer the real property and execute the note, by reason of false and fraudulent statements and representations made by plaintiffs to defendants Wakefield, as follows: that the lease and furniture were of the reasonable value of $28,500; that the gross income for the past year had averaged $2,750 per month; that the net income had averaged $1,500 per month; that the net profit for the past year was $18,000. The court also found that the Wakefields, immediately upon ascertaining the falsity of said statements and representations, rescinded said transaction and offered to return to plaintiffs everything of value received by them; that plaintiffs refused such rescission and offer; that at the time of service of the notice of rescission the Wakefields were not in default under the terms of the lease, contract of sale, or the note. The court concluded that the Wakefields were entitled to have the rescission enforced.

The judgment was that plaintiffs deliver to the Wakefields a good and sufficient deed to the real property in Oregon; that the promissory note be and “is hereby cancelled”; that the contract of sale for the furniture entered into between plaintiffs and the Wakefields be cancelled; and that the Wakefields have judgment for $4,804.69 (that being the difference between the sum of $5,000 paid to plaintiffs by the Wakefields and a deduction of $195.31 to which the court determined plaintiffs were entitled after taking an accounting of the income and expenses of the hotel while it was in possession of the Wakefields and the income and expenses of the ranch while it was in possession of the plaintiffs). The judgment also provided that defendants Landers recover their costs from plaintiffs. Plaintiffs appeal from the judgment and from the order denying the motion for a new trial.

Appellants contend that the evidence does not support the finding of fraud; and that the evidence does not support the finding that the lease and plaintiffs’ interest in the furniture were of no value.

In 1943, the defendants Landers leased the hotel (which had 56 rooms) to one Story for $750 per month, and the lease provided that it should not be assigned without the written consent of the lessors. About May 14, 1946, the plaintiffs became *284 the owners of the lease by an assignment. Plaintiffs also purchased the furniture in the hotel, subject to a chattel mortgage which was held by the Landers as security for the performance of the covenants of the lease. Thereafter the plaintiffs placed a second mortgage on the furniture to secure the payment of a note, in the approximate amount of $5,800, to one Seagle.

About December, 1946, plaintiffs listed the lease and furniture for sale with a real estate broker in Los Angeles. About March 8, 1947, Mrs. Chamberlain informed the broker (with whom she had listed the lease and furniture for sale) that the gross income from the hotel was $2,750' per month, that the expense of operation was about $1,250, and the net income was about $1,550. The following day she signed, the broker’s listing card on which that information was written. It was also stated thereon that the selling price was $28,500. Thereafter, during March, 1947, Miss Wakefield, who at that time was a real estate broker in Seattle, went to the office of the real estate broker in Los Angeles and told him she was looking for a location in California. He told her about the Oxford Hotel, and gave her the information contained on the card above mentioned. Miss Wakefield then went to the hotel where she met Mrs. Chamberlain, and Mrs. Chamberlain told her “that she made from 2750 to 3500,” on the hotel and “she had averaged around 3000,”—that “she would always net $1500 a month,” and she “cleared $18,000 the first year she was in the business.” Mrs. Chamberlain showed a book to Miss Wakefield which purportedly contained a record-of the receipts and expenses of the hotel. That book, according to Miss Wakefield’s testimony, was in the form of a tablet. The book also contained “totals” which showed that plaintiffs “averaged” about $100 a day. About April 4, 1947, Miss Wakefield told plaintiffs she could not go into the hotel business alone, but if her brother could sell his ranch in Oregon he ‘ ‘ might go in ” with her. Mrs. Chamberlain said they would take the ranch in “as a trade.” Thereafter, Mr. Chamberlain went to Oregon to see the ranch and while there told Mr. Wakefield that the hotel “took in” from $2,650 to $3,500 per month.

On April 16,1947, the Landers served upon plaintiffs a written notice of cancellation of the lease, which notice stated that it was given for the reason plaintiffs had not paid the rent for the current month, and had failed to keep the furniture, the equipment, and the hotel building in good repair and in a clean and sanitary condition. Mr. Landers testified that, *285 in a conversation with plaintiff Mrs. Chamberlain a few days after the notice was served, she asked him if he would “please wait a few days” because she thought that she and her husband had a “deal” they could make; that she said that her husband was then in Oregon at a ranch which the prospective buyers wanted to trade “for the hotel.” Mr. Landers also testified that he told Mrs. Chamberlain that he would do nothing further until Mr. Chamberlain returned and either accepted or rejected the ranch. Mr. Chamberlain returned to California, and plaintiffs’ attorney prepared an agreement, dated April 21, 1947, whereby plaintiffs agreed to sell and the Wakefields agreed to buy, the lease and the furniture for $28,500, which agreement provided that said sum should be paid as follows: $5,000 cash, transfer of a $7,500 equity in the Oregon ranch, and execution of a note for $16,000. Miss Wakefield signed the agreement and the promissory note. Mr. Chamberlain then took those documents to Oregon where they were signed by Mr. Wakefield. Plaintiffs thereupon assigned their lease to the Wakefields. Mr. Landers consented to the assignment of the lease, and the plaintiffs paid him $1,000 and also paid the past due rent of $750. Miss Wakefield took possession of the premises on April 22, 1947, and Mr. Wakefield and his wife came to the hotel from Oregon about May 1, 1947.

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Bluebook (online)
213 P.2d 62, 95 Cal. App. 2d 280, 1949 Cal. App. LEXIS 1109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chamberlain-v-wakefield-calctapp-1949.