Miles v. Zadow

This is an appeal by defendant, C. M. Zadow, from a judgment for $575 and costs rendered against him in the superior court of Los Angeles County.

The facts are as follows: In December, 1920, plaintiff, respondent herein, purchased a restaurant from one Bybee through the defendant, appellant herein, as business chance broker, and in the transaction the plaintiff executed a conditional sales agreement as security for the payment of $500 to the defendant; said sum being the unpaid balance of the purchase price of said restaurant.

After about one week’s business the respondent attempted to rescind said purchase on the ground of fraudulent misrepresentations and filed suit against said Bybee and this defendant. The trial court found there was no fraud, but held that appellant Zadow accepted the rescission by taking possession of the restaurant from the respondent and selling it, pursuant to an agreement with the respondent made after the suit was filed. An amended and supplemental complaint, setting out this subsequent agreement, was filed after the trial, and respondent had judgment against defendant, Zadow, for $600. On appeal to this court the judgment was reversed for the reason that the facts alleged in the supplemental complaint occurred after the filing of the original complaint and were no part of the original ease. (See Miles v. Bybee, 59 Cal. App. 613 [ 211 Pac. 251 ].) Conforming to the decision in that case, the respondent filed this action, alleging the agreement between respondent and appellant, wherein appellant took possession of the restaurant from respondent and agreed to sell it for respondent and to pay over the proceeds of the sale to respondent, after deducting said sum of $500 belonging

In April, 1921, the appellant sold the restaurant for the sum of $1,300, but failed to pay anything to respondent. This action was brought to recover the sum of $800 from the appellant, which sum is the balance of the selling price after deducting said sum of $500 belonging to appellant. The trial court allowed the appellant said sum of $500, and also the sum of $225 for his expenses, paid from the time he took the restaurant to the date of sale, and gave respondent judgment for the remainder of the selling price, to wit, $575. Appellant’s defense to this action is that there was a default in the payment of the monthly installments provided to be paid in said conditional sales agreement for $500, and that by reason of said default the respondent forfeited all interest in the restaurant, and when the restaurant was sold it was wholly the property of appellant, and that respondent had no interest in it; therefore respondent was not entitled to any of the proceeds of the sale.

There are two points in particular to be considered in this case, first: Did appellant agree to sell the property for respondent, which in the light of the evidence of both parties and the two decisions already rendered in connection with this matter, must be answered in the affirmative; and, second: Did the respondent place himself in default or did the purported notice given by appellant put respondent in default or deprive him of his interest?

It is not necessary to discuss the original contract of purchase further than to note that the total balance under the purchase lease was not due for many months after the date of sale of the property in April, 1921, but if by strict construction it could have been declared due, the default or forfeiture was cured by the new contract to sell, which contract was not limited, and sale thereunder completed.

At the time of the purchase by respondent, on December 13, 1920, he gave the Title Guarantee Sales Company, under which name appellant did business, authority in writing to sell the property here in question for $1,750, and agreed to pay a commission of $100 above $1,000, then later, on January 17, 1921, upon promise of appellant to sell the

The lease and note given thereunder on December 13, 1920, was filed for record by appellant on - date and afterward recorded on February 4, 1921. On January 28, 1921, appellant sent the following communication to respondent :

“Dear Sir: Your first installment on restaurant at 2116A North Broadway is past due, kindly call and make payment at this office, the amount is $50.00 and interest, if not paid in 3 days, the whole amount will become due.

“Yours truly,

“Title Guarantee Sales Co.,

“By O. M. Zadow.”

This so-called three-day notice is not authorized by the purchase lease or note, and further says nothing about termination of the agency of the appellant. Appellant sent another letter to respondent on February 4, 1921, on the day the original lease was recorded in which it is said: “unless you pay the whole amount of $500.00 dollars and interest within 3 days you will lose your right and title in said Restaurant, as I must protect my $500 dollars I loaned on said Restaurant. Respectfully yours, (Signed) C. M. Zadow.” These letters were sent by the appellant to respondent, notwithstanding appellant’s promise that the respondent should lose nothing and that he would sell for $1,300 and give respondent his money back. While the appellant by his written notices of January 28th and February 4th and his testimony, appears to have attempted to vary the contract entered into in January for the taking over of the property and selling the same and saving the respondent harmless, it seems to this court a futile effort, if it is not entitled to censure, as an attempt to do something which should not be countenanced by the courts.

From a consideration of the entire evidence in this case there is no question but that there was a mutual rescission evidenced by a new contract in which the appellant agreed to sell the property involved herein for $1,300 and after having taken possession thereof for that purpose he sold the same in April, 1921, and then failed to pay the balance due to the respondent or any portion thereof.

Appellant knew that there was no written lease or other than an understanding that the rent was to be $25 and $1 for water. The lease stood until the 1st of March and appellant better than anyone else understood just what would have to be done in regard to leasing—the new lease cost appellant nothing. Moreover, there is evidence in the record to the effect that appellant was to pay to respondent the entire proceeds of the sale, less $500. Appellant also knew the respondent’s financial situation and when he took the key it was for the purpose, as stated by appellant himself, of saving the respondent from any loss, knowing that the respondent could not pay rent nor make payments on the $500 note nor keep the place running. Thus appellant agreed to a rescission and entered into an agreement to sell the whole business or the price would not have been $1,300, from which appellant was to get his commission of $100 and save respondent from loss. Rent, cost of cash register, repairs, cleaning, and garbage removal were charged to respondent.

The trial court had a right to believe any or all of the witnesses or any portion of the testimony which it deemed true, and this court will not comment upon the conflicting nature of the testimony of the appellant.

The contention of counsel for appellant that the decision is against law in that the court failed to find upon material issues presented by the answer of the appellant seems to be without merit when the findings are considered in conjunction with the pleadings and the evidence in the case. Under the evidence the court would have been bound to find against appellant upon the issues in question. Therefore the failure to find upon them is not prejudicial error.

This court will not discuss much of the law cited by counsel for the reason that it bears upon a view of the case which would hold that there was no agreement on the part of the appellant to sell the property, which agreement for sale the court below found satisfactorily proven, and in which belief this court coincides, after having carefully considered all the evidence before it.

It is contended by the appellant that there was no consideration for the agreement to sell, and in this connection we will quote from the case of Gallagher v. Equitable Gas & Light Co., 141 Cal. 707 [ 75 Pac. 329 ] : “These facts show consideration. There was a mutual exchange of promises—promise for promise—which will support each other

The cause of action mentioned in the closing sentence of the above quotation is the cause of action in this case, and it is upon that same cause of action that the trial court herein gave judgment for $575.

In our opinion the findings of the court below are sufficient to cover the issues upon which any evidence was given and are warranted by the evidence, except as to the $100 commission; therefore the findings and judgment below

Judgment, as modified, affirmed.

Works, P. J., and Thompson, J., concurred.