Court Opinion

ID: 9567863
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:58:28.79474+00
Date Added: 2024-06-11T10:20:47.357236
License: Public Domain

SCHATJER, J., Dissenting.
I cannot agree that the finding that plaintiff’s “rescission was not prompt nor timely” is wholly unsupported by the evidence and can be ignored. Nor can I agree that the so-called finding that plaintiff “rescinded the transaction” implies that the rescission was timely. The former finding is particularly addressed to a factual element essential to the effectiveness of the attempted rescission. The latter is a portion of a clause contained in the finding addressed to the question of whether and when plaintiff attempted to rescind; i. e., “about November 1,1943, plaintiff gave to defendants and sent them by mail under registered cover a notice wherein and whereby he rescinded the transaction.” Plaintiff executed his bill of sale to Thacker on August 9, 1943. He first learned of his mistake a few days after September 6, 1943. It was nearly two months later *94that he attempted rescission. Whether, in the circumstances, he exercised reasonable diligence to rescind promptly (Civ. Code, § 1691) was typically a question to be decided by the trial court upon the facts of the case and its discretion in this regard should be respected by the appellate courts. (Davis v. Butler (1908), 154 Cal. 623, 628 [98 P. 1047] ; Cross v. Mayo (1914), 167 Cal. 594, 605 [140 P. 283]; French v. Freeman (1923), 191 Cal. 579, 589 [217 P. 515]; Lubarsky v. Richardson (1933), 218 Cal. 27, 31 [21 P.2d 557]; Bryan v. Baymiller (1928), 95 Cal.App. 481, 487 [272 P. 1106] ; Ballagh v. Williams (1942), 50 Cal.App.2d 10, 13 [122 P.2d 343].)
Even if it be assumed, contrary to the fact, that there is no evidence that plaintiff’s “rescission was not prompt” there is another difficulty in the way of sustaining the judgment on the theory that this was a transaction which plaintiff could and did rescind. The notice of rescission was given about November 1, 1943. The bill of sale from Thacker to Kurofsky was executed on August 9, 1943. Therefore, if Kurofsky was a bona fide purchaser, he acquired title to the goods and plaintiff cannot recover from him. (Civ. Code, § 1744; Keegan v. Kaufman Bros. (1945), 68 Cal.App.2d 197, 202 [156 P.2d 261].) Defendant Kurofsky contends that there is no evidence that he knew of defendant Thacker’s misrepresentations of the contents of the bill of sale from plaintiff to Thacker. Plaintiff points to and I have found no evidence that Kurofsky knew anything of the terms of the agreement between plaintiff and Thacker. Certainly no inference that Kurofsky knew of the duplicity of Thacker can be drawn from the price and the value of the goods, as found by the trial court; Kurofsky could have no reason to suspect, because of such price and value, that plaintiff demanded and believed he was receiving $1,000 for goods of a reasonable value (according to the express finding) of $350. ,
However, giving effect to all the findings, including the finding that the attempted rescission was “not prompt nor timely,” the conclusion that plaintiff is entitled to recover from Kurofsky the supplies and machinery, or their value, can be upheld upon the theory of plaintiff’s second cause of action. During the trial the judge remarked, “Second cause of action dismissed,” but no written order to that effect was made. An order by a court of record is effective only when entered in writing. (See Cox v. Tyrone Power Enterprises *95(1942), 49 Cal.App.2d 383, 394 [121 P.2d 829].) It must be assumed that at a later stage of the trial the court determined that the second cause of action should not be dismissed, since its findings can support a judgment for plaintiff only upon the theory of such cause of action. Plaintiff therein alleges that “at all times herein mentioned without plaintiff’s consent, and wrongfully, defendants withheld the possession of said personal property.” The findings support this allegation, for it appears therefrom that the transaction whereby Kurofsky obtained possession of the property is void. Where a person, because he is deceived by fraudulent misrepresentations, manifests assent to a transaction different from that which he believes he is entering into, the transaction is void rather than voidable and “there is no necessity for attempting to rescind that which never in fact existed.” (McElhaney v. W. E. Moyer & Co. (1929), 101 Cal.App. 53, 57 [281 P. 87]; C. I. T. Corp. v. Panac (1944), 25 Cal.2d 547, 548-550 [154 P.2d 710, 160 A.L.R. 1285] ; 6 Cal.Jur., pp. 85-86; Rest., Contracts, §475; 5 Williston, Contracts, § 1488.)
According to the findings Thacker told plaintiff that he would deliver the supplies to any purchaser he could find who would pay $1,000 therefor; he represented to plaintiff as a fact that he had found a purchaser willing to buy the supplies for $1,000; he prepared and obtained plaintiff’s signature to a document which states that plaintiff has sold both supplies and machinery for $1,000; he did not disclose to plaintiff the “nature and effect” of the document, represented to plaintiff that plaintiff need not read it, and plaintiff therefore signed the document “without knowing its contents.” These findings show that plaintiff’s execution of the bill of sale to Thacker was a manifestation of assent to a transaction with terms materially different from the terms of the sale plaintiff intended to make, and that plaintiff’s mistake as to the terms of the sale was induced by Thacker’s knowing misstatements concerning the contents of the document. The general rule that a person who signs and accepts a written contract is charged with knowledge of its provisions, does not apply where, in reliance upon false misrepresentations of the other party, he does not seek the information which he could otherwise have obtained. Particularly is this so where there is a confidential relation between the parties. (6 Cal.Jur., pp. 85-86.) Here, the trial court found, “plaintiff reposed implicit confidence and faith in the integrity and honesty of said *96defendant [Thacker] and sought and obtained his advice in many matters and particularly concerning [the instant transaction].”
In the similar case of Meyer v. Haas (1899), 126 Cal. 560 [58 P. 1042], defendant’s agent, purporting to act as plaintiff’s agent also, by fraud caused plaintiff to sign a release of all claims against defendant; plaintiff was deceived into the belief that the release discharged only his claim for loss of time while he was incapacitated because of an injury caused by defendant. It was held that the consideration received by plaintiff from defendant should be considered only as payment for his claim for loss of time; that “The contract under such circumstances will be held to be what the maker of it intended it should be, and not what it was made to appear to be by the deception practiced.” In the instant case, however, the parties and the trial court have proceeded on the view that the contract is void, voidable or valid as to all the goods. Assuming, for the purpose of testing the majority opinion, that this position is correct, nevertheless the judgment is in error as to the amount of recovery.
Upon such assumption, the plaintiff can recover, as the trial court concluded, the property or its reasonable value, together with damages for the loss of its use. But the finding that plaintiff has been damaged by loss of the use of the property for the period from September 6, 1943, to Marc?h 22, 1945, is demonstrably untenable. The court found that the damage amounted to $2.00 a day for loss of the use of the machinery. This finding was based upon testimony as to the rental value of the two machines known as a stitcher and a finisher, and plaintiff’s testimony as to the amount by which his earnings would be greater when he used such machines than when he did the work by hand. Plaintiff further testified, and this testimony is not questioned, that on March 30, 1944, he bought another stitcher and another finisher of apparently equal utility for $700 (less than the amount awarded as compensation for the stitcher and finisher taken by Kurofsky). From that date, then, plaintiff was not deprived of the use of a stitcher and a finisher and was not damaged by being without such machines. It is obvious, then, that the award of $2.00 a day for the period from March 30, 1944, to March 22, 1945, is wholly unjustified.
The judgment should be reversed or, in any event, modified.