Barber v. Rochester
| Decision Date | 07 August 1958 |
| Docket Number | No. 34405,34405 |
| Citation | 328 P.2d 711,52 Wn.2d 691 |
| Parties | Richard E. BARBER and Ellen E. Barber, his wife, Appellants, v. Nelson ROCHESTER and Mabel Rochester, his wife, Respondents. |
| Court | Washington Supreme Court |
Fred H. Dore, James D. Dubuar, Seattle, for appellants.
Everett O. Butts, Hereford T. Fitch, Seattle, for respondents.
Appellants, plaintiffs below, sued the respondents for the rescission of a sale or exchange of properties. Many of the thirty-five assignments of error are directed to the findings of fact, but, because the case must be reversed for the exclusion of evidence, a decision on those assignments would be premature.
Appellants owned an automobile repair business, the real property on which it was conducted, and a home. Respondents had a similar business, the real property on which it was conducted, and a written contract (franchise) with the manufacturer for the retail sale of Plymouth and Chrysler automobiles, and an additional contract (franchise) from the manufacturer for the sale of new GMC trucks. The parties were brought together by a broker who was caustically characterized by the trial court as a common enemy of both. Appellants' house was valued at $10,000, and their business, with the real property known as 'Dick's Garage,' at $25,000. Respondents' business, known as the 'Mercer Island Garage' or the 'Mercer Island Motors,' with the personal and real property, was valued at $125,000. A sale or exchange was consummated upon those values. The price of $100,000 was placed upon respondents' real property in an executory contract of sale, which recites a down payment of $25,000, and requires the payment of the balance of $75,000 in monthly installments of $600 with five per cent interest $25,000 was the purchase price for the respondents' personal property, on which $10,000 was paid down, and the balance of $15,000 was secured by a chattel mortgage payable at the rate of $200 per month. Thus, the combined monthly installments on the real-estate contract and chattel mortgage amounted to $800.
Appellants deeded respondents their home and the garage property, and conveyed their repair business, and, in addition, paid $1,750 in cash, or a total of $36,750.
By a separate contract, respondents engaged to do everything necessary to the end that the said Plymouth and Chrysler franchise and the GMC franchise would be 'assigned to or reissued' to the appellants. For the purpose of facilitating the acquisition of the new-car franchise by the appellants, respondents agreed to operate the new-car business for not less than one year, and agreed to pay the appellants a service fee of $100 for each new car sold. Appellants, in turn, agreed to lease the necessary space to the respondents for the operation of the newcar business.
The complaint sought a rescission of the entire transaction on the grounds of fraud, failure of consideration, and substantial breach of the sale by the respondents.
The gravamen of the appellants' case was that they were desirous of having an automobile dealer's franchise for the sale of new cars; another repair shop, rather than the one which they then owned and operated, did not enter into their decision to purchase. It was the appellants' theory that, except for the new-car franchise, the respondents sold the entire business, including the good will thereof, to them 'lock, stock and barrel'--the wrecker, and everything associated with the business--with a single valuation placed upon the whole, and that the sale was partly oral and partly in writing.
It was the respondents' theory, on the other hand, that the entire transaction was in writing; that is, the real-estate contract, the chattel mortgage and the separate contract, respecting the new-car business, covered the entire transaction.
The trial court held, and repeatedly declared, that a contract could be rescinded for fraud inducing the sale and for fraud alone, but that subsequent events were irrelevant, and, consequently, inadmissible. The court said:
'* * * He was either defrauded or he wasn't. If he was defrauded to the extent of authorizing rescission, it doesn't make any difference what happened after he was defrauded. * * *
'The answer to it is if this were a contract, purchase and sale, and it became effective, nothing that could ever happen afterward would be sufficient ground for rescission. * * *'
Both failure of consideration and the breach of a material portion of a contract are grounds for rescission. Knatvold v. Rydman, 28 Wash.2d 178, 182 P.2d 9; Capital Savings & Loan Ass'n v. Convey, 175 Wash. 224, 27 P.2d 136; 5 Williston on Contracts 4064, § 1455; 17 C.J.S. Contracts § 420, p. 905; 12 Am.Jur. 1020, § 440. 1
Offer of proof of such matters was made and denied, to which appellants assign error. The assignment must be sustained. Remedies must be inconsistent before an election may be required. The subsequent events relied upon to entitle appellants to rescind the sale were not at all inconsistent with the alleged fraud in inducing the sale. Indeed, such were, in fact, intimately connected with the claimed prior fraud. But, in any event, only one remedy was sought, that is, rescission of the entire sale. The number of grounds upon which it is sought is immaterial. It is stated in 28 C.J.S. Election of Remedies § 6, pp. 1070, 1071:
'* * * However, there is no inconsistency between different remedies all of which are based on the affirmance or disaffirmance of the contract, * * *'
Here there were not different remedies which were either inconsistent or cumulative, but only different and additional grounds for resort to the idential remedy, the rescission of the contract. Election of remedies at best is a harsh and obsolete rule, the scope of which ought not to be extended (North American Graphite Corp. v. Allan, 87 U.S.App.D.C. 154, 184 F.2d 387; Smith v. Kirkpatrick, 305 N.Y. 66, 111 N.E.2d 209), and it has for its purpose only the prevention of double redress for a single wrong. Cashen v. Owens, 225 Minn. 25, 29 N.W.2d 440.
The action of the trial court in requiring an election between separate grounds for the same remedy was erroneous.
Appellants' counsel then made a formal offer of proof of the following matters: That the respondents mistrepresented the income from the business; that for a long period of time they had sold on an average of twelve to fifteen new cars monthly; that the transfer of the new-car franchise was only a routine matter presenting no difficulty; and that they had great influence in the Chrysler organization. Whereas, the truth was that the transfer of the franchise, or the obtaining of a new one, was impossible, which was at all times known to the respondents, and that the respondents refused to exhibit the new-car franchise to the appellants; that respondents knew the appellants were relying on the income from the service of new cars sold in order to meet the monthly installments on the purchase price, and that, if respondents failed in their contractual obligation to operate the new-car business for at least a year, appellants would be unable to meet monthly installments; that the respondents completely failed to do anything to assist appellants in obtaining an assignment of the new-car franchise, or the obtaining of a new one; that the respondents concealed from appellants the written franchise from the Chrysler Corporation because it required respondents to keep, in their own place of business, a supply of Chrysler and Plymouth parts to render satisfactory and adequate service to all Chrysler and Plymouth customers, and that on August 12, 1955, two representatives of the Chrysler Corporation called on the respondents and advised the respondents, in the presence of the appellants, that, because the parts and repair service had been sold, the franchise would be terminated; that the franchise was thereafter terminated; that, at the time of the sale, the respondents knew if the service department was sold, the franchise would be canceled; that the respondents knew the franchise could not be transferred as a matter of routine, but that, on the contrary, such transfer was impossible; that respondents refused to transfer the tow truck, and...
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