Daniels v. Oldenburg
| Decision Date | 30 November 1950 |
| Citation | 100 Cal.App.2d 724,224 P.2d 472 |
| Parties | DANIELS et ux. v. OLDENBURG et ux. Civ. 4165. |
| Court | California Court of Appeals Court of Appeals |
Harry Ashton, Los Angeles, for appellants.
L. A. West, Santa Ana, for respondents.
Action for rescission of lease. In response to an advertisement, plaintiffs, on April 11, 1949, entered into a written lease with defendants covering a service station, garage, and auto court or motel located on Santa Ana Canyon Highway near Corona. The lease was for a term of approximately five years at an agreed price of $16,665, payable in monthly payments. One thousand dollars was paid and plaintiffs took possession on the date the lease was signed. They operated the properties for about eight or ten days and then served defendants with a written notice of rescission.
Defendants had previously acquired the premises in some trade and operated it for a while. It was at the time located on a two-way highway. The station and auto court were accessible from the highway. Subsequently, a freeway was constructed and the grade made the property less accessible to such traffic. It was about this tim that defendants decided to lease the property.
Plaintiffs' complaint alleged that they were induced to enter into the lease because of certain false and fraudulent representations made by defendants to plaintiffs, namely (a) that defendants falsely represented that plaintiffs 'could keep the motel rented all the time', when, in fact, during the ten days plaintiffs were in possession they had no call for and were unable to rent any of the cabins; (b) that defendants falsely represented that the State was going to place a guard rail between the service station and the highway along a large ditch located there; that in truth and fact the State engineers intended to build a fence close to the service station which would interfere with the operation thereof and in fact had driven iron stakes along that course; (c) that defendants fraudulently represented that plaintiffs could sell 2900 gallons of gasoline per month at that station when in fact, during the time plaintiffs were there, they were only able to sell an average of 14 gallons per day; (d) that defendants falsely represented that they would install two floodlights, which they failed to do; (e) that defendants falsely represented they would deliver to plaintiffs an inventory of all the property but up to the time of the notice of rescission they failed to do so and plaintiffs were unable to determine what personal property was transferred under the lease. It is then alleged that plaintiffs returned everything of value to defendants and demanded the return of the money paid. In an amendment to the complaint it is alleged that defendants had been in possession of the leased premises since September, 1948, operating the same, and that they knew the actual returns therefrom; that the false representations made by defendants were made as matters of fact and not of opinion; that the representations as to the earnings from the property were false and untrue and made for the purpose of deceiving plaintiffs and inducing them to enter into the lease; that at the time the lease was signed the properties had no return quality rental value or earning capacity of $16,665 in the five-year period or any sum in excess of $120 per month, and that defendants well knew of this fact.
Defendants denied generally these allegations. They admitted stating to plaintiffs that the gas gallonage sold in March, 1949, was 2900 gallons; and claim that the State Highway Department was constructing a limited access freeway along and in front of the property and that traffic was only temporarily diverted from one side of the highway to the other and that such temporary diversion greatly curtailed the volume of traffic only during the limited period plaintiffs occupied the property; that these facts were physically apparent to plaintiffs at the time and that they personally inspected the property; that defendants made no representations as to ingress or egress to and from the station or motel.
The court heard the evidence and after viewing the premises found generally in favor of plaintiffs as alleged in their complaint and that by reason of these facts it found that defendants deceived and took an unconscionable advantage of plaintiff. It then found that at the time plaintiffs inspected the property the Highway Department was engaged in constructing a limited access freeway in front of it and that defendants made no representations in respect to ingress or egress, and found that ingress or egress was, at all times, open and free and that the normal flow of traffic thereon or access to the leased premises was not curtailed by reason of work upon the highway. Judgment was entered for rescission of the lease and the return of the $1000 paid by plaintiffs.
The only question on appeal is the sufficiency of the evidence to support these findings and the judgment.
We will first consider the claimed false representation and the allegation of the amendment to the complaint in reference to the fact (a) that plaintiffs 'could keep the motel rented all the time'. It is a general rule, which is subject to qualifications, that a representation, to constitute fraud, must relate to a past or...
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