Estrada v. Alvarez

• Court: United States State Supreme Court (California)
• Citation: 38 Cal.2d 386,240 P.2d 278
• Decision Date: 08 February 1952
• Parties: ESTRADA et al. v. ALVAREZ. L. A. 21515.

Page 278

240 P.2d 278 38 Cal.2d 386 ESTRADA et al.
v.
ALVAREZ. L. A. 21515. Supreme Court of California, in Bank. Feb. 8, 1952.

Page 279

[38 Cal.2d 387] Larwill & Wolfe and Charles W. Wolfe, all of Los Angeles, for appellant.

C. Paul Du Bois, Los Angeles, for respondent.

SCHAUER, Justice.

Plaintiffs appeal from a judgment for defendant entered after a demurrer to their third amended complaint '(For Rescission and Money Paid Under Void Contract)' had been sustained without leave to amend. The action grew out of a contract of conditional sale of a truck and trailer to plaintiffs, and defendant's repossession of the [38 Cal.2d 388] vehicles. Plaintiffs contend that they have stated three causes of action: (1 'For Rescission'): They were induced to enter into the contract by fraud of defendant, they paid certain sums on account of the contract, defendant has received back everything he delivered under the contract, and plaintiffs are entitled to restitution of the sums paid to and for the benefit of defendant or, in the alternative, to damages for fraud. (2 'For Money Paid Under Void Contract'): The contract does not comply with section 2982 of the Civil Code, which requires that a contract for the conditional sale of a motor vehicle must recite certain matters (whether the down payment was by cash or trade-in, etc.); therefore, under the holding of Carter v. Seaboard Finance Co. (1949), 33 Cal.2d 564, 574, 588, 203 P.2d 758, plaintiffs can recover the sums paid under the contract. (3) Plaintiffs purport to allege a common count for money had and received.

We have concluded that the demurrer to the purported cause of action based on fraud was properly sustained, but that plaintiffs have stated a cause of action under the holding of the Carter case. The purported 'third cause of action' uses the language of the common count for money had and received but it also incorporates by reference all the allegations of the 'second cause of action.' The second and third 'causes of action' are, therefore, identical and the 'third cause of action' need not be separately discussed. (See Orloff v. Metropolitan Trust Co. (1941), 17 Cal.2d 484, 489, 110 P.2d 396.)

A copy of the contract is attached to the complaint as an exhibit and incorporated therein by reference. The contract is one of conditional sale as defined by section 2981 of the Civil Code (par. (a), subd. 1). Section 2982 sets forth the form and recitals required of such a contract. The contract here violates section 2982 in

Page 280

the following respects: It does not recite the price at which the seller would have sold for cash (Civ.Code, § 2982, par. (a), subd. 1). It does not recite the amount of the 'time price differential' or the 'contract balance' (Civ.Code, § 2982, par. (a), subds. 7 and 8). Furthermore, subdivision 2 of paragraph (a) of section 2982 requires that the contract recite 'The amount of the buyer's down payment, and whether made in cash or represented by the net agreed value of described property traded in, or both, together with a statement of the respective amounts credited for cash and for [38 Cal.2d 389] such property.' The contract here incorrectly recites that the down payment was $3,500 'in cash,' whereas, plaintiffs allege, the down payment which they actually made was a Buick automobile of the reasonable value of $3,800.

According to the Carter case, 'The obvious purpose of the statute is to protect purchasers of motor vehicles against excessive charges by requiring full disclosure of all items of cost' (page 573 of 33 Cal.2d, page 764 of 203 P.2d); the form and requisites prescribed...