Estrada v. Alvarez

Decision Date08 February 1952
Citation38 Cal.2d 386,240 P.2d 278
CourtCalifornia Supreme Court
PartiesESTRADA et al. v. ALVAREZ. L. A. 21515.

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 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 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 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 by the statute are mandatory; a contract which does not substantially conform thereto is unenforceable; and a buyer who has made payments to the seller under such a contract may recover them because 'A member of the class for whose protection the statute was enacted is ordinarily not considered in pari delicto with those who violate the statute' (page 574 of 33 Cal.2d, page 765 of 203 P.2d).

The third amended complaint, now before us, is plaintiffs' fifth attempt to state a cause of action. (They previously filed a complaint, an amended complaint, an amendment to the amended complaint, and a second amended complaint.) The legal theory of a cause of action under the holding of the Carter case is suggested for the first time by the language of the third amended complaint, but the essential facts constituting that cause of action have been pleaded in each of the complaints filed by plaintiffs. The situation as to the purported fraud cause of action is somewhat different; in their successive complaints plaintiffs have not merely attempted to present different legal theories, but also have changed and added to some of the facts pleaded. As a result of these changes and additions, facts which are fatal to plaintiffs' claimed right to restitution have been brought out.

The third amended complaint contains the following allegations: Plaintiffs were induced to enter into the contract by fraudulent representations that the truck and trailer were in excellent condition and would not need repair for two years, that certain equipment 'would be included with the vehicles in the purchase price,' that defendant would assign to or obtain for plaintiffs a contract for hauling under which 'plaintiffs would receive a net profit of not less than $1,500 per month from the operation and use of said vehicles.' The contract was executed and plaintiffs received the vehicles on July 19, 1947. Thereafter the vehicles 'had numerous mechanical breakdowns, due to * * * bad mechanical condition at the time of delivery to plaintiffs' and plaintiffs had to have many repairs made; for these repairs plaintiffs paid $4,289.82 (an amount equal to more than one-fourth the contract price). Plaintiffs discovered the fraud on March 1, 1948, more than seven months after receiving possession; on March 10, 1948, defendant took possession of the vehicles.

There is no explanation as to how plaintiffs could use the vehicles from July 19, 1947, until the end of February, 1948, and pay $4,289.82 for repairs, without discovering the falsity of material representations of defendant as to the condition of the It should have been immediately obvious to plaintiffs that the promised equipment was not delivered with the vehicles and it should very soon have become apparent, if in truth it was the fact, that the vehicles were not in excellent mechanical condition. Nevertheless plaintiffs used the truck for more than...

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41 cases
  • Greenwood & Co. Real Estate v. C-D Inv. Co., C-D
    • United States
    • California Court of Appeals
    • January 29, 1993
    ...as to the fourth (tort) cause of action since the trial court had found no election of remedies by the plaintiff. Estrada v. Alvarez (1952) 38 Cal.2d 386, 240 P.2d 278 is likewise distinguishable. In Estrada, the plaintiffs pled in the alternative for return of monies based upon theories of......
  • Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co.
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    • California Court of Appeals
    • January 20, 1977
    ...in pursuit of a contract remedy is estopped to pursue a tort remedy based upon the same set of facts, citing Estrada v. Alvarez, 38 Cal.2d 386, 391, 240 P.2d 278; Steiner v. Rowley, 35 Cal.2d 713, 720, 221 P.2d 9; Barrett v. Hammer Builders, Inc., 195 Cal.App.2d 305, 16 Cal.Rptr. 49; and Ei......
  • Hicks v. Hicks
    • United States
    • California Court of Appeals
    • December 19, 1962
    ...been given, although 9 years have gone by; and, not being rescinded, the deed effecting the same is fully operative. (Estrada v. Alvarez, 38 Cal.2d 386, 390, 240 P.2d 278; Loud v. Luse, 214 Cal. 10, 12, 3 P.2d The court found that 132 of the 357 shares of Indian Wells stock acquired by the ......
  • Leeper v. Beltrami
    • United States
    • United States State Supreme Court (California)
    • December 8, 1959
    ...... Rescission, whether legal or equitable, will not be permitted unless the plaintiff acts promptly in rescinding. Estrada v. Alvarez, 38 Cal.2d 386, 390, 240 P.2d 278; § 1691 of the Civil Code; Toby v. Oregon Pac. R. Co., 98 Cal. 490, 499, 33 P. 550; 9 Cal.Jur.2d 570, ......
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