Graff v. Geisel
| Decision Date | 10 August 1951 |
| Docket Number | No. 31642,31642 |
| Citation | 234 P.2d 884,39 Wn.2d 131 |
| Court | Washington Supreme Court |
| Parties | GRAFF et ux. v. GEISEL et al. |
Christ D. Lillions, Seattle, for appellants.
Howard C. Graham, East Stanwood, Elton B. Jones, Seattle, for respondents.
Mr. and Mrs. Graff purchased the Utsalady Marina, a resort on Camano Island, Skagit County, Washington, on contract from Mr. and Mrs. Geisel. The Graffs brought this action in the superior court against the Geisels for rescission of the contract. Their basic contention in the trial court appears to have been that Mrs. Maxine Geisel induced them to purchase the Marina through false and fraudulent representations. They emphasized most strongly the following alleged representations by Mrs. Geisel: (1) That a franchise for the sale of Johnson Outboard Motors would be acquired by the Graffs with the purchase of the Marina; (2) That the franchise would be transferred to the purchasers after Mr. Graff took a course of instruction relative to the sale and servicing of the Johnson motors; and (3) That such a course could be obtained by Mr. Graff through the Johnson Motors, area distributor. Actually, the alleged course was not available. The Graffs did not qualify for the franchise. It was never transferred to them. At the conclusion of the plaintiffs' case, the trial court granted a motion by the defendants, dismissed the action with prejudice, and entered judgment to that effect. The Graffs have appealed.
We now outline the facts at some length and in considerable detail, as we see them from the evidence presented. It appears that the Utsalady Marina was owned and operated by the Geisels for some time prior to its sale to the Graffs. The Marina sold and repaired boats and outboard motors, sold sporting equipment, gasoline and oil, and operated a very small luncheon counter. Under the Geisels' management, approximately two-thirds of the physical area was devoted to the sale and service of outboard motors.
The Geisels listed the Marina for sale with certain real estate agents. Through a realtor the Graffs learned about and investigated the purchase of the Marina. It should also be mentioned parenthetically that the Graffs were not entirely lacking in business experience, as they had operated a filling station for three and a half years prior to their purchase of the Marina. They made three trips to the Marina: one in May, 1949, one on June 12, 1949, and one on June 15, 1949, in connection with their negotiations to purchase.
During the first visit the Graffs met Mrs. Geisel. She allowed them to examine the Marina. During the second visit the sellers' real estate agent was also present. She did substantially all of the talking for the sellers on this occasion. The Graffs were accompanied by their accountant on the third visit. Apparently there was no discussion of the purchase of the Marina with Mr. Geisel. It should be noted that during the first and third visits, Mrs. Geisel exhibited the Marina to the Graffs and pointed out its attractive features. The Graffs were furnished pertinent information as to the gross receipts of the Marina for the years prior to their visits. Their accountant was allowed to examine the state sales tax returns for the years 1947 and 1948. The Graffs' accountant advised them to purchase the Marina. The transaction was completed by means of a written contract, dated July 19, 1949.
Certain provisions from the contract are now quoted as follows:
'4. The Johnson contract now made out to Les Geisel's Utsalady Marina, which contract is renewable annually, shall be continued under said name until such time as Purchasers shall qualify as agents. Purchasers shall be allowed to purchase any motors and accessories pursuant to the terms of said Johnson contract, and shall at all times observe and abide by the terms, covenants and conditions of said Johnson contract. Merchandise bought from the Johnson distributor shall be paid for by the Purchasers immediately according to the terms and demands of said distributor.
Prior to July 19, 1949, the contract date, although appellants talked with two of respondents' wholesale suppliers, they did not talk with anyone in the firm of Pacific Marine Supply Company, of Seattle, the area distributor for the Johnson Motors, regarding the contemplated transfer of the franchise from respondents to appellants. Subsequent to July 19, 1949 (the contract date), and before the first of September, 1949, appellants made somewhat extensive alterations in the Marina. They transferred the outboard motor shop from its original location to a garage in the rear of the Marina. Where this shop had been, the appellants installed shelving for a grocery store. All window display signs relating to outboard motors were removed.
Apparently the franchise for the sale of Johnson Outboard Motors was considered an important factor in the business operations of the Marina. As noted above, this franchise was obtained from the Pacific Marine Supply Company. Such franchises were given only to individuals with certain qualifications. They were not allocated to a specific geographical area; that is, an area or location might have one or more dealers or franchise holders, depending upon the demand for the product therein.
During the preliminary negotiations respecting the sale of the Marina, respondent Maxine F. Geisel talked with appellants concerning the transfer of the Johnson franchise from respondent Leslie A. Geisel to the appellants. She indicated that the appellants should communicate with the Pacific Marine Supply Company of Seattle, and, allegedly, suggested that one of the purchasers should arrange to take a short course of instruction there. This supposedly covered the sale and servicing of Johnson motors, was important in qualifying for a dealership, and could be obtained through the area distributor. The testimony for appellants relative to the statements of respondent Mrs. Geisel, pertaining to the Johnson motor franchise, was in part as follows:
Witness Warren Lind: '* * * she [Maxine Geisel] told us at that time [appellants' first visit] that we would have the Johnson agency; that it would stay with the Marina.'
Witness LaVerne Graff:
At one stage in the negotiations the Graffs contemplated a partnership with Warren Lind (Mr. Graff's brother-in-law) in the purchase of the Marina. When questioned as to whether Mrs. Geisel mentioned that there would be any difficulty in transferring the Johnson Motor franchise, Lind testified, apparently with reference to appellants' first visit to the Marina: (Emphasis supplied.)
But, in speaking of the second trip by the appellants to the Utsalady Marina, appellant R. E. Graff testified: (Emphasis supplied.)
With respect to the second trip, appellant LaVerne Graff stated: (Emphasis supplied.)
During the early part of September, 1949, appellants for the first time discussed the franchise with the distributor and learned that no course or training plan was being conducted by the company, and that appellant R. E. Graff was not qualified to hold the franchise for Johnson Outboard Motors. After learning this appellants regularly made four regular monthly payments of two hundred fifty dollars each on the contract of purchase. Apparently payments were then stopped, and thereafter consideration was given to rescission of the contract.
From the latter part of November, 1949, respondents carried on a retail business of selling Johnson Outboard Motors in East Stanwood, Washington. Although this community is not on Camano Island, it is within the same trading area as the Utsalady Marina. Respondent Leslie...
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...v. Callahan, 514 N.Y.S.2d 819, 821-22 (N.Y. App. Div. 1987); Liebergesell v. Evans, 613 P.2d 1170, 1176 (Wash. 1980); and Graff v. Geisel, 234 P.2d 884, 890 (Wash. 1951). So it turns out that my twin models here are actually consistent with law as applied in a range of cases. 175 Thanks to ......
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