Ikeda v. Curtis
| Decision Date | 06 October 1953 |
| Docket Number | No. 32436,32436 |
| Citation | 261 P.2d 684,43 Wn.2d 449 |
| Court | Washington Supreme Court |
| Parties | IKEDA et ux. v. CURTIS. |
Kennett, McCutcheon & Soderland, Seattle, for appellant.
Helsell, Paul, Fetterman, Todd & Hokanson, Seattle, for respondent.
This is an appeal from a judgment for damages for fraud in the sale of a hotel property.
George S. Ikeda and his wife are Japanese. He has spent most of his life doing farming and farm labor in Salinas and San Jose, California. They have seven children, five of whom are living with them. They came to Seattle in November, 1950. At first they lived with his brother-in-law, Tom Funamori, who operated the American Hotel in Seattle. Ikeda did janitor work and operated the elevator. In June, 1951, they purchased the Strand Hotel, located at 2212 1/2 First Avenue.
August 26, 1951, Frank Yamashita, a real estate salesman representing the Alberg Realty Company, obtained a fifteen day exclusive listing from Nellie Curtis for the sale of the LaSalle Hotel, located at First and Pike Place Market. The sale price was to be $25,000. The proposed sale included good will, licenses, lease, furniture and equipment. The hotel consisted of fifty-seven rooms, fifty-three of which were rentable. Yamashita contacted the Ikedas, who were interested in the purchase. September 15, 1951, an earnest money receipt was signed by the Ikedas, in which they offered to pay $17,500; $7,500 on the closing of the deal (including $1,000 which they put up as earnest money); and the balance of $10,000 at the rate of $200 per month. Yamashita reported to Mrs. Curtis, who stated that she would have to see her attorney before anything final was done. Yamashita contacted her several times without result, and finally returned the $1,000 to the Ikedas, telling them that the deal was off.
Shortly thereafter, George D. Tucker, representing the Grace Ruud Realty Company, contacted the Ikedas with regard to the sale of the same property. Ikeda went to the hotel once with Yamashita and twice with Tucker, but did not see Mrs. Curtis until October 9th. He was always told that she was too ill to see anyone. (During all of this time she was working from 8 p. m. to 8 a. m. as night clerk at the hotel.) Gladys Westbrooke, a colored day clerk, was at the desk during the times Ikeda visited the hotel. There was a card rack at the desk and she stated, upon inquiry by Ikeda, that there were thirty-four or thirty-five permanent guests. When asked about transient guests she stated that there were two or three vacancies during the week, but that they were filled up on week-ends.
October 6, 1951, an earnest money receipt and agreement was signed which was practically identical with the one signed September 15th, except that the latter one provided for a down payment of $10,000. The Ikedas testified that when they saw Mrs. Curtis she told them that the monthly income was from $1,900 to $2,200. When the lease, prepared by the owner, Pike Place Investment Company, was presented by Tucker, Ikeda refused to sign it, because of three clauses which his attorney had advised him should be eliminated. This took a few days of negotiating. Finally, in the afternoon of October 16th, Tucker came back with the word that everything was agreeable. He then asked for a check for the $9,000 balance of the down payment. Ikeda postdated the check to the 17th because that was the day he was to execute the lease.
Ikeda took over the hotel at about 10 o'clock in the morning of October 18th. He there met Tucker and Mrs. Curtis, who remained about fifteen minutes and then left. Mrs. Curtis handed him a memorandum of advance rental collections. He counted the rentals and learned that there were only twelve permanent tenants listed. He testified that he was surprised and asked Mrs. Curtis if that were all, and that she replied, 'That is right.'
Ikeda testified that while he was working at the desk the first day, several men came in and asked for girls. In response to a question as to the number, he testified:
'A. About eighteen; seventeen or eighteen men during the daytime while I was at the desk. They come up to ask about the girls and I told them it was under new hand and I don't have any girls and he said: 'You don't have to be scared, I am seaman.' And he pulled out their identification cards and everything, but I say 'I am sorry, I don't have any girls here, see.' And they said 'Where is Mrs. Curtis; where is Gladys?' and I told them 'I don't know, they left no forwarding address; I don't know how to locate them.' That was the same day, you know, but a couple of days later some men came up there and say 'Give me room' and alright I give him room and he went up to room and he called me and he say 'I want a girl,' and I say 'I am sorry, I don't have any girls' and he just took off.'
Ikeda's son, Bob, a pre-law student at the University of Washington, clerked the Saturday and Sunday night shifts from October 26th to November 17th. He testified that, during that time from thirty to fifty men would come each night and ask for girls.
Concerning this situation, Ikeda testified, He called his attorney the first day and in a couple of days put out a sign reading, 'No Girls'. He testified the the transient trade was one or two tenants a day.
This action was commenced, alleging that the defendant represented that the monthly gross income during the several years she operated the hotel, was from $1,900 to $2,000; that such representations were false and known to be false and were made with intent to induce the plaintiffs to purchase the property; and that the plaintiffs relied upon such misrepresentations to their damage. We quote Paragraphs V and VI of the complaint:
'V.
'VI.
The ledger book for the LaSalle Hotel, kept from September, 1946, until the day of sale, was admitted in evidence. The left hand sheet shows the income (Mrs. Curtis testified that the book reflects all the income which she received from the hotel) and the right hand sheet shows the expenses. However, the sheet showing the income has two rows of figures. For example, the income sheet for September, 1951, shows:
LaSalle Hotel
83 Pike Street September 1, 1951
Date
----
1 $37 $50 Extra $172
2 10 49.50
3 12 40
4 30 45
5 78 312 5 wks rent) 32.50
405 2 wks rent)
6 16 401 2 wks rent 27.57
7 20 41
8 18 35
9 10 49.50
10 18 25
11 26 40
12 40.50 35
13 12 53
14 42 45
15 28 45
16 12 32
17 40 45
18 24 62
19 18 40
20 40 (rentals 41.50
21 45 ( " 35
22 47 47.50
23 12 61
24 20 50
25 14 53.50
26 28 37.50
27 40 63
28 52 67.50
29 16 60
30 6 45
With reference to the September, 1951 income, she testified:
She testified to the following income for three months in 1950:
Gross Expenses Net
--------- --------- ---------
October, 1950 $3,092.50 $1,126.20 $1,963.20
November, 1950 3,142.50 1,168.41 1,983.89
December, 1950 3,013.50 1,421.06 1,590.04
She explained the large income by testifying that there were days when she rented the rooms two or three times.
Seventy-nine registration cards were admitted. They were for October 6, 8, 9, 10, 12, 15, 16 and 17. There was no testimony as to whether or not they were complete. Each card showed the room number, rate ($2), and arrival time. The arrival times were from 10:30 p. m. to 4:00 a. m. The cards also showed that eight, ten and up to fourteen rooms were rented in a given night, and that several rooms were rented two and three times in one night. To say the least, Mrs. Curtis did quite a thriving transient business.
The trial court found that the representations as to income were true, and then found:
'IV.
'That the chief source of revenue to defendant from the LaSalle Hotel business during the period of her ownership was from...
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