Knapp v. Hoerner

• Decision Date: 18 January 1979
• Docket Number: No. 2548-III,2548-III
• Citation: 591 P.2d 1276,22 Wn.App. 925
• Parties: Randall A. KNAPP and Edna Knapp, husband and wife, Respondents, v. Fred V. HOERNER and Lovena R. Hoerner, husband and wife, and Hoerner's Specialty Meats, Inc., a Washington Corporation, Appellants.
• Court: Washington Court of Appeals

Page 925

22 Wn.App. 925

591 P.2d 1276

Randall A. KNAPP and Edna Knapp, husband and wife, Respondents, v. Fred V. HOERNER and Lovena R. Hoerner, husband and wife, and Hoerner's Specialty Meats, Inc., a Washington Corporation, Appellants.

No. 2548-III.

Court of Appeals of Washington, Division III, Panel Four.

Jan. 18, 1979.

Felice, Clayton & Anderson, Dennis W. Clayton, Spokane, for appellants.

William Gordon Luscher, Spokane, for respondents.

ROE, Judge.

In 1964, defendants Hoerner had begun operation of a wholesale and retail meat business. In 1973, the defendants entered into an oral agreement with plaintiffs Knapp whereby the Hoerners agreed to sell a one-half interest in this business to the Knapps. The purchase price was $15,000, payable $5,000 down with monthly installments on the remaining $10,000 balance. Additionally, Knapps purchased 50 percent of the existing inventory and paid $400 as one-half of the existing worth of a van used in the business. After this agreement, the Hoerners and the Knapps received equal remuneration for their services in the business.

The conflict in testimony begins in reference to the events following a December 1974 dinner meeting at the Camelot Restaurant, in which the parties agree there was a discussion at that time concerning the possibility of the Knapps purchasing the Hoerners' remaining share of the business. Mr. Hoerner testified as follows: (a) he offered to sell his share to the Knapps; (b) that the Knapps indicated they did not have sufficient cash, but Mr. Hoerner indicated that he would accept installments if there were adequate security; (c) he definitely did not state he would buy back the Knapps' interest, nor (d) was there ever any discussion after that meeting at the Camelot in which Mr. Hoerner indicated he would buy back Knapps' one-half interest.

The Knapps testified that: (a) at the Camelot meeting they offered to pay cash for the Hoerners' share of the business; (b) that this was rejected, but (c) sometime later in December there was another meeting at which time Mr. Hoerner agreed to pay back to Knapps what they had in the business. It was the Knapps' position, following the meeting a few days after Camelot, that since the parties could not agree on terms by which Knapps would buy out, Mr. Hoerner had agreed to rescind the original sale to them of one-half and to return "what he had in the deal." Upon that theory, Knapps later sued.

In January 1975, Mr. Hoerner negotiated with one Stewart with a view to Stewart purchasing Hoerners' one-half share of the business. According to the testimony of Stewart, no agreement was reached. Stewart testified that he could only buy one-half, that is, Hoerners' one-half, because Knapps owned the other one-half.

Mr. Hoerner underwent an operation in January 1975. Knapps continued to make the monthly installments through January, February, and March of 1975. As Mrs. Hoerner was about to go to the hospital to visit her husband, who was in intensive care, Mr. Knapp stated to her his intention to leave the business by April 1975. Mrs. Hoerner did not tell her husband at that time because of his physical condition.

Later in the spring of 1975, according to Mr. Hoerner's testimony, in an effort to resolve this problem, he contacted an attorney who prepared a document containing terms and conditions under which Hoerners would settle the business relationship with the Knapps and pay them something for their interest. This exhibit was admitted into evidence and forms one of the bases of alleged error in this appeal. The offer was rejected, according to the Knapps, because the figures did not conform with their understanding of what was to be returned to them. The exhibit had been admitted by the trial court as evidence bearing on the state of mind of the Hoerners as to their liability to Knapps. The additional question before this court is whether or not the evidence is sufficient to show a mutual rescission of the 1974 agreement. The trial court ultimately found an agreement to rescind and gave judgment to Knapps for the money they had paid in. Mutual rescission is a matter of contract and involves a meeting of the minds of the parties. An assent to an offer of rescission may be express or implied.

Morango v. Phillips, 33 Wash.2d 351, 357, 205 P.2d 892, 895 (1949). There may be an oral rescission of a written contract. The rescission means a restoration to status quo. Morango v. Phillips, supra. If this is merely a rescission, there is no question involving the statute of frauds. A rescission is not necessarily the same as a contract for terminating the relationship of the parties which might involve new terms. Russell v. Stephens, 191 Wash. 314, 316, 71 P.2d 30 (1937).

In their brief, plaintiffs state, quoting Reynolds Metals Co. v. Electric Smith Constr. & Equip. Co., 4 Wash.App. 695, 698, 483 P.2d 880 (1971), that:

(T)he proper focus of our review of the evidence is to ascertain if substantial evidence supports the trial judge's finding.

The plaintiffs' brief also states:

In order to overturn the Trial Courts (Sic ) findings, the reviewing Court must determine the evidence Preponderates against the findings. (Italics ours.)

citing Hodges v. Gronvold, 54 Wash.2d 478, 483, 341 P.2d 857 (1959), which is a pre-Thorndike v. Hesperian Orchards, Inc., 54 Wash.2d 570, 343 P.2d 183 (1959), case; but in addition, Gronvold relied upon and quoted for its authority Richards v. Kuppinger, 46 Wash.2d 62, 278 P.2d 395 (1955), to the effect that "this court will accept the findings as the facts in the case unless we determine that the evidence preponderates against the findings." Hodges v. Gronvold, supra 54 Wash.2d at 482, 341 P.2d at 858, quoting Richards v. Kuppinger, supra. Plaintiffs' brief supports the seemingly inconsistent position as to the function of the appellate court in reviewing findings of fact. We believe the language found in Stringfellow v. Stringfellow, 56 Wash.2d 957, 959, 350 P.2d 1003, 1004, 353 P.2d 671 (1960), is appropriate:

Factual disputes are to be resolved by the trial court. The Washington constitution, by Art. IV, § 6, vests that power exclusively in the trial court. The power of this court is appellate only, which does not include a retrial here but is limited to ascertaining whether the findings are supported by substantial evidence or not. If we were so disposed, . . . we are not authorized to substitute our judgment for that of the trial court.

This position is restated in Oil Heat Inst. v. Mukilteo, 81 Wash.2d 7, 9, 498 P.2d 864 (1972). It is further affirmed in Parkridge v. Seattle, 89 Wash.2d 454, 464, 573 P.2d 359, 365 (1978), where the court stated:

The rule is that if there is substantial evidence to support the trial court's findings, we will not substitute our judgment for the court's even though, had we been the trier of fact in the first instance, our judgment might have been different.

As stated in Beeson v. Arco, 88 Wash.2d 499, 503, 563 P.2d 822, 824 (1977), which involved an action for damages resulting from the cutting of gill nets by a ship, the court stated:

When a trial court has based its finding of fact on conflicting evidence and there is substantial evidence to support it, an appellate court will not substitute its judgment for that of the trial court even though it might have resolved the factual dispute differently. . . . Substantial evidence is said to exist if there is sufficient evidence to persuade a fair-minded, rational person of the truth of the declared premise.

(Citations omitted.)

Regardless of the language which is found in some cases such as Hodges v. Gronvold, supra, and Seattle-First Nat'l Bank v. Hawk, 17 Wash.App. 251, 254, 562 P.2d 260, 262 (1977), suggesting that:

In order to overturn the trial court's findings, the reviewing court must determine that the evidence preponderates against the findings.

We hold that such statements are not the test and do not square with authorities above cited.

We have carefully reviewed the record. This essentially involves a conflict of testimony between two couples engaged in the same business. The evidence introduced by Knapps is ample to support a rescission. On the other hand, the evidence of the Hoerners is also ample to rebut it. The closeness of the question is reflected from the fact that, after hearing the...