Rider v. Cottle

• Decision Date: 10 February 1949
• Docket Number: 30768.
• Citation: 202 P.2d 741,32 Wn.2d 538
• Court: Washington Supreme Court
• Parties: RIDER v. COTTLE et al.

202 P.2d 741

32 Wn.2d 538

RIDER v. COTTLE et al.

No. 30768.

Supreme Court of Washington

February 10, 1949

Department 2

Action by Edwin H. Rider against H. W. Cottle and H. J. Lane to recover money paid by the plaintiff to the defendants on the purchase price of a business and its equipment. From a judgment of dismissal, the plaintiff appeals.

Judgment affirmed.

Appeal from Superior Court, King County; Donald A. McDonald, judge.

William A. Gilmore and W. H. Cook, both of Seattle, for appellant.

Dickison Bar & Gibbon, of Seattle, for respondent.

GRADY Justice.

This action was brought by Edwin H. Rider against H. W. Cottle and H. J. Lane to recover a sum of money paid to them upon the purchase price of a business and its equipment, it being claimed by the plaintiff that he was induced to make the contract of purchase by reason of false representations made to him by the defendants with reference to the value of the business and property and the net income from such business. The trial of the action resulted in a judgment of dismissal from which the plaintiff has taken this appeal.

The court found and concluded that the evidence was not sufficient to sustain the claim of fraud. The appellant does not challenge such finding and conclusion of the court, nor the action of the court with reference to the exclusion of evidence. The appeal is limited to the question whether the appellant became entitled to the return of purchase money paid by him under the circumstances as disclosed by the record.

The factual situation as found by the court and upon which our decision must be based is that on September 19, 1947, the appellant and respondents made a contract of conditional sale covering an ice creamery business and the equipment connected therewith. The appellant paid three thousand dollars when the contract was made, and agreed to pay the balance of the purchase price at the rate of one hundred dollars or more per month. The contract did not contain any provision for its forfeiture or a retention of purchase money paid in the event of non-performance on the part of the vendee. The first installment payment was to be due and payable on October 19th. The appellant took possession of the property purchased on September 20th. On October 10th, the appellant, through his attorneys, notified the respondents by a letter received in due course by them that he had elected to rescind the contract and made demand upon them that they repay to him the sum of three thousand dollars he had theretofore paid on the contract price. The court specifically found that on October 12th the appellant came to the store building and there contacted respondent H. W. Cottle and asked him if he would open the store the next day. The appellant stated he was going to Vancouver. The appellant left the keys to the store on a refrigerator at a time while respondent was absent from the store room. The appellant did not return to the store and did not operate it any more.

On October 14th, the appellant brought this action. He did not make the payment which became due October 19th. The respondents did not open the store and did nothing relative to the property until the 9th of November, when they rented it to another party on a month-to-month basis. The business was not operated for a period of several weeks. On June 16th, the respondents sold the business and equipment.

The theory advanced by the appellant in this court is that when he gave notice to respondents that he had elected to rescind the contract and demanded the return of the purchase money paid and they took possession of the property he had agreed to purchase and thereafter leased and resold it to third parties, the contract containing no forfeiture clause, the appellant became entitled to have the purchase money returned to him.

In support of his contention the appellant cites a number of our cases, which appear to fall into four groups or classes: (1) Reidt v. Smith, 75 Wash. 365, 134 P. 1057; Jones v. Grove, 76 Wash. 19, 135 P. 488; Jackson v. White, 104 Wash. 643, 177 P. 667; Tungsten Products, Inc., v. Kimmel, 5 Wash.2d 572, 105 P.2d 822, are cases dealing with contracts having no forfeiture clauses. (2) Gibson v. Rouse, 81 Wash. 102, 142 P. 464, and Croup v. Humboldt Quartz & Placer Mining Co., 87 Wash. 248, 151 P. 493, L.R.A.1918A, 537, are ceses dealing with contracts having forfeiture clauses. In each of these cases the vendor was the aggressor in seeking a rescission or a forfeiture of a contract, and the vendee had accepted and acquiesced in the rescission or termination of such contract. The court in each case decided that the vendor could not have the benefit of a termination of the contract without returning to the vendee the purchase money paid. (3) Connelly v. Malloy, 106 Wash. 464, 180 P. 469, and McMillen v. Bancroft, 162 Wash. 175, 298 P. 460, are cases dealing with contracts having no forfeiture clauses. (4) Frahm v. Moore, 168 Wash. 212, 11 P.2d 593, is a case where there was an absolute sale and to secure the payment of the balance of the purchase price the vendee gave to the vendor a chattel mortgage. In each of these cases the vendee was the aggressor in seeking rescission.

In all of the foregoing cases where the vendee was allowed to recover back the purchase money paid by him, it was found by the court and the decision was based upon the idea that the parties by mutual consent and acquiesence had agreed to or accepted a rescission or abandonment of the contract resulting in its...