Stasher v. Harger-Haldeman

• Decision Date: 21 June 1962
• Docket Number: D,HARGER-HALDEMA
• Citation: 372 P.2d 649,58 Cal.2d 23,22 Cal.Rptr. 657
• Court: California Supreme Court
• Parties: , 372 P.2d 649 Rela Ardell STASHER, Individually and as Administratrix, Plaintiff and Appellant, v.efendant and Respondent. L. A. 26244.

Page 657

22 Cal.Rptr. 657

58 Cal.2d 23, 372 P.2d 649

Rela Ardell STASHER, Individually and as Administratrix, Plaintiff and Appellant, v. HARGER-HALDEMAN, Defendant and Respondent.

L. A. 26244.

Supreme Court of California, In Bank.

June 21, 1962.

Lee, LaVigne & Davis, B. T. Davis, Jr., and David J. Lee, Los Angeles, for plaintiff and appellant.

R. D. Sweeney and Cameron W. Cecil, Los Angeles, for defendant and respondent.

SCHAUER, Justice.

Plaintiff appeals from a judgment for defendant in an action (brought individually and as administratrix of her husband's estate) to compel restitution upon claimed rescission of a conditional sale contract for the sale of an automobile and to recover all payments made thereunder to defendant.

Plaintiff contends that the subject contract was voidable at her instance because, as she would construe its language, it fails in certain respects to comply with the requirements of former Civil Code section 2982, subdivision (a). ¹ We have concluded that the contract complies with that statute and hence that the judgment should be affirmed.

Defendant at all times material was a licensed automobile dealer. On January 15, 1956, plaintiff and her (now deceased) husband went to defendant's place of business and negotiated to purchase a 1956 Chrysler automobile. Defendant agreed to allow a discount of $632.63 on the price of the new car, to accept in trade a 1954 Chrysler with an agreed value of $1,600, and to pay off a balance of $1,648.10 owing on the old car. Two days later plaintiff's husband returned and signed the conditional sale contract. He was given a copy of the contract and took delivery of the car.

The pertinent portions of the subject contract provide:

'SCHEDULE OF INSTALLMENTS

'$105.19 on 2/28/56, $450.00 on 1/21/56, $300.00 on 1/27/56, $100.00 on 1/30/56, $105.19 on 3/28/56, and $105.19 on the 28th of each month, after the date of the last payment above specified for 34 months, * * *

                                       "STATEMENT OF TRANSACTION
                "(1) Cash Price ............................................. $3456.00
                     Accessories ............................................   909.30
                     City Sales Tax 
                     State Sales Tax ........................................   111.99
                     Total ..................................................  4477.29
                "(2) Down Payment
                     A. Net Agreed
                        Value 1600.00
                        Less
                        Payoff 1648.10 Net                                      (48.10)
                     54 Yr. Make Chry
                        Motor No
                     B. Discount ............................................   632.63
                     C. Deposit Credit 
                     D. Cash ............................................
                                   Total Down ...............................   584.53
                "(3) Unpaid Cash Price ......................................  3892.76
                "(4) Insurance ..........................................
                "(5) Fees (License & Vehicle Tax) ...........................    57.00
                "(6) Unpaid Balance .........................................  3949.76
                "(7) Time Price Differential ................................   687.08
                "(8) Contract Balance ....................................... $4636.84"
                

The parties found neither uncertainty nor lack of substance in the terms of the contract, and during the ensuing two and one-half years plaintiff and her husband made payments thereon without complaint and drove the car some 63,000 miles. However, after her husband's death, plaintiff brought this action in what appears to be an attempt to have a rescission judicially declared and, in any event, to compel restitution by defendant. She advances the contention that the contract fails in certain aspects of expression to comply with the requirements of former section 2982, subd. (a) of the Civil Code (ante, fn. 1), and seeks to recover all payments made thereunder to defendant. At the time of trial a total of $4,634.31 had been paid on the contract balance. The automobile has remained throughout in plaintiff's possession. Obviously plaintiff has not shown facts which establish a conventional rescission; she relies solely on claimed violation of the above cited statute.

The trial court found that the subject contract 'complied strictly' with the provisions of items 1 to 4 and 6 to 8 inclusive of section 2982 (subd. (a)), and that there was 'substantial compliance' with the provisions of items 5 ² and 9 ³ of that section. The court 'concluded' (i. e., found) that plaintiff '(has) not been damaged by any act or omission of the defendant,' and accordingly entered judgment for the latter.

The principal issue on appeal is whether the subject contract complies with the provisions of Civil Code section 2982, subd. (a). ⁴ In General Motors Accept. Corp. v. Kyle (1960) 54 Cal.2d 101, 109(5), 4 Cal. Rptr. 496, 351 P.2d 768, we adopted for descriptive purposes only the terms 'formal' and 'substantive' to distinguish between, on the one hand, the requirements of subdivisions (a) and (b) of section 2982, and on the other hand the requirements of subdivisions (c) and (d) of that section. ⁵ Definitive of the requirements of these sections we said in Estrada v. Alvarez (1952) 38 Cal.2d 386, 389 (2, 3), 240 P.2d 278, that 'According to the Carter case (Carter v. Seaboard Finance Co. (1949) 33 Cal.2d 564, 203 P.2d 758), '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' (p. 573(9a) of 33 Cal.2d (p. 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 * * *.' (Italics added.) Similarly, in City Lincoln-Mercury Co. v. Lindsey (1959) 52 Cal.2d 267, 273(6), 339 P.2d 851, 73 A.L.R.2d 1420 we held that 'The fact that Lindsey (i. e., the buyer), when signing the contract, could ascertain the amounts of the missing items by calculation based on the figures appearing in the sales order does not show substantial compliance with subdivision (a) (of Civil Code section 2982).' (Italics added.) Again, in General Motors Accept. Corp. v. Kyle (1960), supra, 54 Cal.2d 101, 109-110(6), 4 Cal.Rptr. 496, 351 P.2d 768 we reiterated that 'In Carter v. Seaboard Finance Co. (1949), supra, 33 Cal.2d 564, 203 P.2d 758, we held that substantial violations of formal requirements of subdivision (a) of section 2982 rendered the contract unenforcible by the seller (fn. omitted) and that a buyer who has made payments to the seller under such a contract can recover them.' (Italics added.) (In accord are, e. g., Foster v. Masters Pontiac Co. (1958) 158 Cal.App.2d 481, 487-488(6, 7), 322 P.2d 592; Adams v. Caruso Enterprises, Inc. (1955) 134 Cal.App.2d 403, 408 (1), 285 P.2d 1022; Millick v. Peer (1955) 130 Cal.App.2d Supp. 894, 896(1), 279 P.2d 212.)

Substantial compliance, as the phrase is used in the decisions, means actual compliance in respect to the substance essential to every reasonable objective of the statute. But when there is such actual compliance as to all matters of substance then mere technical imperfections of form or variations in mode of expression by the seller, or such minima as obvious typographical errors, should not be given the stature of non-compliance and thereby transformed into a windfall for an unscrupulous and designing buyer. (See Ridge v. Boulder Creek etc. School Dist. (1943) 60 Cal.App.2d 453, 458(2), 140 P.2d 990.) Section 2982 and its companion provisions of the Civil Code constitute a shield, not a sword, for the use of buyers in proper cases. Thus, in General Motors Accept. Corp. v. Kyle (1960), supra, 54 Cal.2d 101, 4 Cal.Rptr. 496, 351 P.2d 768, this court made it clear that subdivision (a) of section 2982 must not 'be applied in a manner which will give a windfall to the conditional purchaser' (id. at p. 106(1), 4 Cal.Rptr. 496, 351 P.2d 768), and that the purpose of the statute 'is merely to protect, not to enrich, the buyer in cases of purely formal violations' (id. at p. 113 (15), 4 Cal.Rptr. 496, 351 P.2d 768). As will hereinafter be shown, that language is particularly applicable to the case at bench.

We begin by considering the alleged instances of noncompliance with Civil Code section 2982, subd. (a). The total 'cash price' of the automobile stated in the subject contract as item (1) thereof is $4,477.29. Plaintiff suggests that the price for which the car was actually sold to her and her husband was $3,834.66, or $632.63 less than the stated 'cash price,' the difference representing a discount in that amount given by defendant. On this basis plaintiff contends that the contract does not correctly recite the 'cash price' as required by item 1 of Civil Code section 2982, subd. (a).

The contention cannot be sustained. 'Cash price' is defined by (former) Civil Code section 2981, subd. (e) as 'the amount for which the seller would sell and transfer to the buyer unqualified title to the personal property described in the conditional sale contract, if such property were sold for cash at the seller's place of business on the date such contract is executed, and includes any applicable sales taxes.' ⁶ In the context of installment sales, however, this definition appears to be an unfortunate one. The figure sought to be defined is actually the agreed sale price for the vehicle and its accessories (plus sales tax), a figure which is fixed by negotiation and, from the seller's viewpoint, ordinarily takes into account the value to him of the 'time price differential' or finance charge. Yet the latter value, often considerable, is not reflected in the hypothetical 'cash price' as defined above. Thus, in the case at bench, it would be pure conjecture to assume that defendant 'would have sold' the Chrysler to plaintiff and her husband for $3,834.66 in cash, as that sum...