Opinion
Hearing Granted by Supreme Court May 14, 1928.
Appeal from Superior Court, Los Angeles County; Walton J. Wood, Judge.
Action by W. C. Pennell against Stanley W. Smith, Inc. Judgment for plaintiff, and defendant appeals. Affirmed, and remanded. COUNSEL
Newby & Palmer, of Los Angeles, for appellant.
E. O. Leake, of Los Angeles, for respondent.
OPINION
HART, J.
The plaintiff brought this action to recover the sum of $845.25 alleged to be due him by reason of a conditional sales contract for an automobile entered into between him and the defendant. The plaintiff was awarded judgment in the sum of $700, together with interest thereon from May 14, 1923, at the rate of 7 per cent. per annum. The defendant appeals from the judgment on a bill of exceptions.
The defendant is a domestic corporation with its principal place of business in the city of Los Angeles. The second paragraph of the complaint reads as follows:
"That on or about the 6th day of May, 1923, defendant, with intent to cheat and defraud plaintiff and in order to induce plaintiff to enter into a contract to purchase a certain automobile described as Packard roadster, motor No. 151834, and to purchase said automobile, made the following false and fraudulent statements and representations to plaintiff of and concerning said automobile, to wit: That said automobile was in perfect mechanical condition; that in the event plaintiff purchased said automobile it would not be necessary for him to make any repairs thereon or thereto in driving said automobile 25,000 or 30,000 miles; that said automobile had not been driven in excess of the mileage shown by the speedometer thereon, to wit, 24,245.2 miles; that said speedometer correctly showed the mileage said automobile had been driven; that it had said automobile appraised by Earl C. Anthony, Packard dealers in Los Angeles, and had been advised that said automobile was reasonably worth and should sell for $2,500; that they knew the car to be reasonably worth the sum of $2,100."
Paragraph 3 of the complaint alleges:
"That plaintiff believed and relied upon said statements and representations, and was induced to believe and rely upon said statements and representations by defendant, in that defendant, prior to the making of said representations, stated and represented to plaintiff that it was a company of good reputation and would stand behind any automobile which it sold, and would stand behind any representations which it made, and that plaintiff might accept any representations made to him in regard to said car; and plaintiff, being induced solely by reason of the representations so made to him as aforesaid and on account thereof, and without any investigation as to the truth thereof, on or about said 6th day of May, 1923, entered into a contract with defendant to purchase said automobile at and for the price of $2,100, and paid on account thereof the sum of $700, and agreed to pay the balance thereof in installments of $126 per month."
It is alleged in paragraph 4 that all of said statements and representations set forth in paragraph 2 were false and fraudulent, and were known to said defendant to be false and fraudulent, and were made for the purpose of inducing and did induce plaintiff to enter into said contract for the purchase of said automobile and to pay said sum of $700. Paragraph 5 sets forth in detail the alleged defectiveness of the automobile in various parts of the machinery thereof. It is alleged in paragraph 6 that defendant was compelled to pay out the sum of $45.25 for repairs of said machine immediately after purchasing and taking possession of the same, and that he was damaged by reason thereof and loss of time in the sum of $100; that immediately upon learning of the falsity of said representations and on the 14th day of May, 1923, plaintiff did rescind said transaction or contract and notified defendant that he rescinded said transaction, and that he returned and restored to defendant said automobile and demanded of it that it return said sum of $700 received on account thereof; that defendant received and accepted said automobile, and has since said 14th day of May, 1923, been in possession, control, and use thereof, but that defendant has failed and refused to repay and return to plaintiff said sum of $700, and has not returned or repaid the same.
Upon the conclusion of the taking of testimony, the court declared that the evidence was insufficient to support the allegations of the complaint that the execution of the contract for the sale of the automobile was wholly superinduced by fraud practiced upon, or false representations made to, the plaintiff, by the president of defendant during the negotiations leading to the consummation of the transaction as to the mechanical condition of the car. The court at the same time further expressed a doubt as to the sufficiency of the allegations of said complaint to sustain an action for a rescission of the contract by the mutual consent of the parties; whereupon the plaintiff asked and and was granted leave to amend the complaint. The important allegations of the amendment are contained in paragraph 4 of the amendment and are as follows:
"That thereafter and on or about the 14th day of May, 1923, plaintiff and defendant each consented to a rescission of said transaction and a rescission thereof was thereupon had by mutual consent, and plaintiff thereupon returned and restored to defendant said automobile and defendant thereupon accepted and received said automobile and has, since said time, exercised exclusive ownership and control thereover."
The prayer is for a decree adjudging that "said transaction has been and was rescinded by the mutual consent of the parties thereto," and for judgment for $700 and the sums alleged to have been expended by plaintiff in repairing the machine.
The defendant answered, admitting the execution of the contract for the amount alleged in the complaint, admitting the sale of the automobile to plaintiff for the amount stated in the complaint and the execution of the contract embracing the terms thereof, admitting that thereupon and on the 6th day of May, 1923, plaintiff took possession of the automobile under said contract, that he paid in cash at said time $700 and agreed to pay the balance thereof in monthly installments of $126, commencing on the 6th day of June, 1923, and ending on the 6th day of May, 1924. The answer denies that the plaintiff was induced to purchase the automobile by or relied upon any representations or statements regarding the character and the condition of the automobile which were false or fraudulent; and further denies that there was any rescission or act of rescission on its part of the contract at the time stated in the complaint or at any other time; denies that plaintiff, "immediately upon learning of the falsity of said alleged representations, did rescind the said transaction and the whole thereof"; denies that the plaintiff did return or restore to the defendant "everything of value received by him, but admits that said plaintiff, without the consent and over the protest of defendant, did leave said automobile at the place of business of the said defendant and demanded the return of the said $700"; denies that defendant received or accepted said automobile, "but, on the contrary, avers that on the said 14th day of May, 1923, it informed the said plaintiff that it would not accept said automobile or rescind the said contract, and that if he (plaintiff) left the said automobile at the place of business of said defendant, that it would be kept subject to the order of the said plaintiff and under the terms of said written contract, and not otherwise. The defendant admits it has failed and refused to repay or return to the plaintiff the said $700 or any part thereof, but denies that the said $700 or any part thereof is due or owing to the plaintiff from the defendant." The answer also denies that the automobile, after having been taken possession of by the plaintiff, was found to be in the defective condition in several of its parts as alleged in paragraph 5 of the complaint.
As a further defense to said action and by way of counterclaim, the defendant declares upon and pleads the terms of the contract; alleges that "the defendant hereby exercises the option contained in said agreement and declares the whole sum of principal and interest due," etc. The setting up of this counterclaim is of no consequence in the decision of this appeal under the view we take of the case as made, and therefore further reference regarding the same need not be herein made.
The defendant answered the complaint as amended, denying all the allegations contained therein, some of which were substantially the same as those in the complaint as originally filed.
The court found (finding II) "that it is not true, as alleged in plaintiff’s amended complaint, that on or about the 6th day of May, 1923, or at any other time, the defendant made the statements and representations set forth in paragraph 2 of plaintiff’s amended complaint, with intent to cheat and defraud plaintiff or at all"; "that (finding III) it is not true that plaintiff believed and relied upon the statements or representations of defendant as set forth in paragraph 2 of plaintiff’s amended complaint, or was induced thereby to purchase said automobile"; "that (finding IV) defendant did represent to plaintiff that said automobile was in good mechanical condition; and that plaintiff believed and relied upon said representation."
After finding that the contract as described in the complaint was entered into by and between the plaintiff and defendant, and that the plaintiff paid the sum of $700 to the former upon the execution thereof, the court proceeds to find and describe specifically the several vital parts of the machinery of the automobile that were in a defective or not in a good mechanical condition, and further found that the plaintiff was compelled, after taking and having possession of the car, to expend the sum of $45.25 in making repairs thereon "in order to keep the same in operation." It was further found that the plaintiff, on the 14th day of May, 1923, notified defendant that "he rescinded said transaction and did return and restore to defendant everything of value received by him and did demand of defendant that it return said sum of $700 received on account thereof"; that "defendant received and accepted said automobile and has, since said 14th day of May, 1923, been in possession, use and control thereof." The tenth and eleventh paragraphs of the findings relate to the counterclaim pleaded by defendant and are to the effect that the defendant did not exercise its option, reserved to it by the contract, by declaring the whole sum of principal and interest due, and that it is not true that defendant "still holds said automobile in its possession for plaintiff and is ready, able and willing to deliver same to plaintiff upon payment of any sum." In said paragraph 11 it is further found that defendant, immediately upon receiving said automobile, and before any default could have been declared under the terms of said contract, advertised the same for resale as its own property, etc., and thereafter did sell said automobile for and on its own account and not under any of the terms of said contract, and kept and appropriated the proceeds of said sale to its own use, not accounting therefor to plaintiff.
It is readily to be seen, from a perusal of the findings, that the sole question presented by this appeal is whether the finding that the contract involved herein was rescinded either by the mutual consent of the parties or by the plaintiff himself derives support from the evidence. The question of fraud is entirely eliminated by the findings. No other conclusion can follow from a reasonable construction or rational view thereof. Finding II, properly read, will be seen to expressly declare that the alleged false statements and representations, as set forth in paragraph 2 of the complaint, were not made by defendant or its president to plaintiff regarding the mechanical condition of the automobile. It will be observed that the language of the finding is "that it is not true as alleged in plaintiff’s complaint that *** defendant made the statements and representations, *** with intent to cheat and defraud plaintiff or at all. " (Italics ours.) Had the italicized words "or at all" not been used in the finding as they are therein used, the finding would have been subject to the criticism that it involved a negative pregnant; but the words referred to save the finding from such imputation and render it a clear and positive finding that the representations set forth in paragraph 2 of the amended complaint, and which it is alleged in that pleading were false and fraudulent, were not made by the defendant to plaintiff or its agents on the 6th day of May, 1923, or at any other time, or at all. This being so, finding III that "it is not true that plaintiff believed and relied upon the statements or representations of defendant as set forth in paragraph 2 of the plaintiff’s amended complaint, or was induced thereby to purchase said automobile," construed, as it must be, in connection with finding II, or, indeed, as a part thereof, harmonizes with the latter finding, because, obviously, it would be absurd to say that a person believed and relied upon and was induced to pursue a certain course of conduct by and upon statements or representations that were never made. So, with the question of fraud thus entirely expunged from the case as an issue, the sole remaining question which is to be determined here is whether there was a rescission of the contract for the sale of the automobile.
As will be observed from the statement of the case, as it is hereinabove set forth that, upon the announcement of the court, after the taking of testimony had been concluded, that the evidence was insufficient to support the charge in the complaint that the contract was procured by fraudulent representations by the defendant, or its president, and, further, upon the expression by the court of doubt as to whether the averments of the complaint to the effect that the transaction eventuating in the execution of the contract were sufficient to support the action, the plaintiff, by leave of the court, amended its complaint by setting up a rescission of the contract by the mutual consent of the parties, upon the assumption that the proofs, already made, were sufficient to support that plea. And upon that theory the cause was decided below, and upon the same theory it is sought to sustain this appeal.
That there was no rescission by the mutual consent of the parties is plainly apparent from the testimony. The facts as testified to by the plaintiff are: On Saturday, the 5th day of May, 1923, between the hours of 7 and 8 o’clock p. m. he, with a personal friend, Colonel James T. Toy, called at the place of business of the defendant and asked for Stanley W. Smith, president of the latter. Smith was absent at the time, but within a few minutes thereafter appeared at the establishment of defendant. The plaintiff was introduced to Smith by Toy, the latter saying to the former that the plaintiff desired to buy a car. Smith said to plaintiff that he then had an important appointment and would be required to proceed at once to meet it, and he (Smith) thereupon departed, leaving the plaintiff and Toy with a Mr. Gannon, a salesman in the employ of the defendant and superintendent of its "used car" department. Plaintiff was taken by Gannon to said department, and there Colonel Toy called his (plaintiff’s) attention to the car-a Packard roadster-which he (plaintiff) finally agreed to purchase. Gannon said to plaintiff that the car had already been sold and that the defendant had accepted and received a deposit on the sale. Gannon stated that the sale price of the car was $1,950, and further stated (addressing plaintiff) that that price "was quite a bit under the market"; that it was "in good, perfect mechanical condition." "In fact," proceeded plaintiff, "Gannon said the chauffeur from Douglas Fairbanks’ studio had been over the car and pronounced it mechanically correct. I looked at the speedometer, and it recorded somewhere near 25,400 and some odd miles. I asked Gannon if that was the mileage, and he said the mileage of the car was indicated by the speedometer. *** He (Gannon) said that it was mechanically correct and that I would not have to spend any money on it inside of the next twenty-five or thirty thousand miles, other than for incidental adjustments, oiling, and greasings. Colonel Toy said if this car was in the condition represented and it was a Packard Twin Six and only had traveled the mileage indicated that it was a good buy and advised me to offer the party who had the deposit up $200 for his bargain, which I, acting on his (Colonel Toy’s) suggestion, authorized Mr. Gannon to do. Colonel Toy and I then went to our office in the Merritt building." Plaintiff stated that the car had "a new coat of paint and evidently a new set of cushion covers. The cushion covers were made of canvas of some kind, put on over the leather. No portion of the leather covers was visible to me at that time." Continuing, the plaintiff testified that on the same evening, between 10 and 11 o’clock, he received a telephone call from Gannon, who stated that he had seen the party who had made a deposit on the car and that the latter said that if plaintiff "would pay a bonus of $150 that he (said party) would release his option, which would allow me to purchase the car." Plaintiff thereupon (the same evening) went to the Stanley Smith’s place of business and paid in part the initial payment of $700 on the purchase price of the car. He was then told by the salesman that the car would be ready for him to take out between 1 and 2 o’clock Sunday, which was the following day. Plaintiff, on Sunday and at the hour named, went to the Smith agency’s place of business, and, paying the balance of the initial payment ($700), "the premium on the insurance, and some incidental charges," and after executing the contract, took possession of the car. The plaintiff further testified that he did not make any investigation to determine the condition of the car prior to the execution of the contract. He stated that the first time he ever operated an automobile was in the year 1910 or 1911. "I have not," he said, "owned a car continuously since that time, but I have had six automobiles of different makes. I do my own driving and have during that time."
It is unnecessary to present herein in detail the trouble the plaintiff experienced in trying to operate the car, which trouble began the day he took possession thereof and continued, at very frequent intervals, to the 14th day of May, 1923, at which time he returned the machine to the defendant, announced his rescission of the contract, and demanded the return of the money ($700) he had paid on the purchase price upon the execution of the contract. It is sufficient to state generally that, as he described the condition of the car, it was so defective mechanically in many of its parts that it would "stall" or fail to function many times during some days and that by reason thereof he was compelled to have it repaired a number of times by machinists specializing in auto mechanics; that, even after repairs were made, the car could not be operated for a very great distance without being again repaired; that on one occasion, when it was in a repair shop for a somewhat general inspection and "overhauling," he discovered many defects in the mechanism of the car, all of which are specifically enumerated in the court’s findings and which show that the car was mechanically not in good condition. Plaintiff stated, as the court found, that he was compelled to and did expend the aggregate sum of $45.25 in payment for the repairs made on the car.
On the 14th day of May, 1923, the plaintiff returned the car to the defendant’s place of business, and there meeting its president (Stanley W. Smith), said to him that he returned the car "because it was mechanically defective and not in the condition represented. I told him (Smith) that I left the car there." Smith at that time had an engagement with some other party and said to plaintiff that he did not then have time to discuss the matter with him (plaintiff), and requested the latter to return at some future time, when he (Smith) would take the matter up. Approximately two weeks thereafter plaintiff again called at the defendant’s place of business, and the matter was then discussed between the plaintiff and Smith. As to what was said and done on that occasion, plaintiff testified:
"In that conversation he had an offer to give me if I would sell a new Peerless, what it amounted to. If I would sell a new Peerless or get a customer for a new Peerless that he would then return my deposit on the Packard. That is what he said to me at that time. I wanted to know what the terms and conditions of that would be, and he set a time limit for January 1, 1924, all this time would be good for, and told me to come back again, that he would think it over and let me know just exactly what he would do-what sort of a definite proposition he would make. I did not take the car away with me again. I never did take the car away. There was nothing said about my taking the car at that time. I have not had the car in my possession since the 14th day of May. That second visit to Mr. Smith which I had been discussing was prior to June the 6, 1923. He said nothing at that time about my taking the car with me. About two or three days passed before I next had any conversation with Mr. Smith, in his office again. Nobody else was present. That was still prior to June 6, 1923. At that time he had an instrument drawn up; I think it is a deposit form. It was submitted to me for my approval, and was terms and conditions in that which I would not consent to. I did not approve it. I told him that I could not accept an agreement like that; if that is all he had to offer I would just simply either have to get my money, my deposit on the car, or else lose it all; I could not accept an order of that kind. In reply he said he would leave it just that way, then; it was up to me. He did not at that time offer the car back or say anything about it. It was still in their possession, to the best of my knowledge. That was all prior to June the 6, 1923. I never talked to Mr. Smith after that time or to any of his salesmen."
The testimony of the plaintiff as to the representation made by Gannon concerning the mechanical condition of the car on the occasion of the making of the contract and before the document was signed by plaintiff was corroborated by the testimony of Colonel Toy. In fact, Gannon himself practically admitted that he stated to the plaintiff that the car was "in good condition" mechanically.
Smith, the president of defendant, admitted that the plaintiff returned the car at the time stated above, with the complaint that it was not in good mechanical condition, and left the car at the defendant’s place of business. He also testified:
That he "offered to take the car back on a new car. He" (referring to plaintiff), continued Smith, "claimed he could not afford to get a new car. I said: ‘You don’t have to buy it now; I will give you a year or two years; might have been three years. I wrote up an order to the effect of transferring the full $700 over on a new car within a certain length of time, and *** he said he would think it over and come back. When he came back, he wanted to know whether he could dispose of this order, and I said: ‘I don’t want it farmed, but if he found a buyer of the car, just turn it over to some one else, all right, but as far as advertising it or absolutely farming it out promiscuously, that I would not stand for that sort of thing.’"
During this conversation plaintiff stated to Smith that "he was not going to keep the car, was going to give it back to us, and one time he asked for the money back, which we absolutely refused, unless we made a sale there."
On June 4, 1923, the plaintiff, through his attorney, addressed to defendant a written notice notifying the latter that he did, on the 14th day of May, 1923, rescind the contract of sale by returning the car to defendant and demanding the return to him of the $700 paid on the purchase price of the car. Said notice declared that plaintiff "has rescinded and hereby rescinds that certain contract," etc.; that plaintiff "has restored to you and does hereby restore to you everything of value which he received from you under said contract"; and "demands that you return to him all moneys paid you on account thereof, to wit, $700."
The defendant, through its attorneys, addressed to plaintiff’s attorney a notice, under date of June 11, 1923, in reply to the above referred to notice by plaintiff to defendant, notifying the former that:
Defendant "will not accept the rescission of the contract therein referred to, and you are also hereby notified that our client will insist upon the performance of the said contract, and will expect Mr. Pennell to strictly comply with the terms thereof. If he does not take possession of the car and meet the obligations of the contract forthwith, in accordance with the terms thereof, we shall take steps to enforce the rights of the seller in accordance with the terms of the said contract."
On June 16, 1923, the defendant sold the car to one Genter for $2,065. In the transaction Genter turned over to defendant a Chandler seven-passenger sedan and paid in cash $150, making a total payment on the purchase price of the sum of $1,150.
It will not be denied that the finding that the defendant, through its agents, authorized to conduct for it transactions such as the one concerned here, represented to the plaintiff, before the completion of the transaction involving the sale of the automobile, that the car was "in good condition"-that is, that it was mechanically sound-is amply supported by the testimony, of which the foregoing embraces a synoptical statement. Nor will it be denied that the inferences naturally following from the testimony affords sufficient support to the finding that the plaintiff believed and relied upon and was induced by such representation to enter into the contract; and, further, it will not be denied that the finding that the car, at the time of its sale conditionally, to plaintiff, was in a very defective condition, is buttressed by sufficient evidentiary support. But, as stated in the outset of this opinion, the evidence does not support the finding that the contract was rescinded by the mutual consent of the parties thereto. As to this proposition, the plaintiff contends: That the return of the car by him to defendant, with the declaration that he rescinded the contract, and a demand by him for a return of the money he had paid on the purchase price, constituted a notification or offer on his part of a rescission, and that the acceptance, retention, and the subsequent sale of the car to Genter by the defendant constituted conduct on the part of the latter from which the court was justified in finding, as it did find, that it consented and agreed to the abandonment or rescission of the contract.
It is settled law that an agreement to abandon or rescind a contract may be proved by or inferred from the acts or conduct of the parties (Treadwell v. Nickel et al., 194 Cal. 243, 259, 228 P. 25; Tuso v. Green, 194 Cal. 574, 229 P. 327; Green v. Wells & Co., 2 Cal. 584), and where the conduct or acts of the parties are such as reasonably and fairly to justify an inference that a rescission had been intended and effected by the mutual consent of the parties, a finding to that effect will not be disturbed on appeal. But, as said in Tuso v. Green, supra:
"A rescission when effected by mutual consent is a new contract, to effect which there must be a meeting of the minds. It is true that the consent of the parties to such an agreement of rescission is not required to be expressed in words, but may be manifested by conduct. But such conduct must afford a stronger basis for the inference of consent than mere conjecture or speculation."
In the present case it will be noted from the testimony that the defendant refused from the beginning to acquiesce in or consent to the offer or proposal by plaintiff to rescind the contract. The fact that defendant’s proposition to the plaintiff to take a new car in the place of the Packard and that the money paid by the latter on the Packard be credited on the sale of the new automobile, and the declaration of Smith that under no other circumstances or upon no other condition would the defendant consent to a rescission of the contract in controversy, amounted to a positive refusal of defendant to rescind. Defendant’s reply to plaintiff’s written notification of a rescission involved a clear, unequivocal, and emphatic refusal to agree or consent to a rescission.
The sale of the car by the defendant subsequent to the restoration thereof to its possession was only the exercise of a right resting with it in the very nature of the transaction. The title to the car was in the defendant, and was to remain so until it was fully paid for. The written contract, which constituted evidence only of a conditional sale, so provided. Its return to defendant by plaintiff, with the positive, unqualified announcement by the latter, both by word of mouth and in writing, that he would not keep the car, that he rescinded the contract, and that he wanted returned to him the money he had paid on the purchase price left nothing else for the defendant to do, or that it reasonably could be expected to do under the circumstances, than to retain possession of the property, and, if opportunity offered, to sell it to some third person, if necessary, to enable it to realize on the full value of the property. In other words, the defendant was not required, under the contract as written or under the situation with respect thereto as it finally developed, to sacrifice an opportunity, which might not again become available to it, to sell the car at a proper advantage. As is said in Tuso v. Green, supra, in which, although involving a contract for the sale of real property, the general facts are quite similar to those of the case at bar:
"In thereafter selling the premises to a stranger plaintiffs did not more than they had a right to do in the absence of a rescission. Defendant had breached his contract and plaintiffs thereafter held the land freed from any claim or right of defendant thereto or therein. *** In the absence of any other evidence indicating an intention to rescind, the act of the plaintiffs in selling the premises is no more referable to such intent than it is to an intent to stand upon their rights under the contract which defendant had breached and retain to their own use the moneys which he had paid in part performance of his promises. That act indicated nothing more than that plaintiffs did not then intend to thereafter convey those premises to the defendant. It was no more significant than would have been an express refusal on the part of the plaintiffs to convey the premises to the defendant."
See, also, Glock v. Howard, 123 Cal. 1, 14, 55 P. 713.
It is to be understood, of course, that the sale of the car by defendant to Genter, after the return thereof by plaintiff to defendant, was not in pursuance of the exercise of the option by defendant to forfeit the contract because of default in payment of an installment as prescribed. As the court found upon sufficient evidence, the defendant did not exercise the option referred to, and, indeed, could legally not have done so, because the contract had been rescinded by the plaintiff and turned back to the defendant. But, while the decision that a rescission was accomplished by the mutual consent of the parties derives no support from the evidence, it is still true that the evidence unquestionably shows that the plaintiff did rescind the contract, and is sufficient to support a finding to that effect. In brief, the situation, as the evidence shows and the court found, is simply this: That the defendant corporation did not deliver to the plaintiff a car in "the good" mechanical condition which it represented to the latter that the car so delivered was in. In other words, the plaintiff did not receive the car that he bargained for. This being true, the plaintiff was entitled to rescind the contract and upon such rescission entitled to the return of any moneys which he had paid the defendant on the purchase price. Civ. Code, § 1691; Bridges v. Fisk, 53 Cal.App. 117, 200 P. 71, 73; Mettler v. Vance, 30 Cal.App. 499, 158 P. 1044; Hallidie v. Sutter St. R. R. Co., 63 Cal. 575; Condley v. Consolidated L. Co., 53 Cal.App. 8, 200 P. 69; 24 R. C. L. pp. 272, 273, § 551.
The evidence, without conflict, shows that the plaintiff, immediately upon discovering the facts entitling him to rescind, did (or offered to) rescind the contract, and at the same time returned to the possession of the defendant the automobile in the same condition in which he received it; or, stating it substantially in the language of the statute, he "promptly" rescinded "upon discovering the facts which entitle him to rescind" and restored "to the other party everything of value which he had received from him under the contract." Civ. Code, § 1691, subds. 1 and 2. Thus the plaintiff was entitled to have returned to him any moneys he paid to defendant under the contract.
We do not think that, under the state of the case as it was made below, and as it stands here, there should be a reversal. By rather subtle reasoning upon a like analysis of the findings and the conclusions of law, it might, with at least some plausibility, be held, since a rescission of the contract is certainly thereby established, that an ex parte rescission, or a rescission by the plaintiff alone, is necessarily embraced within the decision and the conclusions of law, and that the part of the findings and the like part of the conclusions of law to the effect that a rescission was accomplished by the mutual consent of the parties might be treated, for the purposes of the case as we have found it, as surplusage. But, since the appellate courts now are empowered to change or make findings upon the evidence received into the record or, if necessary, take additional evidence, and modify the conclusions of law accordingly (Const. art. 6, § 4 ¾ ; Code Civ. Proc. § 956a [St. 1927, p. 583]; Milton Realty Co. v. Butterfield [Cal.App.] 262 P. 419, opinion by Justice Plummer of this court), it is preferable to make findings as to the matter of rescission in accord with the undisputed evidence and modify the conclusions of law as to said matter so that they will conform to such findings. Accordingly, finding VIII is hereby stricken from the findings of fact, and the following finding by this court is hereby substituted therefor:
"The court finds that it is true that plaintiff, on the 14th day of May, 1923, did notify defendant that he rescinded said transaction, that the plaintiff did thereby rescind said contract, and at the same time and by reason of said rescission and as an act in pursuance thereof did return and restore to defendant said automobile and everything of value received by him from said defendant under said contract, and did demand of defendant that it return to him said sum of $700 received by said defendant from plaintiff on account thereof."
Finding IX is hereby stricken from the findings, and the following finding by this court is hereby substituted therefor:
"That it is true, as alleged in paragraph 8 of said amended complaint, that defendant on said 14th day of May, 1923, received into its possession said automobile, and has, since said date, been in and retained possession, use and control thereof, but that said defendant then and there refused, and at all times since the said 14th day of May, 1923, has refused, to consent to a rescission of said contract."
Paragraph 1 of the conclusions of law is hereby stricken from the conclusions of law, and the following is hereby substituted therefor:
"The said contract for the sale and purchase of said automobile entered into between plaintiff and defendant was and has been rescinded by the plaintiff."
Upon the findings and the conclusions of law of the trial court in all respects other than those made by this court and the findings and conclusions of law made by this court, as above indicated, the court below is hereby directed to enter judgment for the plaintiff in accord therewith, and for the sums stated in the judgment from which this appeal was taken.
I concur: PLUMMER, J.