BUDGET FINANCE PLAN v. SAV ON FOOD CLUB

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District Court of Appeal, Second District, Division 2, California.

BUDGET FINANCE PLAN v. SAV-ON FOOD CLUB, Inc. et al.* (two cases).

Civ. 20197, 20198.

Decided: July 01, 1954

Mario L. Clinco and Edgar J. Melchione, Los Angeles, for appellant. J. George Bragin, Hollywood, for respondent.

From judgments in favor of defendants after trial before the court in two actions, which were consolidated for trial, to recover for breach of warranties, plaintiff appeals.

Plaintiff filed two complaints against defendants, both for breach of warranties. In the first case, hereinafter referred to as ‘with recourse assignment’ case, it was alleged that defendants had sold food freezers to certain persons on conditional sales contracts, and that said contracts were thereafter assigned to plaintiff under the terms of a ‘with recourse assignment,’ which provided in part:

‘The undersigned (defendant) jointly and severally hereby guarantee full performance of said Agreement in all its terms and the prompt payment of any and all sums provided therein * * * and agrees to pay any attorney's fees and costs incurred in enforcing this guaranty. The undersigned (defendant) jointly and severally hereby agree that in the event of the non-compliance with any of the conditions of said agreement, whether or not repossession has been made or undertaken, suit may be brought by the holder (plaintiff) against any one or more or all of the parties hereto, whether or not suit has been commenced against the party or parties to said Agreement and without waiving any rights as to time of repossession. The undersigned jointly and severally hereby agree that in the event of repossession, or default by the purchaser, the entire balance outstanding under said Agreement shall become immediately due and payable.’

The first case further alleges that the purchasers had failed to make the payments provided in said contracts and under the terms of the ‘with recourse assignment’ defendants became indebted to plaintiff for the balance remaining unpaid on the sales contracts.

After the filing of the complaint plaintiff repossessed the freezer which had been sold.

This is the sole question presented for determination relative to this complaint:

Since plaintiff had repossessed the property after the buyer had become in default on the conditional sales contract, did such act constitute an election of remedies upon the part of plaintiff which prevented it from recovering the balance due on the conditional sales contract?

Yes. The rule is settled that a vendor under a conditional sales contract is given an election of remedies. He may terminate the contract, retake the property and retain the money paid therefor, or he may treat the transaction as a sale and sue for the balance of the purchase price. (James v. Allen, 23 Cal.App.2d 205, 207, 72 P.2d 570; Commercial Discount Co. v. Howard, 107 Cal.App. 83, 86[2], 289 P. 906; Stavnow v. Winfree, 99 Cal.App. 566, 568 [2], 278 P. 905.)

In the instant case plaintiff having elected to retake possession of the freezer waived his right to sue for the balance of the contract price. Therefore since under section 2819 of the Civil Code of the State of California a surety is exonerated if by any acts of the owner without the consent of the surety the remedies of the creditor against the principal are impaired, it is clear that in the instant case plaintiff by its election waived any further rights against defendants.

In the second complaint known as the complaint ‘without recourse assignment,’ it was alleged that defendants had sold a freezing locker to certain persons on a conditional sales contract, and that the contract was thereafter assigned to plaintiff under the terms of an assignment containing this provision:

‘E. That the initial payment shown by the said agreement has been actually received by the undersigned in lawful money of the United States, or, in the event used merchandise has been accepted by the undersigned in part payment of the property described herein, the allowance to said purchaser is not in excess of the reasonable market value thereof.’

It was further alleged that in the event of breach of any of the warranties the terms of the ‘with recourse assignment’ should apply to the contract; that the warranty by defendants that they had received the down payment set forth in the contract was untrue; that therefore defendants became indebted to plaintiff for the balance remaining unpaid on the conditional sales contract.

This is the sole issue relative to this cause of action:

Was there substantial evidence to sustain the trial court's finding that the initial payment shown by the contract had been actually received by defendants?

This question must be answered in the affirmative. Ledgers and journals of defendants were received in evidence and disclosed that the initial payments were received in cash by defendants. This constituted substantial evidence to sustain the trial court's finding.

It is immaterial, as held by the trial court, whether the payment was made directly by the vendee to defendants or by defendants' salesman to defendants. The important fact is that the payment was, as stated by defendants, actually made.

There is no merit in plaintiff's contention that the trial court did not take into consideration Regulation W of the federal government which had been promulgated by virtue of a presidential order based on authority conferred under the Defense Production Act of 1950, 50 U.S.C.A.Appendix, § 2061 et seq.

There is nothing in the record to show that the trial court did not take judicial notice of such regulation. We must therefore assume that he performed his duty and did take judicial notice of it.

No error appearing in the records, the judgments are and each is affirmed.

McCOMB, Justice.

MOORE, P. J., and FOX, J., concur.

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