STASHER v. HARGER HALDEMAN

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

Rela Ardell STASHER, Administratrix of the Estate of Jesse C. Stasher, deceased, and Rela Ardell Stasher, individually, aka Rela Stasher, Plaintiffs and Appellants, v. HARGER-HALDEMAN, a corporation, Defendant and Respondent.*

Civ. 25327.

Decided: October 27, 1961

Lee, La Vigne & Davis, B. T. Davis, Jr., Los Angeles, for appellants. R. D. Sweeney, cameron W. Cecil, Los Angeles, for respondent.

Plaintiff appeals from an adverse judgment in her action to rescind a conditional sale contract for the sale of a motor vehicle and to recover the payments made thereunder. Plaintiff and her now deceased husband were the purchasers and defendant was the seller. Plaintiff sues in her individual capacity, and as administratrix of her deceased husband. She contends that in several respects the contract failed to comply with the requirements of subdivision (a) of section 2982 of the Civil Code.1 The trial court found that there was substantial compliance with the statute.

The record discloses that on January 15, 1956, plaintiff and her husband went to defendant's place of business, selected a 1956 Chrysler for purchase, and agreed to trade in their 1954 Chrysler at a stipulated net value of $1,600. It was understood that defendant would pay off a balance of $1,648.10 then owing on the 1954 Chrysler.

Two days later plaintiff's husband returned alone to defendant's place of business, signed the conditional sale contract, delivered the 1954 Chrysler and took possession of the new vehicle. He received a copy of the contract signed by defendant, but no such copy was provided for plaintiff.

The ‘cash price’, as stated in the contract, is $4,477.29, which includes accessories listed at $909.30 and a state sales tax of $111.99. The ‘down payment’ is stated to be $584.53. This figure was arrived at by allowing the purchasers a discount of $632.63, and deducting therefrom $48.10, representing the balance due on the traded-in vehicle in excess of its agreed value. Deducting from the total cash price of $4,477.29 a down payment of $584.53 left an unpaid cash price of $3,892.76. Added to the unpaid cash price of $3,892.76 were fees of $57 and a time price differential of $687.08, resulting in a contract balance of $4,636.84.

The requirements of subdivisions (a) and (b) of section 2982 of the Civil Code have been termed ‘formal’, while those of subdivisions (c) and (d) have been termed ‘substantive’. Subdivision (e) provides that in the event of a violation of ‘substantive’ provisions, the contract shall be unenforceable by the seller, and the buyer shall have the right to recover the total amount paid on the contract balance. No express statutory provision is made for the sanctions to be applied where the seller has failed to comply with the ‘formal’ requirements of subdivision (a) or (b). The courts, however, have developed rules which govern the sanctions to be applied in such cases. ‘The results of those efforts are rules based on the theory that the rights of the buyer against the seller arising from formal violations are in the nature of traditional rescission and restitution (but without the need for prompt notice and offer to restore required by Civ.Code. § 1691; see Estrada v. Alvarez (1952), 38 Cal.2d 386, 389–391, 240 P.2d 278) * * *.’ General Motors Accept. Corp. v. Kyle, 54 Cal.2d 101, 110, 4 Cal.Rptr. 496, 501, 341 P.2d 768, 773.

The seller whose violations are formal only cannot enforce the contract itself but is entitled to an offset ‘in an amount representing the depreciation in value of the car occasioned by the use made of it by the buyer while in his possession, which necessarily excludes any allowance for depreciation resulting from a general decline in the market value of such automobile during the period in question.’ Williams v. Caruso Enterprises, 140 Cal.App.2d Supp. 973, 980, 295 P.2d 592, 597. ‘The seller who is guilty of intentional substantive violations is penalized by not allowing him an offset.’ General Motors Accept. Corp. v. Kyle, supra, 54 Cal.2d 101, 111, 4 Cal.Rptr. 496, 502, 351 P.2d 768, 774.

Carter v. Seaboard Finance Co., 33 Cal.2d 564, 203 P.2d 758, the leading case after the enactment of the statute in 1945, held that the language of the statute was mandatory. In so holding the court said ‘[t]he entire statute may be resorted to in order to ascertain its proper meaning. If to construe it as directory would render it ineffective and meaningless it should not receive that construction. To so construe it would indicate that the prescribed form and requisites are merely desirable matter which the seller could include or would not be bound to include, at his option. Such a construction certainly would not afford the protection to purchasers which was intended. The form and requisites must therefore be held to be required and the statute in these respects to be mandatory.’ 33 Cal.2d at page 573, 203 P.2d at page 764.

The statute was enacted for the protection of the unwary buyer and is intended to require a full and clear disclosure of the true nature of the transaction. Carter v. Seaboard Finance Co., supra, 33 Cal.2d 564, 573, 203 P.2d 758; See Note, Installment Sales: Purpose of Unruh Act: Comparison with Automobiles Sales Legislation, 12 Hastings L.J. 312 (1961). In the light of this legislative purpose, it would seem necessary to require strict compliance with the formal requirements of the statute.

Giving effect to the foregoing principles, we find merit in plaintiff's contention that the instant contract fails accurately to state the ‘cash price’, defined in Civil Code section 2981 as ‘the amount of which the seller would sell and transfer to the buyer unqualified title to the personal property * * * 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 sale taxes'. The ‘cash price’, as stated in the contract, is $4,477.29. It is undisputed, however, that the price at which the vehicle actually was sold was $632.63 less than the stated cash price, the difference representing a ‘discount’ in the indicated amount.

A similar inaccuracy appears in the statement of the ‘down payment’, defined as ‘that part of the cash price which the buyer pays or agrees to pay to the seller in cash or property value or money's worth at or prior to delivery by the seller to the buyer of the personal property described in the conditional sale contract’. The contract shows a down payment of $584.53. No such down payment was actually made. The indicated figure was arrived at by taking the amount owed on the trade-in ($1,648.10) and subtracting therefrom its agreed value ($1,600). The difference of $48.10 was subtracted from the discount of $632.63, resulting in the figure of $584.53, the stated down payment. It is well settled that the use of an inaccurate or a fictitious figure in the statement of the cash price or the down payment constitutes a substantial violation of the statute. General Motors Acceptance Corp. v. Kyle, supra, 54 Cal.2d 101, 106, 4 Cal.Reptr. 496, 351 P.2d 768; Lewis v. Muntz Car Co., 50 Cal.2d 681, 683, 328 P.2d 968; Estrada v. Alvarez, 38 Cal.2d 386, 389, 240 P.2d 278; Bratta v. Caruso Car Co., 166 Cal.App.2d 661, 663, 333 P.2d 807.

It seems clear that the inclusion of a discount in the stated down payment would not serve to make the buyer aware of the true substance of the transaction. As the court noted in City Lincoln-Mercury Co. v. Lindsey, 52 Cal.2d 267, 273, 339 P.2d 851, 856, 73 A.L.R.2d 1420, ‘[t]he intended warning will not be effective if the buyer cannot see at first glance the data which the statute requires to be called to his attention. Adams v. Caruso Enterprises Inc., 134 Cal.App.2d 403, 408–409, 285 P.2d 1022.’ Thus the false inclusion of an unrealistic down payment tends to frustrate the purpose of the statute requiring clear, full and accurate disclosure.

The present contract fails to recite ‘a description and itemization of amounts * * * which will actually be paid by the seller * * * to any public officer as fees in connection with the transaction, which are included in the contract balance’ but simply states ‘(5) Fees (License & Vehicle Tax)—$57.00.’ Similarly, the contract involved in General Motors Accept.Corp. v. Kyle, supra, 54 Cal.2d 101, 106, 4 Cal.Rptr. 496, 499, 351 P.2d 768, 771, recited only ‘Fees Paid: Registration and Transfer $_____, Other $54.00.’ In the last cited decision, this was held to constitute a material violation of subdivision (a) of section 2982. A similar holding is required here since the facts are essentially the same.

There is no merit in plaintiff's contention that the contract is rendered invalid because she personally did not sign it or receive a copy signed by the seller. As pointed out in Stegeman v. Vandeventer, 57 Cal.App.2d 753, 759, 135 P.2d 186, 190: ‘It is well established in California that a husband or a wife may act as agent for the other; that the agency may be proved by circumstantial as well as by direct evidence (Puget Sound Lumber Co. v. Krug, 89 Cal. 237, 26 P. 902; Rauer's Law etc., Co. v. Berthiaume, 21 Cal.App. 670, 132 P. 596, 833; Clendenin v. White, 62 Cal.App. 664, 217 P. 761; that it requires less evidence to establish agency in a case of this kind than in other cases (Rauer's Law etc., Co. v. Berthiaume, supra; Wagoner v. Silva, 139 Cal. 559, 73 P. 433); that such an agency may be established by proof of ratification of acts already performed without previous authority. (Schader v. White, 173 Cal. 441, 160 P. 557.)’

In the instant case the evidence is undisputed that plaintiff went with her husband to select the vehicle; that she participated in the discussions regarding the purchase; that community funds were used; that plaintiff made no complaint of such use; that she considered the vehicle as the joint property of herself and her husband; and that she used it for nearly three years in conjunction with her husband. This evidence is more than sufficient to support the finding of the trial court that plaintiff's deceased husband acted as her agent in the purchase of the automobile. In these circumstances, plaintiff is estopped to deny her ratification of the purchase. Crittenden v. McCloud, 106 Cal.App.2d 42, 50, 234 P.2d 642. None of the other contentions advanced by plaintiff requires discussion.

The judgment is reversed.

FOOTNOTES

1.  The pertment requirements of subdivision (a) of § 2982 read as follows at the time here material: ‘Every conditional sale contract for the sale of a motor vehicle * * * shall be in writing and shall contain all of the agreements between the buyer and the seller relating to the personal property described therein. It shall be signed by the buyer or his authorized representative and by the seller or its authorized representative, and when so executed an exact copy thereof shall be delivered by the seller to the buyer at the time of its execution. It shall recite the following separate items as such, in the following order: ‘1. The cash price of the personal property described in the conditional sale contract. [‘Cash price’ is defined (by Civ.Code, § 2981, subd. (e)) as ‘the amount for which the seller would sell * * * 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 * * *’] ‘2. The amount of the buyer's down payment, and whether made in cash or represented by the net agreed value of described property traded in, or both, together with a statement of the respective amounts credited for cash and for such property. * * * [‘Down payment’ is defined (by Civ.Code, § 2981, subd. (f)) as ‘that part of the cash price which the buyer pays or agrees to pay to the seller in cash or property value or money's worth at or prior to delivery. * * *’] ‘3. The amount unpaid on the cash price, which is the difference between Items 1 and 2. ‘4. The cost to the buyer of any insurance, the premium for which is included in the contract balance. ‘5. A description and itemization of amounts, if any, which will actually be paid by the seller or his assignee to any public officer as fees in connection with the transaction, which are included in the contract balance. ‘6. The amount of the unpaid balance which is the sum of Items 3, 4, and 5. ‘7. The amount of the time price differential. [‘Time price differential’ is defined (by Civ.Code, § 2981, subd. (h)) as ‘any amount which the buyer agrees to pay to the seller in excess of the unpaid balance.’] ‘8. The contract balance owed by the buyer to the seller which is the sum of Items 6 and 7. ‘9. The number of installments required to pay the contract balance, the amount of each installment, and the date for payment of the installments.’

HERNDON, Justice.

FOX, P. J., and ASHBURN, J., concur.