N. J. K. Corp. v. Pacific Vital Foods Stores, Inc.

The N. J. K. Corporation, of which Mr. and Mrs. Nathan Jack Smith are the sole stockholders, filed the present complaint asking rescission of a contract of sale of a retail health food store purchased from appellants, and damages for fraud. After trial before a judge, respondent corporation recovered judgment in the sum of $10,956.25, and the cancellation of a $3,000 promissory note given to appellants as part of the purchase price.

It is appellants’ contention that the evidence does not support the findings; that the true measure of damages is not the loss alleged to have been suffered; that respondent was not damaged in the amount of the judgment by reason of the alleged fraud, and was not entitled to a cancellation of the $3,000 note; and that the appellants’ motion for a nonsuit should have been granted.

The record discloses that when Mr. and Mrs. Smith first inquired about the health food store, appellant Kordell, vice president of Pacific Vital Food Stores, Inc., represented that the store business grossed approximately $57,000 during 1953, whereas it appeared from the appellants’ books that the entire gross sales of Pacific Vital Food Stores, Inc., which was engaged in…