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SISKIN v. COHEN ET AL. (01/03/50)

January 3, 1950

SISKIN
v.
COHEN ET AL., APPELLANTS



Appeal, No. 175, Jan. T., 1949, from decree of Court of Common Pleas No. 4 of Philadelphia County, June T., 1948, No. 6274, in case of Louis Siskin v. Irving Cohen et al. Decree affirmed.

COUNSEL

Albert S. Oliensis, with him Herman M. Modell for appellants.

Earl G. Harrison, with him Abraham J. Levinson and Schnader, Harrison, Segal & Lewis, for appellee.

Before Maxey, C.j., Drew, Linn, Stern, Patterson, Stearne and Jones, JJ.

Author: Drew

[ 363 Pa. Page 581]

OPINION BY MR. JUSTICE DREW

Louis Siskin, plaintiff, entered into a contract to purchase a taproom business from Irving and Jack Cohen, defendants. Plaintiff, having learned after the transaction was completed that defendants had grossly imposed upon him by fraudulently misrepresenting the amount of receipts and net profits of the business, filed this bill in equity to rescind the contract. The learned court below entered a decree granting plaintiff the relief prayed for and defendants now appeal. In bringing this appeal, defendants do not dispute the finding of fraud but contend that plaintiff did not act to rescind within a reasonable time and also did not rely on the misrepresentations.

Early in 1948 defendants decided to sell their liquor license and taproom business located at 8400 Tinicum Avenue in the City of Philadelphia. Accordingly they engaged Berman & Co., business brokers, to act as their agent, telling Berman that the business grossed weekly between $1300 and $1400 with a net profit of $450 to $500, and Berman & Co. so advertised in the Philadelphia Inquirer on March 21, 1948 and April 25, 1948. These advertisements caused plaintiff to make inquiries regarding the taproom and during the months of April and May, plaintiff, accompanied by his son, visited the taproom on several occasions. During these visits defendants repeatedly stated that the business was grossing between $1300 and $1400 a week and that the net profits were "$500 and over". Those statements appeared to be substantiated by the large volume of trade being handled while plaintiff was present. As a result

[ 363 Pa. Page 582]

    of defendants' statements and plaintiff's observations an agreement of sale was entered into for $26,000, $4000 of which was to be paid by a judgment note payable in sixty days. The sale was consummated on June 28, 1948, and, on that date, plaintiff took possession.

Because he was not familiar with the business of operating a taproom, defendants agreed to remain with plaintiff for two weeks to teach him the business. During that time neither gross receipts nor net profits were as high as defendants had represented, but plaintiff, upon questioning defendants, was temporarily satisfied with their explanation that the business was subject to some fluctuation. However, in the following weeks, the income remained low, the gross receipts averaging approximately $850 and the net profit $185. Plaintiff, having grown very suspicious that this was more than mere fluctuation, started an investigation by questioning the beer distributor and the liquor wholesaler with whom defendants had dealt. From them he learned that defendants could not have grossed more than $850 a week nor could they have shown a net profit of over $350 a week. Upon other inquiry it was revealed to plaintiff that, in order to make it appear a thriving business was being done, defendants had given customers money to spend in the taproom whenever he, plaintiff, was present to inspect it prior to buying. When all of these facts became known to plaintiff, he filed this bill in equity to rescind the contract and the learned chancellor, after making these findings, decreed recission.

The bill was filed on August 30, 1948, two months after the sale was completed. Defendants argue that in waiting that length of time, plaintiff failed to act promptly and thereby lost the right to rescind. It is true, as defendants contend, that The Sales Act of May 19, 1915, P.L. 543, governs the sale ...


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