537 P.2d 345 (Okla. 1975), 46802, Z. D. Howard Co. v. Cartwright

Docket Nº:46802.
Citation:537 P.2d 345
Party Name:Z. D. HOWARD COMPANY, Appellee, v. Tommy J. CARTWRIGHT and Kerry Cartwright, Appellants.
Case Date:June 17, 1975
Court:Supreme Court of Oklahoma
 
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Page 345

537 P.2d 345 (Okla. 1975)

Z. D. HOWARD COMPANY, Appellee,

v.

Tommy J. CARTWRIGHT and Kerry Cartwright, Appellants.

No. 46802.

Supreme Court of Oklahoma.

June 17, 1975.

Page 346

Donald D. Thompson, Sapulpa, and Joe A. Moore, Memphis, Tenn., of counsel on the brief, for appellants.

Watson & Watson, by Charles D. Watson, Jr., Drumright, for appellee.

HODGES, Vice Chief Justice.

The question presented by this appeal is whether exemplary damages are allowable under Appellant's cross-epetition.

Appellee contends that Appellant's cross-petition is nothing more than an action for breach of a contract, and cites the general rule, supportive by our statute, 23 O.S.1971 § 9, that exemplary damages are not recoverable in action arising from contract.

Appellants counter that their cross-petition is based upon an action in fraud; therefore, the action sounds in tort, and punitive damages are recoverable.

The facts leading to this confrontation arise out of a sale of an automobile by the Appellee (seller) to the Appellants (buyers). The promissory note, which the buyers executed upon sale of the car, was allegedly in default, and seller filed an action to recover the unpaid balance.

The buyers filed an answer and cross-petition. They admitted the execution and delivery of the note and installment contract, and that seller was the owner of the note. However, they alleged they were induced to execute and deliver the note by false and fraudulent material misrepresentations made by seller, and that the fraud destroyed the mutuality and consideration for the note. They asserted that they entered into the purchase agreement with the understanding that the automobile was new. They alleged that the car was not new, but had been heavily damaged prior to delivery, and that the seller had knowledge of these facts. Buyers prayed for rescission of the note and installment contract, attorney fees, and for damages in the amount of consideration paid to the seller.

In the alternative buyers alleged that the seller had breached expressed and implied warranties in the amount of the difference between the actual value of the automobile as delivered and the value had it been as warranted.

Buyers further alleged damages of $27.16 paid by them to seller for repair to the car due to its damaged condition on delivery.

Subsequently, buyers filed an amended cross-petition which adopted all previous allegations and in addition they asked for punitive damages. The pertinent amendments provided:

'Plaintiff and its partners, agents and employees at all times material hereto knew of the damaged condition of the 1970 Ford Torino automobile and they and each of them while acting within the scope of their authority and employment

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knowingly and deliberately made the aforementioned false and fraudulent representations with the intent to deceive and defraud defendants and induce defendants to...

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