Bill Dreiling Motor Co. v. Shultz

• Decision Date: 03 February 1969
• Docket Number: No. 22004,22004
• Citation: 168 Colo. 59,450 P.2d 70
• Parties: BILL DREILING MOTOR COMPANY, a Colorado corporation, Plaintiff in Error, v. Donald E. SHULTZ and Shirley M. Shultz, Defendants in Error.
• Court: Colorado Supreme Court

Page 70

450 P.2d 70

168 Colo. 59

BILL DREILING MOTOR COMPANY, a Colorado corporation Plaintiff in Error, v. Donald E. SHULTZ and Shirley M. Shultz, Defendants in Error.

No. 22004.

Supreme Court of Colorado, In Department.

Feb. 3, 1969.

Rehearing Denied Feb. 24, 1969.

Maley & Schiff, a professional company, John Maley, Denver, for plaintiff in error.

George L. Vamos, Denver, for defendants in error.

MOORE, ^* Justice.

Defendants in error were plaintiffs in the trial court and will be referred to herein as plaintiffs or by name. Plaintiff in error will be referred to as defendant or as Dreiling.

The complaint of plaintiffs contained two claims for relief: (1) Rescission of a contract allegedly procured by false representation; and (2) damages for breach of warranties contained in the contract sought to be rescinded in the first claim. On motion of defendant, plaintiffs were required to elect as between the two claims, and they elected to proceed upon their claim for rescission.

The contract which the plaintiffs sought to rescind related to a series of events finally culminating in the purchase by the plaintiffs from the defendant of a 1960 Studebaker automobile. It was alleged in their complaint that they were entitled to a rescission of the contract for the reason that the defendant '* * * warranted both expressly and impliedly that said 1960 Studebaker was free from mechanical defects, was fit for the purpose for which purchased and was of merchantable quality.'

It was further alleged that at the time the motor vehicle was purchased defendant 'guaranteed' that it had been driven 'a maximum of 40,159 miles'; that the above mentioned representations were false; were known to be false; and were relied on by plaintiffs in making the purchase. It also was alleged that the plaintiffs demanded the return of the consideration paid by them and offered to return to the defendant the Studebaker involved in the contract. The demand and tender were refused by the defendant.

In its answer the defendant denied generally all allegations of the complaint upon which the claim for rescission was based. No affirmative defense was alleged pursuant to the provisions of R.C.P. Colo. 8(c), which, insofar as pertinent to this controversy, provides that:

'In pleading to a preceding pleading, a party shall set forth affirmatively * * * estoppel, * * * waiver, and any other matter constituting an avoidance or affirmative defense.'

The case was tried to the court and at the conclusion thereof detailed findings of fact and conclusions of law were entered in which the issues of fact and law were resolved in favor of the plaintiffs. Accordingly the trial court entered judgment granting the relief prayed for by the plaintiffs. While there was a dispute in the evidence on the questions involved in the essentials governing the right of the plaintiffs to rescind the contract, there was an abundance of evidence to support the findings of the trial court to the effect that an actionable fraud had been perpetrated on the plaintiffs by the defendant.

The main thrust of defendant's argument for reversal of the judgment is presented under the following summary of argument:

'Even if the plaintiffs were entitled to rescind the contract because of misrepresentation, they abandoned their right to do so by continuing to drive the 1960 Studebaker for their own purposes and the trial court erred in ruling that their simple tender of the car was effective. * * *'

As already noted, no affirmative defense of 'waiver' or 'estoppel' was contained in the answer of defendant, and the pleadings in themselves raised no issue with regard thereto. At no time was any motion made by counsel to amend the pleadings in such manner as to create an issue upon the question here argued as the chief ground for reversal of the judgment.

The substance of the undisputed evidence received upon the trial, which counsel for defendant insists warrants reversal, is as follows: The plaintiffs were the owners of an automobile which they delivered to the defendant as part of the consideration to be paid for the motor vehicle finally purchased by them; they badly needed a car to provide transportation for Donald Shultz to and from his employment in El Paso county; the defendant refused to return the car to plaintiffs, in violation of its promise to do so in the event that suitable financing could not be arranged concerning the purchase of a Buick automobile which plaintiffs at first intended to buy; suitable financing being unattainable for that car the defendant persuaded plaintiffs to substitute the Studebaker for the Buick and steadfastly refused to return to the plaintiffs the car originally belonging to them; and, immediately upon the discovery of the falsity of the representations made by the defendant relating to the Studebaker, plaintiffs tendered redelivery thereof and demanded return of the consideration, including their original automobile. Their demands were refused, and thereafter plaintiffs kept the Studebaker and from the date of their tender to the time of trial had driven it and used it in supplying their transportation needs. They testified, however, that their normal use of a car was very substantially curtailed because of the mechanical shortcomings of the Studebaker. The evidence relating to the use to which the plaintiffs had put the car following the defendant's refusal to accept their demand for rescission was received in evidence without objection.

It is argued by defendant's counsel that under these circumstances the provisions of R.C.P. Colo. 15(b) are applicable, namely,

'When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after...