Bradford v. Western Oldsmobile, Inc.

• Decision Date: 15 June 1960
• Parties: James W. BRADFORD, Respondent, v. WESTERN OLDSMOBILE, INC., a corporation, Appellant.
• Court: Oregon Supreme Court

Page 232

353 P.2d 232

222 Or. 440

James W. BRADFORD, Respondent, v. WESTERN OLDSMOBILE, INC., a corporation, Appellant.

Supreme Court of Oregon, Department 2.

Argued May 12, 1960.

Decided June 15, 1960.

W. J. Masters, Portland, argued the cause for appellant. On the briefs were Masters & Masters, Portland.

Frank E. Day, Portland, argued the cause for respondent. On the brief were Stern, Reiter, Day & Anderson, Portland.

Before McALLISTER, C. J., and WARNER, SLOAN, O'CONNELL and MILLARD, JJ.

MILLARD, Justice pro tem.

In this case defendant appeals from a judgment in favor of the plaintiff rendered in the circuit court of Multnomah county for $911.80 general damages and $4,000 punitive damages and costs, based upon a jury verdict returned in an action for alleged conversion of an Oldsmobile previously sold by defendant to plaintiff under a conditional sales contract.

Briefly, plaintiff's complaint, after alleging ownership and right to possession of the automobile and its value, claims that on May 23, 1957, the defendant wrongfully and unlawfully took the car from plaintiff and converted it to its own use, to plaintiff's damage in a specified sum, and that such action was done intentionally, maliciously and in wanton disregard of the rights and feelings of plaintiff and asks for punitive damages in the sum of $50,000. These allegations were denied by defendant in its answer. In addition, defendant alleges in effect that the automobile was sold by defendant to plaintiff on May 18, 1957, pursuant to a written contract of conditional sale executed for the principal sum of $4,272.16, after certain additions and credit for a trade-in allowance of $911.80 for plaintiff's equity in a Ford car, and the balance was to be paid as follows: $300 on May 20, 1957, $100 on June 2, 1957, and $107.56 per month commencing July 2, 1957, until 36 installments had been paid. Title was also retained in the seller who was also given the usual remedies provided in such contracts, including the right to repossess the vehicle in the event of default by the buyer in the payment of the indebtedness or any part thereof, time and strict performance being of the essence. Defendant further alleges that plaintiff, being in default in payment of installments, on demand turned the Oldsmobile back to the defendant. Plaintiff in his reply denies these allegations and in addition sets forth affirmative matter in which he attempts to invoke the doctrine of estoppel in which he inferentially admits that he agreed to enter into such a contract but in effect says that he was induced to do so because of fraudulent misrepresentations in that defendant represented, promised and guaranteed that it would secure a loan for plaintiff in the sum of $300 from a finance company in order that he could make the payment due May 20, 1957, and that defendant would guarantee plaintiff that such a loan could and would be obtained because it had checked plaintiff's credit and found it to be excellent, had checked plaintiff's financial statement and found it to be accurate and had verified the pay-off balance on plaintiff's Ford automobile which was being traded in as a down payment. He further says that these promises were knowingly false and made for the purpose of inducing plaintiff to rely thereon; that plaintiff did rely thereon and executed a purchase order although defendant then knew that plaintiff did not have, nor could he raise, the money to pay the $300 payment. Plaintiff in addition says he was willing to sign all documents and do whatever was necessary to obtain the loan but that defendant defaulted in its promise and would not assist plaintiff in obtaining the loan and funds with which to make such payment, but instead repossessed the Oldsmobile, and that defendant should be estopped from asserting plaintiff was in any way in default in his contract.

As one of its assignments of error defendant contends that the court erred in denying the motion of defendant for a directed verdict and as one of the grounds, contends there is no estoppel as shown by the evidence viewed in the light most favorable to plaintiff.

Viewing the evidence in that light it appears that plaintiff did execute the conditional sale contract as alleged, trading in the equity in his Ford car as a down payment, and that he did not have, nor was he able to raise, the $300 payment which he agreed to pay May 20, 1957. Plaintiff testified that defendant through one of its agents made the statement to the effect that he 'guaranteed me the loan. You said you would assist me in every manner proper to get the loan.' Plaintiff further testified that, 'He told me I would need $300 additional. I said I didn't have it. He said he had a tie-in with Budget Finance Company, arrange a loan for me.' Plaintiff also stated that after talking it over with his wife, he told defendant's representative, 'Well, okay; if you can guarantee me the loan, let's write it up,' and that thereafter said representative stated: 'Jim, you have nothing to worry about. I guarantee the loan,' and again, 'I have checked everything, your credit is as good as gold. You have not a thing to worry * * *.' Thus, along with other evidence, it clearly appeared that plaintiff would not have entered into the conditional sales agreement or consummated the transaction unless he was assured of obtaining a loan from a finance company.

It further appears that defendant did repossess the automobile and that at the time plaintiff was in default as to the $300 payment. So, assuming that all the elements of estoppel are present and proved, with exception of reliance, did plaintiff have a right to rely on defendant's misrepresentations? It is the duty of the 'representee to use some measure of protection and precaution to safeguard his interests.' Hansen v. Holmberg, 176 Or. 173, 184, 156 P.2d 571, 575. From this case it appears that while this court is committed to the general policy that it is better to encourage negligence in the foolish than fraud in the deceitful, it must still appear that 'Plaintiff reasonably believed them [the representations] to be true.' Wheelright v. Vanderbilt, 69 Or. 326, 328, 138 P. 857, 858.

Here it appears that all the documents relating to the consummation of the transaction of sale were signed at about the same time. Thereafter there was prepared and included a purchaser's statement of financial condition which plaintiff signed, knowing it was going to be used to obtain the projected loan of $300 from the finance company. This statement was filled out prior to the consummation of the transaction by plaintiff supplying the information which was written in by defendant's representative.

On this statement entries were made showing that plaintiff was employed by Broadway Cab Co. and a life insurance company; that his income was $500 per month; that he had $110 other monthly income from property; that his spouse earned $200 per month, and that he owned his own house clear of any mortgage. In truth he had only been employed by the cab company two days, and his salary was $350 per month. While he then had a right to sell life insurance, his agent's card was cancelled a few days thereafter for inactivity. The additional income of $110 did not accrue to him but to his wife, who was not a party to the transaction. He did not own his house, but his wife was buying it on contract, and there was an unpaid balance. Plaintiff testified that, 'I told the man when he made out the credit statement, I started to work with Broadway Cab a--only been with them two days.'

Plaintiff further testified in answer to questions from his own counsel as follows:

'Q. And when he asked you the name of your employer, what did you tell him? A. I told him Broadway Cab.

'Q. And what did you say about Beneficial Standard Life Insurance Company? A. I told him that I got my license the previous November, and was just dabbling in insurance part-time because I was just learning.

'Q. And did you tell him how long you had been with Broadway Cab Company? A. Absolutely, the two days.

'Q. And when he asked you about your monthly income, what did you tell him? A. I told him that a cab driver could earn about $350 a month.

'Q. And what did he say about that? A. Well, he said, 'let's put in $500,' he said, 'it will look better to the bank.' He said, 'it won't mean anything, but look better.'

'Q. Did you have--also have some income in addition to this $350. from the Broadway Cab; from the Beneficial Standard Life Insurance Company from selling insurance on the side? A. Like I explained to Mr. Golling, I figured that I could get $100. on the side selling insurance. It was all estimated income.

'Q. I see. And did you tell him that your wife had additional income from property of $110. a month? A. Yes, I did.

'Q. And did you tell him that your wife had an income of $200. a month? A. She was working, yes.

'Q. And did he ask you whether or not you were renting your house you were living in? A. I told him the house was clear.

'Q. You told him that you owned your own home? A. That is, my wife did, yes. Wasn't in my name.

'Q. I see. And was that true? A. No. I found out after that--that she was buying it on contract.

'Q. I see. How long have you been married, very long? A. Just married the previous November.

'Q. And you were living in a house that belonged to her; that is, buying on contract? A. Yes.

* * *

* * *

'Q. (by Mr. Masters) Mr. Bradford, you have down here on this credit statement that you signed, that your monthly income was $500. Was that true? A. It was not true.

'Q. It was not true? A. As----

'Q. No? A. No.

'Q. As a matter of fact, you had not been active in selling insurance to something previous to May? A. I told Mr. Golling simply I was dabbling in it part-time, than that in fact----

'Q. And isn't it true that the life insurance company cancelled your license because of lack of activity on your part? A. Correct.

'Q. And you...