C. V. Hill & Co. v. Fricke

• Decision Date: 15 December 1939
• Docket Number: No. 13999.,13999.
• Parties: C. V. HILL & CO., Inc., v. FRICKE.
• Court: Texas Court of Appeals

135 S.W.2d 582

C. V. HILL & CO., Inc., v. FRICKE.

No. 13999.

Court of Civil Appeals of Texas. Fort Worth.

December 15, 1939.

Rehearing Denied January 19, 1940.

Appeal from District Court, Tarrant County; A. J. Power, Judge.

Suit by Eric C. Fricke against C. V. Hill & Co., Inc., for rescission of an oral contract whereby plaintiff purchased from defendant a refrigerator show case and other equipment, wherein defendant filed a cross action to recover a balance claimed on the purchase price of property in controversy. From a judgment for plaintiff, and against defendant in its cross action, defendant appeals.

Reversed and remanded.

Webb, Bransford & Matthews, of Fort Worth, for appellant.

G. G. Tunstill and Richard Owens, both of Fort Worth, for appellee.

SPEER, Justice.

Plaintiff, Eric C. Fricke, sued defendant, C. V. Hill & Co., a private foreign corporation, with permit to do business in Texas, for rescission of an oral contract, whereby he purchased from defendant a refrigerated show case and other equipment in connection therewith.

Plaintiff's action was based on fraudulent representations made by defendant, acting through its agent and salesman, H. A. Padgett. He alleged that he was engaged in the butcher business in Fort Worth, Texas, where he kept on hand fresh meats for sale to the retail trade for human consumption. He knew nothing about the merits of the show case which defendant proposed to sell him, and relied upon the representations of the agent who displayed a large catalogue colored picture and described its merits. He alleged that defendant, through its agent, represented that the show case was "mechanically perfect, was the best new show case made and would keep the plaintiff's meats chilled and would maintain such a low temperature as to prevent the spoiling thereof." That it was further represented by said agent that said show case would not sweat and was in every way suitable for the requirements of plaintiff's business in the storage and display of meats for human consumption. It is alleged that relying upon said representations he purchased the show case, agreeing to pay $1,395 for it. That the amount was to be paid by a sale by him of two used show cases then in the store, at an agreed price of $610, and executing a series of twenty-four notes for the remainder. That at the same time plaintiff executed to defendant his chattel mortgage lien on the new show case, to secure the instalment notes.

Allegations were made that the new show case was not mechanically perfect, claiming that the electric current extended to the metal show case and shocked those who touched it; the electric light inside would not burn; the sweat accumulated in the case and water dripped into the pans, saturating the meats stored therein, causing it to spoil, resulting in the loss of the meat; that the temperature maintained was inadequate to preserve the meats; that the value of meats lost by plaintiff because of the defective show case was greater than the value of its use during the time he retained it in his store; that the equipment was wholly worthless to him for the purposes for which it was sold by defendant and purchased by him.

Frequent complaints were made by plaintiff to the agent during the time between its date of installation and when it was taken out. The agents and a factory representative tried many times to correct the alleged defects, but failed. Whereupon he notified defendant he would not retain the equipment, but had rescinded the contract. Prayer was for rescission of the contract, cancellation of the notes and for $610, alleged to be the agreed value of the two show cases delivered by plaintiff in part payment for the new one. There is what plaintiff calls an alternative prayer for damages in the value of the two show cases and the cancellation of his notes.

Defendant answered by general demurrer and many special exceptions, all of which were overruled by the court, a general denial, special pleas denying the agency of Padgett, and that he had any authority to make oral representations concerning the equipment, but that it issued to plaintiff a written warranty which did not cover the matters complained of by plaintiff. That such purchase as plaintiff made was from Padgett and not from defendant and that plaintiff inspected the show case and relied upon his own knowledge in such matters and not upon oral representations made by Padgett. That plaintiff accepted the equipment on March 28th, 1938, retained and used it until August 18th, 1938, thereby waiving any breach of warranty thereon and was now estopped to plead the same.

Defendant filed a cross action against plaintiff, alleging the series of notes and chattel mortgage lien; it was shown that by the terms of the chattel mortgage, defendant repossessed the fixtures and sold them out for $550 and credited the amount on the debt, and prayed for judgment in the sum of $378.69, the remaining amount unpaid. The pleadings are lengthy but we believe enough has been said about them to enable us to discuss this appeal.

A jury trial was had upon special issues. The answers were favorable to plaintiff. The court overruled the motion of defendant for judgment non obstante veredicto, and entered judgment for plaintiff cancelling and rescinding the contract of purchase, the notes and chattel mortgage executed by plaintiff, and for judgment for $503 the amount found by the jury to have been the agreed value of the two second hand show cases delivered by plaintiff to defendant as part payment on the new fixtures. Judgment was entered against defendant in its cross action.

Motion for new trial was overruled and defendant has appealed.

Defendant's first two propositions challenge the action of the court in overruling its general demurrer to plaintiff's petition. It is argued that the allegations which relate to representations made by Padgett, the sales agent, did not constitute actionable fraud. Counsel quotes well recognized rules in support of the contention, such as: "To be actionable a false representation must be the affirmation of a fact as distinguished from mere expressions of opinion, intention or promise." Citing 20 Tex. Jur. page 23, sect. 11. Likewise, counsel urges as a controlling rule in the instant case, the principles announced by the courts relating to dealer's and seller's talk, or "puffing" of one's property by a salesman.

It is insisted by defendant in its brief that the general demurrer should have been sustained because an improper measure of damages was plead by plaintiff. It is contended that since the deal between the parties here was one of exchange of property, the proper measure of damages would necessarily be the difference between the reasonable cash market value of the property given in exchange for that received, or the amount the purchaser obligated himself to pay for such article. Many authorities are cited in support of the proposition. In cases which involve that question the proposition is sound, but we shall presently show that is not the case before us.

This is not a case in which it is sought to recover damages for breach of warranty in a contract, nor is it one to recover damages for fraudulent representations growing out of the exchange of property. The rules applicable in such cases do not control the rights of the parties here.

As disclosed by our statement of the nature of plaintiff's petition, this suit was instituted to rescind a contract of purchase of a refrigerated show case for which plaintiff had agreed to pay $1,395, to recover the down payment alleged to have been $610, by the delivery of two second hand cases, and to cancel the notes and mortgage executed for the remainder of the purchase price. The grounds alleged were, in effect, that defendant, acting through its sales agent, had presented to plaintiff a picture of the fixtures and represented that it was mechanically perfect, would maintain a temperature sufficient to preserve meats to be sold for human consumption, would not sweat, and in every way was suitable for the purposes plaintiff desired to use it; that plaintiff was not familiar with the fixture contracted for; that he relied upon the representations of the salesman and but for which he would not have made the purchase; that the representations were false and that the equipment was wholly worthless to him for the uses intended when the sale was made.

If Padgett had a legal right to sell the equipment for defendant to plaintiff, he had the right to bind defendant for representations made concerning it, which induced the plaintiff to buy. It is, we think, fundamentally true that if plaintiff was defrauded into making the purchase by false and fraudulent representations made by defendant or its agent, he would have a right to rescind, if seasonably exercised. Henderson v. Railroad Company, 17 Tex. 560; C. Aultman & Co. v. York, 71 Tex. 261, 9 S.W. 127; Jesse French Piano & Organ Co. v. Costley, Tex.Civ.App., 116 S.W. 135; Johnson County Savings Bank v. Renfro, 57 Tex.Civ.App. 160, 122 S.W. 37.

In Way v. Siddall, Tex.Civ.App., 299 S. W. 313, writ refused, a very similar situation to the one here was involved. There, plaintiff sued to rescind a contract of purchase of a refrigeration machine, and alleged that the seller had made certain representations as to the capacity of the machine; that plaintiff was ignorant concerning such things and relied upon the representations of the seller; that they were false, and that the machine was worthless to plaintiff in his business. Such allegations were held to state a cause of action.

As applicable to defendant's contention that the court erred in overruling its general demurrer to plaintiff's petition because it alleged an improper measure of damages, we think the proposition unsound in such cases as this. While it is true that the pleadings disclose part payment was made on the new show case by a sale to defendant of two...