Cays v. McDaniel

• Decision Date: 18 May 1955
• Parties: Noble L. CAYS, Respondent, v. D. L. McDANIEL and John F. Stinson, d/b/a McDaniel Motors, and Ken Martin, Appellants.
• Court: Oregon Supreme Court

Page 658

283 P.2d 658

204 Or. 449

Noble L. CAYS, Respondent, v. D. L. McDANIEL and John F. Stinson, d/b/a McDaniel Motors, and Ken Martin, Appellants.

Supreme Court of Oregon, Department 2.

Argued and Submitted April 13, 1955.

Decided May 18, 1955.

John Sheldahl, Oregon City, argued the cause for appellants. On the brief were Sheldahl & Misko, and Stanley J. Mitchell, Oregon City, and Latourette & Latourette, and Henry A. Buehner, Portland.

Bert E. Joachims, Portland, argued the cause for respondent. With him on the brief was Richard D. Nelson, Portland.

Before WARNER, C. J., and TOOZE, LUSK and BRAND, JJ.

TOOZE, Justice.

This is an action for damages for fraud and deceit, brought by Noble L. Cays, as plaintiff, against D. L. McDaniel and John F. Stinson, dba McDaniel Motors, and Ken Martin, as defendants. A verdict was returned in favor of plaintiff for the sum of $360 as compensatory damages, and for the further sum of $750 as punitive damages. Judgment was entered accordingly, and defendants appeal.

On October 18, 1952, plaintiff purchased from McDaniel Motors and took possession of a 1952 Hudson hornet club coupe automobile, for the sum of $3,360. On October 22, 1952, plaintiff and McDaniel Motors executed a conditional sales contract for the sale and purchase of said motor vehicle. Defendants represented to plaintiff that said automobile was a new car. In truth, the car had been driven more than 5,000 miles, and prior to October 18, 1952, pursuant to directions of defendant D. L. McDaniel, the speedometer thereon had been turned back to less than 400 miles. On October 18, when plaintiff was trying out the car before signing a purchase order therefor, the speedometer showed 337 miles. The evidence disclosed that the car had been driven from the factory to McDaniel Motors at Gladstone, in Clackamas county, Oregon, and then had been used by D. L. McDaniel as his own personal car; it also appeared from the evidence that McDaniel had loaned the car to one Solomon for a period of six weeks, and that Solomon had driven it for more than 2,000 miles. Plaintiff discovered the truth about the car's prior use about a week after purchasing it. He then commenced this action for damages.

Defendants as their first assignment of error charge that the trial court erred in denying their motion for a directed verdict in their behalf.

This assignment of error challenges the entire record of evidence in the case. In our consideration of the matter we must view the evidence in the light most favorable to plaintiff and determine therefrom whether there is any substantial evidence in the record to support the verdict. Plaintiff is entitled to the benefit of every reasonable inference that can be drawn from the evidence in his favor. Rosa v. Briggs and Lafferty, 200 Or. 450, 455, 266 P.2d 427; Glascock v. Anderson, 198 Or. 499, 257 P.2d 617; Willoughby v. Driscoll, 168 Or. 187, 191, 120 P.2d 768, 121 P.2d 917.

Fraud is never presumed. He who charges fraud must prove it by evidence that is clear, satisfactory, and convincing. It is not necessary that it be established by direct evidence. Indeed, in many cases, that would be impossible. Therefore, it may be proved by circumstantial evidence of a clear and satisfactory character. Conzelmann v. Northwest P. & D. Prod. Co., 190 Or. 332, 350, 225 P.2d 757.

In the instant case there are disputes between the parties as to the material facts. However, it is the sole province of the jury to settle those disputes and determine wherein lies the truth. By its verdict in the instant litigation the jury resolved the disputed facts in favor of plaintiff.

There is substantial evidence in the record to establish each and every of the essential elements of actionable fraud. The representation of defendants that the car was a new rather than a used automobile constituted a false representation of a material fact; defendants knew the representation to be false and intended thereby to mislead and deceive the plaintiff, and to induce him to purchase the car. Plaintiff was ignorant of the truth and relied upon the representation of the defendants which, under the circumstances, he had the right to do, and, being misled and deceived thereby, was induced to and did purchase the automobile as a new automobile, to his damage in the amount of the difference between the market value of a new car and the market value of the car actually sold and delivered to him.

Defendants contend that plaintiff did not rely upon the representation that the car was new. They also maintain that plaintiff knew the truth about the use of the car before signing the conditional sales contract on October 22. Because of this latter claim, they seek to apply the doctrine announced in Anderson v. Laws, 176 Or. 468, 159 P.2d 201, and reaffirmed in Conzelmann v. Northwest P. & D. Prod. Co., supra [190 Or. 332, 225 P.2d 766], as follows:

'It is well established by the authorities that when one who has been induced by fraud to enter into a contract, subsequently, with knowledge of the fraud, enters into another agreement respecting the same transaction with the one guilty of the fraud, he, the injured party, thereby waives and relinquishes all right to damages on account of such fraud. If he receives some substantial concession from the one guilty of such fraud, he waives his right to insist further upon holding the wrongdoer responsible in damages for the fraud.'

Had the evidence been undisputed that plaintiff learned the truth about the number of miles the car had been driven before his purchase thereof on October 18 prior to his execution of the conditional sales contract on October 22, the rule would have been applicable; but that is not the state of the record. The evidence justifies a finding that plaintiff did not learn the truth until after the conditional sales contract had been executed.

Under the facts and circumstances of this case, the plaintiff had the undoubted right to rely implicitly upon the representations made by defendants as to the amount of use the car had had prior to his purchase thereof. Hogan v. Mason Motor Co., 133 Or. 14, 18, 288 P. 200.

There is no merit in defendants' first assignment of error.

As their second assignment of error, defendants maintain that the trial court erred in submitting the issue of punitive damages to the jury.

In his complaint, plaintiff alleges:

'II.

'That on or about the 18th day of October, 1952, plaintiff purchased from the defendants a 1952 Hudson Hornet Club Coupe, bearing Serial No. 178- 070, Engine No. 178-070, Oregon License No. 843-352, for the sum of $3,360.00;

'III.

'That defendants D. L. McDaniel and John F. Stinson, intentionally, by and through its agent, Ken Martin, who was acting in the scope of his employment, did on or about the 18th of October, 1952, falsely and fraudulently and with intent to deceive and defraud plaintiff and with intent to induce plaintiff to rely thereon, did as aforesaid, represent to plaintiff that said vehicle was new;

'IV.

'That said representations were false, and were then and there known by all defendants to be false; that in truth and fact said vehicle above described and sold to and purchased by plaintiff was a much used vehicle and had been driven some several thousand miles;

'V.

'That plaintiff believed and justifiably relied upon said representation so made as above stated, and was thereby induced to and did purchase as aforesaid the above described vehicle;

'VI.

'That by reason of the...