Garbark v. Newman

• Decision Date: 18 January 1952
• Docket Number: No. 33049,33049
• Citation: 51 N.W.2d 315,155 Neb. 188
• Parties: GARBARK v. NEWMAN et al.
• Court: Nebraska Supreme Court

Page 315

51 N.W.2d 315

155 Neb. 188

GARBARK v. NEWMAN et al.

No. 33049.

Supreme Court of Nebraska.

Jan. 18, 1952.

Syllabus by the Court.

1. An improper transfer of an action at law from the law docket of a district court to the equity docket thereof does not change the character of the action.

2. It is unnecessary to secure a formal reformation of a written instrument where it differs from the true agreement of the parties in order to enforce it or have the advantage of it as a defense as it should have been expressed in the writing.

3. The denial of a jury trial over objection of a party in an action at law is error, but it is not in all cases prejudicial error.

4. The findings of a court in an action at law have the effect of a verdict of a jury and will not be disturbed unless clearly wrong.

5. A positive statement of a seller of the condition of personal property made during negotiations for its sale indicating his intention to be bound for the truth thereof, and which was so understood and relied upon by the other party, is an express warranty.

6. Where a purchaser receives what he purchased, and bases his right to rescind on a false representation of its quality, condition, or matter affecting its value, he must show that the representation was material and that he was misled thereby to his damage.

7. If a misrepresentation is likely to affect the conduct of a reasonable person with reference to a transaction with another person, it is generally material to the contract, and if it is material to the transaction entered into by a person deceived thereby, it is assumed, in the absence of a showing to the contrary, that the transaction was induced by the misrepresentation.

8. A person is justified in relying upon a representation made to him in all cases if it is a positive statement of fact and if an investigation would be required to discover the truth.

9. An agent who fails to disclose the fact of his agency and represents himself as a principal inducing another to deal with him as such is liable and may be treated as principal for all purposes until the fact of his agency is made known, and a person dealing with the agent of an undisclosed principal may, after disclosure, sue either the principal or agent, or both.

10. A certificate of title of a motor vehicle is generally conclusive evidence in this state of the ownership of the vehicle.

11. Generally a rescission of a contract of a sale of a chattel must be made by the purchaser giving notice to the vendor of his election to rescind and a return of or offer to return the property to him at the place where it was received by the purchaser.

12. The law does not require vain things, and a formal tender of property is not required if it appears that it would have been futile.

13. A person who has given a reason for his conduct and decision concerning a matter involved in controversy cannot, after litigation has begun, change his position and place or explain his conduct upon a different consideration.

14. If a buyer of a chattel is entitled to rescind the sale and elects to do so, and if the seller refuses to accept an offer of the buyer to return the goods, the buyer is thereafter presumed to hold the goods as bailee for the seller subject to a lien to secure the repayment of the price paid.

15. Generally a bailee is charged with the amount and kind of care of the subject of the bailment that would be exercised by an ordinarily prudent person in the same or similar circumstances.

16. Under the Uniform Sales Act, if a purchaser of an automobile for legal cause rescinds the purchase and the seller refuses the offer of return of the vehicle, the purchaser becomes a bailee for hire of the property, subject to a lien to secure repayment of the price paid, and is entitled to reasonable compensation from the seller for its care and protection. The purchaser may in such a situation place the property in storage, and if he does, the seller is liable for and may be required to pay the reasonable storage charges as a prerequisite of his securing possession of the property.

17. The provision of the Uniform Sales Act that the buyer or seller may recover special damages in any case permitted by law authorizes the recovery of special damages without regard to whether the transaction to which they are incidental has been rescinded or affirmed.

18. The recovery of proximate special damages is recognized in this state.

19. Generally if a purchaser sues for general damages for breach of the contract of sale, he affirms the contract and cannot thereafter disaffirm it. An exception to, or a situation without the operation of this rule, may exist if one expends money or furnishes material in the improvement of property before discovering the fraud by which he was induced to purchase it. In such a case the purchaser may rescind the contract of sale and also recover the reasonable cost of improving the property or of the repairs made thereon.

Sterling F. Mutz, Lincoln, for appellants.

Max Kier, Charles Bocken, Lincoln, for appellee.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.

BOSLAUGH, Justice.

This is an action at law based upon rescission by appellee of a contract for the purchase by him from appellants of a used automobile on the ground of breach of an express warranty of the condition of the machine, to recover a money judgment for the purchase price paid at the time of the transaction, and for the amount of expenditures made on account of the machine before appellee discovered the falsity of the representations made and that the warranty had been breached.

The district court, on application of appellants and over objection of appellee, transferred the case to the equity docket, denied a demand of appellee for a jury trial of the issues of the case, and heard and decided it without a jury.

The trial court made a general finding for appellee and against appellants, and special findings, in substance: That the claims of appellee as stated in the petition were true; that about August 13, 1949, he purchased from Ben Newman, doing business in Lincoln, Nebraska, as Newman Motors, one of the appellants, who was acting for an undisclosed principal, Roy Kipf, appellant, a 1941 Buick Roadmaster Sport Coupe for $800; that Newman during the negotiations and at the time of the sale at the place of business of Newman Motors specifically stated and represented to appellee that the cylinder block of the automobile had not been cracked; that appellee believed, relied, and acted upon that statement and would not have made the purchase of the machine if that representation of the condition thereof had not been made to him by the seller; that the statement was false; that Newman knew or should have known it was untrue; that the representation as to the condition of the cylinder block of the car was material to the transaction and to the subject of the sale; that Kipf was the equitable owner of the car and had repaired it shortly before the sale of it to appellee; that Kipf was not a licensed dealer and he put the car in the name of Newman, an authorized used car dealer, for the purpose of having a sale of it made by Newman; that the certificate of title of the car at the time of the sale showed Newman to be the owner thereof; that the purchase price of the car was paid by appellee to Newman, but thereafter the appellants each participated therein and benefited therefrom; that appellee did not discover that the said representation of Newman was untrue until September 29, 1949; that he forthwith rescinded the sale, demanded of Newman the return of the amount appellee had paid for the car, and he offered to return to the situation the parties were in before the sale; that Newman stated he would not accept return of the car, would not return the amount paid by appellee to him, that he had acted only as agent for Kipf, and disclaimed all responsibility in the transaction; and that before appellee discovered that the representations made by Newman to induce the sale were false and untrue, appellee had expended on account of the car in repairs for and improvements thereof the reasonable amount of $127.62, and was entitled to recover from appellants the total sum of $995.62 upon appellee depositing with the clerk of the court a title certificate for the automobile showing title thereto in appellee free from encumbrance except a lien for storage of the car after return of it was refused by Newman. The certificate of title was deposited as required, and judgment was rendered in accordance with the findings. This is an appeal from that judgment.

The character of this suit, an action at law, was not altered or changed by its transfer from the law docket to the equity docket of the trial court. It did not become an equity case. It was at its inception, continued to be, and is an action at law for the recovery of money. The significance of the transfer of this case to the equity docket of the court was a mere indication of the determination of the trial court to explore the issues of the case and decide them without the presence or assistance of a jury. Foltz v. Brakhage, 151 Neb. 216, 36 N.W.2d 768.

There was no matter presented by the pleadings requiring or justifying the transfer of the case or any proceedings in it other or different than was appropriate and permissible in an action at law. The claim made in the answer of Roy Kipf that the terms of the guaranty of the automobile made at the time of the sale were only partly put in writing, that a part of the terms and conditions of the guaranty were omitted from the writing and existed only in spoken words, that the writing should be reformed to state all the agreement of guaranty made between the parties, and that this was essential to permit appellant to make his defense in the case, did not make it either mandatory or discretionary for the court to send this...