Godwin v. Hampton

Decision Date09 May 1984
Docket NumberNo. CA,CA
Citation11 Ark.App. 205,669 S.W.2d 12
PartiesEarl GODWIN, Appellant, v. Burt T. HAMPTON d/b/a Southern Scrap Company, and Troyce Hampton, Appellees. 83-304.
CourtArkansas Court of Appeals

Woodward, Kinard & Epley, Ltd. by Mike Kinard, Magnolia, for appellant.

Keith, Clegg & Eckert, Magnolia, for Troyce Hampton.

Larry W. Chandler, Magnolia, for Burt Hampton.

MAYFIELD, Chief Judge.

The appellee Burt Hampton filed suit in the Columbia County Chancery Court against appellant Earl Godwin alleging that because of false and material representations, knowingly made by appellant, appellee entered into a contract to purchase a Magnolia, Arkansas, scrap metal business from appellant, and as a result thereof appellee sustained damages. In addition to a money judgment, the appellee sought an injunction to prevent appellant from continuing to engage in business in competition with appellee, contrary to the provisions of the contract.

Godwin answered with a denial of the allegations of the complaint. He also filed a counterclaim against Burt Hampton and a third party complaint against Burt's father, appellee Troyce Hampton. The claims against the Hamptons alleged that they purchased the business as a partnership and Godwin sought judgment against them for $19,000.00 alleged to be due on the purchase price. An additional judgment for $100,000.00 was sought against the father on allegations that he caused Godwin mental anguish and monetary loss by attempting to abrogate the purchase agreement and by conspiring to prevent payment of the amount due on the purchase price. No motion was made to transfer any part of the case to law.

The chancellor found that one of the assets of the business was a crane which Godwin represented was operable and had been purchased for $25,000.00; that in fact it was not operable to do the job for which it was intended and Godwin had paid only $3,000.00 for it; that Burt Hampton agreed to a $25,000.00 increase in the purchase price of the business in reliance upon Godwin's false representations about the crane; and that Hampton was entitled to damages for $22,000.00 which was the difference between the cost of the crane and what Godwin represented the cost to be. The court also found there was no partnership between the Hamptons, and that Godwin was not entitled to judgment against Troyce Hampton in any amount. The $22,000.00 due to Burt Hampton was offset against the $19,000.00 he owed on the purchase price, and Burt was given judgment against Godwin for $3,000.00. The chancellor found there was no proof that Godwin was competing against Burt contrary to the purchase agreement and, therefore, no ruling was made on the right to injunctive relief.

Godwin appeals and contends that the trial judge's decision as to liability is not supported by a preponderance of the evidence and that the judge erred in failing to rule on the validity of the covenant not to compete.

The parties are in agreement that the elements of an action for fraud or deceit are (1) a false representation, normally of fact, by the defendant; (2) knowledge or belief by the defendant that the representation is false--or, what is regarded as the equivalent, that he has not a sufficient basis of information to make the representation; (3) an intention to induce the plaintiff to act or to refrain from action in reliance upon the misrepresentation; (4) justifiable reliance upon the representation on the part of the plaintiff, in taking action or refraining from it; (5) damage to plaintiff, resulting from such reliance. MFA Mutual Ins. Co. v. Keller, 274 Ark. 281, 623 S.W.2d 841 (1981).

There is evidence in the record to support the following factual summary. Burt Hampton was about 25 years old when he entered into the agreement to buy the scrap metal business from Godwin. Burt had no prior experience in this business and his father helped negotiate the purchase and obtain the financing for Burt. Burt lived next door to the business and the purchase had been under discussion for some time. In April of 1981 a price of $30,000.00 was agreed upon but just before Burt started operating the business, Godwin informed the Hamptons that he had purchased a crane from a scrap dealer in Dallas, Texas. Godwin told the Hamptons that he had paid $25,000.00 for the crane and that the sale price of the business would have to be increased to $55,000.00 to cover the amount paid for the crane. Both of the Hamptons testified that Godwin said the crane was operational and had been working on a yard in Dallas, and that in reliance upon his statements as to the crane's cost and condition they agreed to increase the purchase price to $55,000.00.

Burt started operating the business on April 21, 1981, and the crane arrived a few days later. On April 30, 1981, apparently the same day the crane arrived, Burt gave Godwin three checks which left him owing $19,000.00 on the $55,000.00 purchase price. On July 10, 1981, a formal written agreement to buy and sell the business was signed by Burt Hampton and Earl Godwin.

The crane was an old scrap railroad crane. Its function was to crush cars and load and unload scrap metal. When it was delivered to the Magnolia yard the magnet generator had a burned out coil. The truck engine would not run and the crane had to be pulled from place to place by another vehicle. The motor that ran the boom up and down would run but a chain had slipped to the side of the chain drive sprocket and some sprockets needed to be rebuilt. There was evidence of other defects in the crane and, although there was testimony that it should have been repaired for less, Troyce Hampton, who testified to extensive experience in automotive repair, filed a lien against the crane for $79,554.39, which he said was for repairs he made to the crane that were absolutely necessary.

A stipulation in the record agrees that the manager and assistant manager of the Dallas scrap company that sold the crane to Godwin would testify that it had been taken out of operation by that company approximately seven months before Godwin purchased it; that it was taken out of service because it became inoperable; that it was sold to Godwin for $3,000.00 and would not have been sold...

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9 cases
  • Bright v. Gass, CA
    • United States
    • Arkansas Court of Appeals
    • April 29, 1992
    ...to grant the relief sought, objection to its jurisdiction is waived if no motion to transfer to law is made. Godwin v. Hampton, 11 Ark.App. 205, 210, 669 S.W.2d 12, 16 (1984). Here, appellant inappropriately characterizes the issue as one of subject matter jurisdiction. In Liles v. Liles, 2......
  • Pickering v. Garrison, No. CA08-810 (Ark. App. 2/18/2009)
    • United States
    • Arkansas Court of Appeals
    • February 18, 2009
    ...Foods, Inc. v. Davis, 347 Ark. 566, 66 S.W.3d 568 (2002); Hart v. Bridges, 30 Ark. App. 262, 786 S.W.2d 589 (1990); Godwin v. Hampton, 11 Ark. App. 205, 669 S.W.2d 12 (1984). Reliance is presumed when the misrepresentation goes to a material matter. See Manhattan Credit Co. v. Burns, 230 Ar......
  • Morris v. Knopick, CV–16–373
    • United States
    • Arkansas Court of Appeals
    • April 12, 2017
    ...is a question of fact. Sunbelt Bus. Brokers of Ark., Inc. v. James , 2009 Ark. App. 659, 2009 WL 3210609, (citing Godwin v. Hampton , 11 Ark. App. 205, 669 S.W.2d 12 (1984) ). On appeal, it is our duty to determine whether the trial court's finding is clearly erroneous or clearly against th......
  • Wedin v. Wedin
    • United States
    • Arkansas Court of Appeals
    • May 7, 1997
    ...321 Ark. 269, 900 S.W.2d 552 (1995) (citing Roach v. Concord Boat Corp., 317 Ark. 474, 880 S.W.2d 305 (1994)); Godwin v. Hampton, 11 Ark.App. 205, 669 S.W.2d 12 (1984). Of course, the chancellor's decision permits appellee to avoid these questions by construing the parties to have been in a......
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