Green v. Uncle Don's Mobile City

• Decision Date: 13 September 1977
• Citation: 279 Or. 425,568 P.2d 1375
• Parties: Susie L. GREEN, Respondent/Cross-Appellant, v. UNCLE DON'S MOBILE CITY, an Oregon Corporation, Appellant/Cross-Respondent.
• Court: Oregon Supreme Court

Page 1375

568 P.2d 1375

279 Or. 425

Susie L. GREEN, Respondent/Cross-Appellant, v. UNCLE DON'S MOBILE CITY, an Oregon Corporation Appellant/Cross-Respondent.

Supreme Court of Oregon, Department 2.

Argued and Submitted May 9, 1977.

Decided Sept. 13, 1977.

[279 Or. 426-A] Robert H. Anderson, of Murphy, Anderson & Cegavske, Roseburg, argued the cause and filed briefs for appellant/cross-respondent.

Dean A. Heiling, Roseburg, argued the cause for respondent/cross-appellant. With him on the brief was Heiling & McIntosh, Roseburg.

Before DENECKE, C. J., and BRYSON, LINDE and CAMPBELL, JJ.

BRYSON, Justice.

This is an action for fraud arising out of a contract wherein plaintiff agreed to purchase a mobile home from defendant. The jury returned a verdict in favor of plaintiff and judgment was entered on that verdict. Defendant appeals and plaintiff cross appeals on the disallowance of witness fees in her cost bill.

Defendant first assigns as error the trial court's failure to grant its motion for a directed verdict, contending there was insufficient evidence to submit the case to the jury. There were direct conflicts of testimony between defendant's and plaintiff's witnesses.

On such an issue, we determine if there is sufficient evidence to support the jury's verdict. The plaintiff is entitled to the benefit of all favorable evidence and all favorable inferences which may reasonably be drawn from the evidence. Further, the jury judges the credibility of the witnesses testifying before it. Accordingly, we view the evidence in the light most favorable to the plaintiff, and all conflicts of evidence must be resolved in favor of the plaintiff. Lipinsky v. Hufft, 271 Or. 572, 573, 533 P.2d 328 (1975); Krause v. Eugene Dodge, Inc., 265 Or. 486, 490, 509 P.2d 1199 (1973).

From the evidence received, the jury could have found as follows. Sometime on April 24, 1972, plaintiff Susie Green went to Mobile City with her daughter and daughter-in-law to shop for a mobile home. She was aided in her search by one of defendant's salesmen, a Mr. West.

Mrs. Green found a mobile home suitable for her needs but was hesitant to purchase it because she was uncertain whether she would have sufficient income to meet the monthly payments. Plaintiff's only income, in addition to her social security, was a $75 monthly payment she received on the contract from the sale of her home in California. Prior to leaving California she had also received some state welfare assistance.

Mrs. Green informed West that she would purchase the mobile home only if she could obtain financial assistance from welfare to help with the monthly payments. West assured her that he thought such a contract could be arranged and prepared a work sheet with the notation, "sale subject to Welfare Dept. Approval." Plaintiff was requested to sign the work sheet and did so.

The sale was completed that same day, April 24, 1972. During this portion of the transaction Mobile City was represented by its sales manager, a Mr. McCarty. Mr. McCarty went over the work sheet with plaintiff and was aware that the contract was to be subject to the procurement of welfare assistance.

After reviewing the work sheet, defendant's sales manager directed plaintiff to sign several blank forms, one of which was the uncompleted purchase agreement. When this purchase agreement was subsequently filled in, the provision on the signed work sheet, that the contract be subject to welfare approval, was omitted.

Mrs. Green testified as follows:

"Q And now, when you signed the contract, it was in the same terms as it is right now, wasn't it?

"A No, sir, I think I signed the papers and took it in and filled it out like Dean was supposed to or West was supposed to.

"Q Are you stating that when you signed this contract it was in blank?

"A It was.

" * * *

"Q Now, the one that West wrote, did that provide something about the Welfare Department?

"A Absolutely. We wrote on there I told him I would not take the trailer unless the Welfare approved of it and he wrote it right down on the corner and when he brought that back, it wasn't even wrote on it.

"Q Now, did this all happen on April 24th?

"A I believe so. It was."

The following day Betty Williams, plaintiff's daughter, called welfare officials in Oregon and California and discovered that plaintiff would not be eligible for welfare benefits. She called salesman West the same day, and he advised her that he thought her mother would be able to get her down payment back.

On April 26, 1972, plaintiff and her daughter returned to Mobile City to talk with sales manager McCarty about cancelling the purchase agreement. Upon hearing of plaintiff's difficulties, McCarty placed a call to one Janice Allen, an employee of the California Welfare Department. Mrs. Allen informed him that it was of no concern to the California Welfare Department whether plaintiff bought a mobile home because plaintiff had moved to Oregon and was no longer eligible for California benefits. Notwithstanding this knowledge, sales manager McCarty represented to plaintiff that the welfare department had said it was "okay" to go ahead and purchase the mobile home.

Plaintiff also signed a retail installment contract dated May 30, 1972, which assigned her purchase agreement with defendant to Commercial Credit. Plaintiff did not recall signing this instrument, but her daughter, upon whom Mrs. Green was dependent for transportation, testified that her mother did not visit Mobile City on May 30, 1972, and that she signed no additional papers after the April 26 meeting with defendant's sales manager.

Defendant's sales manager testified that, on the 29th or 30th of May, Mrs. Green visited Mobile City and expressed dissatisfaction with the trailer she had purchased. He further testified that the problems were resolved and that the retail installment agreement was signed on May 30, 1972. Regardless of the May 30 date, the jury could reasonably infer that the retail installment contract was signed on April 26, after defendant's sales manager's representation that welfare had approved the sale.

Defendant delivered the mobile home to plaintiff's property contrary to plaintiff's numerous requests that the mobile home not be delivered. When plaintiff failed to make her monthly payments, defendant repossessed the mobile home, resold it, and retained plaintiff's $1,200 down payment.

Defendant contends that plaintiff failed to prove that defendant made its promise to make the contract conditional upon welfare approval with the present intent not to perform the promise. ¹ We recently discussed the standard of proof necessary to show promissory fraud in Sproul v. Fossi, 274 Or. 749, 752, 548 P.2d 970 (1976). However, it is not necessary to reach that question because we are satisfied that plaintiff proved fraud on the part of defendant. The amended complaint, upon which the case went to trial, alleges defendant "advised and represented to Plaintiff that said contract would be conditioned upon Plaintiff's receiving said special public financial assistance. In reliance thereon, Plaintiff paid Defendant the sum of $1,200.00 as a down payment for said mobile home."

The work sheet signed by plaintiff stated, "sale subject to Welfare Dept. Approval," and plaintiff's understanding was that the contract would be so conditioned. On the switch of plaintiff from salesman West to sales manager McCarty, the language that the sale was subject to welfare approval was omitted from the contract. By accepting part of defendant's testimony and part of plaintiff's testimony, the jury could have found that when plaintiff signed the contract the defendant concealed from her that the words "subject to Welfare Dept. Approval" had been omitted. This concealment was the fraud, and it is not promissory fraud.

"The elements necessary to establish an action for fraud are: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; and (9) his consequent and proximate injury." Rice v. McAlister, 268 Or. 125, 128, 519 P.2d 1263, 1265 (1974).

All these elements were established in this case. Plaintiff was damaged because the concealment and misrepresentation caused her to sign the contract and pay the $1,200 when the transaction should have been terminated.

Defendant's assertion that plaintiff ratified or waived her right to damages for the fraud must also fail. In Conzelmann v. N. W. P. & D. Prod. Co., 190 Or. 332, 354, 225 P.2d 757, 766 (1950), relied on by defendant, we stated the elements required to show ratification:

"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. * * * " (Emphasis added.)

Plaintiff's evidence disputes the signing of any agreement after plaintiff learned of the fraud, and there is no evidence of a substantial concession to plaintiff. True, on April 25, 1972, plaintiff did learn that she would not be eligible for welfare assistance. However, the jury could also have found that plaintiff was assured by defendant's sales manager that the California welfare department had informed him that everything would be "okay." Plaintiff was not sufficiently aware of the fraud to render a knowing ratification or waiver of it. See Chester v. McDaniel, 264 Or. 303,...