Industrial Supply Co. v. Goen

• Decision Date: 09 November 1954
• Docket Number: No. 5792,5792
• Citation: 58 N.M. 738,1954 NMSC 107,276 P.2d 509
• Parties: INDUSTRIAL SUPPLY COMPANY, a corporation, Plaintiff-Appellee, v. Carl GOEN and W. I. Davis, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 509

276 P.2d 509

58 N.M. 738

INDUSTRIAL SUPPLY COMPANY, a corporation, Plaintiff-Appellee, v. Carl GOEN and W. I. Davis, Defendants-Appellants.

No. 5792.

Supreme Court of New Mexico.

Nov. 9. 1954.

Grantham, Spann & Sanchez, Albuquerque, for appellants.

Dale B. Dilts, Albuquerque, for appellee.

SEYMOUR, Justice.

Suit was instituted by appellee against appellants on an open account for services and for goods and merchandise sold relating to truck repairs. Appellants answered, denying the indebtedness, and filing two cross-claims for damages arising from the alleged fraud and deceit of appellee, the second of these concerning the capacity and the model of a certain Autocar truck with Buda engine sold by appellee to appellants. The trial court found for appellee on its open account for $4,280.17, for the appellants on their first cross-claim in the amount of $1,200, and for the appellants on their second cross-claim in the amount of $1,900, the finding on the second cross-claim being the only portion of the judgment rendered from which an appeal is taken. The ultimate judgment, therefore, was against the appellants for the sum of $1,180.17. However, the sole question in this Court concerns the finding of damages for appellants in the sum of $1,990 on the second cross-claim and relates to whether or not the trial court applied the proper measure of damages for the fraud and deceit of appellee in this sale.

For the purpose of this opinion we need not detail the alleged misrepresentations and can accept as true what we believe to be one of the findings of the trial court, namely, that appellee was guilty of fraud and deceit in misrepresenting to appellants the pulling capacity and model of the Autocar truck sold to appellants and equipped with Buda engine.

The trial court on this cross-claim allowed appellants $1,900 in damages, consisting of the reasonable value of the rental of substitute trucks required by appellants as a result of the defective equipment sold to appellants on the fraudulent representations of appellee. This $1,900 item was comprised of two cancelled checks for rental totalling $1,731.88 and testimony of appellants that there was approximately another $200. One of the appellants was asked:

'Q. Was that all to pay for rental on trucks used to replace Unit No. 1? A. That is right. We had a balance of two hundred some odd dollars on top of these. It was about $1900.00.'

Appellants contend that they are entitled, in addition to this amount, to an item comprising the difference between the real and represented values of the motor vehicle at the time of its sale to appellants and further amounts suffered by reason of the loss of use and profits, the loss of the cost of repairs to the defective engine, the loss of the cost of a replacement engine, and additional sums allegedly spent in rentals.

We shall consider first what we deem the principal contention of appellants, that they are entitled to the difference between the real and represented values of this motor vehicle in addition to their expenditure for rentals already allowed. In support of this contention is cited Stewart v. Potter, 1940, 44 N.M. 460, 104 P.2d 736, 738, which clearly adopts in New Mexico the so-called 'benefit of bargain' rule in case of this character and recognizes and adopts the general rule that the defrauded purchaser may recover the difference between the real and represented values of the property at the time of the transaction. That case further holds that recovery cannot be defeated for the sole reason that there may be some slight uncertainty as to whether the exactly correct amount of compensatory damages can be ascertained from the evidence.

We have no quarrel with the principles of law here advanced by appellants. Nevertheless, their contention must fail. The language of this Court in the Potter case and the language in many other decisions from foreign jurisdictions is to the effect 'that the uncertainty which prevents a recovery is uncertainty as to the fact of damages, and not as to its amount * * *.' However, this principle cannot serve to cover appellants' failure of proof as to value in the instant cause. This rule is for the benefit of those persons who have been damaged by fraud and deceit but whose damage is of a character unsusceptible of accurate proof in terms of monetary loss. The limitation on this doctrine is clearly expressed in the article on damages, 25 C.J.S., Damages, Sec. 28, p. 496---- '* * * and when compensatory damages are susceptible of proof with approximate accuracy and may be measured with some degree of certainty, they must be so proved even in actions of tort.'

In the instant case the difference between the real value of the truck sold and the value of the motor vehicle as represented at the time of its sale was easily susceptible of proof. Appellants assert the amount of this differential to be $6,000. The only evidence to support this assertion is briefly as follows and comes from one of the appellants:

'Q. How much did you pay for that new piece of equipment, Mr. Davis? A. Well, I believe the basic cost was $17,200.00.

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'Q. In your opinion, what was the value of that piece of equipment at the time you bought it?

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'A. Well, we, of course, wouldn't have bought it at any price. It might have been a pretty good truck to have bought the Cummins engine for. The Cummins engine sells for about $6,000.00. You take off $6,000.00 from $17,000.00, and you got about $11,000.00, a pretty good rig at $11,000.00, and install a 275 Cummins engine in it.'

The figure of $6,000 for the cost of the particular make of engine preferred by appellants could not, except by chance, equal the difference in value at which the proof should have been directed to support the recovery here contended for by appellants. The most obvious error is the failure to give any value to the Buda engine installed in the truck at the time of delivery and which must have had some substantial value. It actually pulled the truck some 60,000 miles. Testimony of this inconclusive sort cannot be substituted for accurate testimony as to damages when the accurate testimony is available. Falkner v. Sacks Bros., 1948, 149 Neb. 121, 30 N.W.2d 572.

As a part of this same contention, appellants assert error not only by reason of the refusal of the trial court to find for appellants that 'the measure of damages is the difference between the real and represented value of the Autocar truck with Buda engine, in the sum of $6,000.00.' but also in the refusal of the trial court to make appellee's requested finding of fact numbered 6 to the effect that 'There is not sufficient convincing evidence upon which to find the difference between the real and represented value of the Autocar tractor with the misrepresented Buda engine.' Appellants rely on Laumbach v. Laumbach, 1954, 58 N.M. 248, 270 P.2d 385, in which this Court said that it is the duty of the trial court to make findings of fact. In that case the trial court was requested by both parties to make a finding on a material issue; there was conflicting testimony; and the failure to find was held to be error. In reaching this decision, the Court quoted Sec. 19-101(52)(B), 1941 Comp., Rules of Civil Procedure, rule 52(b)(2), and we repeat the following portion of that rule:

'(2) The findings of fact shall consist only of such ultimate facts as are necessary to determine the issues in the case, as distinguished from evidentiary facts supporting them. * * *' (Emphasis added.)

In the Laumbach case the determination of the issues posed could not be made without a finding as to whether or not one of the parties had performed a contract. No proper decision on the merits of the Laumbach case could be made absent this finding. This is not true in the instant case. The trial court in the instant case had a clear right to refuse to make a finding concerning the amount of one alleged item of damages if, in fact, there was not sufficient evidence to justify such a finding. The court made a finding on the ultimate fact of appellants' damages in a specified amount. The failure to find as to evidentiary facts concerning particular items of alleged damages must be deemed a refusal of such items and not an erroneous failure to find an ultimate fact. By the same token, had this case been tried to a jury, the trial court would have been justified in refusing to instruct on this 'difference in value' theory since there was no evidence to support such an instruction. We find no merit in appellants' reliance upon Laumbach v. Laumbach, supra.

Under Stewart v. Potter, supra, we have said that in cases of this character, i. e., fraud and deceit, the difference between the real and represented values of the property at the time of...