International Harvester Co. of America v. Rieke

• Decision Date: 10 November 1925
• Docket Number: No. 7007.,7007.
• Citation: 9 F.2d 776
• Parties: INTERNATIONAL HARVESTER CO. OF AMERICA v. RIEKE.
• Court: U.S. Court of Appeals — Eighth Circuit

9 F.2d 776 (1925)

INTERNATIONAL HARVESTER CO. OF AMERICA v. RIEKE.

No. 7007.

Circuit Court of Appeals, Eighth Circuit.

November 10, 1925.

Frank L. Grant, of Denver, Colo., for plaintiff in error.

W. R. Ramsey, of Denver, Colo., for defendant in error.

Before LEWIS and KENYON, Circuit Judges, and MUNGER, District Judge.

KENYON, Circuit Judge.

This case was commenced in a state court of Colorado and removed to the District Court of the United States for the District of Colorado. Defendant in error sought damages from the International Harvester Company of America, alleging that on the 19th day of August, 1922, he purchased from it through its agents one International truck, model No. 61 (referred to hereinafter as model No. 61), and that he was induced to purchase the same by the false and fraudulent representations of such agents; that said representations were agreements to furnish him work on a federal aid highway construction project near Canon City, Colo., for a period of 90 days at a compensation of $40 per day, and thereafter to furnish him further work; that the work was ready for him when said truck was purchased; that he agreed to pay for said truck the sum of $3,469.30, $300 to be paid in cash and the balance in notes; further that he was given credit by plaintiff in error for the sum of $900, the purchase price of a truck he had theretofore purchased from it, being International truck, model No. 41 (hereinafter referred to as model No. 41). The complaint alleges that plaintiff in error did not furnish defendant in error the work agreed upon, and therefore he was unable to make the $40 per day promised for the period of 90 days, or for any other period; that he was compelled thereafter to incur additional expense for a new body and equipment for the truck; that as an inducement to incur said additional expense plaintiff in error proposed to give him work on highway construction at or near Brighton, Colo.; that the situation was in general misrepresented to him, and that he did not know such representations were false until about the 7th of September, 1922, at which time he demanded of plaintiff in error the return of the purchase money, the cancellation of the notes, and the return of model No. 41; that he endeavored to return to plaintiff in error model No. 61.

Plaintiff in error in its answer admits the sale of model No. 61; denies any representations, further than those contained in the written warranty; denies that any parties had the right to make representations as to furnishing work, and, further, that before model No. 61 was delivered defendant in error was fully advised that the parties claimed to have made the alleged fraudulent representations as to furnishing work had no authority so to do; that in consideration of extended terms granted defendant in error he signed and delivered to plaintiff in error the following statement, which is in evidence:

"Defendant's Exhibit D.

"International Harvester Company of America (Incorporated).

"Farm Operating Equipment.

"McCormick. International. "Deering. "Harvester Machines. "Hay and Corn Machines. "Tillage Implements. "Seeding Machines. "Plows. "Threshers. "Binder Twine. "Motor Trucks. "Oil Tractors. "Oil Engines. "Cream Separators. "Manure Spreaders. "Farm Wagons. "Feed Grinders "2308-26 15th St. Denver, Colo "September 20, 1922. "Denver Branch "W. J. Pilant, Manager. "G. C. Marsh, Asst. Manager "For Mr "Your Letter "Subject

"In consideration of the extended terms and for the added equipment in the purchase of an International model 61 truck for which I have executed notes, I wish to state that I am absolutely satisfied with the deal as it now stands, and that I waive any and all promises, either verbal or in writing, which have been made to me by any of the salesmen or any other representatives of the International Harvester Company, and I unconditionally release and relinquish any and all claims against said Harvester Company arising out of the purchase of said truck.

"This agreement has been signed by me before the truck has been delivered and the agreement is part of the consideration for the delivery of the truck.

"Signed Raymond Rieke. "Witness: Signed C. F. Jackson.

"Address reply to the company at branch address above.

"Mention name of writer and the date of this letter."

Motions for a directed verdict in favor of plaintiff in error were made at the close of defendant in error's testimony, and also at the close of all the testimony. Said motions were denied. The jury returned a verdict in favor of defendant in error in the sum of $760, and a judgment was duly entered on the verdict.

A number of questions are raised by the assignments of error, the important ones being: (a) Were the alleged fraudulent representations merely such promises to do something in the future as would be insufficient to base thereon an action for deceit, or should the action properly be one for breach of contract? (b) Did defendant in error prior to entering into the contract for the purchase of model No. 61 have full knowledge that the alleged false representations were made by parties having no authority to bind plaintiff in error thereby, and with such knowledge did he enter into and carry out the contract and thus waive the alleged fraud?

There may be doubt as to the first proposition, and we find no necessity for passing on the same, as a correct answer to the second is in our judgment decisive of the case presented by the record. This suit is not for deceit and fraud in inducing defendant in error to enter into the contract for the purchase of model No. 41 (the two-ton truck), but is confined entirely in the complaint filed to matters entering into the purchase of model No. 61 (the three-ton truck). We review somewhat in detail the evidence. In the Denver Post of August 9, 1922, appeared the following advertisement:

"Truck Hauling

"Money-making job that will pay for a truck, give you a good living, and save money. Man that can invest $1,189 can find a real opportunity here with a firm that has a 90 year old reputation of square dealing. We investigated this work thoroughly and found an average earning of $24 per day, counting rainy days and all delays, and the work will take from a year to 18 months to finish. Out-of-town inquiries telephone please, as this will be gone shortly.

"International Harvester Co.

"2308 15th St."

After reading this defendant in error went to the office of the International Harvester Company, and he testifies that one Hewitt, of Hewitt & Doss (who seem to have been agents selling upon commission and handling the matter referred to in the advertisement), represented to him that if he purchased one of plaintiff in error's trucks he would have a job on road work "out to Brighton" with a daily wage of $24, which would last from a year to 18 months, and that he would be working for the International Harvester Company. He then entered into a contract for the purchase of model No. 41, claiming that he did so because the supposed job went with the sale of the truck. He turned in a car, which plaintiff in error took as a $600 credit, paid $300 in cash, and gave notes for the balance. He received this car about the 15th of August, 1922, and went to the place where the work was supposed to be. The matter did not prove satisfactory, and he returned to Denver; had a conference with Hewitt, and told him he could not make any money on the job, and Hewitt said he knew it was not very good. He then negotiated with Hewitt with reference to trading in model No. 41 for a larger truck, viz. model No. 61, and claims that Hewitt promised him he was to have a job paying from $40 to $70 a day at Canon City doing certain work with the truck, and that it would last ninety days, after which time he would have other work for him. These are the alleged false representations set forth in the complaint and relied on in this case.

Defendant in error signed a written order for said model No. 61 August 19, 1922, which was accepted by plaintiff in error September 2, 1922; said order reciting that the truck was sold under the regular warranty given by the International Harvester Company of America as printed on the back thereof, and no others. After defendant in error had made the arrangement for model No. 61 he went to Canon City and worked on the job for four days, but was unable to make more than $15 a day. The contractor, Mr. Allen, became dissatisfied, and decided he could not afford to run the steam shovel for the two trucks employed, and as a result defendant in error was again out of a job. He returned to Denver, saw Hewitt, and was told by him that the Brighton job was "going good now"; that if he would go out there with a three-ton truck he could make money. He went and looked the matter over, but was dissatisfied with the body of his truck, and returned to Denver again, and arranged with Mr. Hancock, of the International Harvester Company, for a body with a hydraulic hoist for the truck. Before this was delivered, Exhibit D (heretofore set forth) was signed by defendant in error. Mr. Jackson, credit manager of the International Harvester Company, testified that he passed on the credit for model No. 61, and that he had had a talk with defendant in error concerning the entire matter. This testimony being of great importance, we quote therefrom the following:

"Well, it was a question of extending him further credit. We had sold him a two-ton, or a model 41, and he was dissatisfied with the capacity of it, and he asked to trade it back and get a larger truck. I told him that we couldn't extend him any further credit. Then he talked about some promise that had been made him by Hewitt & Doss in regard to the earning capacity of the 41, and finally concluded to exchange with him and sell him a model 61, and before the 61 was delivered to him, before I accepted the order, I asked him positively whether or not there had been any...