International Harvester Co. v. Kesey
| Decision Date | 01 November 1972 |
| Docket Number | No. 6266,6266 |
| Citation | 487 S.W.2d 799 |
| Parties | INTERNATIONAL HARVESTER COMPANY and H & M Truck & Tractor Co., Inc., Appellants, v. Ray KESEY and C. J. Kesey, Individually and d/b/a Kesey Brothers, Appellees. |
| Court | Texas Court of Appeals |
Grambling, Mounce, Deffebach, Sims, Hardie & Galatzan, Malcolm Harris, El Paso, W. F. Leigh, Pecos, for appellants.
Stubbeman, McRae, Sealy, Laughlin & Browder, W. B. Browder, Jr., Alvin Walvoord, Jr., Midland, for appellees.
Ray Kesey and C. J. Kesey, d/b/a Kesey Brothers, Plaintiffs-Appellees, filed suit against International Harvester Company and H & M Truck & Tractor Co., Inc., Defendants-Appellants, for damages resulting from alleged false representations in the sale of farm machinery. From a jury verdict in the total amount of $41,900.00, the Defendants have appealed. Reversed and rendered in part and in part affirmed.
The tractors involved were ordered by the Plaintiffs from Defendants on September 1, 1965, and were delivered as new equipment on December 1, 1965. The tractors were utilized for operating six row farm equipment. Plaintiffs experienced mechanical difficulties with the tractors, and brought suit to recover damages sustained by them based upon the representations made by the Defendants as to the suitability of the units for the type of work for which they were purchased. The damages awarded by the jury consisted of the sum of $35,000.00 against the Defendants, jointly and severally, for crop loss, $1,900.00 against both Defendants for excessive repairs, and $5,000.00 against International Harvester Company as exemplary damages.
Defendants assign ten points of error. The first point of error complains of the action of the trial Court in entering judgment in a suit that is barred by the two year statute of limitations, Art. 5526, Vernon's Ann.Tex.Civ.St. The only question to determine is the effective date for the commencement of the limitation period. Plaintiffs pled their cause of action based on fraudulent representations. This was found by the jury. The jury also found that the Plaintiffs first discovered, or by the exercise of ordinary care should have discovered, such representations were false, on April 1, 1968. The cause of action under Plaintiffs' theory would then have to be filed within two years of April 1, 1968.
Defendants contend that the tractors having been delivered on December 1, 1965, and the evidence shows by Plaintiffs' own testimony that trouble commenced within two weeks, and the additional fact that out of 43 repair tickets in evidence, 27 pertain to repairs performed more than two years prior to the time suit was filed, thus refutes jury's finding of the April 1, 1968 'discovery.' Thus, the basis for Defendants' contention is that the evidence conclusively establishes, as a matter of law, that the matters complained of by the Plaintiffs were known to them more than two years prior to the institution of the suit, and is thus barred by the two year statute of limitation.
Throughout the period of time that the Plaintiffs used the tractors, the Defendants reassured Plaintiffs that the trouble could be corrected by repairs and continued their efforts to do so. Both parties testified that with any type of equipment some repairs would be anticipated. Finally, by letter dated March 28, 1968, the District Manager of International expressed surprise at the amount of service required and suggested that the Plaintiffs permit a demonstration of another type of equipment. Plaintiffs considered that by their conversation with the District Manager and the letter received that International had 'given up' and Plaintiffs testified that at that time they concluded that the tractors would not perform.
In support of this point of error, Defendants rely on Bishop-Babcock-Becker Co. of Texas v. Jennings, 245 S.W. 104 (Tex.Civ.App. n.w.h.); Smith v. Fairbanks, Morse & Co., 101 Tex. 24, 102 S.W. 908 (1907); and Richker et ux. v. United Gas Corporation et al., 436 S.W.2d 215 (Tex.Civ.App. writ ref'd n.r.e.) for the proposition that attempted repairs and subsequent assurance by the manufacturer or seller would not extend the statutory period provided for limitation of actions. It should be noted, and we so construe, that each of these cases was pled and tried on a contractual or breach of warranty theory rather than false or fraudulent representations which sounds in tort. The other two cases on which the Defendants rely are White v. Bond et al., 362 S.W.2d 295 (Tex.Sup.Ct.1962) and Pelton v. Trico Oil Co. et al., 167 S.W.2d 625 (Tex.Civ.App. n.w.h.). These two cases appear to deal directly with the point of error involved. In White v. Bond et al., supra, no issue was submitted as to when the Plaintiffs should have discovered the fraud. The Court of Civil Appeals held in 355 S.W.2d 225 that the testimony did not show, as a matter of law, that the fraud should have been discovered. The Supreme Court held that the pleadings and the evidence conclusively showed that the Plaintiff had such knowledge of the facts 'that would cause a reasonably prudent person to make inquiry which would lead to a discovery of the fraud.' In Pelton v. Trico Oil Co. et al., supra, the Plaintiff himself testified as to his knowledge of the fraudulent representation more than two years prior to filing his cause of action. His delay in filing suit for six years was occasioned by promises that the matter of defective title would be cured, and that his failure to institute suit within the two year period barred his cause of action. The applicable rule is stated in Pelton v. Trico Oil Co. et al., supra, 167 S.W.2d on page 627, as follows:
'It is held under all Texas decisions that a cause of action sound in fraud and deceit is barred by the two years statute of limitation, and that limitation begins to run from the time the party defrauded or deceived knew of the fraud and deceit, or, by the exercise of reasonable diligence could have known of it.'
A more recent discussion of the applicable rule is discussed in Puretex Lemon Juice, Inc. v. S. Riekes & Sons of Dallas, Inc., 351 S.W.2d 119 (Tex.Civ.App. writ ref'd n.r.e.) wherein the Court made a distinction in the rule 'where there is a direct invasion of rights' as in medical malpractice cases. It should be noted that even in this respect, the Supreme Court has applied the same rule in medical malpractice cases as a radical departure from the long standing decision in Carrell et al. v. Denton, 138 Tex. 145, 157 S.W.2d 878 (Tex.Comm'n App.1942) and Stewart v. Janes, 393 S.W.2d 428 (Tex.Civ.App., writ ref'd). See Gaddis et vir. v. Smith et al., 417 S.W.2d 577 (Tex.Sup.Ct.1967) wherein the applicable rule as to fraud is reiterated. We therefore overrule Defendants' first point of error.
Defendants' second point of error complains that the trial Court erred in entering judgment on the theory of misrepresentation since under the terms of the sale, the contractual obligation of the parties was, by tis own terms, affected by a limited warranty which limits or restricts the liability of the manufacturer to the replacement or repairing defective parts during a specified time.
The Courts of this State recognize a limited warranty; and this Court has done so as recently as Lankford v. Rogers Ford Sales and Ford Motor Company, 478 S.W.2d 248 (writ ref'd n.r.e.). Here, again, as above stated, the action is not based on breach of contract or warranty, but rather on alleged false or fraudulent representations, which sounds in tort. We are of the opinion that the rule now applicable in this State as to causes of action available is stated in Dallas Farm Machinery Company v. Reaves, 158 Tex. 1, 307 S.W.2d 233 (1957), is as follows:
'. . . for it is well settled that one who is induced by fraud to enter into a contract has his choice of remedies. 'He may stand to the bargain and recover damages for the fraud, or he may rescind the contract, and return the thing bought, and receive back what he paid."
See also 26 Tex.Jur.2d, Sec. 78, pp. 17--18; Mack et al. v. Bradford, 359 S.W.2d 941 (Tex.Civ.App. writ dism'd); Dyer v. Caldcleugh & Powers et al., 392 S.W.2d 523 (Tex.Civ.App. writ ref'd n.r.e.). We therefore overrule point of error number two.
Defendants' points three, four and five complain of the trial Court's entry of judgment for the reason that Defendants contend that the representations made by the Defendants' representatives were nothing more than 'sales talk' or 'puffing' rather than a false representation. To differentiate between sales talk and actionable misrepresentation can only be determined by the circumstances in the particular case. The Defendants rely on Zucht et al. v. Stewart Title Guaranty Co. et al., 207 S.W.2d 414 (Tex.Civ.App. writ dism'd) and Saunders v. Martin et al., 390 S.W.2d 513 (Tex.Civ.App. n.w.h.). Each of these cases involved representations as to quality and value of real estate and subsequent sales substantiated the represented value. A general statement as to the basic considerations in distinguishing between puffing and actionable misrepresentation is contained in 25 Tex.Jur.2d, Sec. 47, p. 689:
This concept is perhaps most graphically illustrated in Shaw Equipment Company v. Hoople Jordan Construction Company, Inc., et al., 428 S.W.2d 835 (Tex.Civ.App. n.w.h.) wherein the seller of road equipment in eulogizing his product represented to the purchaser that the...
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