J. I. Case Threshing Mach. Co. v. Webb

• Citation: 181 S.W. 853
• Decision Date: 23 December 1915
• Docket Number: (No. 7002.)<SMALL><SUP>*</SUP></SMALL&gt
• Parties: J. I. CASE THRESHING MACH. CO. v. WEBB.
• Court: Court of Appeals of Texas

181 S.W. 853

J. I. CASE THRESHING MACH. CO. v. WEBB.

(No. 7002.)^*

Court of Civil Appeals of Texas. Galveston.

December 23, 1915.

Rehearing Denied January 6, 1916.

Appeal from District Court, Harris County; Wm. Masterson, Judge.

Action by the J. I. Case Threshing Machine Company against J. E. Webb. From judgment for defendant, plaintiff appeals. Affirmed.

A. B. Wilson, of Houston, for appellant. Cole & Cole, of Houston, for appellee.

McMEANS, J.

The J. I. Case Threshing Machine Company brought this suit against J. E. Webb to recover $665 upon a check given by defendant to plaintiff, and upon nine promissory notes aggregating $1,200 and to foreclose a chattel mortgage executed by defendant to plaintiff upon an automobile as security for the payment of said notes.

Appellant, in its brief, makes the following statement of the issues made by the pleadings of the parties, which we adopt:

Plaintiff alleged that on July 29, 1914, it sold and delivered to defendant one automobile, defendant executing and delivering to plaintiff in payment therefor his check on the Humble State Bank for $665 and nine promissory notes, due and payable monthly, beginning September 1, 1914, for the aggregate sum of $1,200, said notes bearing interest at 8 per cent. per annum from date, and providing 10 per cent. attorney's fees if suit was brought thereon, or if placed in the hands of an attorney for collection; that defendant executed and delivered to plaintiff a chattel mortgage of the same date to secure the payment of the balance of the purchase price of the automobile; that defendant instructed the Humble State Bank not to pay said check, which was returned unpaid; that defendant is further indebted to plaintiff in the sum of $10 a month for the storage of the automobile since August 1, 1914; that plaintiff placed said notes in the hands of its attorney for collection and is entitled to recover the 10 per cent. attorney's fees. Plaintiff prayed for judgment for its debt evidenced by the check, notes, for the storage charges, for attorney's fees, foreclosure of the chattel mortgage, and general relief.

For answer defendant alleged that he executed the chattel mortgage, check, and notes by reason of the misrepresentations of plaintiff's agents, said misrepresentations consisting of the statement by plaintiff's agents to defendant that they (plaintiff's agents) had exhibited the automobile to defendant's wife, that she had ridden in it, and that she desired same, and had told them (plaintiff's agents) to persuade defendant to purchase the automobile for her; that said representations were untrue, were material, and, without the same having been made to defendant by plaintiff's agents, he would not have executed the notes, check, and chattel mortgage; and that he believed the statements and representations made to him by plaintiff's agents to be true. Defendant prayed for the cancellation of the check, notes, and chattel mortgage.

Plaintiff by supplemental petition alleged that defendant executed and delivered to it an order in writing July 29, 1914, for said automobile, which order stipulated that no branch house manager, salesman, or local dealer had any authority to make any different contract, representations, or warranties, and that they were not authorized to bind the company by any act, statement, or representations, and that it was not responsible to the purchaser for any promise, undertakings, or warranties made by the representations beyond those expressed in the order; that, in pursuance of said order, plaintiff delivered to the defendant the automobile, defendant executing and delivering to the plaintiff the check, notes, and chattel mortgage as alleged.

Defendant denied the defenses set up in plaintiff's first supplemental petition, and alleged that they executed the order by reason of the fraud and misrepresentations of the plaintiff's agents as set forth in defendant's answer.

The case was submitted to a jury upon special issues, and upon a return of their answers thereto the court entered judgment for the defendant canceling the check, notes, and chattel mortgage, and against plaintiff for costs, from which judgment the plaintiff has appealed.

Appellant, under appropriate assignments of error, urges the following proposition:

"Plaintiff sold and delivered to the defendant an automobile, in consideration of which defendant executed and delivered to plaintiff his check for $665, nine promissory notes for the aggregate sum of $1,200, and a chattel mortgage upon the automobile securing the payment of the notes; the automobile being delivered to plaintiff by defendant. Defendant stopped payment of the check, refused to pay the notes, and plaintiff filed suit to recover the amount of the check and notes, foreclosure of the mortgage securing same, and for storage of the car. Defendant pleaded, and introduced evidence to support said plea, that plaintiff's agents induced him to enter into said contract for the purchase of said automobile and to execute his check, notes, and chattel mortgage by falsely representing to defendant that defendant's wife had ridden in the car and was pleased with it, and wanted plaintiff's agents to get defendant to purchase said automobile, but did not allege any pecuniary damage to him. Such a defense is unavailable in law or equity, and did not constitute any legal defense to plaintiff's cause of action, and the court erred in not instructing a verdict for the plaintiff for the amount sued for."

As we understand the above proposition, it is the contention of appellant that the fraud of appellant's agent alleged in the appellee's answer, which induced the appellee to buy the automobile and to give his check and notes for the purchase money, did not constitute any defense to plaintiff's cause of action, for the reason that the defendant did not allege that he had suffered any pecuniary damage as the result of the fraud so practiced upon him. It seems to be admitted by the appellant in its proposition that the fraud was proved as charged in appellee's answer. At any rate, we find from the evidence in the record that the allegation of fraud was proved as charged. It is elementary that fraud, in order to be the basis for the recovery of damages, must have resulted in pecuniary injury to the party complaining; but this rule applies generally to only those cases where the injured party is seeking to recover damages from the wrongdoer as indemnity against the injury which he has sustained by reason of the fraud, and has no just application to a case like the present, where the fraud is relied upon as a defense to the enforcement of an executory contract. In cases such as this, if the false representations relate to a material fact, the law implies that the defrauded party has suffered an injury sufficient to defeat a recovery. Kanaman v. Hubbard, 160 S. W. 304; Stewart v. Lester, 49 Hun, 58, 1 N. Y. Supp. 699; MacLaren v. Cochran, 44 Minn. 255, 46 N. W. 408; Smith v. Countryman, 30 N. Y. 655; Brett v. Cooney, 75 Conn. 338, 53 Atl. 729, 1124; Harlow v. La Brum, 151 N. Y. 278, 45 N. E. 859.

The rule is thus stated in 14 Am. & Eng. Ency. p. 140:

"It has been held that pecuniary damage is not necessary to entitle a person to relief by way of rescission; but that it is enough for him to show that he has been induced by material, false, and fraudulent representations to enter into the contract which he would not have entered into but for such representations."

We think that the fraud alleged in the petition, and which admittedly was proved induced the defendant to enter into a contract which he otherwise would not have made, and that his contract, being executory, was voidable for the fraud as a defense to the plaintiff's suit for the enforcement thereof, and that the issue of pecuniary injury has no place in this case in view of the remedy sought by defendant. The assignments are overruled.

The second assignment complains of the action of the court in permitting the defendant, over its objection, to testify that plaintiff's agents had made statements and representations to defendant prior to the purchase by him of the automobile to the effect that defendant's wife had told plaintiff's agents to get defendant to purchase the automobile, and that said agents represented to defendant that the defendant's wife was pleased with the automobile.

At the time plaintiff contracted with the defendant's agents for the purchase of the automobile, and executed his check and notes for the consideration, he signed a contract which contained the following provision:

"The company is not responsible to the purchaser for any undertakings, promises, or warranties made by their representatives beyond these expressed...