Jardine v. Brunswick Corp.

• Decision Date: 07 February 1967
• Docket Number: No. 10631,10631
• Citation: 423 P.2d 659,18 Utah 2d 378
• Parties: d 378 Richard Nolan JARDINE, Plaintiff and Respondent, v. BRUNSWICK CORPORATION, Defendant and Appellant.
• Court: Utah Supreme Court

Page 659

423 P.2d 659

18 Utah 2d 378

Richard Nolan JARDINE, Plaintiff and Respondent, v. BRUNSWICK CORPORATION, Defendant and Appellant.

No. 10631.

Supreme Court of Utah.

Feb. 7, 1967.

Brayton, Lowe & Hurley, John W. Lowe, Salt Lake City, for appellant.

Richard L. Bird, Jr., Salt Lake City, for respondent.

CROCKETT, Chief Justice:

Richard Nolan Jardine sued and recovered a judgment of $28,714.34 against Brunswick Corporation on the ground that the latter had by negligent misrepresentation deceived him into making an ill advised loan to a third party, Jack Charlesworth, and lose the money. Defendant appeals contending that the evidence does not establish any basis for such a recovery.

Plaintiff had been a successful business man in the state of Washington. He had operated variously a cafe, barber shop, grocery store, saw mills, and engaged in farming; and had at times hired up to 30 employees. His wife having passed away, he 'sold out and retired' in 1959, and moved to Salt Lake City to be near his children. He talked to Ida Young, a real estate broker, about his desire to have something to do, which led to his becoming interested in the bowling business. In November, 1961, she contacted Brunswick and arranged for Jardine to meet with them. A plan was devised: Brunswick would help Jardine find someone to finance and build a bowling establishment and lease it to him with an option to purchase. Brunswick's interest was in getting customers to sell its equipment. In January, 1962, Jardine signed an order for $320,000 worth of bowling equipment, paying $1,000 down; the next payment was to be $32,000 before delivery.

In February, after the first builder-financier recommenced by Brunswick declined to take the job, defendant Brunswick arranged for a meeting between Jardine and Jack Charlesworth. At that meeting Brunswick's representative, Harold Tracy told Jardine that Charlesworth 'could build these buildings and finance them and there was nothing to worry about * * * he (Charlesworth) was going to buy the land and build the building and lease it to me (Jardine) with an option to buy it.' The building site recommended by Brunswick was rejected by Jardine, who found another site of 18 1/2 acres selling for $37,000, which the parties all approved. The down payment was to be $500.

Charlesworth was purportedly relying on money coming from a housing project he was building near Hill Field in Davis County. Early in April, 1962, when the money from this project was not forth-coming and Charlesworth was unable to make the $500 down payment on the land, Charlesworth met with Jardine and Brunswick to discuss this problem. It was dealt with thus: Jardine agreed to advance $9,000 and take the contract to purchase the 18 1/2 acre site in his name. Because of this larger down payment, the seller would convey outright two acres to Jardine, which he would then convey to Charlesworth to build upon and mortgage if necessary; and Charlesworth was to reimburse Jardine. Brunswick's representative approved this arrangement and said that 'If this would hurry the plan along he thought it would be a good thing.'

The following month, about May 25th, Charlesworth informed Jardine that he still was unable to get capital to commence the construction. He had learned from Brunswick that Jardine had about $23,000 set aside which was to be used as a down payment on the bowling equipment. Charlesworth assured plaintiff that his funds were only temporarily tied up, and that if Jardine would advance him the $23,000 he would go forward with construction and be able to repay Jardine before he needed the money to pay Brunswick. Jardine expressed willingness to loan it if Charlesworth could get a written statement from Brunswick Branch Manager, Mr. Dobbs, approving his loan of the money. Mr. Dobbs wrote Jardine the following letter:

At the request of Mr. Jack Charlesworth I am writing this note to inform you that it will be satisfactory with us for you to pay the majority of the balance due remaining of your down payment upon the arrival of the lanes. This amount will be a sight draft attached to a Shipper's Order Bill of Lading.

Charlesworth requested a stronger statement, but was refused. When Charlesworth brought this letter to Jardine, it did not give the latter the assurance he desired, so he telephoned Dobbs asking 'If it was all right to give him (Charlesworth) this money.' He states that Dobbs' answer was that 'He thought it was all right but to protect myself.' (emphasis added) Upon this state of facts Jardine advanced Charlesworth the additional $23,000 and took a promissory note for that plus the $9,000 already advanced, a total of $32,000, then owed him by Charlesworth, and as his only security took an assignment of an insurance policy on Charlesworth's life.

The details of the failure of Charlesworth to obtain adequate finances for the project, and later of Jardine to do so, can be spared except to say: they did fail; the property was sold at foreclosure sale, and by reason thereof Jardine lost substantially all of the money he had advanced, which he now blames upon and seeks to recover from Brunswick.

We have no disagreement with the proposition advocated by the plaintiff and adopted by the trial court that under some circumstances there may be a cause of action for deceit even though the misrepresentation was not wilfully false. ¹ Where one having a pecuniary interest in a transaction, is in a superior position to know material facts, and carelessly or negligently makes a false representation concerning them, expecting the other party to rely and act thereon, and the other party reasonably...