Joslyn v. Cadillac Auto. Co.

• Decision Date: 08 March 1910
• Docket Number: 1998.
• Citation: 177 F. 863
• Parties: JOSLYN v. CADILLAC AUTOMOBILE CO.
• Court: U.S. Court of Appeals — Sixth Circuit

177 F. 863

JOSLYN v. CADILLAC AUTOMOBILE CO.

No. 1998.

United States Court of Appeals, Sixth Circuit.

March 8, 1910

[Copyrighted Material Omitted]

P. B Moody and C. D. Joslyn, for plaintiff in error.

Harrison Geer, for defendant in error.

Before SEVERENS, WARRINGTON, and KNAPPEN, Circuit Judges.

KNAPPEN Circuit Judge.

The plaintiff in error brought suit against the defendant for the recovery of the purchase price of an automobile claimed to have been bought by plaintiff from defendant; plaintiff having elected to rescind the purchase by reason of certain alleged false and material representations claimed to have induced the sale. There was a jury trial. The judge submitted to the jury the questions of fact involved, but later instructed a verdict for defendant. The apparent ground of this direction is that in the opinion of the court there was no substantial evidence that the automobile did not fully meet the alleged representations.

The alleged misrepresentations relied on, so far as material here, were that the engine would develop 30 horse power and that it would weigh about 400 pounds less than proved to be its weight. We may dismiss from consideration the question of weight, for the reason that the declaration contains no allegation of misrepresentation in this regard, and the court below was not asked to submit such question to the jury.

In our opinion, the learned judge was in error in holding that there was no testimony that the car did not have 30 horse power. There was testimony to the effect that Mr. Metzger, the defendant's sales manager, directly admitted to plaintiff, after the controversy over the power of the car had arisen, that defendant had turned out 150 cars of the type in question supposing that they had 30 horse power, but had found that they would develop but 24 horse power; that accordingly defendant was getting out some new parts, by way of additions, which it was thought would add from 15 per cent. to 20 per cent. to the power, and would so bring it up to 30 horse power; that there had been trouble and complaints over quite a number of these cars, and that the defendant claimed that its next year's model, which embraced the additions referred to, had about 30 horse power. The plaintiff also offered certain testimony, which was rejected by way of comparison of the power of the car in question with another car of a lower rated power. It is alleged that this statement of the sales manager was shown to have been merely his personal opinion; that upon the trial he disclaimed the possession of expert knowledge at the time of the making of the admission referred to, and testified that he had since found that the car would develop 30 horse power; and it is insisted that the prior admission had thus no force as evidence of the fact. But not only is the testimony referred to susceptible of the construction that the defendant had actually ascertained the fact of the deficiency in power, but the defendant and those by whom it speaks are presumed to have knowledge of the power of the machine which the defendant manufactures and sells. The admission in question must be held competent, although not conclusive, evidence of the fact of the alleged deficiency in power.

It is also urged that the expert testimony on both sides shows that an engine of the type in question, with a 4 3/8 inch cylinder and a 5 inch stroke, is bound to develop 30 horse power. But there was testimony tending to show that this proposition is only theoretically true; that is to say, that it is true only when all of numerous conditions are normal and perfect. In our opinion, the power of the machine was a question of fact for the jury.

This conclusion, however, does not work a reversal of the judgment provided, as is contended by defendant, the verdict might properly have been directed in its favor upon other grounds. Currier v. Dartmouth College, 117 F. 44, 54 C.C.A. 430; Latting v. Owosso Manf'g Co., 148 F. 369, 78 C.C.A. 183.

It is earnestly contended by defendant that the testimony showed beyond dispute that plaintiff did not purchase the car from defendant, but that he bought it from Metzger, in his capacity as local seller of defendant's cars in Detroit and vicinity. There was positive and express testimony to that effect, supported by the undisputed facts, among others, that the order was addressed to Metzger personally, the invoice issued in his name, and the purchase price paid directly to him. On the other hand, there was testimony tending to show that the sale of the automobile proper, as distinguished from certain accessories, was made by defendant through Metzger as its general sales manager; such testimony embracing, among other things, correspondence with plaintiff both by defendant and Metzger, recognizing the sale of the machine as made by the defendant itself, and the latter as the one under duty to satisfy plaintiff; the fact that defendant sent its own expert to Omaha to put the car in condition; the fact that Meigs, who is alleged to have participated in making the sale, was in the sole employ of the defendant; that Metzger's retail agency extended by its terms only to sales in Detroit and vicinity, and thus not, on its face, to a sale to an Omaha customer; as well as testimony that the reason the car was billed through Metzger was, in the opinion of the witness Meigs, 'that a discount was given to plaintiff off the list price, and it was thought best because of agency arrangements to bill it through Metzger's company, to avoid trouble arising from the discount.'

That under Metzger's contract and employment as sales manager the relation of principal and agent was created between him and defendant is clear. Wheaton v. Cadillac Automobile Co., 143 Mich. 21, 106 N.W. 399; Willcox & Gibbs Sewing Machine Co. v. Ewing, 141 U.S. 627, 12 Sup.Ct. 94, 35 L.Ed. 882. The substantial question is, in which relation-- that of sales manager or retail dealer-- the contract with plaintiff was made. This was obviously a question of fact for the jury.

It is further urged by defendant that there is no competent evidence of the making of any misrepresentations by defendant justifying a rescission of the contract of sale; that the written contract contains no warranty or representation whatever, the reference in the order to the machine contracted for being merely 'one model D. Cadillac four car, aluminum body, etc.'; that the provision in the contract that 'no verbal or other agreement or promise not clearly specified in this order will be recognized' forbids parol proof of representations adding to the terms of the written contract; and that, even if a warranty can be predicated upon the language of the advertising pamphlet, which refers to the model D. as 'four cylinder, vertical 30 H.P., 4 3/8 inch bore by 5 inch stroke' (such words being claimed to be descriptive merely), no right of rescission, by reason of breach of warranty, exists in the case of an executed sale, at least unless fraudulent.

Plaintiff does not necessarily take issue with defendant upon the two propositions of law last stated. Plaintiff, however, does not claim a warranty, but relies upon the alleged fact of misrepresentation external to the contract, with respect to facts material thereto and inducing the same. In such cases the rule is that misrepresentation may be shown, not for the purpose of adding to or varying the terms of the contract, but to show that the contract was obtained by misrepresentation, and so gave the right to rescind on that ground. Peck v. Jenison, 99 Mich. 326, 32., 58 N.W. 312. There was evidence tending to show that the machine was represented as having 30 horse power, and that this representation was material, and that the plaintiff made the contract in reliance upon it; and, as already said, there was evidence tending to show that this representation was untrue. There was, however, no express testimony that defendant knew when the representations were made that they were untrue.

Plaintiff contends that proof of defendant's knowledge of the falsity of its representations is not necessary to entitle him to rescind, and relies upon the proposition that the vendee in a contract of purchase of goods may, at his own election, rescind the contract on discovering the falsity of the representations inducing it, and recover the purchase price paid, even though such misrepresentations were honestly made.

Under the common-law rule, an innocent misrepresentation or concealment of the truth is not recognized as ground, in an action at law, for the avoidance of a contract of sale unless, perhaps, the representations were such as to show that there was a complete difference in substance between what was supposed to be and what was taken, so...